Reprinted with permission. All rights reserved by the Bangkok Post.

Asia has emerged as an engine of growth in the world economy. It accounts for more than 30% of world GDP and contributes half of global growth. This impressive performance has been associated with the region's firm integration into the global economy, as well as its emergence as a leading producer of the goods the world demands.

Now, in order to further strengthen its global role, as well as to face its own challenges, Asia needs to integrate its financial markets internationally. Asia has successfully reduced vulnerabilities through the build-up of reserves. The next step should be to develop more resilient national and regional financial markets. This would further reduce vulnerabilities by improving the channeling of savings and investment.

Financial integration was the topic of a high-level seminar in Singapore last week, jointly sponsored by the Monetary Authority of Singapore and the IMF. It brought together Asian leaders who are key to this process. The seminar produced a lively exchange of views and provided an opportunity for the IMF to underscore its strong support for Asia's regional and global integration—including through increased Asian representation at the Fund.

The benefits from financial integration—for Asia, and for the world—are clear. They represent the next important step in Asia's increased, overall integration in the global economy. Regional and global financial integration will help deepen financial markets and strengthen the resilience of Asian economies to external shocks. It also will facilitate the better use of Asia's huge pool of savings, including for investment in the region. And this will enable the region to participate in the global economy in a more balanced fashion.

Asian countries have already made significant progress in regional financial integration, although local financial market development has progressed more rapidly than regional financial integration.

At a national level, countries are working on developing their capital markets by encouraging the issuance of investment-grade securities, strengthening corporate governance, and relaxing regulations that restrain the role of institutional investors.

At the regional level, initiatives are under way to strengthen financial ties: the Asean-plus-3 roadmap for spurring the development of a regional bond market, and the Chiang Mai network of bilateral swap arrangements. The IMF supports these efforts and is prepared to assist if it can.

Greater regional integration should not—and need not—come at the expense of Asia's increased engagement with the rest of the world. Indeed, Asia's economic success in the postwar era has been the result of its growing participation in the global economy. As the international community approaches a critical stage in the Doha Round of trade negotiations in December at Hong Kong, Asia has the opportunity to assume a leadership role. A successful conclusion to the Doha Round—with its implications for further opening global markets and strengthening the multilateral trading system—will bring huge benefits to all developing economies. Such leadership would deepen Asia's influence in the global economy.

At the same time, the reality of Asia's role in the world economy should be reflected in its influence at international institutions like the IMF. Our review of the Fund's medium-term strategy, which is to be published this month, offers an excellent chance for progress on this issue. Asia's representation in global institutions like the Fund falls short of the region's weight in the global economy. I firmly believe that Asia has a valid case for a stronger voice in the international community.

With respect to the IMF, the management of the Fund recognises the importance of rebalancing representation to adequately reflect Asia's weight. The issue is complex, touching on the interests of many stakeholders. But it must be addressed—sooner rather than later. The international community must recognise that this is not a zero-sum game. A greater Asian role in the IMF will not only benefit Asia, but will also strengthen global financial cooperation. With political will, it should be possible to find a solution.

The IMF has had a long history of engagement with Asia, and our medium-term strategy also underlines how this relationship will evolve and deepen. In the advanced economies, we will continue to remain engaged in policy dialogue and advice, paying particular attention to the systemic implications of country policies and developments. In the emerging markets, we will continue to support progress with the reform agenda through dialogue, policy advice, and technical assistance. For the low income countries, the IMF will maintain its efforts to promote poverty reduction, achieve the UN Millennium Development Goals, and adjust to external shocks.

The relationship between the IMF and its members must always adapt to changing circumstances.

As Asia's role in global economic cooperation increases, there are opportunities ahead for partnership between the region and the IMF.