Project Outline

The status and recent progress of Asia currency which is mooted by Asian Development Bank is discussed here in detail. The factors that prompt countries to create a common money, the Expected advantages,the Problems or concerns involved are the different features that come under our discussion.

We also deal with Euro, the prevailing example that has been in effect for about five years. Based on the five years experience, the benefits and or disadvantages of the euro to member countries and the advantages or problems of extending the Euro to other countries are being contemplated.

Likewise all the serious proposals to create a 'World Currency' and its pros and cons are also dealt with.

Research Information

ASEAN – Its Background

The ASEAN declaration of 1967 exhorts the association to attain its economic, social and cultural aims through “joint endeavours” and “active collaboration and mutual assistance.” Regarding its political objective of regional peace and stability, however, the Declaration contains no equivalent exhortation. It speaks only of “respect for justice and the rule of law” and “adherence to the principles of the United Nations Charter.” It makes no impassioned call for the ASEAN member states to take common political positions.

The restraint with which ASEAN’s founders expressed the political aim of their brainchild was understandable. They did not want their intentions to be misunderstood. They did not want ASEAN to be mistaken for a military grouping among political allies-as some of its predecessors had been.

Full Article is at:



The Association of Southeast Asian Nations or ASEAN was established on 8 August 1967 in Bangkok by the five original Member Countries, namely, Indonesia, Malaysia, Philippines, Singapore, and Thailand. Brunei Darussalam joined on 8 January 1984, Vietnam on 28 July 1995, Lao PDR and Myanmar on 23 July 1997, and Cambodia on 30 April 1999.

The ASEAN region has a population of about 500 million, a total area of 4.5 million square kilometers, a combined gross domestic product of almost US$ 700 billion, and a total trade of about US$ 850 billion.


The ASEAN Declaration states that the aims and purposes of the Association are: (1) to accelerate economic growth, social progress and cultural development in the region and (2) to promote regional peace and stability through abiding respect for justice and the rule of law in the relationship among countries in the region and adherence to the principles of the United Nations Charter.

Full Article is at:

Member Countries

Brunei DarussalemBrunei Darussalam










Full Article is at:

ASEAN Statistics

Statistics Updates

Selected Key Indicators

Macroeconomic Indicators

External Trade Statistics

Foreign Direct Investments Statistics

Tourism Statistics


ASEAN Cooperation in Statistics

ASEAN International Merchandise Trade Statistics Workshop

Links to Statistical Information Resources

Statistical Publications

ASEAN Statistical Pocketbook 2006

ASEAN Statistical Yearbook 2005

Statistics of FDI in ASEAN, 7th Ed, 2005

ASEAN Statistical Yearbook 2004

ASEAN Statistical Yearbook 2003

Full Article is at:

ASEAN Summits

Thirteenth ASEAN Summit, Singapore, 18-22 November 2007

Twelfth ASEAN Summit, Cebu, Philippines, 9-15 January 2007

Eleventh ASEAN Summit, Kuala Lumpur, 12-14 December 2005

Tenth ASEAN Summit, Vientiane, 29-30 November 2004

Ninth ASEAN Summit, Bali, 7-8 October 2003

Eighth ASEAN Summit, Phnom Penh, 4-5 November 2002

Seventh ASEAN Summit, Bandar Seri Begawan, 5-6 November 2001

Fourth Informal Summit, Singapore, 22-25 November 2000

Third Informal Summit, Manila, 27-28 November 1999

Sixth ASEAN Summit, Ha Noi, 15-16 December 1998

Second Informal Summit, Kuala Lumpur, 14-16 December 1997

First Informal Summit, Jakarta, 30 November 1996

Fifth ASEAN Summit, Bangkok, 14-15 December 1995

Fourth ASEAN Summit, Singapore, 27-29 January 1992

Third ASEAN Summit, Manila, 14-15 December 1987

Second ASEAN Summit, Kuala Lumpur, 4-5 August 1977

First ASEAN Summit, Bali, 23-24 February 1976

Photos of ASEAN Summits

Full Article is at:


Remarks by Mr. Ong Keng Yong, Secretary-General of ASEAN at the Economix 2004 Conference,

University of Indonesia Jakarta, 18 February 2004

  1. I have been requested by the organizers of the Economix 2004 Conference to speak on ASEAN monetary cooperation and, in particular, the steps being taken towards an ASEAN single currency.
  2. I have to say at the outset that ASEAN does not have yet the conditions for an optimal currency area or currency union. I will explain this in a little while. Nevertheless, ASEAN is undertaking certain policies and projects that are expected to achieve some of the objectives of a single currency arrangement. In the process, this would also contribute to the necessary conditions for adopting a common regional currency.
  3. Before I proceed to explain what the ASEAN finance and central bank officials have been doing, let us review first what the objectives of adopting a common regional currency are. I will then briefly refer to the experience of the European Union to help us understand the subject better.

The objectives of a single currency

  1. The overall goal of a single currency is to contribute to the financial stability of a regional economy, including price stability.
  2. For countries which are members of a monetary union, a single currency means lower cost or risk of cross-border business through the elimination of currency risk. Greater flows of intra-regional trade would put pressure on prices, resulting in cheaper goods and services.
  3. Individuals benefit not only from the lowering of prices, they also make savings by not having to change money when traveling within the union, by being able to compare prices more readily, and by the reduced cost of transferring money across borders.

Full Article is at:

Achievements in Political Collaboration

Since 1967 ASEAN has forged major political accords that have contributed greatly to regional peace and stability, and to its relations with other countries, regions and organizations. Foremost among these are:

Zone of Peace, Freedom and Neutrality. On 27 November 1971 the foreign ministers of the then five ASEAN members met in Kuala Lumpur and signed the Zone of Peace, Freedom and Neutrality (ZOPFAN) Declaration. It commits all ASEAN members to “exert efforts to secure the recognition of and respect for Southeast Asia as a Zone of Peace, Freedom and Neutrality, free from any manner of interference by outside powers,” and to “make concerted efforts to broaden the areas of cooperation, which would contribute to their strength, solidarity and closer relationship.”

ZOPFAN recognizes “the right of every state, large or small, to lead its national existence free from outside interference in its internal affairs as this interference will adversely affect its freedom, independence and integrity.”

Another five years passed before the next major development in political cooperation came about-the First ASEAN Summit in Bali, when the ASEAN leaders signed three major documents: the Declaration of ASEAN Concord, the Treaty of Amity and Cooperation in Southeast Asia, and the Agreement Establishing the ASEAN Secretariat.

Declaration of ASEAN Concord. Departing from the more circumspect Bangkok Declaration, the Declaration of ASEAN Concord stated for the first time that the member countries would expand political cooperation. It also adopted principles for regional stability and a programme of action for political cooperation. The programme called for holding ASEAN summits among the heads of government; signing the Treaty of Amity and Cooperation in Southeast Asia; settling intraregional disputes “by peaceful means as soon as possible”; improving the ASEAN machinery to strengthen political cooperation; studying how to develop judicial cooperation including the possibility of an ASEAN extradition treaty; and strengthening political solidarity by promoting the harmonisation of views, coordinating positions and, where possible and desirable, taking common action.

Full Article is at:

The Dialogue System

At the Second Summit in Kuala Lumpur the ASEAN heads of government agreed that the association’s economic relations with other countries or groups of countries needed to be expanded and intensified.

On that occasion, the ASEAN heads of government met with the Prime Ministers of Australia, Japan and New Zealand, the first time that they had held consultations as a group with the leaders of non-ASEAN countries.

The next year, the first Post-ministerial Conference took place immediately after the ASEAN Ministerial Meeting. This was a gathering among ASEAN and its dialogue partners, which were then Australia, Canada, the European Union, Japan, New Zealand and the United States.

Every year since then, the foreign ministers of dialog countries have met at these post-ministerial conferences with their ASEAN counterparts. Between these conferences, dialogs are held at various levels and wide-ranging projects are undertaken. These relationships have become models for mutually beneficial relations between North and South as well as for South-South cooperation.

Four more countries have since joined the ASEAN dialog system: China (1996), India (1996), the Republic of Korea (1991) and Russia (1996). The United Nations Development Programme (1977) is the only dialog partner that is not a sovereign state.

Full Article is at:

ASEAN Regional Forum

It was only a matter of time before ASEAN’s regular interaction on economic cooperation with states and multilateral agencies outside Southeast Asia would evolve to include other concerns-primarily regional security.

At the 1992 Singapore Summit, the ASEAN leaders declared that “ASEAN shall move towards a higher plane of political and economic cooperation to secure regional peace and prosperity.”

By this time, the end of the Cold War had altered the configuration of international relations in East Asia. The new environment presented historic opportunities for the relaxation of tensions in the region through multilateral consultations, confidence building, and eventually the prevention of conflict. Thus, in 1994, ASEAN and its dialogue partners decided to create the ASEAN Regional Forum for this purpose. Initially, Forum participants included the ASEAN members, the other Southeast Asian states that were not yet ASEAN members, ASEAN’s then seven dialogue partners, Papua New Guinea, an ASEAN observer, and China and Russia, then still “consultative partners” of ASEAN. India became a participant on becoming a dialogue partner in 1996. Mongolia and the Democratic People’s Republic of Korea were admitted in 1999 and 2000.

As a major venue for carrying out ASEAN’s objectives of regional harmony and stability, ARF adopted two main objectives: first, to foster constructive dialogue and consultation on political and security issues of common interest and concern and, second, to contribute to efforts towards confidence building and preventive diplomacy in the Asia-Pacific region.

