The Voice of ASEAN Youth: ASEAN Priorities and Challenges

Sothea OUMEconomic Research Institute for ASEAN and East Asia

(ERIA)

The 8th Asia Economic Forum on “ASEAN in the Evolving Regional Architecture: Opportunities, Challenges, and

Future Direction” Hotel Sofitel Phnom Penh Phokeethra, Phnom Penh, 16 -18

March 20121

The Voice of ASEAN Youth: ASEAN Priorities and Challenges

www.eria.org

AEC Vision and Blueprint: Key Initiatives Towards AEC

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3

Transformation of International Commerce - 2nd Unbundling in Manufacturing and Related service

Bay B

Bay A

Bay C

Bay B

Bay A

Bay C

Bay B

Bay A

Bay C

1) Two-way flows of goods, ideas, technology, capital, and technicians.

2) Investment and application of technical, managerial and market know-how abroad.

Connecting factory & doing business abroad: The “trade-investment-services nexus”

20th century

trade

21st century

trade

Source: Baldwin (2011)

1) Necessary trade & service linksConnecting factories- Trade policy barriers;- Transportation services;- Business mobility;- Communication services.

2) Necessary “Behind the border barriers” (BBB) reformDoing business abroad- International investment;- Application of home’s technology abroad;- Local availability of business services.

GDP ($m)

Trade ($m)

Intra-trade ($m) (%)

FDI ($m)

Intra-FDI ($m) (%)

GDP per capita ($)

Poverty (%)*

ASEAN 480,912.6 576,108.0 120,918.0 21.0 22,958.8 2,727.6 11.9 956.2 28.0 Cambodia 3,130.1 1,967.8 688.2 35.0 243.0 95.7 39.4 253.1 42.0 Laos 1,226.2 922.3 666.9 72.3 45.3 28.3 62.6 251.0 38.6 Myanmar 5,925.8 3,771.9 1,189.4 31.5 683.6 153.9 22.5 134.1 23.0 Vietnam 27,209.6 20,861.0 5,406.6 25.9 1,700.0 398.7 23.5 360.9 37.4

ASEAN 1,472,434.4 1,536,843.3 376,207.3 24.5 39,623.0 4,428.9 11.2 2542.2 16.0 Cambodia 10,797.9 8,886.7 2,097.9 23.6 530.2 170.8 32.2 768.4 30.1 Laos 5,585.0 2,962.1 2,478.2 83.7 318.6 57.3 18.0 885.7 27.6 Mynanmar 18,988.6 10,191.3 5,262.4 51.6 578.6 19.5 3.4 587.3 N.AVietnam 93,187.9 125,921.9 22,121.5 17.6 7,600.0 428.7 5.6 1068.3 14.5

ASEAN 3.06 2.67 3.11 1.2 1.73 1.62 0.9 2.66 0.6Cambodia 3.45 4.52 3.05 0.7 2.18 1.79 0.8 3.04 0.7Laos 4.55 3.21 3.72 1.2 7.03 2.02 0.3 3.53 0.7Myanmar 3.20 2.70 4.42 1.6 0.85 0.13 0.1 4.38 N.AVietnam 3.42 6.04 4.09 0.7 4.47 1.08 0.2 2.96 0.4

Source: ASEAN Secretariat, World Bank, IMF, UNCTAD, * Simple average for ASEAN (2008,2009)

2009/1998

ASEAN Socioeconomic Landscape 1998 - 2009

2009

1998

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HDI and Its Components in EAS countries

HDI Rank Country

HDI Index

Life expectancy

(years)

