3. Functions of ASEANa) To accelerate the economic growth, social progress and culturaldevelopment in the region through joint endeavours in the spirit of equalityand partnership in order to strengthen the foundation for a prosperous andpeaceful community of Southeast Asian Nations.b) To promote regional peace and stability through abiding respect forjustice and the rule of law in the relationship among countries of the regionand adherence to the principles of the United Nations Charter.
c) To promote active collaboration and mutual assistance on matters ofcommon interest in the economic, social, cultural, technical, scientific andadministrative fields.d) To provide assistance to each other in the form of training and researchfacilities in the educational, professional, technical and administrativespheres.e) To collaborate more effectively for the greater utilisation of theiragriculture and industries, the expansion of their trade, including thestudy of the problems of international commodity trade, the improvement oftheir transportation and communications facilities and the raising of theliving standards of their peoples.f) To promote Southeast Asianstudies in their call for a “strong and resilient Southeast Asia”. This is due tothe need to realise the validity of the regional concept of Southeast Asia,which from a convenient geographical expression to the regional concept hasboth political and intellectual dimensions.g) To maintain close and beneficial cooperation with existing international andregional organisations with similar aims and purposes, and explore all avenuesfor even closer cooperation among themselves.
4. ASEAN Economy4.1 ASEAN Economic Community Blueprint 2015Formally established on 31 December 2015.- A major milestonein the regional economic integration agenda in ASEAN.- Offersopportunities in the form of a huge market of US$2.6 trillion and over 622million people.- AEC Blueprint2025, adopted by the ASEAN Leaders at the 27th ASEAN Summit on 22 November 2015in Kuala Lumpur, Malaysia, provides broad directions through strategic measuresfor the AEC from 2016 to 2025.
o It succeeded theAEC Blueprint (2008-2015), which wasadopted in 2007.o The new Blueprint will not only ensure that the 10 ASEANMember States are economically integrated, but are also sustainably andgainfully integrated in the global economy, thus contributing to the goal ofshared prosperity.4pillars of AEC 2015a) A single market and production baseThefirst AEC pillar seeks to create a single market and production base throughfree flow of goods, services, investment, skilled labour and freer flow ofcapital. These aim for greater opportunities to trade and do business withinthe region, with reduced trade costs and improved investment regimes. b) A highly competitive economic regionThesecond pillar helps to create a business-friendly and innovation-supportingregional environment.
That is achievable through the adoption of commonframeworks, standards and mutual co-operation across many areas. In turn, suchdevelopments provide the impetus to start new businesses, expand the existingmarket base, encourage strategic sourcing of goods and services within theregion as well as create employment.c) A region of equitable economicdevelopmentThe thirdpillar seeks to achieve sustainable and balanced growth and development throughequitable economic development. This is done through creative initiatives thatencourage SMEs to participate in regional and global value chains, and focusedefforts to ensure their effective integration into the economic community. d) A region fully integrated into theglobal economyThefinal pillar envisages nothing less than ASEAN’s full integration into theglobal economy pursued through a coherent approach towards external economicrelations and enhanced participation in global supply networks.4.1.
1Areas to improveThere werecriticisms on AEC for being “too slow” and some observers have said that theissues that have been delayed were those of importance and could make or breakthe success of the integration. Some specialistsalso commented about the lack of leadership on this issue – the role of Aseanchairmanship is a rotating position and a series of officials from the poorer,less developed Asean countries will be the chair of Asean for the next fewyears which means that leadership will be inexperienced and possibly be lessinterested in pushing ahead quickly with integration on all fronts.There is also toomuch concentration on both hard and soft infrastructure. Hard infrastructure: Many countries’ governments haveplans to upgrade their infrastructure. E.
g Thailand’s government has also beentalking to China about the high-speed train project linking Laos and Thailand’sNong Khai to the southern border and Malaysia. 4.2 ASEAN Economic Community Blueprint 2025Adopted by the ASEAN leaders at the 27th ASEAN Summit on 22 November2015 in KL, MalaysiaConsists of five interrelated and mutually reinforcing characteristics(i.e. a highly integrated and cohesive economy; a competitive, innovative anddynamic ASEAN; enhanced connectivity and sectoral cooperation; a resilient,people oriented, and people centred ASEAN; a global ASEAN) Strategic measures under each of the 5 characteristics of AEC 2025 areimplemented through the work plans of various sectoral bodies in ASEAN 4.2.1 Highly Competitive Economic Region4.
2.1 A culture of fair competitionIndonesia, Malaysia, Singapore, Thailand, and Vietnamhave enforced their respective Competition Policy and Law (CPL). ThePhilippines-while yet to introduce a competition law, has established theOffice for Competition under the Department of Justice even though they havenot established a law of competition. A CPL is expected to create a levelplaying field and foster a culture of fair business competition. 4.