At the Twenty-seventh ASEAN Ministerial Meeting in 1994, the Foreign Ministers agreed: “ARF could become an effective consultative Asia-Pacific Forum for promoting open dialogue on political and security cooperation in the region. In this context, ASEAN should work with its ARF partners to bring about a more predictable and constructive pattern of relations in the Asia Pacific.”

Full Article is at:

Recent Issues and Concerns

It is in ASEAN’s ability and readiness to resolve political differences affecting its members and other countries in the Asia-Pacific region that the association’s commitment to political co-operation is put to the test. More often than not, that commitment has been affirmed and the ASEAN approach to solving potentially explosive issues vindicated.

These issues include territorial and jurisdictional disputes in the South China Sea; self-determination for East Timor; nuclear proliferation in Northeast Asia and South Asia; weapons of mass destruction; and the impact of globalization.

South China Sea. Like many other parts of the world, Southeast Asia faces territorial disputes among its members and nearby states. In these disputes ASEAN has consistently pursued a policy of cooperation in seeking the peaceful settlement of differences.

In 1992, recognizing that any conflict in the South China Sea could directly affect peace and stability in the region, ASEAN issued a declaration “urging all parties concerned to exercise restraint in order to create a positive climate for the eventual resolution of all disputes.” ASEAN further “emphasised the necessity to resolve all sovereignty and jurisdictional issues about the South China Sea by peaceful means, without resort to force.”

Full Article is at:

Enlightened Regionalism

ASEAN is widely recognised in the international community as an exemplar of enlightened re-gionalism. But what makes up the nature and measure of its achievements?

It is remarkable that ASEAN has survived for more than three decades because, at the time of its birth, many political observers had predicted that, like previous attempts at regional organisation, it would soon wither in the blast of the complex and hostile regional situation.

Given the wide divergence of views among its founding members, besides the differences in their political and economic systems, ASEAN at the beginning offered little cause for optimism that it would ever attain its goal of regional cooperation. The Southeast Asian security situation was so grim during ASEAN’s early years that the international media often likened the region to the Balkans. Foreign Minister S. Jayakumar of Singapore recalls that the Western press then described the countries in the region as forming a row of dominoes, which were about to fall on one another.

Full Article is at:

Asia’s Woes Produce an Economic and Political Silver Lining

by Fidel Ramos Former President of the Philippines

This article appeared in International Herald Tribune, 29 March 2000

Tokyo – Like a man who has suffered a heart attack, post-crisis East Asia has had intimations of mortality. It has learned that while development is possible, it is not inevitable.

Spurred by this lesson, the devastated economies of the region are bouncing back, although resumption of the kind of galloping growth they enjoyed before financial turmoil struck in mid-1997 is still some distance away.

The crisis is forcing these economies to become more efficient, productive and competitive. It is also making national politics more transparent, accountable and democratic.

Making democracy really work will be Asia’s biggest challenge over the next 20 years. The future of the region’s economies, while bright with promise, is still fraught with uncertainties. Foremost of these is the political resolve of leaders to implement unpopular reforms.

Sustained recovery will entail a long and sometimes tortuous process. Brave leadership, the perseverance to pursue reforms and strong political will are the most important factors in recapturing East Asia’s economic dynamism.

Partly as a result of the pain caused by the crisis in terms of job and income losses, neither democratization nor globalization hold the attraction they once did.

Today’s East Asians are more aware than they were of the downside of globalization – of the havoc it can bring to traditional ways of doing things. They are also more conscious of the social injustice that free-ranging capitalism can impose on poor people.

They have come to realize that globalisation will not bring about general progress automatically. Indeed, at least initially, it may sharpen inequalities within less-developed countries and between them and mature economies.

Replacing authoritarian regimes with representative system – as East Asians have done in the past decade or so in South Korea, Taiwan, the Philippines, Thailand and Indonesia – may turn out to have been the relatively easy part. While democracy’s trappings are easy to assemble, making democracy work properly for ordinary people requires a long learning process, for which leaders often have little patience.

Full Article is at:

Need for a Balancer on East Asia's Way to World Eminence

By Lee Kuan Yew

In 50 years, China will have a giant economy. Per capita, China's GNP may still be about one-quarter to one-third that of the United States, but its total output and technological competence will make it a heavyweight.

By 2040, the combined domestic production of China and Japan will exceed that of America. These developments will shift the economic center of gravity of the world from the Atlantic to the Pacific. Already, U.S. trade with East Asia exceeds that with Western Europe. By 2050, the living standards of nearly 1.75 billion people in Northeast Asia will reach levels similar to those of present-day Japanese.

The high economic growth rates of East Asian countries in the last four decades were not fortuitous. They spring from the intense cultures of peoples keen to acquire new knowledge and master new technology. By 2050, the 600 million people of Southeast Asia will achieve about half the per capita income of Northeast Asia.

To meet the economic challenge of China's attractiveness to foreign investments, the members of the Association of South East Asian Nations will have to combine their markets in an ASEAN Free Trade Area. It will be tough to compete against a homogeneous China with an economy that is likely to grow at between 7 and 9 percent per year. Hence the pressures on ASEAN countries to integrate their markets. Without this, they will be left out by international investors.

Full Article is at:

Michael Vatikiotis: One Asian currency?

Michael Vatikiotis

Published: FRIDAY, MAY 13, 2005

ISTANBUL: Asian finance ministers took another step toward creating an Asian monetary fund on the fringes of this year's annual meeting of the Asian Development Bank in Istanbul in the first week of May.

Appropriately, they were meeting on the edge of Europe, for it is a kind of European-style financial union that proponents of closer cooperation in Asia are striving for.

However, while the channel that divides Asia from Europe in this ancient city is narrow, the gulf that Asia needs to bridge before establishing anything like a European-style financial union is dauntingly wide.

Common wisdom has it that Asia is dreaming if it thinks economies as diverse and as far-flung as China, Japan, South Korea, the countries of the Association of South East Asian Nations and now India can emulate Europe.Your browser may not support display of this image.

Full Article is at:

What are the advantages of the euro?

When traveling in the euro area

You only have to change money once; one currency is all you need now. For instance, when you visit a museum in Italy, you can pay the entrance fee using euro coins left over from your stay in Greece; you can buy a meal in France with euro banknotes you got from a cash dispenser in Spain; etc. All this will save both time and money.

When shopping in the euro area

Prices are displayed in the same currency; they are easier to compare and help you make the right choice.

When doing business with the euro area

There is no longer any risk of fluctuation between currencies. Interest and inflation rates are much lower. You buy, sell and borrow within a larger and more competitive market. Managing your business is easier and less expensive.

Full Article is at:

The euro & you

What are the advantages of the euro for citizens?

When traveling in the euro area

You only have to change money once; one currency is all you need now. For instance, when you visit a museum in Italy, you can pay the entrance fee using euro coins left over from your stay in Greece; you can buy a meal in France with euro banknotes you got from a cash dispenser in Spain; etc. All this will save both time and money.

When shopping in the euro area

Prices are displayed in the same currency; they are easier to compare and help you make the right choice.

When doing business with the euro area

There is no longer any risk of fluctuation between currencies. Interest and inflation rates are much lower. You buy, sell and borrow within a larger and more competitive market. Managing your business is easier and less expensive.

'Advantages for Europe's international role

  • Having a single currency and an economic and monetary union strengthens Europe’s role in international fora and organisations like the International Monetary Fund, World Bank, and Organisation for Economic Co-operation and Development.
  • As a world currency, the euro is taking on an important role as an international investment and reserve currency.
  • The euro has already become a major currency in which to borrow money: issues of international securities denominated in euro now rival dollar issues.
  • Use of the euro in international trade is also expanding, reflecting Europe’s weight in the world economy.
  • A single currency makes Europe a strong partner to trade with and facilitates access to a genuine single market for foreign companies, who will benefit from lower costs of doing business in Europe.
  • The option of pricing goods and commodities in euro (such as oil and metals for example) will become more attractive over time.

Advantages for investors, who have access to larger and more liquid financial markets.

Full Article is at:

The European Monetary Union:Advantages and Disadvantages

In a general sense we can assert that the EMU provides net benefits for the euro area as a whole, though the allocation of those benefits will depend on how the different countries and their agents get adapted to the new situation.

As advantages of the EMU we can mention between others:

  • the costs decrease in transactions with the countries of the euro zone,
  • reduction of the degree of uncertainty among the currencies of each nation with respect to the exchange rate, as it should improve the quality of the information with which consumers as well as companies can take decisions,
  • greater prices transparency when all goods will be labeled in euros, that will provoke an increase in the level of competition in the single market,
  • promotion of economic integration will result in some European finances becoming more efficient.
  • greater price stability.
  • the single currency will be international reserve currency,
  • if the ECB maintains inflation under control, this will contribute to greater economic efficiency and
  • advantages in foreign policy and common security as well as with co-operation in areas such as justice and home affairs.

As a rule, we can say that the principal objective of the EMU, is to obtain prices stability. It can have large benefits for companies that are able to control their production costs, for the Public Administrations, (since with the control of the deficit, fiscal pressure will decrease), and for consumers, who will see an increase in the number of products and services with lower prices due to greater competition, and for whom it will be more inexpensive to request credit and to travel to the countries of the euro zone as they will not have to face up to the cost of changing their currencies.

