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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. Theadvantages 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.

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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 regardingdevelopment 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.