Ave. years of

schooling

Exp. years of schooling

GNI per capita (PPP 2005 US$) 2011 2010

2 2 Australia 0.929 81.9 12.0 18.0 34,431

5 3 New Zealand 0.908 80.7 12.5 18.0 23,737

12 11 Japan 0.901 83.4 11.6 15.1 32,295

15 12 South Korea 0.897 80.6 11.6 16.9 28,230

26 27 Singapore 0.866 81.1 8.8 14.4 52,569

33 37 Brunei 0.838 78.0 8.6 14.1 45,753

61 57 Malaysia 0.761 74.2 9.5 12.6 13,685

101 89 China 0.687 73.5 7.5 11.6 7,476

103 92 Thailand 0.682 74.1 6.6 12.3 7,694

112 97 Philippines 0.644 68.7 8.9 11.9 3,478

124 108 Indonesia 0.617 69.4 5.8 13.2 3,716

128 113 Viet Nam 0.593 75.2 5.5 10.4 2,805

134 119 India 0.547 65.4 4.4 10.3 3,468

138 122 Lao PDR 0.524 67.5 4.6 9.2 2,242

139 124 Cambodia 0.523 63.1 5.8 9.8 1,848

149 132 Myanmar 0.483 65.2 4.0 9.2 1,535

Source: UNDP (2011).

Challenges: Closing Income Gaps

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2010 ($USbillio

ns)

Av. Growth

2000-2010 (%)

2010 ( $US)

Av. Growth

2000-2010 (%)

GDP Per Capita

GDPGDP Per Capita

GDPGDP Per Capita

GDP

1 Brunei 12.37 1.52 29,674.82 (0.98) N.A N.A N.A N.A N.A N.A2 Cambodia 11.63 7.94 813.80 6.61 53.20 63.85 13.75 16.50 7.65 9.183 Indonesia 706.75 5.23 2,974.03 3.94 34.58 45.89 10.12 13.43 6.11 8.104 Lao PDR 6.46 7.05 1,003.71 5.17 50.02 68.27 13.15 17.95 7.39 10.095 Malaysia 237.96 5.02 8,423.18 2.96 21.27 36.07 7.29 12.37 4.89 8.296 Myanmar 45.43 10.67 742.44 8.49 54.61 68.66 14.01 17.61 7.75 9.757 Philippines 199.59 4.74 2,123.01 2.58 39.19 71.95 11.05 20.29 6.50 11.948 Singapore 222.70 6.00 43,116.69 3.62 3.00 3.00 3.00 3.00 3.00 3.009 Thailand 318.91 4.40 4,992.43 4.07 27.78 30.03 8.70 9.41 5.50 5.94

10 Vietnam 103.57 7.22 1,173.55 5.85 47.69 58.88 12.71 15.69 7.21 8.90Source: IMF (2011), World Economic Outlook 2011 and author's calculations

* By assuming that GDP Per capita in Singapore Grows at 3% Per Annum, in 2020 = 57,945, 2050=140,648, 2100=616,589. All else contant

Country

GDP GDP per CapitaRequired Annual Growth Rate for GDP Per Capita Covergence

to GDP Per Capita of Singapore*

2020 2050 2100

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What does AEC look like in 2015?

AEC 2015 is more than FTA. It aims for a common market but not quite a single market. It is not a customs union and does not aim for economic and monetary union.

NOTE: Common Market range of nuance: from free movement of goods and freer flow of services, capital and labor on one end, and on the other end, a single market.

ASEAN

Challenges and Ways Forward

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Challenges- Jobs, Jobs, and Jobs for new entrants to labor markets and business

opportunities- Master ASEAN language and new high skills to benefit from new

industries - Once AEC is further advanced, fiercer competition – standards and

conformance, technological gaps/frontiers, especially for SMEs - Structural/sectoral adjustments , skill mismatch, dislocation, losers

Ways forward- Be better informed and prepared for AEC – mechanism/safety net to

mitigate potential negative effects- ASEAN activism - proactive be it business, political or cultural,

policies that matter to youth – Raise your voice to be heard- Compassionate, prosper-thy-neighbors – within and beyond borders- You(th) are deserved and should demand for Quality of Education,

Education, and Education !!!- Streamlining ASEAN studies into education system

Economic Research Institute for ASEAN and East Asia

www.eria.org

Thank You

“Don't ask what ASEAN can do for you, but what you can do for ASEAN” - John F. Kennedy, the 35th President of the United States, reincarnated as ASEAN Champion

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