2.2 Efficient and integrated transportation networkASEAN member states have concluded three transportfacilitation agreements namely, the ASEAN Framework Agreement on theFacilitation of Foods in Transit (AFAFGIT), ASEAN Framework Agreement onMultimodal Transport (AFAMT), and ASEAN Framework Agreement on Facilitation ofInter-State Transport (AFAFIST). Once these measures are fully in place,investors will see simplified and harmonised transport procedures anddocumentation, uniform guidelines and requirements for registration of transittransportation, and ICT-driven applications for cargo transfers.One of the key projects of ASEAN is the completion ofthe ASEAN Highway Network (AHN) and the Singapore-Kunming Rail Link (SKRL).
AHN is a network of 23 designated routestotalling about 38,400 kilometres in 10 ASEAN countries connecting seaports,airports, as well as investment and tourism areas.SKRL will run throughSingapore-Malaysia-Thailand-Cambodia-Vietnam-and Kunming, China. It will havespur lines in Thailand-Myanmar and Thailand-Lao PDR.
4.2.3 Energy securityASEAN is currently implementing the US$5.9 billionASEAN Power Grid (APN) project which requires 16 cross –border transmissioninterconnections among ASEAN countries. To date, nine interconnections havebeen constructed and are running while the others are in varying stages ofplanning and construction. Meanwhile, the US$7 billion Trans-ASEAN Gas Pipeline(TAGP) project, which will enable Southeast Asia to transport gas across ASEANcountries, has completed eight bilateral gas pipelines. 4.
3 Equitable Economic DevelopmentASEAN is committed to reducing development gaps in theregion. It aims to develop small and medium enterprises (SMEs) through theASEAN Blueprint for SME Development. It seeks to strengthen the implementationof technical assistance and capability building programmes for public andprivate sectors needing assistance in some ASEAN countries through theInitiative for ASEAN Integration (IAI).Strong participation of SMEs in the building ofregional production network which in turn will provide businessmen with wideroptions for suppliers and partners from supporting industries. Investors canbenefit from the Initiative for ASEAN Integration as beneficiary ASEANgovernments will be more capable to develop and implement economic policiesthat would further boost the positive effects of the AEC.
4.4 Fully Integrate into a Global EconomyASEAN has signed 5 Free Trade Agreements (FTA)- one each with China,Korea Japan, Australia and New Zealand, and India.The FTAs help push for trade liberalisation andfacilitation, with others being more comprehensive and including provisions oninvestments and movement of natural persons. Other provisions are focused on rules of origin, customs procedures, anddispute settlement.ASEAN and its dialogue partners continue to discussways and negotiate on how the FTAs can be enhanced and best maximized.In November 2012, heads of states of ASEAN, China,Japan, Korea, Australia, New Zealand, and India officially started negotiationsfor the Regional Comprehensive Economic Partnership (RCEP) in Phnom Penh,Cambodia. RCEP is bound to be the largest regional trading arrangement as itwould create an integrated market spanning 16 countries with a combined marketof over 3 billion people and total GDP of about US$20 trillion.
ASEAN leadersexpect the RCEP to keep the region’s growth momentum as it further opens upmarkets and makes economies competitive. 5. Case Study- Terrorist Attackin Marawi CityOn May 23, militants from the Maute and Abu Sayyaf groups stormed intothe city of Marawi in Mindanao and occupied large parts of it. The battle forMarawi began when the Philippine military tried to capture Isnilon Hapilon, thehead of the Abu Sayyaf group that has pledged loyalty to ISIS leader Abu Bakral-Baghdadi. But the army met fiercer than expected resistance.
Allied withanother pro-ISIS brigade called the Maute Group, Hapilon’s fighters took apriest and his congregation hostage, freed prisoners from the local jail, andoverran the city. More than three weeks later, the fighting persists, hundredshave died—militants, soldiers, civilians—and hundreds more residents remaintrapped in the city. Many have no electricity or running water. Food stocks arediminishing fast.
As residents seek safety, much of Marawi has become a ghosttown. What has ASEAN been doing to conquer this?? On June 19, Indonesia, Malaysia and thePhilippines agreed to fight trans-border terrorism activities on theSulu-Sulawesi-Celebes Sea by launching maritime patrols – to disrupt thenetwork of the illegal smuggling of weapons, humans and drugs – a network thatis now also used by militants? Singapore, for example, has offered to deploydrones for intelligence and surveillance, and provide urban warfare training ? Singapore has two types of unmanned aerialvehicles (UAVs): the Heron 1, which has a range of 200km and can stay in theair for 24 hours; and the Hermes 450, which has half the range and a shorterflying time of 14 hours. Singapore is also offering to send a C-130 aircraft tohelp transport humanitarian aid and supplies to evacuees from Marawi.? Defence Minister Ng Eng Hen said Singapore wasalso willing to help train Philippine security forces in urban warfare andfighting in “built-up areas”. He said he suggested to Mr DelfinLorenzana who is the Philippine Secretary of National Defense, the use of”urban training villages” that the Singapore Armed Forces use totrain soldiers being sent to conflict areas in Afghanistan and Iraq. 6.
Areas to Explore 6.1 Opportunities on ASEAN members:6.1.1 More Competitive RegionEconomic integration would make ASEAN a more competitive region withinthe world economy.
