Asia has integrated better over the past decade, but will face more difficulties in future cooperation, said a report recently released by the Asian Development Bank (ADB).

According to the Asian Economic Integration Monitor (AEIM) report, when economic and financial crisis force countries to collaborate, the recovery runs smoother and crisis prevention is strengthened.

The 2008-09 global and eurozone debt crisis triggered further cooperation in Asia, helping build resilience to future shocks, it said.

As Asia’s policymakers digest the ongoing eurozone debt crisis and costs of contagion, they may have a reduced appetite for deeper cooperation. Therefore, work on future cooperation will likely become more challenging as well.

The report further stated that regional economic integration has progressed rapidly in Asia, with easy and more straightforward benefits from regional cooperation and integration having been realised. The remaining areas of cooperation and integration – and deepening existing ones – are much more complex.

The biennial AEIM pointed out that the Integration Index, based on five indicators including foreign direct investment, capital markets, output correlations, trade and tourism, shows that Asia’s integration increased from a base level of 100 points in 2001 to 233.27 points in 2010 and slightly decreased to 192.22 points in 2011 due to the impacts of the Europe debt crisis.

Boosting physical connectivity across the region is now a major priority, the report said, citing that ASEAN+3 (including China, the Republic of Korea and Japan) also expanded their regional financial safety net, established an independent surveillance unit, and continued work on deepening local currency bond markets across the region.

India has offered to finance a financial safety net for South Asia, while several countries have expanded bilateral currency swap arrangements to step up financial cooperation and promote trade settlement in local currencies. All these initiatives bolster Asia economic integration, it said.-VNA