Brexit may reshape Asian regionalism

WHILE the United Kingdom's decision to leave the European Union will inevitably spark off economic and financial uncertainty, the true implications of this decision may be more profound and far-reaching than initially realised. In fact, it may resonate as far as Asia. Specifically, Brexit may compel Asian leaders to rethink their integration strategies.

Policymakers of Asia have often looked towards the EU in their quest for deeper regional integration. Indeed, the EU has been the epitome of institutionalised integration for several years now with several milestones including a single market and common currency along with the free movement of goods, labour and services. That the EU's financial and trade integration was accompanied by notions of shared sovereignty and efforts at collective institution- building only served to emphasise the allure of the EU model.

Unlike the EU, regionalism in Asia has largely been a market-driven affair, the onset of the 1997 Asian Financial Crisis providing a strong impetus for closer economic integration and policy coordination. A consequence of this was the consolidation of the 10-member Asean grouping, culminating in the implementation of the Asean Economic Community last year. However, disparities in socio-economic and political development among Asian states are much more stark than those in the EU.