The ASEAN summit in Singapore is closing down and leaders of the grouping have a number of issues to tackle at this years meeting, mainly which is Myanmar, the “problem child” in the group as it has been called.

But putting Myanmar aside, ASEAN is in the process of coming closer together economically and will resemble a European Union style trade bloc in the not to distant future I believe. That’s all fine and great, and I think that will work to the point where you will see greater integration and cohesiveness amongst the grouping, and, benefit all economies rich and poor.

But there have been discussions, rumors, whatever you want to call them, about ASEAN going even further and adopting a single currency similar to the Euro. And while this is just pure speculation at this point, I think if it were to be seriously raised in the meetings that there would be a lot of resistance to it.

But, putting all this aside for the moment, say ASEAN were to move to a single currency similar to the Euro. Some see a lot of similarities between ASEAN and Europe; I see differences – big glaring differences.

First being the economic disparity amongst the landscape of ASEAN countries. When the EU really got going, the economies and per capita levels of individuals of Germany, France, the United Kingdom and other founding countries, were much more “even.” ASEAN nations and citizens of ASEAN play on a completely different level. Having 10 nations convert to a single currency I think would be disastrous…Europe’s integration to the Euro wasn’t necessarily smooth sailing at first, but eventually the underlying strength of their economies did allow things to pick up and now look at where the currency is.

With ASEAN, if a similar event was to happen, I don’t think things would recover like they did in Europe where you’d see the ASEAN currency rebound to the strength like the Euro has vs. the U.S. dollar. Again, that’s just my pure honest opinion and nothing more. A “gut” feeling of mine (and my gut serves me pretty well).

The economies of ASEAN are strong, but not that strong to weather a weak debut. Technically it would be a nightmare as well.

So I don’t seem like I am “ASEAN bashing,” there is one strength I believe a single currency would bring and that would be easier trading for investors and individuals in regional stock markets. Regionally speaking, the markets are moving “closer” together. A single currency would open up access across the board literally for people to put money in just about every major bourse in ASEAN. That could be a plus…but unfortunately I think it is the only advantage of a single currency, and it’s not enough to beat out the disadvantages a single currency would bring.

Maybe 30 years from now, we’ll see this actually become a reality as economies of ASEAN develop, but for now, it’s every currency for itself.

Curtis Bergh

Labels: ASEAN, ASEAN Leaders Summit, currency