But together with the advantages, disadvantages also are observed in the EMU such as:

  • impossibility of carrying out monetary policies at a domestic level, as each State, on an individual bases will be not be able to alter the exchange rates to answer to temporary economic crisis, nor modify unilaterally the national interest rates,
  • requirement to limiting substantially the use of expansive fiscal policies at a domestic level and probability of the existence of unemployment problems in some zones that will be difficult to combat due to the loss of sovereignty in monetary policy, requiring some form of transfer between the richest zones and the most disadvantaged areas of the EMU, in an attempt to achieve a sense of convergence among the members states, basically through the Cohesion Funds.

Full Article is at:

Disadvantages and Risks of the Euro

While there are many advantages to the euro, there are also some disadvantages. The cost of transitioning 12 countries' currencies over to a single currency could in itself be considered a disadvantage. Billions were spent not only producing the new currency, but in changing over accounting systems, software, printed materials, signs, vending machines, parking meters, phone booths, and every other type of machine that accepts currency.

In addition, there were hours of training necessary for employees, managers, and even consumers. Every government from national to local had impact costs of the transition. This enormous task required many hours of organization, planning, and implementation, which fell on the shoulders of government agencies.

The chance of economic shock is another risk that comes along with the introduction of a single currency. On a macroeconomic level, fluctuations have in the past been controllable by each country.

  • With their own national currencies, countries could adjust interest rates to encourage investments and large consumer purchases.
  • The euro makes interest-rate adjustments by individual countries impossible, so this form of recovery is lost. Interest rates for all of Euroland are controlled by the European Central Bank.
  • They could also devalue their currency in an economic downturn by adjusting their exchange rate. This devaluation would encourage foreign purchases of their goods, which would then help bring the economy back to where it needed to be.
Since there is no longer an individual national currency, this method of economic recovery is also lost. There is no exchange-rate fluctuation for individual euro countries.
  • A third way they could adjust to economic shocks was through adjustments in government spending, such as unemployment and social welfare programs. In times of economic difficulty, when lay-offs increase and more citizens need unemployment benefits and other welfare funding, the government's spending increases to make these payments. This puts money back into the economy and encourages spending, which helps bring the country out of its recession.
Because of the Stability and Growth Pact, governments are restricted to keeping their budget deficits within the requirements of the pact. This limits their freedom in spending during economically difficult times, and limits their effectiveness in pulling the country out of a recession.
  • In addition to the chance of economic shock within Euroland countries, there is also the chance of political shock. The lack of a single voice to speak for all euro countries could cause problems and tension among participants. There will always be the potential risk that a member country could collapse financially and adversely affect the entire system.

Advantages of the Euro

The euro is fundamentally a tool to enhance political solidarity. This political motivation began when the idea of the European Union and a single currency was first conceived. While it also has the economic effect of unifying the economies of participating countries, it ultimately does much more for the European Union.

Economically, the euro's advantages include:

  • Elimination of exchange-rate fluctuations - Any time either a consumer or a business made a commitment to buy something in a different country in the future (at future prices), they stood the chance of paying much more (or less) than they had planned. The euro eliminates the fluctuations of currency values across certain borders.
  • Price transparency - Being able to easily tell if a price in one country is better than the price in another is also a big benefit, both for consumers and businesses. With price equalization across borders, businesses have to be more competitive. Pricing still varies, but consumers can more easily spot a good deal -- or a bad one.
  • Transaction costs - This is particularly helpful for tourists and others who cross several borders during the course of a trip. Before, they had to exchange their money as they entered each new country. The costs of all of these exchanges added up significantly. With the euro, no exchanges are necessary within the Euroland countries.
  • Increased trade across borders - The price transparency, elimination of exchange-rate fluctuations, and the elimination of exchange-transaction costs all contribute to an increase in trade across borders of all the Euroland countries.
  • Increased cross-border employment - Not only can business be conducted across borders more easily, but people are more easily employable across borders. With a single currency, it is less cumbersome for people to cross into the next country to work, because their salary is paid in the same currency they use in their own country.
  • Simplified billing - Billing for services, products, or other types of payments are simplified with the euro.
  • Expanding markets for business - Business can expand more easily into neighboring countries. Rather than having to set up separate accounting systems, banks, etc. for transactions in countries other than their native one, the euro makes it simple to operate from a single central accounting office and use a single bank.
  • Financial market stability - On a larger scale, the financial and stock exchanges can list every financial instrument in euros rather than in each nation's denomination. This has further ramifications in that it promotes trade with less restriction internationally, as well as strengthens the European financial markets. Banks can offer financial products (loans, CDs, etc.) to countries throughout Euroland.
  • Macroeconomic stability - Because of the European Central Bank (ECB), introduction of the euro also helps to lower (and control) inflation among the EU countries.
  • Lower interest rate - Because of the decreased exchange-rate risk, the euro encourages lower interest rates. In the past, additional interest was charged to cover the risk of the exchange-rate fluctuation. This risk is gone with the introduction of the euro.
  • Structural reform for European economies - The participation requirements of the euro pushed many EU member states who wanted to participate to get their economies in shape and improve their economic growth. With the requirements of the Stability and Growth Pact, they will also have to maintain that control in the future, or face fines.

Disadvantages of UK Joining the Euro

By Richard Pettinger

  1. Loss of Independent Monetary Policy. On joining the EURO interest rates would no longer be set by the MPC. They would be set by the European Central Bank. The ECB look at the whole EURO economy and not what is best for the UK. Thus if the UK joined now interest rates would fall from 5.25% to the ECB rate of 2.25%. This fall in interest rates could cause and further boost the buoyant Housing Market and cause future inflationary pressures.
  2. Difficulty in getting out of a recession. On the other hand if the UK suffered a recession they would be unable to cut interest rates. It would be difficult to boost demand and get out of the recession. To an extent this occurred in 1992; the UK was in a recession but because they were in the ERM (2) they were trying to maintain a high value of the £. Thus interest rates were far too high (15%) these high interest rates exacerbated the UK’s recession.
  3. Sensitivity to interest Rates. The nature of the UK housing market means the UK economy is sensitive to changes in interest rates. Unlike European countries most UK householders own their own house, their variable mortgage is a high % of their income. Thus even a 0.25% change in interest rate can significantly affect disposable income. If the UK were to join now and interest rates were to fall by 2% it would very likely cause a further boom in the housing market which would feed through into higher inflation.

Weighing up the benefits and disadvantages of taking the euro plunge

Sunday Herald, The, Jul 15, 2001 by Mark McSherry

THERE are many benefits to companies from a single currency but the main disadvantage for any state joining the euro zone is the loss of the ability to manage its own monetary policy including the setting of interest rates.

The European Central Bank (ECB) sets one interest rate for all countries in the euro zone, regardless of the different states of economies among the 12 countries currently using the euro.

So, while the Netherlands and Ireland could benefit from an interest-rate rise to cool down their boom economies, Germany's growth has slowed to 1.3% and it would probably benefit from a cut in rates. The ECB tries to find an appropriate rate for the whole zone. Critics say this approach will never work and countries will have to suffer under inappropriate interest rates.

Full Article is at:

Asian currency problems affecting U.S.

Journal Record, The (Oklahoma City), Dec 4, 1997

WASHINGTON (AP) -- Asia's currency devaluations are hurting sales of American factory and farm products, the Federal Reserve said Wednesday in a survey showing the first economic fallout in the United States from problems overseas.

"Asian financial turmoil and currency weakness have adversely affected demand for manufactured and agricultural exports," the Fed said in its "beige book," a survey of economic conditions by its 12 district banks.

"Some districts report increased competition from imports," it said. Economists had been predicting for weeks that the sharp devaluation of Asian currencies from the Thai baht to the South Korean won would slow the U.S. economy by reducing demand for American products abroad and by slashing the price of Asian goods in the United States. Wednesday's report, based on information collected before Nov.24, is the first clear evidence that is happening. Wall Street showed little reaction. The Dow Jones industrial average rose 13 points to close at 8,032. The report was issued as the International Monetary Fund approved a record $55 billion bailout of the foundering South Korean economy, the world's 11th largest. Treasury Secretary Robert Rubin said Americans had "a vital national economic and security interest in helping Korea" and pledged up to $5 billion to the package.

Full Article is at:

A Global Currency


Today, there are almost 190 different currencies being used in the world. On a daily basis, $1.2 trillion worth of currency is traded, at the cost of billions of dollars to consumers, corporations, and governments struggling to keep their currency strong and above others. Because currency values are measured relative to other currencies, all currencies are at risk of currency fluctuations and the currency crises that often accompany radical changes in currency value. Many nations in recent history have faced these problems, currency fluctuations that have devastated their nations' economies. Key examples are Mexico, Argentina, Russia, and Thailand. In addition to nations adjusting for currency crises, corporations doing business in more than one country must deal with adjusting their prices to ensure their products sell at the correct value. As the world economy becomes more and more globalized, with corporations increasingly doing business in other nations, currency fluctuations become more and more influential in daily business. With this globalized world economy, the question arises, do we need a global currency?

Full Article is at:

Wall St. Journal's Bartley Has Synarchist Plan for World Currency and Super-Bank

by Richard Freeman

(This article appears in the July 11, 2003 issue of Executive Intelligence Review.)

Wall Street Journal editor emeritus Robert Bartley, only three weeks after his angry editorial attack on Lyndon LaRouche for exposing the "Straussian" fascist cabal in Washington, has used his Journal column to propose Synarchist measures for the economic collapse—a single, global central bank and a single world currency.

