1. 2018
Dr Rebecca Fatima Sta Maria
Senior Policy Fellow
ASEAN ECONOMIC COMMUNITY :
opportunities and challenges

2. ASEAN – at a glance
Population 628 million
- Youth 60%
GDP (2015) current
prices
US$2,432 billion
GDP Growth 4.7%
GDP per capita USD3,867
Total Trade (2015) USD2,270 billion
- Intra-ASEAN USD543.7 billion
- Ratio to GDP 93.3%
Total FDI USD120.8 billion
- Intra-ASEAN USD22.2 billion
Tourist Arrivals 108.9 million
- Intra-ASEAN 46 million
2

3. ASEAN: Growing through economic integration
334
606
1,898
2,432
GDP (US$ mil)
760
1,172
3,162
3,867
GDP per capita (US$)
317
519
593
628
Population (mil)
1990
2000
2010
2015
Source: ASEANStat, IMF, WB, UNCTAD
306
759
2,009
2,270
Total Trade (US$ bil)
144
167
511
543.7
Intra-ASEAN Trade (US$ bil)
13
23
100
120.8
FDI Inflows (US$ bil)
1990
2000
2010
2015
3

4. 3rd largest market in the world
Population in million
JAPAN
128
EU
502
INDIA
1,195
CHINA
1,340
USA
310
ASEAN
628
16.8
7.7
5.2
5.0
7.7
5.2
5.0
2.2
1.6
The whole is greater than the sum of its parts
4
Source: ASEANStat, IMF, WB
In 2015, 7th largest economy in the world and on
to be the 4th largest by 2030
GDP 2015 in US$ trillion
Brazil
ASEAN
United Kingdom
France
Germany
Japan
China
United States 16.8
9.2
4.9
3.7
2.8
2.7
2.4
2.2
4

5. The considered path to economic integration
• 1975: first AEM
• 1980s: Preferential Trade Agreement
• 1992: Framework Agreement on Enhancing ASEAN Economic
Cooperation, which led to AFTA
• 1995: ASEAN Framework Agreement on Services (AFAS)
• 1998: ASEAN Investment Agreement
• 2007: AEC Blueprint 2015
• 2015: AEC Blueprint 2025
5

6. I feel I am a Citizen of ASEAN
46%
71%
32%
67%
64%
58%
39%
44%
36%
15%
21%
32%
18%
41%
25% 29%
21%
47%
34%
25%
30%
56%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
ASEAN BRUNEI CAMBODIA INDONESIA LAO PDR MALAYSIA MYANMAR PHILIPPINES SINGAPORE THAILAND VIET NAM
Very much Moderately
6

7. • AEC 2015:
– ASEAN aspires to be a competitive, dynamic
region, which allows for free flow of goods,
services and investment, and freer flow of capital
and skilled workers, by 2015.
The dream: A highly integrated region
7

8. AEC 2025: consolidation and going beyond…
• Incorporate unfinished commitments from AEC 2015
• Framework of the ASEAN Economic Community 2025:
covers 5 main pillars:
– A Highly Integrated and Cohesive Economy;
– Competitive, Innovative and Dynamic ASEAN;
– An ASEAN with Enhanced Economic Connectivity and
Deeper Sectoral Cooperation;
– A Resilient, Inclusive and People-Oriented and People
Centered ASEAN; and
– Global ASEAN.
8

9. Masterplan of ASEAN Connectivity 2016-2025
(MPAC)
• To achieve a seamlessly and comprehensively
connected and integrated ASEAN that will promote
competitiveness, inclusiveness, and a greater sense
of community
9
• To seamlessly integrate with the AEC and the
regional value chains; and to become globally
competitive, innovative, inclusive and resilient.
ASEAN Strategic Action Plan for SME Development
2016-2025

10. The Reality: The To-Do list is comprehensive and
ambitious
• The Consolidated Strategic Action Plan (CSAP) comprises
153 measures and 513 action lines for implementation
through 2025.
• Example: Of these, 5 measures and 28 action lines are
related to connectivity in ASEAN
– to move towards greater connectivity, efficiency, integration,
safety and sustainability of ASEAN transport
– to strengthen ASEAN’s competitiveness and foster regional
inclusive growth and development.
• New Masterplans being added: ASEAN Air Transport
Masterplan
10

