Long-Run Trade Competitiveness and Exchange Rate Misalignments in ASEAN-5

Abstract

Abstract: After the Asian Financial crisis of 1997/98, ASEAN-S (Indonesia, Malaysia, the Philippines, Singapore and Thailand) strongly promoted exportled policies to revive their ‘economies. This paper attempts to compare the long-run trade (exports) competitiveness of the ASEAN-S economies and to measure how much of the long-run trade competitiveness. has been transferred into domesti growth. The study further evaluate the exchange rate policies of the ASEAN-S counties by examining the exchange rate misalignments. Overal, these findings suggest that Singapore has the smallest amount of misalignment and is ranked as the most competitive country. This would imply that “prudent control” of the exchange rates ideal for achieving a stable trading environment, allowing fo transfer of wealth from trading (exporting) into domestic growth.