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Local currency bond markets in emerging Asian economies have expanded dramatically since governments took steps to end the currency and maturity mismatches that savaged borrowers in the region's financial crisis nearly 20 years ago. Encouraged in part by regional cooperation programs such as the Asian Bond Markets Initiative, the value of local currency government and corporate bond sales has grown fourfold in the past decade, helping to fund much-needed infrastructure development and protect businesses from global financial shocks. However, much more needs to be done to strengthen market infrastructure and institutions, address inconsistent policies and regulations, and enhance corporate governance. This paper presents evidence that better macroeconomic performance and stronger institutions help develop larger local currency bond markets and also create conditions for the growth in local currency sales of corporate debt and bonds with longer maturities. Regional integration can be stepped up to support the key determinants for developing efficient local currency bond markets in emerging Asia.

Asia's economic significance has risen substantially over the past several decades. Further economic development in ASEAN, with its massive population, requires very efficient utilization of resources and cross-border cooperation. While ASEAN has much to gain from economic cooperation and integration, it faces non-trivial growth and integration barriers: (i) an infrastructure development gap; (ii) an education gap; and (iii) a market institutions gap, especially in financial sectors, which is very much related to governance issues such as government inefficiency and policy ineffectiveness. The paper offers an overall perspective on maintaining sustainable and inclusive development in ASEAN - the broad trend and the barriers. Three lessons emerge for ASEAN to seize the economic opportunities. First, the governments can gain great mileage in sustainable development from building sound market institutions, catering to financial and economic stability, and establishing sound health care and redistribution programs. Second, governments should promote deeper regional economic integration, invest in digital infrastructure and wireless access, and invest in training workers and companies to tune into the virtual technology. They should partner with the private sector to multiply the gains from the opportunities arising from crises. Finally, governments should embrace digital−IOT−AI technology while considering strategies to address the associated challenges.

In this paper, we propose a panel approach in the construction of the Asia-Pacific Regional Cooperation and Integration Index (ARCII) to strengthen the index's ability to track the progress of economic integration in the region over time. Panel-based procedures are employed in imputing missing values, normalizing raw data, and deriving dimensional and subdimensional weights via principal components analysis. Findings suggest the pace of integration in Asia was broadly steady over the 11-year sample period (2006-2016). However, modest gains have been made as a majority of economies in the sample have moved up in their levels of regional integration from 2006 to 2016. Of the six dimensions featured in the ARCII, trade and investment and movement of people are the main drivers of regional integration, while the money and finance dimension was the weakest link. Based on global normalization, Asia comes second to the European Union (EU) in progress on regional integration, but in recent years a few Asian economies have broken through to the top tier dominated by the EU economies.