Asia needs more economic co-op in changing global economy: ADB

Asia needs to strengthen its economic cooperation with the shift in relations between the countries in the continent and the changing global economy, an ADB report said today.
"Asia needs stronger cooperation now more than ever. Regional trade and financial integration have ratcheted up over the past decade and closer cooperation is needed to counter geopolitical risks while surveillance and financial safety nets can address contagion," said Iwan J Azis, Head of ADB's Office of Regional Economic Integration.
With the economy of China growing and driven by domestic shocks, economic growth in Japan, Korea, and ASEAN is increasingly correlated to China, the report highlighted.

Also, the region urgently needs to improve its insurance and other disaster risk financing to address high human and economic toll of floods, droughts, and other increasingly common natural disasters that have cross-border impacts.
"Asia and the Pacific is more vulnerable to natural hazards than any other region in the world, with financial costs alone totaling about USD 53 billion annually over the last 20 years.
"However, in 2013 only 7.6 per cent of those economic losses were insured, so costs are threatening to outstrip governments' ability to finance recovery. Long-term damage to infrastructure, businesses, farms, and homes can push many back into poverty," the report said.

Business continuity planning, enhanced technical and institutional capabilities, and better coordination among public authorities are among the key priorities for developing disaster risk financing markets and strengthening financial resilience, it said.

As per the report, Asia's intra-regional trade share has risen to about 54 per cent in recent years.
Asia-Pacific's trade share with other emerging markets outside the region continues to rise while the trade share with the US and Japan continues to decline, it said.
It said intra-regional bank credit flows, particularly from Japan and Australia to other Asian countries is emerging as an important source of stable external financing.