Comparative Politics, Year I

THE IMPLICATIONS OF AN ASIAN COMMON MONETARY UNIT

The existence of the European common monetary unit, the Euro, present in the
context of the European Union at some of its members that were capable of meeting some
conditions for its existence appears, of course, to be a viable example for other countries in
the world, moreover, for those that concentrate upon international commerce as means of
sustain the economy of the state. The Asian continent, represented by Japan and China as
dominant in the production and exportation would serve as an alternative.
However, it is important to analyze the implications of the existence of such a
monetary entity in that region, since the idea of a common monetary unit supposes a certain
correlation between the states that decide to approach it.
Firstly, as in the case of the European Union, there has to be a framework to
bound these states together, and stimulate them to walk upon a common path in regards to
decision-making, both relating to political and economic decisions.
Then, the level of development, in order for such a monetary unit to be
introduced, has to present at least common tendencies, if not close similarities, since it would
be impossible to impose such a monetary unit in the context of an underdeveloped agrarian
community in a remote region of Taiwan, obliging them to buy, for example, a bus ticket to
the city, with the same price that a Chinese living in Shanghai would pay.
In addition, the differences in development would render such a measure not
viable, moreover, if the development potential of the countries is not the same- supposing that
a common monetary unit can be implemented within an organization where the liberty of
circulation of capital, persons and goods exists, the isolated or poorer regions would provide
a more cheaper workforce, making it more attractive to investors and determining the
migrations of the companies, causing disequilibrium within the organization. The effects of
this migration was for example perceived in France when the Renault trust chose to migrate to
Turkey and Romania, leaving a city that gravitated around the factory, in bankruptcy. The
advantages of these measures will be perceived in the moment Romania would meet the
conditions of adoption the Euro, and the salary of a factory worker here would be of around
800 E, while in France would have been of at least 1500 E.
However, the idea of globalization and the optimization of costs, in order to
provide a better product both in quality and in price for the customer, can be accounted for
these negative consequences.
On the other hand, the differences, on the Asian continent, between the level of
development of the states both in education, proportion of people living in the urban area,
means of production, would render such a measure impossible.
 Also, taking into consideration the political organization of the state,
determining the Asian states to converge as to reach the common goal of prosperity would be
impossible, since we have different governments among the states- democratic, authoritarian
and communist, the communist presenting the possibility of being more influential given the
economy and perspectives of development of China. As such, there would be no equality but
rather only discrepancies between states.
Moreover, the level of industrialization unequal, it would suppose that China
would stock the markets of the other countries, moreover of those with a low level of
development, in this manner rendering close to inexistent their perspectives of development of
production.
As such, even if the implementation of a common monetary unit among the
Asian states would seem to aim to the development of the region, in fact it would only be
benefic for the states that are already well developed in the region and therefore prepared and
capable to flood the market, such as China or Japan.
Looking at the approach globally, a common monetary unit, implying freedom
of circulation of goods, persons and capital, since it cannot be perceived nor implemented
without it, would present much interest for the other developed states in the world, such as the
United States and the European Union, which would be tented to invest in those less
developed Asiatic regions where the workforce would be cheaper, and in this manner
functioning as development factors also.
To conclude, the implications of a common monetary unit are debatable and
depend very much of the perspective and the one that approaches it. Even if it seems
attractive, it is more likely to be regarded as an utopia, since on one hand the different
governments of Asia would find it difficult to make their points of view regarding
development converge, while also sovereignty would not be easily granted to a supra-national
organization that would implement such a policy that would permit a common monetary unit
to exist.