Harnessing the Benefits of Regional Cooperation and Integration

The Asia and Pacific region's rapid growth into a global economic powerhouse is driven by deepening regional cooperation and integration. According to ADB’s Asian Economic Integration Report 2025, the region has made significant strides in trade, investment, finance, and movement of people. Despite strong regional cooperation, growing geopolitical tensions and global fragmentation call for renewed attention to these benefits to cushion external shocks. Modernizing free trade agreements, upgrading regional financial arrangements, and ensuring digitalization will contribute to economic prosperity, tackle the climate crisis, narrow the digital divide, and navigate geopolitical challenges in the coming decades.

Transcript

The rapid growth of the Asia and Pacific region into a global economic powerhouse can be fully understood through the crucial role of deepening regional cooperation and integration.
 
In recent decades, the region has made remarkable strides in integration through the accelerated growth in trade, investment, movement of people, and―importantly―knowledge.
 
Asia's trade integration is drawing closer to that of the European Union, with intraregional trade shares increasing by 10 percentage points from 1990 to 2023. 
 
Foreign direct investment within Asia has grown, with 52% of FDI from 2013 to 2023 coming from within the region, boosted by investments in services, digital industries, and green sectors. 
 
Financial integration has lagged behind trade and investment. 
 
Yet it remains a critical conduit for translating the region’s existing and future savings into regional investments.
 
Expanding markets and income has made Asia a crucial source of remittances and tourism, beyond pre-pandemic levels. 
 
For several economies in the region, they have become financial lifelines.
 
While the region is backed by strong regional cooperation and partnership, growing risks of geopolitical tensions and global fragmentation calls for renewed attention to the benefits of regional cooperation and integration in better cushioning external shocks.
 
The region needs to broaden, deepen, and modernize its free trade agreements and investment treaties.
 
Also, existing regional financial arrangements must upgrade their effectiveness to safeguard the region’s financial stability.
 
Digitalization must ensure it helps facilitate the secure movement of people, money, and ideas; and lower transfer costs.
Tourism can thrive only if improved connectivity―along with liberal air transport and visa policies―can expand regional travel opportunities.
 
With these efforts, regional cooperation and integration will increasingly contribute to economic prosperity, help tackle the climate crisis, narrow the digital divide, and navigate geopolitical challenges in the coming decades
 
To learn more, please read the Asian Economic Integration Report 2025.