AN INTRODUCTION TO

ASEAN INTEGRATION
 AGENDA
Information about ASEAN
Information about the AEC
Key motivation of the AEC
Benefits
Costs
Progress of the AEC
Progress
Challenges
Solutions
Conclusion
Questions to ponder
INTRODUCTION TO ASEAN
 COUNTRIES
1. Brunei Darussalam
2. Cambodia
3. Indonesia
4. Lao PDR
5. Malaysia
6. Myanmar
7. Philippines
8. Singapore
9. Thailand
10. Vietnam
 REASON
Former:
they formed an alliance to not only secure the region against the threat of communism, but
to give Southeast Asia a cohesive voice on the Cold War issue.

Current:
international trade, border security and collaboration with other countries like China and
South Korea.
 STRENGTH
(1) GDP - $2.5 trillion
More than enough volume to support intra-ASEAN
Trade
Production
Jobs
Fuel economic growth that will be good for both foreign investors and locals

(2) Collaboration of military forces

Improve security and draw in more investment as well
 WEAKNESS
(1) Erosion of culture
Each ASEAN country is unique
Apart from trade, they have always been able to develop in silos
Opening of cultural barriers will erode national culture and identity
Profitable to modify culture to fit modern needs
Intentional Westernisation of Korean pop culture
Culture and entertainment in Boracay
Inevitable

In a region where most countries are still developing, the bottom line matters more.
THERE IS MORE THAN MEETS THE EYE
 WEAKNESS >>> STRENGTH

The ASEAN economy is not

(1) Integrated and cohesive
(2) Competitive, innovative and dynamic
(3) Connected and lacks in sectoral cooperation
(4) Resilient, inclusive, people-oriented and people-centred
ASEAN ECONOMIC COMMITTEE (AEC)
 WHAT IS THE AEC?

A blueprint that is supposed to help ASEAN grow as a community in

the face of increasing global trade and progressive integration
amongst the member countries.
 COMPARISON OF AEC

AEC 2015 AEC 2025

1. Single market and production base 1. A highly integrated and cohesive environment
2. Competitive economic region 2. A competitive, innovative and dynamic ASEAN
3. Equitable economic development 3. Enhanced connectivity and sectoral cooperation
4. Integration into the global economy 4. A resilient, inclusive, people-oriented and
people-centred ASEAN
5. A global ASEAN
 (1) A HIGHLY INTEGRATED AND COHESIVE ENVIRONMENT

Trade in goods
Trade in services
Investment environment
Financial integration, financial inclusion and financial stability
Facilitating movement of skilled labour and visitors
Enhancing participation in Global Value Chains
 (2) A COMPETITIVE, INNOVATIVE AND DYNAMIC ASEAN

Effective competition policy

Consumer protection
Strengthening intellectual property rights cooperation
Productivity-driven growth innovation, research and development and technology
commercialisation
Taxation cooperation
Sustainable economic development
 (3) ENHANCED CONNECTIVITY AND SECTORAL COOPERATION

Transport
Information and communication technology
E-commerce
Energy
Food, agriculture, forestry
Tourism, healthcare, minerals and science and technology
(4) A RESILIENT, INCLUSIVE, PEOPLE-ORIENTED AND PEOPLE-CENTRED
ASEAN
Strengthening the role of micro, small and medium enterprises (MSME)
Narrowing the development gap
Strengthening the role of the private sector
Public-private partnerships
 (5) A GLOBAL ASEAN

Coherent approach towards external economic relations

Enhanced participation in global supply networks (cited from
AEC 2015)
PERSONAL OPINION
 OVERCOMING STIGMA
Stigma: Pre-conceived notions about a group of people
Eases social friction so that talent and money can move more freely
ASEAN in the developing phase and there is a need for some belief
Help investors from richer countries put money in developing countries
where there is no historical track record but a lot of hustle
Help developing countries accept help and cooperate with rich investors
even though they have a track record of exploiting others
WHERE ARE WE TODAY?
 TRADE IN GOODS

Trade barriers have been eliminated/ reduced

A subset of ASEAN countries have set up their National Single Window and have
established their National Trade Depository
Harmonisation of technical standards for 3 sectors have been signed
Electronics and electrical equipment
Cosmetics
Pharma producs
 TRADE IN SERVICES
Different modes involved
Mode 1 (cross-border supply, where neither the provider not the consumer moves) and mode 2 (overseas consumption where
provider is not physically present) have been met
Mode 4 (movement of people) has been signed for 8 professions
Engineering
Nursing
Architecture
Surveying
Accountancy
Medical
Dental
Tourism
 FREE FLOW OF INVESTMENT

ASEAN Comprehensive Investment Agreement (ACIA) is now operational

Promotion has been done
Linked investment agencies websites
Developed and disseminated investment publications
Conducted roadshows and public seminars
 COMPETITION POLICY

ASEAN Expert Group on competition has been set up

ASEAN Regional Guidelines on Competition Policy
Handbook on Competition Policy and Laws in ASEAN for
Business
 INFRASTRUCTURE DEVELOPMENT

ASEAN Highway Network

Singapore Kunming Railway Line
ASEAN Open Skies Policy
Information and Communication Tech Development has been identified
 SME DEVELOPMENT

Strategic Action Plan for the ASEAN SME Development

ASEAN Benchmark for SME Credit Rating Methodology
Web-based Service Centre
ASEAN Common Curriculum for Entrepreneurship
ASEAN SME Policy Index
 INTEGRATION INTO THE GLOBAL ECONOMY

Signed 5 FTAs
Australia
New Zealand
China
India
Japan
South Korea
CHALLENGES AHEAD
 (1) GROWING NATIONALISM

Indonesia, the biggest ASEAN member, continues to impose non-trade

barriers (NTBs) to protect its industries.
Countries afraid of offending China because o the money they need to build
soft and hard infrastructure that is essential to growth.
 (2) SELF INTEREST DOMINATES
Each country has its own needs and are careful not to be exploited
Careful and anticipatory way of approaching the situation makes it difficult for ASEAN to progress

Also have very different strategic interests

Makes implementation very tricky and slow

There are often more stakeholders than meet the eye.

Many ASEAN countries function with close clientelist ties between business and politicians.
Stand in the way of new regulation or deregulation
 (3) NO MORE LOW HANGING FRUIT

The rest of the plans need a confluence of factors to align

Political willingness
Robust organisation
Substantial human and financial resources
 (4) GLOBAL ECONOMIC GROWTH MODEST

Global economic growth low while risks still remain

Economic stability in their home country will take precedence
SOLUTIONS
 SOLUTIONS

1. Strengthen domestic industries by raising productivity

2. Infrastructure development has to be taken seriously
3. Educating bureaucrats and other involved parties
4. Allocate more resources
 CONCLUSION

More has to be done. But before we can do that, we have to ask what

can be done.
- Anonymous, World Economic Forum
 POTENTIAL QUESTIONS

1. Can there be equitable distribution of wealth in ASEAN? (IEB; I Trade)

2. How much does ASEAN benefit XX country?
3. The AEC should be scraped. Discuss.
4. If I was a key decision-maker in ASEAN, I would do XX. (Please carry out actions with the AEC in
view)