The World and a Borderless ASEAN: The Regional Perspective Jayant Menon Lead Economist (Trade and Regional Integration) Office of Regional Economic Integration Asian Development Bank 11 th MAP International CEO Conference 10 September 2013, Makati Shangri-La The views expressed in this presentation are those of the author and do not necessarily reflect the views and policies of the Asian Development Bank, or its Board of Governors or the governments they represent.
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The World and a Borderless ASEAN: The Regional Perspective
Jayant MenonLead Economist (Trade and Regional Integration)
Office of Regional Economic Integration Asian Development Bank
11th MAP International CEO Conference 10 September 2013, Makati Shangri-La
The views expressed in this presentation are those of the author and do not necessarily reflect the views and policies of the Asian Development Bank, or its Board of Governors or the governments they represent.
Presentation Outline
Introduction Towards 2015 - AEC – how likely?Beyond 2015- Implementation- Development divide- Regionalism as a means, not an end
Introduction
ASEAN the most durable regional association in the developing world. Defining characteristics include:
a) Diversity – greater than any other major regional grouping. History, language, politics, and especially economics (50:1 GDP/cap), population, resource endowments.
b) Generally rapid economic development, with sharp reductions in extreme poverty
. - But ASEAN membership no guarantee (Myanmar)
Introduction
c) Avoidance of strong supra-national organization; deliberately under-powered secretariat; the ‘ASEAN Way’ – strengths & weaknesses. d) Model of ‘open regionalism’, among original members.
Major contribution has been non-economic – undervalued intangibles - increased regional harmony and understanding, while remaining globally connected.
Does it need to be more than that? If so, in what direction, to 2015 and beyond?
Towards 2015 - AEC
Increasingly being recognized that 2015 target for AEC is too ambitious
ASEAN’s own assessment- not only for new but also original members
Given diversity within ASEAN, and sensitivities regarding different issues\sectors, liberalization of goods, capital, and (skilled) labor flows would proceed at different speeds
Towards 2015 with Increased Vulnerability
ASEAN today is more regionally integrated and globally connected than ever.
These features deliver significant benefits, but also carry risks. Increased vulnerability to external shocks, as well as contagion that spreads rapidly across the region
Rising vulnerability can impact AEC AFC lead to increased integration, but initial
reaction to GFC was inward-looking, increased protectionist sentiment
Current Account of ASEAN4, 2011- 2013 (quarterly, as a share of GDP)
Beyond 2015 Whatever happens, bound to be declared
a success come 2015! ASEAN way of admitting this is to start
talk about “beyond 2015” Process rather than destination Much is made about preserving “centrality”
of ASEAN – economic and political – now and beyond 2015
ASEAN+3, +6 (RCEP), +8, TPP, ASEAN+1 and other bilateral FTAs etc – pulling in different directions?
Beyond 2015
Will depend on implementation: member countries’ readiness, national policy objectives, and levels of economic and financial development.
Domestic laws may have to be changed to facilitate implementation.
Thus, despite the blueprint and the various priority actions and schedules, it remains to be seen to what extent concrete liberalization initiatives will be implemented, or whether it will remain essentially a vision statement.
Beyond 2015 – development divide
Future survival of ASEAN will depend on cohesiveness - bridging the “Development Divide”, especially between original and new members
One measure is narrowing gaps in income per capita (economic convergence)
Currently, CLV countries per capita incomes as a share of Thailand’s ranges around 20-25% -catch-up but huge gaps remain.
Significant inter-country income inequalities within Southeast Asia
CLMV GDP per capita, PPP (constant 2005 $) as % of Thailand’s GDP per capita, 2000-2011