Thus Bartley, coming from a secret meeting of international bankers and financiers in Siena, Italy, let out exactly what Presidential candidate LaRouche had just warned of—a plan to create an "economic Sept. 11" with a collapse of U.S. credit and the dollar, allowing them to then impose emergency rule of international finance (see EIR, June 13). In his warning, LaRouche put his finger on what many had begun to suspect, that the colossal incompetence of especially the U.S. government and Federal Reserve, in rapidly worsening the pace of economic collapse, may reveal an underlying intent among central bank circles. Bartley's announcement is virtually a "Synarchists' answer to LaRouche" on that point.

Bartley's call for the creation of a one-world single currency, to be issued by a powerful "supranational central bank," created at the same time, appeared on June 30 in the Wall Street Journal, where Bartley was an editor for 15 years. This would be underpinned, he wrote, by a British 19th-Century-type gold standard. Bartley's raving attack on LaRouche had been published on June 9, seeking to discredit the Presidential candidate's campaign pamphlet, The Children of Satan, of which nearly 1 million copies are circulating. It exposes the Synarchist network around Vice President Dick Cheney, which has taken control of the White House on behalf of a policy of perpetual global warfare, and the common allegiance of that network to the ideas of German emigré fascist philosopher Leo Strauss.

Full Article is at:

An 'Interest-Rate Trap,' Then Deflation

The connection Bartley and the Journal have exposed is lawful, as the breakdown of the world economic-financial system is accelerating. On June 25, the Federal Reserve Board of Governors, led by Chairman Alan Greenspan, lowered the Federal funds rate by one-quarter percent, to 1%—its lowest level since 1958. The objective of bringing interest rates down to near zero, is to accelerate the huge central bank money-printing binge to unprecedented levels, in an attempt to prop up the remaining international financial bubbles, especially the real estate asset bubble in the United States. This money-printing approach will further a Weimar-style hyperinflationary upsurge. Then it is likely, as LaRouche warned in early June, that Greenspan would suddenly reverse course and jack interest rates up, pulling the plug on an "interest-rate trap" which would set off deflation and bankrupt millions of investors.

Speaking before some 400 people at a June 29 campaign event in Queens, LaRouche explained the dire consequences of this one-two punch: "There are a group of financier interests, who ...

Full Article is at:

Robert Mundell and Siena Bank

Bartley's June 30 op-ed described the proceedings of a conference entitled, "Does the Global Economy Need a Global Currency?" which had just been held at a 15th-Century castle near Siena, owned by the conference's sponsor, Robert Mundell. Mundell, who has been a mentor of Bartley's for decades, is a leading spokesman for the older elements of the international financier oligarchy, grouped around the Mont Pelerin Society, but also other institutions (more on him below). Bartley reported that one participant at this small, but strategic gathering, was former Federal Reserve Chairman Paul Volcker, who openly voiced his support for a one-world currency. Starting in 1979, Volcker applied a policy of "controlled disintegration of the economy," that devastated the U.S. economy.

Other important participants, presently known of, were former Argentine Finance Minister Domingo Cavallo, notorious for destroying that country's economy; Steven Hanke, who abrogates national sovereignty by setting up currency boards; and former Israeli Central Bank head Jacob Frenkel.

Full Article is at:

Strategic Showdown

Mounting evidence points to the fact that the world financial system is on its last legs. In the June 30 issue of a leading German daily, Die Welt, Swiss fund manager Marc Faber warned that central bankers are engaged in "extreme monetary expansion, in particular in the U.S. and Japan," which is courting calamity. In its June 30 annual report, the BIS itself warned about the increasing dangers of highly leveraged, risky financial instruments, such as derivatives, which, it said, "are increasingly traded" among large financial institutions. Trading among "large players" could "move markets in ways that could affect the cost and availability of needed hedging. In this way, idiosyncratic shocks could conceivably turn systemic," said the BIS report.

Full Article is at:

Regional Financial Cooperation Among ASEAN+3

The Asian financial crisis of 1997-98 caused extensive damage in East Asia. This experience made the East Asian countries acutely aware of the need to promote regional financial cooperation to prevent resurgence of a crisis and to attain stable economic growth. Since then, Japan has been vigorously promoting regional financial cooperation together with the other ASEAN+3 countries. With the rapid increase in economic interdependency in East Asia, regional financial cooperation is becoming all the more important.

  • ASEAN+3: 10 countries of Association of Southeast Asian Nations (Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam), China, Japan, and the Republic of Korea

Economic Review and Policy Dialogue [ERPD]


Effective economic review and policy dialogue would contribute to the prevention of financial crises through the early detection of irregularities and the swift implementation of remedial policy actions. It will also lay a foundation for providing immediate assistance, such as the CMI, in the event of a crisis.

ASEAN+3 countries have been conducting Economic Review and Policy Dialogue (ERPD) at the Ministers’ level annually and at the Deputies’ level twice a year to discuss economic and financial developments in the region.

Full Article is at:

“Towards a Borderless Asia: A Perspective on Asian Economic Integration”

Speech by, Haruhiko Kuroda


Asian Development Bank

At The Emerging Markets Forum

10 December 2005

Oxford , UK

I. Introduction

Distinguished members of the Forum, colleagues from the multilateral institutions, ladies and gentlemen:

I would like to congratulate the Advisory Board of the Emerging Markets Forum on undertaking this important initiative. I am honored to be in the esteemed company of Forum Co-Chairs, Mr. Michel Camdessuss and Mr. Fidel Ramos, as well as the many eminent speakers and participants who are here this week. My thanks to Mr. Michael Earl and Mr. Gautam Kaji for hosting the Forum at Templeton College, at a University that has inspired great intellectual debates for over nine centuries. Regional Cooperation and Economic Integration: the Four Pillars

Since the early 1990s, Asian leaders have significantly ramped up their efforts to strengthen what we at ADB view as the four key pillars of regional cooperation and economic integration: (i) cross-border infrastructure and associated software , (ii) money and finance, (iii) trade and investment, and (iv) regional public goods.

On the first pillar—subregional cooperation in infrastructure—much work is underway to connect countries through roads, ports, bridges, power and telecommunication networks, and also to facilitate trade through harmonized policy and institutional environments. The Greater Mekong Subregion, the Central Asian Republics and the countries of South Asia are all involved in such activities. And new initiatives are emerging that indicate a more pan-Asian approach. In this respect, the Mekong countries of Cambodia, the People’s Republic of China, Lao People’s Democratic Republic, Myanmar, Thailand and Viet Nam are well positioned to serve as a crucial link between South and East Asia.

II. Building on the Momentum

The questions that often come up in discussions on Asia’s regional economic integration are: How far should Asia go in its endeavors towards regional integration? Should the ultimate objective be the adoption of a single currency, as in Europe? Or should Asia’s economic integration be modeled on the North American Free Trade Area ¾ or NAFTA, as it is commonly referred to ¾ far short of adopting a single currency but creating a giant free trade area? Or, should Asia innovate its own model of economic integration, threading together some elements of both the European and North American models and adding new ones of its own? These are the types of issues that the region needs to address to have a clear vision of where we want to see the region heading in the next quarter century.

1992 Maastricht treaty. Given this magnitude of intra-regional trade, even small intra-regional exchange rate misalignments can disturb trade and investment flows and could create trade frictions among the regional economies. This indicates the need for intra-regional exchange rate stabilization in the years to come, and ultimately a single currency.

As for political will, I believe that economic interests would affect political considerations in as much as political will can determine economic outcomes. So long as the economic benefits from regional integration are substantial, political compromises could eventually be reached.

Full Article is at:

The Asian Currency Crisis and the Asian Historical Statistics Project

Takatoshi Ito

The Asian currency crisis, which started with the collapse of the Thai baht on July 2, 1997, reminded us how important the rest of Asia is to Japan, and conversely how important Japan is to the nest of Asia. With the outbreak of the crisis, economists from Japan and the West, led by specialists of international finance, began researching the Asian economies. The fact that the currency crisis increased the levels of interest in Asia among economists was one of the few positive effects amidst the flood of negative developments. It seems likely that the number of Japanese researchers and bureaucrats visiting Asia increased dramatically in 1997 as a consequence of the crisis. With a constant stream of conferences and research groups on the Asian currency crisis being sponsored in Asia, I too visited Bangkok (four times), Kuala Lumpur, Singapore, Jakarta, Seoul, and Beijing during the last six months.

Full Article is at:

The Building of Stable Economic and Financial Systems

Domestic Efforts Taken within Individual Asian Countries

(1) Reform of financial and corporate sectors

(2) Reviews of appropriate exchange rate regimes

(3) Capital liberalization and capital controls

(4) Appropriate social safety nets

Global Efforts to Strengthen International Financial System

(1) Report by G7 finance ministers to the Cologne Summit in June 1999

(2) Report of the Financial Stability Forum

(3) IMF reform

Regional Efforts within the Asian Region

(1) Promotion of intraregional trade and investment

(2) Developing regional trade-financing networks

(3) Development of regional bond markets

(4) Exchange rate stability within the region

(5) Promoting policy dialogue in the region

(6) Building a financial cooperation network in the region

The Role Japan Should Play

(1) The stable growth of the Japanese economy, and the further opening of the Japanese market

(2) The role of Japanese companies and financial institutions

(3) Assistance for efforts made domestically by Asian countries

(4) Assistance for global efforts

(5) Assistance for regional efforts

(6) Fostering the internationalization of the yen

Full Article is at:

The Asian Economy: Current Situation & Prospects

1. Current Situation of the Asian Economy

(1) Rapid recovery of the Asian economy

(a) Macroeconomic trends

The Asian currency and financial crisis dealt a heavy blow to the Asian economy, illustrated by the fact that numerous countries suffered severe recessions in 1998. In 1999, however, the real growth rate turned positive in all countries of the region, although there were disparities in the pace of recovery, which varied from 10.7% in the Republic of Korea to 0.3% in Indonesia.