This would help improve standard of living by reducingpoverty through Economic development. Open more regional cooperation (improve scale efficiency and competitivenessof ASEAN members). This offers new ways to coordinate the supply chain andgrants more access to new products within ASEAN members. ASEAN countries willbe more attractive to foreign investors. Since they are considered as a singlelarge market, the Asean Free Trade Agreement willbe expanded to zero tariffs on almost all goods by 2015. 6.1.2 Tourism OpportunitiesAsians travels morein the region and there are more travelers from other countries that have begunto reach out to Asia as new visitors.
The trends were evident at the recent HubCity Forum, held by the Pacific Asia Tourism Association (Pata), where morethan 100 travel industry executives discussed the tourism potential, government’sspending to upgrade facilities both for leisure attractions like museums; andalso MICE facilities such as convention centers, reported the newspaper. (MICEtourism opportunities are particularly large and hopefully countries that havethe most experience in this area such as Thailand and Singapore will rendertheir assistance to those with weak MICE experience – recent examples of thisare Thailand with Vietnam and also some talk in Thailand about renderingassistance in Laos and possibly Cambodia.) 6.2 Challenges on ASEAN members: For 2017 – By oneside, ASEAN will attract attention from international relations in the Asia –Pacific region. On the other hand, ASEAN countries must find the way to balance the national interest and commoninterest of one ASEAN. (Background info: The Philippines will be in chargeof chairmanship of ASEAN in 2017 and, besides, Manila would also promote amajor regional trade deal initiated by Beijing.
) – Thebiggest challenge for ASEAN countries would be dealing with the newly elected US President Trump’s unpredictability.While keeping this aspect in mind, the other aspect that brings our attentionwould be “to keep the United States engaged in Southeast Asia to balance Chinaat a time when the Duterte government is moving in the opposite direction” 2016 ASEAN Economicintegration – Managing wider income gapASEAN is an economic region which has diverse patterns of economicdevelopment. The majority of ASEAN countries are categorized as low middleincome countries, whereas a few are positioned better economically.
The existing income inequality gap may also widen among some of theASEAN countries. – Disparity and Diversity between ASEAN membersThere is a high degree of political and socio-cultural diversity amongASEAN countries. ASEAN member countries have disparate existing levels of capital marketdevelopment and financial regulations. Some of the ASEAN member countries donot have the appropriate financial sector regulation and infrastructurenecessary for a seamless integration process.
We can expect that there will bechallenges associated with capital market development, financial servicesliberalization, capital account liberalization, and an eventual ASEAN currencycooperation. Different National Interest – ASEAN makes decisions in a consensual manner,meaning that all member states must agree upon a certain plan or action beforeASEAN acts on it as a whole.- With different national interests among memberstates, there will be a lot of difficulties and delays in the implementation ofASEAN initiatives.- There is no mechanism to ensurethat commitments made by ASEAN members are implemented- During talks regarding the SpratlyIslands dispute, different member states actually wanted control of the SpratlyIslands for themselves to their own benefit.
– ASEAN and China also had differentmethods in mind for which to settle the Spratly Islands dispute.- This led to increasing tensionbetween ASEAN and China. – Also, although the U.S did step inand call for talks between ASEAN and China, the talks still fell apart due tosquabbling within ASEAN itself. – Increase in anti-globalisation, anti-immigrationand anti-elite sentiments.
– Little attention paid to small and medium-sizedenterprises, small-scale farmers and entrepreneur- Lack of a sense of ownership of ASEAN among ourpopulations- Increased urbanisation and demographic shifts. 7. ASEANSummit Whatis The ASEAN Summit?The ASEAN Summit is a semi-annual meeting held by the member ofthe Association of Southeast Asian Nations. What does ASEANSummit aim to achieve?The ASEAN Summit aims toachieve political and security cooperation, economic cooperation, andsocio-cultural cooperation; For the purpose of ensuring durable peace,stability and shared prosperity in the region.
Who attends the ASEAN Summit?The ASEANLeaders and ASEAN dialogue partners. ASEAN MEET 2018 SINGAPORE will chair the Association of South-east Asian Nations (ASEAN)in 2018, the first time that it will helm the 10-member bloc since 2007. Key theme: Resilience and Innovation Key focus: To pursue a set of tangible and meaningful economic deliverables. They want to tap on global megatrends such as digital economy and trade facilitation. Aims to focus on ecommerce and the digital economy (this would provide greater digital connectivity amongst ASEAN countries, reducing barriers. Also aims to work on the ASEAN Economic Community 2025 (AEC) Economic integration are going steady (continuation) However, there are more to be done for new areas relevant to modern business Specific example:· Work onthe Code of Conduct (COC) of Parties in the South China Sea· Improvetrade facilitation measures to support the internationalisation plans (includingfor SMEs). Work closely with the other ASEAN Member States towards therealisation of an ASEAN-wide Self-Certification regime and the ASEAN SingleWindow (ASW).