00:00Now continuing our discussion on adopting a single currency for ASEAN,
00:04we catch up with Dr. Uma Murthy, lecturer at the Faculty of Business and Law at Taylors University,
00:10on the key benefits as well as challenges to overcome in order to make the idea a reality.
00:17So the key advantage is that by adopting ASEAN single currency,
00:22it's definitely going to reduce transaction costs, investment, and also tourism costs.
00:30And also that will eliminate exchange rate volatility,
00:35which is currently affecting small ASEAN economies.
00:41And other advantage, if you look at it, it will strengthen the ASEAN identity
00:46and making a global influence as a unifying economy block.
00:51And it's also, if you look at it, we can be able to develop price transparency
00:58and it can have a more efficient capital flow.
01:02Uma also highlighted the challenges in implementing a single currency for ASEAN
01:07with member states of different strengths and capacity.
01:11Countries like Malaysia, Singapore, Thailand, they are more advanced than Laos, Myanmar, and Cambodia.
01:18So we have an issue of GDP per capita, infrastructure quality.
01:26So to understand a single ASEAN currency,
01:30that works best when the economy are similar in terms of productivity,
01:36inflation, labor mobility, and also institutional strengthness.
01:41So what ASEAN can do to overcome these challenges is by invest in infrastructure,
01:48education, connectivity in a country like Cambodia, Laos, Myanmar, and Vietnam,
01:55increase their intra-ASEAN trade, investment, skill sharing,
02:00and also create a funding program for lagging economy through ASEAN Development Fund.
02:07So we have an issue with the debt-to-GDP ratio because ASEAN countries have a different GDP-to-debt ratio.
02:18Likewise, if you look at it, Malaysia, we have like 66% and whereas if you look at Brunei, they are debt-free.
02:24So without proper coordination, single currency would be destabilized.
02:33And this is what we have witnessed when Greece nearly destabilized the Eurozone in 2010.
02:41So we have to learn from the past experience.
02:44So what ASEAN can do is that ASEAN can set a common fiscal rules,
02:51for example, like set a budget deficit not exceeding 3% of the GDP,
02:57agree on the debt ceiling, strengthening national audit institution,
03:03financial transparency, establish independent oversight to monitor the compliance.
03:09So what a ASEAN can do is that ASEAN can do with the cost of the cost of the cost of the cost of the cost of the cost of the cost of the cost of the cost of the cost of the cost of the cost of the cost of the cost of the cost of the cost of the cost of the cost of the cost of the cost of the cost of the cost of the cost of the cost of the cost of the cost of the cost of the cost of the cost of the cost of the cost of the cost of the cost of the cost of the cost of the cost of the cost of the cost of the cost of the cost of the cost of the cost of the cost of the cost of the cost of the cost of the cost of the cost of the cost of the cost of the cost of the cost of the cost of the cost of the cost of the cost of the cost of the cost of the cost of the cost of the cost of the cost of the cost of the cost of the cost of the cost of the cost of the cost of the
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