Ignoring the maxim that you should make hay while the sun shines, Southeast Asia is taking only baby steps toward badly needed financial and economic integration despite the region's brightening economic prospects.
Even as global investors beat a door to China and India, the main decisions taken by Asean finance ministers at their annual meeting this week were to mount road-shows to raise the group's profile and to explore linkages between securities markets.
To be sure, host Singapore had billed Wednesday's talks as a low-key occasion to take stock of progress since the 10 leaders of the Association of South East Asian Nations adopted a roadmap in October for the financial integration of the group by 2020.
What's more, portfolio capital inflows are buoyant, currency markets are calm and regional growth is set to quicken this year.
So ministers felt no compulsion to act urgently.
But one business consultant said this was precisely the time for ASEAN to speed up a range of reforms to attract more foreign capital to the region and make sure it stays.
Capital inflows have shrivelled since the 1997 Asian financial crisis, with ASEAN no match for the pulling power of China's huge, booming market.
"ASEAN markets have had a good year, but it's in their interest to make sure that when the yield goes up somewhere else there are still people interested in ASEAN," the consultant said.
Ministers patted themselves on the back for setting up a regional capital market training programme. Another idea floated was to explore creating a pan-ASEAN index of 100 top stocks.
But can ASEAN, with its fierce respect for consensus, make progress fast enough to expand the potential of financial markets that, in the words of Singapore Deputy Prime Minister Lee Hsien Loong, are small and fragmented by international standards?
"Integrating our economies requires hard work, political will and, often, tough decisions," Lee said.
FRAUGHT WITH RISK: Lee said Asean's 2020 deadline for creating a single market for goods, services and capital was a long time away; so once one or two countries were ready to press ahead, they should not have to wait for the other members of the group, he argued.
This cuts to the heart of the perennial ASEAN problem: how to knit together an eclectic mix of states that runs the gamut from first-world democracy Singapore to poor, military-ruled Myanmar.
ASEAN's other members are Indonesia, Thailand, Malaysia, the Philippines, Brunei, Laos, Vietnam and Cambodia.
Ministers got a rude reminder from the private sector that this diversity, a source of pride to ASEAN, can be a big put-off for the investment community.
A single focus during road-shows planned for later this year will fail because Asean's canvas is too wide, said Sanjiv Misra of the US-ASEAN Business Council's financial services working group.
"The notion of having an Asean road-show to the US is fraught with risk that it is not relevant to anyone at the end of the day," Misra told reporters after a meeting with ministers.
On the economic front, too, some analysts fret ASEAN could hit turbulence if China's high-flying economy suffers a hard landing instead of gliding smoothly to a slower growth path.
Ministers expect their economies to grow between 5.5 percent and 5.9 percent this year, up from five percent in 2003, bolstered by booming exports of commodities and raw materials to feed China's thrumming industrial machine.
The Philippines' exports to China last year grew by 58 percent; Thailand's by 55 percent, Singapore's by 41 percent, Indonesia's by 30 percent and Malaysia's by 22 percent.
Asean's overall share of China's imports jumped to 11.4 percent last year from 8.6 percent in 1997.
But Morgan Stanley for one frets that China may raise interest rates and crack down further on capital inflows to prick an investment bubble that has become so big it could threaten political stability.
"If China slows, as I now suspect, Asia's nascent economic recovery could be in serious trouble. That remains a key risk in the second half of 2004 in my view," Stephen Roach, the bank's chief economist, said in a recent report.
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