The collapse of Lehman Brothers triggered a global credit shock that struck with surprising force in Asia. Before Lehman’s failure, many looked to the region as a bastion of economic stability. After all, Asia had high growth rates, large trade surpluses, and substantial foreign reserves. Its large companies were well capitalized and the books of its banks mostly free of the subprime loans and doubtful investments afflicting their Western peers.

Yet Asia couldn’t avoid the economic fallout from the troubles of Europe and the United States: the region’s stock markets plummeted, its currencies weakened, and its exports to the West slowed considerably. The impact of the crisis on the financial markets and real economies of Asia has largely ended speculation about its full “decoupling” from the West. The ties still bind. But the developments of the past few months reinforce our view that Asia should move more aggressively than ever to secure its economic future and improve its resilience in future crises. Asian governments must accelerate their plans to integrate regional economies—for instance, by boosting demand at home, speeding up intraregional trade and investment, and strengthening local and regional financial markets. Only through such initiatives can Asia hope to minimize...