Accompanying drops in exchange rates in 1998, consumer price index increased by 77.6% in Indonesia, 9.8% in the Philippines, 8.1% in Thailand, and 7.5% in the Republic of Korea, but these inflation rates fell in 1999, turning negative in some countries.

Exchange rate movements were generally subdued in 1999, and equity prices showed a general rise from September 1998. This year, however, has seen downtrends in both exchange rates and equity prices in many countries.

Full Article is at:

(b) Factors behind the economic recovery

The factors behind the economic recovery include the growth of exports, the implementation of appropriate fiscal and monetary policies, and progress in the reform of the financial and corporate sectors. In the case of the Republic of Korea in particular, which has achieved a very rapid economic recovery, factors that can be identified include the early switch to expansionary fiscal and monetary policies, that the reform of the financial and corporate sectors was pursued vigorously, and that to counter the occurrence of a credit crunch, measures (such as bond markets, and policy-based finance) were taken to supplement bank lending.

Full Article is at:

(2) Progress in financial and corporate sectors' reform

In order to stabilize their financial systems, Asian countries have been creating and improving legal systems and asset management institutions for the purpose of disposing of NPLs, and have been implementing measures such as expediting capital injection into, and the reorganization of, financial institutions, and closing or nationalizing banks that are non-viable. In addition they are reinforcing the regulation and supervision of financial institutions, including through the sequenced strengthening of prudential regulations. As a result they have largely halted the uptrend in NPLs, and in many countries these have begun to trend downwards.

Full Article is at:

(a) Resolution of non-performing loans ("NPLs")

In Malaysia Danaharta, the institution established in 1998 to purchase NPLs, has been carrying out that task, with the result that the NPL ratio of the domestic banking sector had declined to 17.1% by the end of January 2000, down from a peak of 20.4% in November 1998.

In the Republic of Korea the Korea Asset Management Corporation is buying up NPLs. The NPL ratio declined to 6.6% in September 1999, down from a peak of 8.5% in March 1999. (However, the ratio rose at the end of 1999 as a result of the stricter definition of NPL categories.)

Full Article is at:

(b) Capital injections

In Indonesia the total amount of public funds necessary for the revival of the financial sector was said to be 550 trillion rupiah in March 1999, and by March 2000 a total of some 300 trillion rupiah of capital (approx. 25% of GDP) had been injected.

In the Republic of Korea, 64 trillion won (approx. 13% of GDP) of public funds have been injected, of which capital injections by the Korea Deposit Insurance Corporation total 18.6 trillion won (approx. 4% of GDP).

In Malaysia, Danamodal, the capital-injection institution established in September 1998, had injected 6.2 billion ringgits (approx. 2% of GDP) into 10 banks by the end of June 1999.

Full Article is at:

(c) Restructuring of financial institutions

In the Republic of Korea, two commercial banks experiencing operating difficulties were nationalized in January 1998, and steps have been taken to improve their management and then privatize them, and the Financial Supervisory Commission, established in April 1998, is undertaking the restructuring of financial institutions. With regard to 12 commercial banks with capital adequacy ratios of 8% or less, it was decided that five were unable to achieve reconstruction through their own efforts and should be merged with other banks, and that the other seven could remain in existence subject to management improvements. This triggered bank reorganization, resulting in the reduction in the number of commercial banks from 26 to 17.

Full Article is at:

(d) Strengthening of regulation and supervision of financial institutions

In many Asian countries the financial supervisory agencies are being reformed, and prudential regulations are being strengthened. The latter include the strengthening of regulations governing capital adequacy ratios, and the introduction of stricter definitions of NPL categories.

With regard to NPL criteria in the Republic of Korea, for example, the end of 1999 saw the introduction of criteria for categorizing asset soundness that take future capacity to repay debt into consideration. As a result, NPL categorization is more stringent. In four ASEAN countries provisioning requirements have been raised. In Thailand and Indonesia the independence of the central banks has been reinforced.

(e) Corporate debt restructuring

To expedite the restructuring of corporate debt, Asian countries have created corporate debt restructuring frameworks.

Thailand, Indonesia, Malaysia, and the Republic of Korea have established mechanisms to facilitate negotiations directly between creditors and debtors; these are based on the principle that dealing with debt is to be between the parties concerned, and are designed to assist this process. In this way the most desirable methods of resolving these problems from the standpoints of creditors and debtors are being sought.

Full Article is at:

(f) Reform of state-owned enterprises (SOEs) in China

State-owned enterprises (SOEs) in China remain in very poor condition: burdened with the legacy of excessive employment, excessive capacity of plant and equipment, and excessive debt; lagging behind in responding to the shift to a market economy; and carrying out social functions such as providing education and health care. In 1998, 41% of SOEs made losses, and that number is gradually rising. Furthermore, many of the loans of the state-owned commercial banks are to SOEs, and therefore the operating difficulties of those SOEs is giving rise to an increase in NPLs.

In order to address the problem of SOEs we believe it is important to find a resolution based on market principles. That is, to permit SOEs and companies that are not state-owned to compete on equal terms in the market, and in that way to bring about the reallocation of resources from the low-productivity state sector to the high-productivity non-state sector.

Full Article is at:

The social impact of the currency and financial crisis

(a) Increase in poverty

The Asian economy is recovering rapidly, as described above, but the Asian currency and financial crises have had an enormous negative social impact on Asian countries. Although the degree differs according to country, province, sector, and group, the blow dealt to the people of Asia has yet to disappear. Income distribution as measured by the Gini coefficient is not deteriorating markedly, but there has been a marked increase in the number of people below the poverty line, and there has been a particularly large increase in the number of urban poor in all countries.

(b) Trends in the labor market

The substantial fall in demand for labor that accompanied the Asian currency and financial crisis has led to the movement of labor forces from cities to regional areas, from the manufacturing sector to the agricultural sector, and from the formal sector to the informal sector, causing declines in real wages in the labor market, and increased unemployment. The impact on unskilled workers in the formal sector in urban areas has been particularly large. Therefore, the impact of this has been the greatest in the Republic of Korea, where the movement of labor to the informal sector has been more limited than in other countries, and urbanization is the most advanced. In Thailand there had been an outflow of large numbers of workers from the cities to the rural areas, and rises in prices of agricultural goods were relatively small, which resulted in that the crisis had an acute impact mainly in rural areas. The economic recovery in Asian countries is bringing about increases in real wages and substantial declines in unemployment rates, but the levels of unemployment remain higher than before the crisis.

(c) Response of households and governments

In the Republic of Korea and Malaysia there were rises in the saving ratios in response to the substantial fall in income during the crisis, whereas in Indonesia there was a large fall in the ratio. In Indonesia the access by poor households to education and health care declined, and this decline was particularly marked in urban areas.

In many countries public spending on education and health (as a proportion of GDP) was reduced, but it increased in Thailand, where government programs mitigated the adverse effects of the crisis by preventing a decline in the school attendance ratio and access to health services. Though there were countries that made substantial increases in public spending for a safety net, it has been pointed out that the effects of these were limited, owing to factors such as the lack of development of safety nets in pre-crisis days, tardiness in responding to the crisis, institutional problems, and the low level of spending relative to the seriousness of poverty.

Full Article is at:

Causes of the Asian Currency & Financial Crisis

The causes of, and background to, the Asian currency and financial crises and the lessons to be learned from them have already been discussed in detail in the report of the Subcouncil on Asian Financial and Capital Markets. In this report we wish to recapitulate the main points after considering subsequent economic movements, the spillover of the currency crises on other emerging market economies, and the progress of the discussion about a new international financial architecture.

As was pointed out in the aforementioned report, the causes of, and background to the Asian currency and financial crises differ from country to country. Basically, however, there were composite factors comprising macroeconomic factors - relating to international finance (abrupt and large-scale international capital movements)-and microeconomic factors - domestic structural factors (the vulnerability of the financial and corporate sectors), meaning that the crises were "twin crises that were a combination of rapid liquidity crises through capital accounts, and crisis" in domestic financial systems. However, in addition, the following factors have also been identified as those that may have acted in a composite manner.

Full Article is at:

Lessons from the Asian currency and financial crisis

From the above analysis of the causes of the Asian currency and financial crisis, it is possible to draw the following lessons for the revival of Asian economy and financial system.

(a) The currency and financial crisis that occurred in Thailand spread rapidly to many Asian countries, and over the following year spilled over into other emerging market economies. Its effects also caused the global plunge in equity prices that started in Hong Kong, and the collapse of the U.S. hedge fund LTCM. The rapid, worldwide spread of its effects suggests that the crisis did not arise only because of problems of individual emerging market economies, but that there are aspects of the international financial system itself that should be improved. Accordingly, to assure the sustainable and stable growth by Asian countries, global efforts must continue to be made to strengthen the international financial system.

(b) The Asian currency and financial crisis has revealed the vulnerability of the financial and corporate sectors in Asian countries. It is necessary to reform the financial and corporate sectors of Asian countries in order to build stable economic and financial systems that can support sustainable economic growth.

Full Article is at:

The Long Term Prospects for the Asian Economy, and Issues to Be Resolved

The high growth of the Asian economy up to the time of the currency crisis was lauded as the "East Asian miracle," and Asia became the focus of attention as the world's growth center. However, the Asian currency and financial crisis has given rise to cautious views about the future prospects of the Asian economy.