11. What we sought to do:
• AEC 2015 and 2025 Blueprints
– ASEAN Trade in Goods Agreement
• Working on a Single window;
• self-certification
• Creating a common trade repository system to increase transparency in
trade rules
• Working to harmonise product standards and procedures
– ASEAN Comprehensive Investment Agreement:
• a single investment destination of 600 million people and GDP of US$2
trillion
– ASEAN Framework Agreement on Services
– ASEAN Dispute Settlement Mechanism
11

12. 1212
 ASEAN-6: 99.65% duties
eliminated (1 Jan 2010)
 CLMV on track to meet tariff
reduction commitments in
2018
The Reality: Trade in Goods – So far only tip of the
iceberg?
NTBs
12

13. 13
What we sought to do: Facilitating Movement of
Professionals and Talent
ASEAN Movement of Natural Persons
Agreement (MNP) – temporary entry or
temporary stay of natural persons:
 limited to business visitors, intra-
corporate transferees, and contractual
service suppliers;
 does not cover permanent entry and
unskilled labour.
13

14. 14
The Reality: Much more to do…
• Equity restrictions
• Impediments, including limits on
the number of service providers
• Cumbersome procedures, rules
and regulations
• Mobility of skilled persons
14

15. 15
 MRA – Agreement to facilitate movement of ASEAN professionals across the
region.
 ASEAN has concluded 8 MRAs; in various stages of operationalization:
NO. MRA DATE OF SIGNING
1. MRA for Engineering Services 9 Dec 2005
2. MRA for Nursing Services 8 Dec 2006
3. MRA for Architectural Services 19 Nov 2007
4. Framework MRA for Surveying Qualifications 19 Nov 2007
5. MRA for Medical Practitioners Services 26 Feb 2009
6. MRA for Dental Practitioners Services 26 Feb 2009
7. MRA for Tourism Professionals 9 Nov 2012
8. MRA for Accountancy Services 26 Aug 2014
Mutual Recognition Agreements (MRA)
15

16. Pressing Problems
29%
31%
29%
18%
27%
33%
22%
39%
29%
47%
23%
24%
27%
28%
30%
32%
35%
36%
46%
47%
0% 20% 40% 60% 80% 100%
Quality education provision and access
Unemployment
Infrastructure availability and quality
Human rights
Poverty
Agriculture and food security
Trade, investment, and regulatory coherence
Income disparity and social inequality
Climate change and natural disasters
Corruption
Faced by ASEAN Faced by Country
16

17. ASEAN’s Success=
f (Implementation, Implementation, implementation)
• Is the ‘ASEAN Way good enough?
• What about ‘ASEAN Centrality?’
• ASEAN Alignment, Coordination,
Coordination: the ‘Whole-of-ASEAN’
approach
17

18. Whither the ‘ASEAN Way?’
18

19. 19
Example: Our journey towards liberalising the services
sectors…
1977, 1st package
December 1998, 2nd package;
December 2001, 3rd package
September 2004, 4th package
ASEAN
Economic
Community
December 2006, 5th package
November 2007, 6th package
1967: Bangkok Declaration
February 2009, 7th package
October 2010, 8th package
August 2014, 9th package
2015, 10th
package
19

20. 20
Evolution of Investment Liberalisation and Protection in
ASEAN
1987
Agreement for Promotion and
Protection of Investments (IGA)
1998
ASEAN Investment Area Agreement
(AIA)
2009
ASEAN Comprehensive Investment
Agreement (ACIA)
20

21. ASEAN ‘Centrality’ :
Are we shaping the rules of the game?
Or singing to someone else’s tune…
Or worse still are we being led…
21

22. • Unnecessary
Regulatory
Burden;
• Lack of
transparency;
• Multi-agency
processes
Tariffs almost 0%
Research support
• Ad-valorem
equivalent
• Regulatory
convergence
• Transaction costs
Push for
• greater
transparency
• reduction
• Clarify impact
• Prioritise
• Monitor outcomes
• Reduce
• Review
• Institutionalise
Alignment, Coordination, Collaboration: Managing NTMs
22

23. Alignment, Coordination, Collaboration: Trade Facilitation
ASEAN Seamless Trade
Facilitation Indicators
(ASTFI) &
Trade Transaction Costs
Develop ASTFI
• Institutionalise
• oversight
23

24. ‘Whole-of-ASEAN’ : We’re in this race together…
24