asean 2030
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ASEAN 2030 - Towards a Borderless Economic Community by Masahiro Kawai, Dean and CEO Asian Development BankTRANSCRIPT
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Masahiro Kawai Dean and CEO
Asian Development Bank Institute
ERIA-Harvard-ASEAN Secretariat Symposium: Realizing a more Integrated, Competitive, Equitable, and Resilient ASEAN Community
30 October 2012, Phnom Penh, Cambodia
ASEAN 2030 Toward a Borderless Economic Community
Outline Key Messages SWOT Analysis Aspirations Challenges and Enabling Factors Policy Options Conclusions: Toward a Borderless
Economic Community
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Economic issues have assumed central stage in ASEAN since its creation 45 years ago => An ASEAN Economic Community will be created in 2015
Economic slowdown in the West and rising competition from the PRC and India bring ASEAN at a crossroads => A RICH ASEAN by 2030: Tripling per capita incomes and people’s increasing quality of life to OECD levels; or Losing Centrality: Slowdown to 3% growth and a rise in security and political tensions–depends on right policy mix
Need for deep structural reforms and bold initiatives for regional cooperation: ASEAN must evolve beyond the AEC toward a truly borderless economic community
Key Messages
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Strong macroeconomic fundamentals
Abundant natural resources
Young, growing population and expanding middle class
Strong FDI record and regional production networks
Ability to manage diversity and solidify ASEAN institutionalization
Huge development gaps within and across countries
Low education attainments and large unskilled workforce
Lack of regional strategy to promote investment in R&D
Incomplete achievement of the AEC by 2015 and lack of vision for integration beyond 2015
Weak ASEAN Secretariat and need for an efficiency update of ASEAN’s governance principles
Main Strengths Main Weaknesses ASEAN SWOT Analysis
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Central, strategic location in expanding Asia with huge market potential
Deep manufacturing and technology links with Northeast Asian economies
Strong financial cooperation initiatives to build on
Potential to develop regional hubs in various new areas
Convener of Japan, PRC, Korea & India, and regional groupings
Loss of regional centrality due to the rise of PRC and India
Vulnerability to external shocks due to high degree of economic openness and trade dependence on US and EU
Loss of internal cohesion due to competition with PRC and India
Unresolved territorial disputes
Inability to collectively manage climate change, energy security, disaster management
Main Opportunities Main Threats
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Ambitious yet pragmatic 2030 targets Triple average per-capital GDP, with higher
growth in CLMV countries than elsewhere to help close development gaps
Increase average people’s quality of life to reach today’s OECD levels
Realize a Resilient, Inclusive, Competitive, and Harmonious region – A RICH ASEAN
ASEAN 2030 Aspirations
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2030 GDP Projections & Aspirations
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Quality of Life: Dimensions & Indicators
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Reaching OECD Levels (2 examples)
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A “RICH” ASEAN by 2030
Challenges and Enabling Factors
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Singapore Brunei Dar. Malaysia Thailand Indonesia
Overcome Land & Demographic
Constraints
Diversify the Economy
Improve the Business and Investment
Climate
Foster Human Capital
Strengthen Macroeconomic Management
Increase Labor Productivity
Improve the Business and Investment
Climate
Foster Human Capital
Narrow Inequalities and Foster
Social Cohesion
Develop Economic
Infrastructure
Improve the Business and Investment
Climate
Foster Human Capital
Cultivate Technology
and Innovation Capabilities
Diversify the Economy
Improve the Management
of Natural Resources
Primary Challenges by Country - I
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Philippines Viet Nam Lao PDR Cambodia Myanmar
Improve the Business and Investment
Climate
Strengthen Governance
and Institutions
Diversify the Economy
Foster Human Capital
Strengthen Governance
and Institutions
Develop Economic
Infrastructure
Develop Economic
Infrastructure
Foster Human Capital
Diversify the Economy and Develop the Agricultural
Sector
Strengthen Macroeconomic
Management
Strengthen Governance
and Institutions
Foster Human Capital
Improve the Management
of Natural Resources
Reduce Poverty
Diversify the Economy and Develop the Agricultural
Sector
Primary Challenges by Country - II
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2030 Challenges by Income Group
ASEAN-Wide Challenges and Enabling Factors
Key 2030 Challenges
Enhancing macroeconomic and financial stability
Promoting economic convergence and equitable growth
Forging a competitive and innovative region
Managing natural resources and sustaining the environment
Enabling Factors
Broadening and deepening financial markets
Harnessing human capital
Building seamless connectivity
Strengthening governance
Enhancing ASEAN's institutional framework and empowering the Secretariat
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Beyond the realization of the AEC by 2015 Toward a borderless economic community by 2030
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Macroeconomic & financial stability Maintain macroeconomic and financial stability Avoid future crises and contagion Economic convergence & equitable growth Narrow development gaps within & across