By implementing measures such as the reform of the financial and corporate sector, and reviving its economic and financial systems, is it possible that the Asian economy will be able to sustain once again the high growth rates it achieved prior to the crisis?

(1) Strength of Asia's economic fundamentals

The strength of the fundamentals of the Asian economy, which supported high growth over the past 30 years (e.g. the high saving ratio and continuous investment in education), has basically remained unchanged since the Asian currency crisis. By overcoming the vulnerability in the financial and corporate sectors that was revealed by the currency crisis, resource allocation should be made more efficient, and it makes possible to utilize the strength of the fundamentals more effectively.

The Asian economy's biggest strength is its high saving ratio. In all cases except the Philippines and Taiwan, the domestic saving ratio ((GDP – total consumption) / GDP) in Asian countries exceeds 30% - the highest level in the world, including the industrialized countries. (However, as a result of the currency crisis, the saving ratio in Indonesia fell to 24% in 1998.) The ratios in Malaysia and China exceed 40%, and in Singapore the ratio is over 50%. In the nine Asian economies (4 ASEAN countries, the NIEs, China), the average saving ratio is 37%, almost double the world average of 21%.

(2) The IT revolution and the Asian economies

Owing to the existence of the Internet, which permits speedy, low-cost, wide-ranging communication, the IT revolution is expected to have a major impact on the existing ways of business and production, and indeed on our society and economy as a whole. In view of this, when examining the long-term outlook for the Asian economy, it is one of the important points to assess the kind of impact the IT revolution will have on the Asian economy, and whether Asia can make effective use of the advantages offered by the IT revolution.

Full Article is at:

Development of communications infrastructure

For Asia to take advantage of the IT revolution, it is essential to resolve the problem of underdeveloped communications infrastructure. A particularly important issue is the development of the communications infrastructure in rural areas, where the ratio of telephone installation is low relative to urban areas, and another factor that has been identified is that disparities between countries in terms of their communications infrastructure are growing wider. It is essential to reduce these disparities between countries and provinces.

On the other hand mobile communications through the use of cellular phones are spreading rapidly in Asia, as networks are relatively easy to construct compared with those for fixed-line telephones, and deregulation is fuelling competition. It is forecast that cellular phones will be widely used as terminals for the Internet, raising the possibility that the spread of cellular-phone would resolve the bottleneck to the spread of the Internet.

Full Article is at:

The economic impact of the IT revolution

It is said that continuous investment in education and relatively equal distribution of income were factors that have brought about high growth in Asia. These factors should also be beneficial for Asia amid the spread of the Internet. To ensure that advantage, it will be necessary to increase computer literacy and develop human resources by such means as improving school education and professional training.

In addition, the IT revolution will increase the volume, speed, and scope of transactions of all kinds, and enable information to be transmitted and reproduced instantly, enabling the efficiency of resource allocation to be greatly enhanced. This should make it possible to put the soundness and potential of Asia's economic fundamentals to more effective use.

Full Article is at:

Dealing with risks associated with the IT revolution

On the other hand it has been pointed out that the IT revolution will give rise to new risks in such areas as the security of transactions, the stability of financial and economic systems, and consumer protection. In view of this, it is important to provide sound environment like making rules. Particularly important is the fact that without a resolution of the problems in the financial and corporate sectors that were revealed by the recent currency and financial crisis, for example the lack of modernity and transparency in management, the progress of the IT revolution could pose considerable danger. For example there is the risk that if erroneous information were to leak into markets it could be reproduced and propagated instantaneously; it is essential that transparency be enhanced by such means as ensuring the disclosure of accurate corporate information.

Full Article is at:

The catch-up growth pattern of Asian economies

Empirical analyses of the growth pattern of Asian economies, particularly those of the NIEs, show that these economies achieved high growth through inputs of resources such as capital and labor, and that the raising of production efficiency (increase in total factor productivity) at a macro level did not make a particularly large contribution to economic growth. They also question whether it will be possible to sustain high growth based on this input-dependent growth pattern.

This assertion has aroused a variety of counterarguments, including against the empirical analyses that provide the grounds for it. The most important point is whether or not - despite the fact that East Asia has hitherto followed this input-dependent growth pattern - this means that the East Asian economy will be unable to sustain high growth in the future.

Full Article is at:

Transformation to a productivity driven growth pattern

For the NIEs and ASEAN countries to maintain relatively high growth, they must transform from an input-dependent growth pattern to a productivity driven growth pattern of industrialized countries. The means of doing that include increasing investment in research and technology development, nurturing science, engineering, and managerial human resources, and fostering supporting industries by such means as establishing policies for small and medium-sized enterprises (SMEs).

However, the fact that the economy of the Soviet Union failed in its attempt to transform to a productivity driven growth pattern, in spite of large-scale investment in research and technology development and human-resource development, suggests that although the accumulation of human capital is a condition for a transformation of growth pattern, it is not a sufficient condition in itself.

Full Article is at:

Intraregional linkage of the upgrading of industrial structures

Another important point to note when debating the growth potential of the Asian economy is the dynamic upgrading of the industrial structure in Asian countries, and its intraregional linkages.

In the course of their growth, Asian countries have been carrying out dynamic change in their industrial structures. That is to say there has been a shift from primary to secondary industry and then to tertiary industry, and within manufacturing industry a shift from labor-intensive industries to capital-intensive industries, and further to technology-intensive industries. Moreover, this structural change has been occurring at a very rapid pace. In addition, this upgrading has not been confined to within single countries; existing industries with a comparative advantage have been transferring from one country to the next after a certain time lag. We believe that it is this continuous upgrading of industrial structures and the way in which it has happened in a chain within the region that have brought about the sustained high growth that Asia has achieved for more than 30 years.

Full Article is at:

Response to change in the comparative advantage

The comparative advantage in Asia is changing significantly as a result of factors such as market entry by latecomer low-wage countries. Given these circumstances, for Asian countries to maintain high growth it is essential for each of them to make ceaseless efforts to change its own industrial and export structure, and it is essential that, through these efforts, they transform their growth patterns from an input-dependent to a productivity driven type. However, it has been pointed out that one of the factors behind the recent currency crisis was that some aspects of Asian countries' efforts to upgrade their industrial structures in response to changes in comparative advantage were inadequate.

An example is provided by the proportion of the value added by the manufacturing sector in Thailand - where the currency crisis started - accounted for by industries such as food and textiles. This fell from 66% in 1965 to 43% in 1995, but was nevertheless high next to Indonesia (47%) and the Philippines (44%). This lags in making a transformation in the industrial structure, and is believed to have lowered the confidence of foreign investors.

Full Article is at:

Construction of industry network within the Asian region

What will be important to Asian countries if they are to make ongoing progress with the upgrading of their industrial structures, including through the introduction of foreign investment, is to shift from the formation of exporting and manufacturing areas based on cheap and abundant labor, to the formation of concentrations of companies and industries based on an independent technological base.

Japanese and other foreign companies have a major role to play in the development of domestic industries in Asian countries. By transferring technologies to local industries and sharing technologies with them, foreign companies can convert the relevant technologies to ones that are adapted to the difficult environments in developing countries. As part of this process of sharing and developing technologies within the Asian region, Japanese companies should seek out new possibilities for the 21st century; some Japanese companies are already making moves of this kind.

Full Article is at:

The Deepening of Interdependence in the Asian Economy

The pattern of trade in 1997 of ten Asian economies (4 ASEAN countries, the NIEs, China, and Japan) shows that 46% of exports and 50% of imports were intraregional (under the impact of the currency crisis, in 1998 these figures were 41% and 52% respectively, while in 1980 they were 32% and 32%). With respect to foreign direct investment, in China's case 67% was from within the region (1998). As a result of the chain of upgradings of industrial structures in the Asian region, very close trading and investment relationships have arisen, and this is creating a value-chain structure of trade and investment within the region.

It is forecast that higher economic growth than in other regions will be maintained in Asia, and that the expansion of the regional market will continue. It is also expected that as a result of the progress of free-trade agreements such as for the ASEAN Free Trade Area (AFTA), the degree of intraregional dependence in Asia will increase still further in the future.

Full Article is at:

The Building of Stable Economic & Financial Systems

In view of the causes and lessons of the currency crisis examined in the previous section, in order to build stable economic and financial systems that can support sustainable economic growth, we believe that approaches must be made from three levels: (1) domestic efforts at the national level, (2) global efforts to strengthen the international financial system, and (3) regional efforts within the Asian region.

An important point that was made clear by the currency crisis is that as a result of the increasing interdependence in trade and investment in the Asian region, if a currency crisis occurs in the region it can spread rapidly to many countries, and there is a risk that this will cause intraregional economic activity to contract in a vicious cycle. To build stable economic and financial systems that can support sustainable economic growth, region-wide efforts are indispensable.

Domestic Efforts Taken within Individual Asian Countries

(1) Reform of financial and corporate sectors

In the wake of the Asian currency and financial crisis, many Asian countries have been taking vigorous steps to rehabilitate their financial and corporate sectors (including through the liquidation of failed financial institutions, recapitalization of financial institutions, disposal of NPLs, and restructuring of corporate debt). Although there are disparities between the countries concerned, as a result of these efforts the NPL ratios in many countries declined in 1999, and certain progress has been made in the reform of their financial and corporate sectors, reflected in the fact that gradual progress in restructuring corporate debt is beginning to be made. Nevertheless, many problems remain unresolved. We believe that the continued rehabilitation and strengthening of those sectors is also an important issue to be addressed. Furthermore, the fiscal situation in these countries is deteriorating as a result of factors such as the cost of rehabilitating the financial sectors, and therefore fiscal consolidation is also an important issue.

