Asia-Pac moves towards greater economic integration

The APEC (Asia-Pacific Economic Co-operation) 2009 summit upped its efforts last week to strengthen economic integration in the region. While APEC has always strived for greater economic integration in order to increase trade, improve investor confidence and reduce business costs across the region, in today’s globalised and more interdependent world, Asia-Pac leaders are considering plans to accelerate this integration. In particular, APEC is advocating enhancing supply chain connectivity and making it easier for businesses to launch by getting access to credit and trade across borders. As these plans take effect, the region’s banking and payment systems will have an important role to play.
 
APEC should perhaps look to Europe to see how payments innovation is supporting economic integration there. The single euro payments area (SEPA) provides a framework where all electronic payments are considered domestic, and where a difference between national and intra-European cross border payments does not exist. As Asia-Pac moves towards greater economic integration, surely discussions around the development of common financial instruments, standards, procedures and infrastructure to enable economies of scale will follow?  Only time will tell whether the anticipated reduction in costs to the European economy of moving capital around the region will come to fruition with SEPA, but other regions will be monitoring progress closely to see if similar mandates should be considered in their parts of the world.