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7/28/2019 2011042102-ongkengyong-110503222240-phpapp01

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ASEAN Community 2015 -beginnings, opportunities and challenges

Ambassador Ong Keng YongDirector, Institute of Policy Studies, Singapore


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Opportunities (1970s / 1980s)

China's development under Deng Xiaoping'sstrategy

Multinational companies strategy of manufacturingin low-cost locations

Japan's strategy of shifting its production ofmanufactured goods to Southeast Asia

Oil-rich countries cash flow (from dramaticincrease in oil prices)

European economic integration and offshoremanufacturing

USA's globalisation drive


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ASEANs Response

Focus on economic cooperation

Develop economy of scale

Liberalise trade and open market (ASEAN FreeTrade Area or AFTA)

Strengthen vision of one economic region

Capitalise on Southeast Asia's strategic

geography and inherent strengths


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All led ASEAN Leaders to move collectively

First, do the ASEAN Economic Community as it was easier tostart and the business/market conditions already there

Later, ASEAN Leaders added the ASEAN Political-SecurityCommunity and the ASEAN Socio-Cultural Community

- End of Cold War

- Globalisation

- China's economic growth

- Trade Liberalisation

- Free flow of capital

Different world . . . 21stCentury


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Towards an ASEAN Community

ASEANCommunity

ASEANVision2020

BaliConcord

II

ASEAN Vision2020

(1997)

A concert of Southeast

Asian nations, outwardlooking, living in peace,stability and prosperity,bonded together inpartnership in dynamicdevelopment and in acommunity of caring

societies

Bali Concord II

(2003)

An ASEAN Community shall be

established comprising three pillars,namely political and security

cooperation, economic cooperation, andsocio-cultural cooperation that areclosely intertwined and mutually

reinforcing for the purpose of ensuringdurable peace, stability and shared

prosperity in the region


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Strategic Moves

ASEAN Leaders recognise the challenges andconstraints of building ASEAN Community by2015

ASEAN need to be seen as serious

ASEAN Leaders moved quickly on: Having an ASEAN Charter

Accelerating economic integration Enhancing ASEAN connectivity


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ASEAN Charter:

Meeting Global Changes

ASEANs way of operating: With change:

Informal and flexible

Deadline not always clear

Implementation

subjective/non-

confrontational

Low priority

Inadequate resources

Formal (ASEAN Charter)

Clear targets (2015;

roadmaps with milestones)

Rules-based and

accountability (report card

to ASEAN Leaders)

Compliance-oriented

(success stories)


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Trade Liberalisation and Market Opening

Started with AFTA

Supplemented by FTAs with key tradingpartners

China's offer to set up Free Trade Area withASEAN led to ASEAN-China FTA, then FTAswith Korea, Japan, Australia/New Zealand, India

Such momentum created a high profile on theinternational scene for ASEAN and facilitatedASEAN's broader diplomatic initiatives


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ASEAN CommunityAPSC AEC ASCC

Enhance rules andgood governance

Enhance integrationand competitiveness

Enhance well-beingof ASEAN citizens

Narrowing the Development Gaps

People-to-People

ConnectivityTourism, Education,

Culture

Physical

ConnectivityHard Infrastructure

Transportation,Logistics Facilities, ICT,

Energy (Power Gridand Pipelines), Special

Economic Zones

Institutional

ConnectivitySoft InfrastructureTrade facilitation,

ASEAN Single Window,

Investment facilitation,Services Liberalisation,

Regional TransportAgreements, Capacity-building programmes

ASEAN Connectivity

Resource

Mobilisation


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Opportunities in ASEAN

Global Trade

ASEAN total trade with the world in 2009:

US$ 1.537 trillion Growth of 19% of total trade from 2008 to 2009

despite global economic slowdown

Foreign Direct Investment (FDI)

Total net inflow to ASEAN in 2009: US$ 39.6 billion


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ASEANs Challenges

Implications of enlargement

Narrowing development gap

Slow progress on ASEAN agenda: decision makingby consensus

Bigger countries in ASEAN projecting beyondASEAN

Myanmar Affect engagement with ASEAN Dialogue Partners


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ASEANs Challenges

Competing claims/interests of countries in theSouth China Sea

Bilateral problems remain, eg border disputes

Ambitions of ASEAN Dialogue Partners, eg

China, USA


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ASEANs Challenges

Chinas rise

Indias role

USAs distractions Japans stagnation

EUs inward-looking orientation


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Going forward

National ego (big country/small country)

Bureaucratic culture (corruption/use

technology) Domestic politics (leadership changes)

Insufficient institutional set-up to championASEAN agenda (only small secretariat in Jakarta)

Rule of Man; not enough Rule of Law (ASEANCharter)


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Lessons learned

Stay open and inclusive (ASEAN economicintegration)

Be transparent (regular meetings at all levels -Leaders, Ministers, Senior Officials, Experts)

Give sense of ownership/stakeholdership(ASEAN agenda)

Adhere to principle of equality (equal shares ofoperational budget)


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Lessons learned (2)

Focus on practical projects first (start withcapacity building, then economic cooperation,later political/security issues)

Pick low-hanging fruits and have early harvest(ASEAN-China FTA)

Use existing mechanisms as much as possible;

avoid new structures till all ready to accept


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Success depends on

Implementing plans and projects in a timelymanner

Keeping the "ball rolling"; no harm with smallsteps and small yields

Building on any "common factor"

Getting the top leadership to weigh in and evendrive projects, where necessary

Sharing the "dividends"


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Bear in mind

Political will is everything

Design of plan or mechanism not at fault

Seize the opportunity Capitalise on any favourable circumstances

Engage positively those who matter


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Thank You.

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