From economic and political perspectives, evaluation of the process of convergence is significant for a number of reasons. We focus here on the economic and political economy aspects of convergence, leaving actual ‘politics’ and specific international-relations-related topics, such as peace issues, to other contributions.
First, convergence is important in that the greater the economic integration between countries, the more dependent they will be on the economic growth of their partner countries. This type of convergence is the most direct; a recession in other ASEAN countries would have little effect on Singapore if it did not trade much with ASEAN. But because it does, Singapore is to some degree dependent on ASEAN (and, of course, has an incentive to urge its partners to embrace sound economic policies). Hence, because of this real convergence, there exists a second (and related) reason why convergence is important: policy externalities. As policies in the region will affect a specific country according to the degree to which it ‘converges’ with its neighbours, it has a strong incentive to co-operate with them. This type of this argument can also be applied independent of convergence if one expands the analysis to the sphere of political relation: if a country pursues potentially-destabilising economic policies or a dangerous foreign policy, the instability that might be created could have critical spill-over effects with negative implications for regional development, even if that country has not converged economically with its neighbours.
Third, greater economic convergence makes it easier to launch initiatives, both with economic and political intentions, in regional forums when countries are closely integrated. For example, one could argue that the ASEAN Free trade Area (AFTA) would have been impossible if the ASEAN countries had not already attained a certain degree of economic(and policy) convergence. The fact that a few of the new member-states were not highly integrated with ASEAN – either in terms of economics or politics – has made it more difficult for these countries to fully co-operate in AFTA and other initiatives. Moreover, the single Market Program in Europe and, Especially, monetary union would not have been possible without highly advanced degrees of convergence in Western Europe. The Maastricht Treaty even required a considerable degree of convergence in measurable quantitative macroeconomic indicators (the ‘Maastricht Criteria’) before countries could qualify for monetary union.