From government-led to market-led reform

It has generally been the case that national governments have played the leading role in the steps that have been taken hitherto, such as the liquidation of failed financial institutions, recapitalization of financial institutions, resolution of NPLs, and restructuring of corporate debt, owing to the need for rapid rehabilitation of financial sectors amid the continued economic and financial turbulence that followed in the wake of the currency and financial crisis. Some observers take the view that countries that have proceeded with the reform of their financial and corporate sectors under government guidance, such as the Republic of Korea, have made more rapid progress. Nevertheless, now that the financial and economic turbulence has subsided, and reviews are now proceeding with the strengthening of market functions of the financial sector and the reorganization of financial institutions, we believe that financial and corporate sector reform should switch to being market-led. Countries such as the Republic of Korea are already moving in this direction.

Role of indirect finance

A characteristic feature of the financial systems of Asian countries is the very important role played by indirect finance (i.e. bank lending) in financial intermediation. Since disclosure and other systems tend to be undeveloped in developing countries, indirect finance is regarded as being more appropriate than direct finance. Also, for Asian countries to develop supporting industries that have fundamental technologies, the supply of funds to local SMEs is important. In view of this, indirect finance is likely to continue to play an important role in the financial systems of Asian countries, particularly ASEAN countries, and thus the most important issue to address when reforming their financial and corporate sectors is that of restoring and strengthening the financial intermediation functions of financial institutions.

Specific measures

(a) Strengthening the functions of financial institutions

Foreign-investment-led industrialization of the type seen in ASEAN countries has enabled even developing countries with undeveloped domestic financial systems and industrial bases to pursue industrialization by circumventing those problems. But, as a result of this the problem of the immaturity of local financial institutions and local companies has persisted. For ASEAN countries to achieve ongoing industrial development while actively utilizing foreign direct investment it is also necessary for them to overcome these problems by putting the management of local financial institutions and companies on a sound basis, and strengthening

(b) Promoting finance to SMEs

SME lending is important for developing local industries such as supporting industries that shoulder grounds for fundamental industrial technologies. However, given that many SMEs have lower creditworthiness than large-scale corporations and lack adequate collateral for borrowing, we believe to foster the supply of funds to them, some kind of policy is necessary.

(c) Developing domestic bond markets

Asian countries have high saving ratios but owing to the lack of development of domestic capital markets, particularly bond markets, domestic savings flow overseas for long-term investment. Therefore it would be possible to reduce short-term foreign-currency exposure by developing domestic bond markets and making effective use of these savings at home. The development of domestic bond markets is important from the standpoint of debt management, insofar as it promotes borrowing of long-term debt denominated in home currencies.

development of secondary markets; thus the reform of stock markets is also an important issue to address.

(d) Strengthening the operation of bankruptcy laws

Asian countries have been tackling the development of bankruptcy laws in the wake of the currency and financial crisis, with the result that today all of them have a bankruptcy-legislation infrastructure with at least bankruptcy and composition provisions. For example Indonesia has introduced reconstruction-type composition proceedings and has established a commercial court to take overall charge of bankruptcy procedures, and Thailand has made revisions to its bankruptcy laws to include the introduction of reconstruction-type corporate-rehabilitation procedures, and the establishment of a bankruptcy court.

(e) Strengthening corporate governance

With respect to corporate governance in Asian countries, problems that have been pointed out include family-type corporate governance based on concentrated corporate ownership structures, and intimate relationships between governments, financial institutions, and companies. Some observers insist that it is necessary to switch to capital-market-type corporate governance. However, as is stated in the OECD's principles of corporate governance, there is no single model for good corporate governance. There are various models corresponding with the stage of economic development and social and cultural forms in individual countries, and it has been pointed out that in the process during which developing countries catch up with the industrialized countries, family-type

(2)Reviews of appropriate exchange rate regimes

It is not possible to make any generalizations about the kind of exchange rate regimes that are appropriate for Asian countries, as the countries differ in regard to aspects such as their economic scale, dependence on trade, trade structure, and the stage of sophistication of their financial systems. Furthermore, this would change in response to the development of their financial systems.

The exchange rate regimes of developing countries began with fixed exchange rate systems, and as monetary policy grew more sophisticated, and financial and other systems developed, they shifted to more flexible exchange rate regimes, moving gradually towards floating exchange rate systems. Asian countries appear to be in that transition phase at present.

(a) Fixed and floating exchange rate regimes

One argument that emerged in the course of overcoming the Asian currency crisis is the view that because international capital flows have become very vigorous, the only exchange rate regimes that can be maintained are either freely floating exchange rate regimes or very hard pegs (e.g., currency boards).

(b) Present exchange rate regimes in Asian countries

Since the currency crisis, Malaysia and Hong Kong have officially adopted fixed exchange rate regimes, Singapore and China have officially adopted managed float systems, and other countries have adopted free floating regimes. (Singapore's managed float is based on a basket of currencies, and China's exchange rate is virtually pegged to the dollar.)

(c) Currency-basket systems and virtual dollar-peg systems

We believe that a persuasive option for many Asian countries is an exchange rate regime in which the currency is held stable against a currency-basket made up of components such as the dollar, the yen, and the euro, each being assigned a weight in light of trade and other economic factors. Such currency-basket regime should also ensure flexibility by such means as having a sufficiently wide band in which to move.

Looking at exchange rate systems in countries throughout the world showed us that many countries whose systems are officially floating exchange rate regimes utilize what are to all intents and purposes exchange rate stabilization policies. We observed that there was a tendency to maintain currencies stable against a support of currency-basket systems.

(3)Capital liberalization and capital controls

(a) Appropriately sequenced capital liberalization

The fact that economies that maintain wide-ranging capital controls and are not integrated into the international financial system were not greatly impacted by the recent currency crisis suggests that appropriately sequenced capital liberalization is important for emerging market economies. When carrying out capital liberalization it is essential not only to have sound macroeconomic policies, but also to develop the domestic financial system, including through the strengthening of the regulation and supervision of financial institutions. In addition, long-term capital liberalization should precede short-term capital liberalization, and it is particularly vital to remove regulations on direct investment as quickly as possible. In this regard, there was a view in the Subcouncil that Asia can keep a relatively high growth rate without foreign capital because of the high domestic saving rate. Another view held that even direct investment may also cause selling pressure against local currencies when companies try to cover their local currencies investment position in forward markets against the risk of a currency devaluation.

(b) Control of capital inflows and outflows

In economies in which progress has already been made with capital liberalization, but the financial systems are insufficiently developed, what should be done as regards controlling capital inflows and outflows?

systems are insufficiently developed, these kinds of controls of capital inflows are a possible option in the event of sudden large-scale short-term capital inflows.

(4)Appropriate social safety nets

(a) The necessity for creating social safety nets

For social safety nets to function well during times of currency crises, it is necessary to put appropriate ones in place prior to the occurrence of the crises. If governments want to develop such safety nets once a crisis has erupted they will be too late, or the nature of the safety nets will be inadequate, owing to factor such as the time taken to set up the required systems, and limitations on funding and personnel owing to the need to use these to combat the crisis.

(b) Appropriateness to the situation in each individual country

An adequate social safety net can guarantee basic human needs, but as Asian countries are at differing stages of economic development and have different cultures and traditions, they have developed their own unique systems and practices to resolve social problems. In view of this, when developing social safety nets it is necessary for them to conform with the realities of the situation in each country.

(c) Technical assistance from international development financial institutions and other sources

We believe that technical assistance from international development financial institutions and industrialized countries is important in the development of social safety nets referred to above. In addition, in the development and operation of social safety nets it is important to engage in dialogue with NGOs and other entities outside the government sector.

Global Efforts to Strengthen International Financial System

(1) Report by G7 finance ministers to the Cologne Summit in June 1999

Based upon the understanding that in order to reduce the risk of currency and financial crises it is necessary to reform the international financial system, G7 finance ministers issued a report entitled "Strengthening the International Financial Architecture" at the Cologne Summit.

This highly comprehensive report covered the following matters.

- Strengthening and reforming the international financial institutions and arrangements;
- Enhancing transparency and promoting best practices;
- Strengthening financial regulation in industrial countries;
- Strengthening macroeconomic policies and financial systems in emerging markets;
- Capital control in emerging markets;
- Improving crisis prevention and management, and involving the private sector; and
- Promoting social policies to protect the poor and most vulnerable.

(2) Report of the Financial Stability Forum

Steps to carry out the proposals in this G7 finance ministers' report are currently being vigorously pursued in such fora as the IMF, the G-20, and the Financial Stability Forum.

- Improving the surveillance of financial markets by the official sectors and international institutions.

(3) IMF reform

The reform of the IMF, the institution positioned at the core of the international financial system, is indispensable for building an international financial system that will not be vulnerable to currency crises. We consider the following aspects to be important in carrying out reform of the IMF.

