Europe has done it. Latin America is talking more and more about it. Six Persian Gulf states also want a common currency of their own. Can Asia be far away from a similar move? It's a question that will tantalize economic policy makers from Jakarta to Washington for years to come. After all, the region is steadily moving toward greater integration.
On Jan. 1, six members of the Association of Southeast Asian Nations, or ASEAN, created a free-trade area. In the works for a decade, the step is expected to boost exports and foreign investment.
A logical next step would be a single currency, say academics and businesspeople. It could eliminate the exchange-rate gyrations holding back growth and scaring away investors. It could lead to greater convergence, bringing borrowing costs, fiscal policies and inflation trends into line with one another. It also could counter growing competition from China and India.
That explains why ASEAN is on record agreeing that "a customs union, a common market and the establishment of a common currency" are "distinct possibilities" over time. Economists think others in the Asia region, like New Zealand and Australia, also should consider a single currency.
Yet don't bet on Asia adopting one anytime soon. Even people whose job it is to foster greater cooperation in Asia harbor some deep-rooted doubts. "Eventually it will occur, but I don't foresee it in our lifetime," Rodolfo Severino, ASEAN's secretary-general, told the Associated Press last week.
Why a common currency won't happen quickly isn't a mystery: Asia's economies and cultures are as disparate as they come, particularly Southeastern ones. Among ASEAN's 10 members, you have functioning electoral democracies and authoritarian regimes ruled by Communists or military leaders. Pushing their economic trends together is a logistical nightmare. Singapore's annual per capita income is over US$22,000, while in Cambodia it's US$300.
Asians also are reluctant to surrender any control over their economies. Getting them on the same page is a struggle in the best of times. But after the 1997 crisis, some leaders are leaning more toward closing their economies to the outside world than opening them. If Asia learned anything from 1997, it's how vulnerable nations can be to the whims of investors and capital flows. Few want to become even more vulnerable.
Look at how things have gone in the more developed economies of Europe. Euro notes and coins may be circulating along with deutschemarks, lire and francs, but Europe's grand experiment still has much to prove. Not least of which is how one central bank will conduct monetary policy for 12 nations experiencing a wide spectrum of growth rates. One manifestation of this question has been a weak euro.
The challenge of getting Asia's economies in a row will make Europe's experience seem trivial. Some economies here are still reeling from 1997, when weak banking systems, excessive government debt, low interest rates and a lack of transparency set living standards back a generation. When the Maastricht Treaty -- which set the euro in motion -- was signed in 1992, Europe wasn't emerging from the worst financial meltdown in 50 years.
ASEAN, as a group, is notoriously slow-moving. Its 33-year history provides few examples of political consolidation.
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