countries Smoothen intra-ASEAN labor movements and
reduce inequalities, social tensions, and discrimination
Challenges - I:
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Competitiveness and innovation Reduce cost of doing business across ASEAN countries Accelerate technological diffusion & absorption Capture synergies between science & industry Exploit comparative advantage in tropical agriculture Capitalize on the increasing inflow of tourists Natural resources and the environment Protect the environment and manage climate change Ensure energy supply & security Manage natural resources and avoid their depletion
Challenges - II
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Develop efficient markets in support of the real sector
Increase effectiveness of financial intermediation
Improve the recycling of regional savings for regional investment
Cope with the aging population and slowing work force growth
Invest in higher quality education systems, including tertiary education and science & maths in basic education
Financial markets Human capital Enabling Factors - I
Connectivity Foster ability to trade, travel,
& transit Update existing facilities in
transport & communication Harmonize rules, standards,
& regulations
Governance Promote use of transparent
rules & regulations Manage national institutions
effectively Strengthen national civil
services
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ASEAN’s institutional framework, governance and the Secretariat Power of the ASEAN Secretariat ASEAN’s decision-making processes National sovereignty and ASEAN
ASEAN’s regional and global roles
Enabling Factors - II
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Enhancing macroeconomic & financial stability Strengthen ASEAN mechanisms to participate in wider regional initiatives and create an ASEAN Financial Stability Dialogue Start a dialogue and establish regional guidelines on fiscal sustainability Introduce a flexible coordination mechanism to maintain intraregional exchange rate stability in normal times while allowing for flexibility in times of stress
Promoting economic convergence & equitable growth Improve coordination to channel external assistance to CLMV countries through the Framework for Equitable Economic Development Introduce an ASEAN-wide system for freer, managed movement of unskilled labor Establish an ASEAN Convergence Fund by enlarging the ADF, entrusting professionals for its administration
Policy Options - I
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Forging a competitive & innovative region Create an ASEAN Competitiveness Institute to promote region-wide
yet country-specific R&D strategy and innovation policy Establish an ASEAN agency for the certification & standardization of
Made-in-ASEAN products Form an ASEAN Tourism Council to promote multi-country tours and
adopt a single ASEAN Visa for qualified tourists
Managing natural resources and sustaining the environment
Adopt long-term development strategies that mainstream green growth, reflecting regional priorities to protect the environment
Harmonize countries’ environmental laws & standards and promote green products’ development using common standards
Adopt national policies to tax environmental “public bads” and eliminate harmful subsidies that encourage inefficient use of natural resources, especially fissile-based
Policy Options - II
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Create an ASEAN College of Financial Supervisors
Invest in scientific & technical skills Expand scholarships and
student exchanges and credit transfer system
Financial markets Human capital
Policy Options - III
Connectivity Strengthen private sector
links and operationalize the ASEAN Infrastructure Fund Expedite the
implementation of the ASEAN Connectivity Master Plan
Governance Adopt an ASEAN-wide
competition policy & legal framework
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Empower the ASEAN Secretariat Enhance its legal capability to attain trust & respect in enforcing
commitments by member countries Increase its financial & human resources (to match the operational
costs expected to rise to $200M by 2030) Revisit the equal budget contribution principle based on contributing
capacity & expected benefits
Improve decision-making processes & efficiency Adopt a more flexible decision-making system to allow operational
issues to be decided through qualified majority, while maintaining consensus for fundamental issues
Enhance ASEAN’s institutional framework Shift more responsibilities from national to ASEAN Create new functional institutions based on members’ interest to
serve as regional champions, with the Secretariat’s coordinating role Raise ASEAN’s global role Speak with a louder voice in international forums by entrusting the
ASEAN Chair and the Secretary General more
Policy Options - IV
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The path beyond AEC 2015—to realize the aspirations of a RICH ASEAN by 2030—requires a solid vision of a truly borderless economic community ASEAN leaders need to make the best commitments
possible today for meeting the aspirations of a RICH ASEAN tomorrow A right mix of deep domestic structural reforms and bold
cooperation initiatives is needed Different country-specific solutions reflect the diversity of
ASEAN economies as part of a region-wide strategy ASEAN leaders, policymakers and businesses need to think
globally, coordinate regionally, and act nationally
Conclusions: Toward a Borderless Economic Community by 2030
Thank you! For more information:
Dr. Masahiro Kawai
Dean & CEO Asian Development Bank Institute
[email protected] +81 3 3593 5527 www.adbi.org