Regional Efforts within the Asian Region

(1) Promotion of intraregional trade and investment

(a) Regional arrangements to complement the multilateral trading system

The fact that the upgrading of industrial structures has spread in a chain within the Asian economy, and also that strong interdependence within the region has formed in a natural manner, suggests the importance of regional efforts in

(b) Moves towards regional agreements within Asia

In ASEAN the formation of the ASEAN Free Trade Area (AFTA) will mean that tariffs among six ASEAN nations (Thailand, Indonesia, Malaysia, the Philippines, Singapore, and Brunei) will in principle be lowered to a maximum of 5% by the year 2002, and that tariffs among all the AFTA nations will be abolished completely by the year 2018. Although there may be complications caused by the handling of exceptional goods, we believe that it is highly likely that the AFTA agreement will bring about the creation of a free-trade area in Southeast Asia by the year 2018. We believe that in the course of that, the subsequent phased expansion of AFTA to ASEAN +3 (Japan, the Republic of Korea, China) will be an important issue to be studied within the East Asian region.

(2) Developing regional trade-financing networks

During the currency crisis, because of Asian companies' heavy dependence on financial institutions for trade financing, the contraction of lending impeded the export activity essential for economic recovery. Because of this, Japan, other industrialized countries, and the international institutions provided financial assistance to facilitate trade financing. In addition, Japan paid particular attention to strengthening and promoting trade financing in the region by providing financial and technical assistance to governmental export-import banks, and through related measures such as strengthening collaboration between those banks.

(3) Development of regional bond markets

(a) Invigoration of the region's international bond markets

The development of domestic capital markets, particularly bond markets, is an important issue for Asian countries to address. However, factors such as the lack of maturity of domestic institutional investors mean that it will be some time yet before all of these countries have sophisticated bond markets, and the domestic bond markets are restricted with respect to their scale and the availability of funds. On the other hand, taking into consideration factors such as the saving surpluses in the Asian region as a whole, and the future growth of institutional investors in Asian countries, we believe that there will be growing demand for regional bond markets in which Asian investors can engage in pricing within the Asian time zone.

Therefore we believe that in order to establish a mechanism to facilitate the recycling of long-term capital from countries with saving surpluses to those with shortages in the region, it is necessary to make region-wide efforts to develop regional bond markets, including by invigorating the region's international bond markets (e.g. Tokyo, Hong Kong, and Singapore). It is noteworthy that many participants from Asia pointed out in this Subcouncil's discussions the importance of developing the regional bond markets.

(b) Issues to address

Participants pointed out that in developing regional bond markets it is necessary to examine the development of new instruments for the sharing of exchange risk by borrowers and lenders or of derivatives markets for hedging exchange risk; rating agencies with extensive knowledge of economic conditions in the region; credit-enhancement schemes for bond issuance; securities settlement and clearing systems; and the promotion of the issuance of bonds denominated in local currencies by international development financial institutions.

Regarding the development of securities settlement systems in the region, we should consider the differences among countries in the stage of development of such systems and the fact that the building of multinational networks will create complex systems and be costly, and will require time for adjustments to be made between countries, and that in the near term the volume of cross-border securities transactions may not be sufficient to justify those costs. In view of these considerations, we are interested in the phased approach adopted by Hong Kong, which intends to have direct bilateral linkages with other securities settlement systems at a similar stage of development. (Hong Kong has built bilateral linkages between its central securities deposit institution and its counterparts in with Australia, New Zealand, and the Republic of Korea.)

(4) Exchange rate stability within the region

(a) Examination of mechanism for regional exchange rate stability

In Europe a variety of attempts - including the EMS - were made to ensure stability of exchange rates within the region, until finally monetary union was achieved in January 1999. Factors indicated as being behind this are the European economy's high degree of dependence on trade, and the strong interdependence in Europe.

(b) Multilayered and phased approach

In view of factors such as the substantial differences in the stage of economic development of the countries of Asia, when considering a regional exchange rate stability mechanism it would - as in the case of the formation of a free-trade area - be both effective and realistic to adopt a multilayered and phased approach in which bilateral agreements and regional agreements are combined.

(c) Long-term perspective towards a common currency

Since the Asian currency crisis, the view has developed that Asia should aim to have a common currency partly because it has become clear that the linkage of East Asia's economies is growing.

However, compared with Europe there are considerable disparities in Asia with regard to stage of economic development and other aspects, and economic integration within ASEAN is still only at an intermediate stage. Factors such as these make it unclear at this stage whether Asian countries would derive a net benefit from participating in a common currency and abandoning independence in their monetary policies. Furthermore, there is as yet no political consensus

(5) Promoting policy dialogue in the region

(a) Building networks for multilayered policy dialogue

In order to build a currency stability mechanism within Asia it is important to promote policy dialogue within the region, so as to ensure that individual countries' macroeconomic and other policies are not managed in a way that is inconsistent with the relevant exchange rate level.

Also, in the course of policy dialogue within the region it will be important that all Asian countries share expertise in such areas as the building of frameworks for

(b) The ASEAN + 3 framework

In the Joint Statement on East Asia Cooperation issued at the ASEAN + 3 (Japan, China, and the Republic of Korea) summit held in Manila in November 1999, it was agreed to "strengthen policy dialogue, coordination and collaboration on the financial, monetary, and fiscal issue of common interest." That was an extremely important first step towards fostering policy dialogue within the Asian

(c) The Japan-China- Korea framework

Japan, China, and the Republic of Korea have major roles to play in furthering regional cooperation in the Asian region, and we consider it necessary to promote policy dialogue actively by means of a Japan-China- Korea framework.

(6) Building a financial cooperation network in the region

(a) Building networks for multilayered financial cooperation

Considering factors such as the growing interdependence in the Asian region and the possibility of the contagion of currency and financial crises within the region, we believe it to be indispensable to have a regional financial arrangement to complement existing international financial cooperation mechanisms, including the IMF. Such a framework for regional cooperation between monetary authorities would also contribute to the stability of exchange rates within the Asian region. Many of the participants from Asia who joined in this Subcouncil's discussions pointed out the necessity of a complementary regional mechanism.

(b) The Chiang Mai Initiative

At the ASEAN + 3 meeting of finance ministers held in Chiang Mai in May 2000, agreement was reached on the following matters, based on the agreements at the November summit.

The Role Japan Should Play

As became clear from the contagion of the currency crisis and the course of the recovery, the Asian economy is strengthening its economic and social unity through a process of deepening interdependence.

Japanese companies have played a major role in this process of deepening interdependence. Japanese companies are building cross-border procurement, production, and sales networks within the Asian region, and the Japanese economy is deeply integrated into the region. Deepening interdependence with the Asian economy could produce a variety of beneficial effects for Japanese society, affected as it is by the aging of its population and a falling birth rate.

(1) The stable growth of the Japanese economy, and the further opening of the Japanese market

The stable growth of the Japanese economy is of very great importance to the economy of Asia, and Japan is exerting every effort in bringing about its own economic recovery. Asian countries have particularly high hopes and expectations with regard to the increase of Japan's imports.

(2) The role of Japanese companies and financial institutions

(a) Direct investment by Japanese companies has played a major role in the process by which the industrial structure within Asia has been upgraded in a chain-like sequence. In addition, by building procurement, production, and sales networks in the region, Japanese companies have helped to nurture the development of local industries. They have also contributed to the recovery of the Asian economy by such means as supporting local subsidiaries experiencing funds shortages after the currency crisis by means of loans and capital injections, including through the use of the Overseas Investment Credits from Japan Bank for International Cooperation ("JBIC"), and by other measures such as shifting their orientation from domestic demand to exports, and increasing local procurement ratios.

(3) Assistance for efforts made domestically by Asian countries

(4) Assistance for global efforts

(5) Assistance for regional efforts

(6) Fostering the internationalization of the yen

With regard to the internationalization of the yen, in April 1999 a report by the Council on Foreign Exchange and Other Transactions pointed out that strengthening the role of the yen as an international currency would be conducive to the stability of foreign exchange markets, particularly those in Asia, and in turn to the economic stability of Asian countries.

Participants from Asia pointed out that to increase the weighting of the yen in currency-basket systems operated by Asian countries: it is necessary to increase the convenience of investing and raising funds in yen; the internationalization of the yen should be fostered through regional cooperation; and it is necessary to develop direct foreign exchange transactions between the yen and Asian currencies.

Concrete measures to foster the internationalization of the yen were announced at the end of 1998 and subsequently implemented, including the start of a competitive price auction of Financial Bills (FBs) and the tax reform. In compliance with the wishes of Asian countries, further steps must be taken to expedite the internationalization of the yen, including fostering the improvement of Japanese financial and capital markets and the development of settlement systems.


As the upgrading of industrial structures has spread in a chain-like sequence among Asian countries, multilayered close trading and investment relationships have been created, and progress is being made with the building of cross-border procurement, production, and sales networks by Asian companies. In consequence, Asian economies have reached an unprecedented state of interdependence. What is more it is projected that East Asia will continue to achieve high economic growth relative to other regions, and the degree of dependence on intraregional trade will continue to increase.

The recent Asian currency and financial crisis has meant tremendous hardship for many people in Asia. However, the crisis made them search long and hard for solutions to overcome this disaster and this present endeavor has brought real sense of solidarity to the people in Asia. The crisis has strengthened cooperation within the Asian region, and may provide an opportunity to build a more stable and prosperous Asia in the 21st century.

In Asia, relationships between "the center" and "the periphery," and "great nations" and "peripheral nations," have existed since antiquity as fundamental models. However, the high growth and increasing regional interdependence that has occurred over the past 30 years in Asia show that Asia is entering a new era in which the countries of the region are linked mutually through networks, and the IT revolution is accelerating this trend. In the 21st century it is incumbent upon us to build within Asia a multilayered regional cooperation network to adapt to this change.

Full Article is at: