Jakarta. A senior economist recently said that ASEAN had been on the right path by not following the European Union or EU’s footsteps in adopting a single currency and one-size-fits-all customs rules.
Lili Yan Ing, the secretary-general of the International Economic Association (IEA), said that ASEAN had gained an “upper-hand position” compared to the regional blocs, as European nations all locked themselves to the euro. The EU’s current customs system also slaps the same tariffs on goods imported from outside the region.
“ASEAN sees the EU as a role model, but we are not mimicking the EU. We understand the disadvantages of a customs and monetary union. We are not advocating for ASEAN to proceed toward that direction,” Lili told the recent Jakarta Globe Insight forum.
“Being integrated in trade and investments is the best ASEAN can achieve by not going into [such] unions.”
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ASEAN’s stance of non-alignment paints the Southeast Asian grouping as a “strategic partner”, unlike the EU’s tendency to lean towards the US, according to Lili.
As ASEAN shies away from a single currency, Lili highlighted the need to lift non-tariff measures to improve the group’s economic integration. She said: “That is by harmonizing standards and simplifying rules of origin,” the latter referring to the criteria that determine where a product is from.
On monetary cooperation, discussions between Southeast Asian central banks put more emphasis on enabling countries to trade in local currencies to bypass the dollar. Indonesian businesses can now settle their trade transactions in rupiah, ringgit, or baht with Malaysia and Thailand, respectively.
A former Indonesian trade official Iman Pambagyo said that while ASEAN is “not like the EU with a single currency”, the Southeast Asian club needs to unify its understanding on their agreements. ASEAN gatherings have resulted in countless accords, including those meant to grant “facilitative measures”.
“But when we [members] go back to our own capitals, we create the national variation of those regional agreements. We have to minimize that,” Iman, the ex-director-general for international trade negotiations, told the same conference.
ASEAN reported that its total trade had hit $3.8 trillion in 2024. About 21.4% of that figure had come from intra-ASEAN trade that year.
At home, Indonesia’s rupiah has been facing persistent pressure against the greenback since the Iran war erupted. Bloomberg spot market data showed that the rupiah stood at Rp 17,848 per dollar as of Thursday at 2:13 p.m.
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