Title: Kerangka Kerja Kebijakan Moneter dengan Sasaran Akhir Kestabilan Harga
1Asia-Pacific Finance and Development Center
Biennial Forum Shanghai, 22 September, 2006
Regional Cooperation and Innovation Development
Dr. Aslim Tadjuddin Deputy Governor Bank
Indonesia
2Outline
- Introduction
- Financial Cooperation
- Initiatives and Suggestions to Foster the Asian
Financial Integration - Sustainable Development and Innovation
- Conclusion
3 4Economic Integration
- Economic and financial regional integration are
vehicles to achieve the ultimate goal of economic
cooperation which is the stable and prosperous
region. - Geographical proximity and strong economic
relations among countries have been the main
driving force behind the establishment of
regional economic integration.
5 6Driving factors for integration
- Politic
- Market
- Asian financial integration should mainly be
driven by market force.
7Economic Integration is no panacea
- Economic and financial integration will increase
the flow of capital within the region. - The increasing financial integration also
contains risks that relate to the possibility of
sudden and huge capital reversal.
8Financial integration among Asian economies is
still limited
- Financial market integration in Asia has lagged
substantially behind the trade integration.
Therefore, surpluses of saving are largely
intermediated through financial markets outside
Asia. - Major foreign lenders in Asian banking industry
are mainly American, European, and Japanese
Institutions. - Major foreign investors in Asian capital market
are still from non-Asian economies.
9Approaches for financial integration
- Through establishment of Regional Financial
Arrangement, or - By establishment of currency union as in Europe
- Due to the large differences in the structure and
economic performance of Asian countries remain,
the launching of the RFA is more appropriate for
the first stage that latter on could be followed
by other measures, including the adoption of a
common currency.
10Three types of RFA
- RFA with single currency basket
- RFA without a uniformed of fixed exchange rate
system - RFA that focuses only on strengthen the financial
system - Adopting the RFA with the support of a single
currency basket (Asian Basket Currency/ABC) as a
reference for each local currency would promote
intra-regional exchange rate stability and that
in turn would promote intra-regional economic
growth.
11- Initiatives and Suggestions to Foster the Asian
Financial Integration
12Initiatives to establish resource
pooling
- The Asian Money Fund (AMF)
- Chiang Mai Initiative (CMI)
- Bilateral Swap Agreement (BSA)
13Capital market development
- EMEAP countries launched the Asian Bond Fund
program - ABF1
- ABF2
14Suggestions to improve
monetary policy coordination in the region
- Creating a forum to formally the exchange rate
policy dialogue and information exchange among
East Asia economies. - Strengthening cooperation and coordination among
central banks in maintaining exchange rate and
financial market stability by looking possibility
of conducting coordinated and concerted
intervention in the foreign exchange market.
15- Sustainable Development and Innovation
16Innovation and the role of government
- With innovation, an effective and efficient
technique or method would be continually created. - Government and private sector must create a good
climate for growing innovation. - In Indonesia, the central bank obligate banks to
spend certain amount of fund to enhance human
development. - Sharing knowledge among countries in the region
plays a key role as well in propping up
innovation.
17The Importance of Intellectual Property Right
System
- A good system will provide confidence to
innovators that their rights will be respected. - A balance must be pursued between intellectual
property protection and sharing innovation
benefit. - Adoption of Anti-Counterfeiting and Piracy
Initiatives by APEC economies will reduce trade
of counterfeit goods, protect against
unauthorized copies, and prevent the sale of
counterfeit goods.
18Indonesias measures in establishing and
improving the intellectual property right system
- Member of the World Intellectual Property
Organization (WIPO) and in 1997 became full party
to the Paris Convention for the Protection of
Intellectual Property. - Signing
- The Trade Related Aspect of Intellectual Property
Right (TRIPS Agreement). - The Nice Agreement for the International
Classification of Unclassified Goods and
Services, the Strasbourg Agreement Concerning the
International Patent Classification. - The Budapest Treaty on the International
Recognition of the Deposit of Microorganisms.
19Conclusions
- The regional economic cooperation and
coordination becomes more relevant than before,
because Asian economies are facing new external
risks like global imbalances, US dollar
depreciation, and raising volatility in capital
markets. - Securing of world wide intellectual property
protection is an important element to foster
innovation development that in turn will bring
considerable economic benefits to the region. - The APEC member economies to work hand in hand to
promote public awareness through education and
sharing of knowledge.
20Thank you