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Research Pack: ASEAN and the AECWarwick ASEAN Conference 2016

No. Items

1 Table of Content

2 Foreword

3 Itinerary

4 Map of University of Warwick

5 Instructions for the day

6 Timeline of ASEAN Integration

7 The ASEAN Community

8 Aspects of the AEC

9 AEC 2025

9.1. Addendum

10 Research Themes

10.1 International Relations

10.2 Industry

10.3 Investment

10.4 Education

11. ASEAN Focus: Myanmar

12 Selected Articles

12.1 Tourism

12.2 Gender Equality

13 Bibliography

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Foreword

Dear Delegate,

On behalf of the Warwick ASEAN Conference 2016 committee, I cordially welcome and thank you for joining in The ASE-

AN Conversation this year. And on behalf of the Internal Content Team, you have our sincere appreciation for taking up

our 2016 Research Booklet.

Needless to say, this Research Booklet represents the cumulative research experience of the Internal Content team of the

2016 committee. Weeks and months of hard work by our six Research Officers, four Content Executives and the Depu-

ty Team Head have gone into reading past the headlines, between the lines and under the surface. As a result, we have

brought you a selection of detailed updates on the trends and developments within ASEAN, of differing perspectives on

key issues that touch ASEAN, and also a peek into the poster boy of democratic reform and potential star economy of

tomorrow – Myanmar.

If we did not believe in the potential, future and purpose of ASEAN, none of us would be here today digging up nuggets of

information about the varied and fascinating history of ASEAN and its constituent states, or its cultural quirks, or thinking

about what the news of today really say about tomorrow. Through the written word, each and every one of the twelve of

us hope that we can convey our excitement, our enthusiasm and our belief in ASEAN to you, our dear reader and dele-

gate.

The Warwick ASEAN Conference is a student-run organisation, and hence by nature all twelve of us are students as well.

Yet, as the Team Head and oftentimes the Editor as well, although that role more often falls onto the hands of the Depu-

ty Team Head, Mr Jaideep Singh, through countless nights proofreading and editing the articles that the team produces,

through countless hours of debating the team’s research directions and findings, I can say with absolute certainty that the

work they produce and the thoughts that go through their minds are definitely of a world-class standard that outshines

our competitors and peers.

With this closing paragraph, I will like to publicly express my thanks to my Deputy Coordinator for Content Ms Elaine

Pang, all members of my team, and to the Marketing and Media team for making this designed Research Booklet a reality.

One day, when we have grown up and have found our place in the world, we will look back on this conference, and on this

Research Booklet, and we will amaze ourselves all over again at the work that we did when we were students, just as all of

you have amazed me time and time again, and very often all over again, with every subsequent draft, revision, article and

summary that you gave me.

With Warmest Regards,

Goh Yeow Chong

Head of Internal Content

Warwick ASEAN Conference 2016

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Registration, Refreshments, Visiting Sponsors’ &

Partners’ Booths

Opening Remarks by the Emcees and Speech by

the Coordinator

Opening Keynote Address

Politics Session (Forum, Q&A)

‘Global Relations: The New Reality’

Youth Perspectives

Lunch

ASEAN Perspectives I:

‘Pushing the Social Development Agenda

Intermission

ASEAN Perspectives II:

‘The ASEAN of Tomorrow’

Closing Address

Conference Adjourns

Yong Shi Kai

His Excellency Major General (Rtd) Dato PadukaSeri Haji Aminuddin IhsanBrunei Darussalam High Commissioner to the UK

His Excellency Dr Rizal SukmaAmbassador of the Republic of Indonesia to the United Kingdom

Dr Thum Ping TjinCoordinator of Project Southeast Asia

Mr Karim RaslanCEO, KRA Group

(Moderator: Dr Catherine Jones, East Asia Post-Doctorate Research Fellow, Warwick University)

Mr Muhammad Hazim Bin MohamadCo-founder of Warwick ASEAN ConferenceUniversity of Warwick

Ms Gustika Jusuf-HattaNational Youth Delegate to UNFCCC COP18/CMP 8King’s College London

Ms Okky MadasariCo-Founder and Programme Director of the ASEAN Literary Festival

Associate Professor Dr Zainal Abidin SanusiDirector, Education Malaysia (EM) UK and Ireland

Professor Danny QuahProfessor of Economics and International Development, London School of Economics

Mr Wempy Dyocta KotoCEO, Wardour and Oxford

Mr Andrew RatcliffePresident, ICAEW

His Excellency Sayakane SisouvongLaos Ambassador to the United Kingdom

Time Events Speakers

Itinerary

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Instructions

Transport

Warwick ASEAN Conference’s chartered Shuttle Bus Service

Start Time: 1000 hrs

Frequency: every 20 minutes

Pick-up Point: Coventry Rail Station

Alternative transport options

• Public Bus Service: 11,11u and 12x buses with 15 minutes frequency

• Cost: £2 for a Single-Trip Ticket, £3.90 for a Day Ticket, £8 for a Group Daysaver Ticket

Lunch

For those who have ordered lunch, head to the Bread Oven to collect your lunch order. Your

lunch option will be written behind your name tag.

Alternative lunch venues/options for delegates who have not ordered lunch are:

• Curiositea

• The Dirty Duck

• Rootes Grocery Store

• Library Cafe Extension

• Varsity Pub Restaurant

• Warwick Arts Centre Cafe

Emergency Contacts

Head of Operations Vicknesh Rajkumar: 07547 753086

Chief Coordinator Yong Shi Kai: 07751 498432

Deputy Coordinator of Operations Zachary Lim: 07926 392919

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The 25th ASEAN Summit Plenary Session on 12th November 2014Image source: http://www.asean.org/media-gallery/photo/asean-summits

Timeline of ASEAN integration

1967 –

1976 –

1977 -

1978 –

1984 –

1987 –

1992 –

1994 –

1995 –

1997 –

On 8th of August, the Association of South East Asian Nations (ASEAN) was established with 5 initial mem-

bers, namely Indonesia, Malaysia, Philippines, Singapore and Thailand, through the signing of the Bangkok

Declaration in which the five nations aimed to work hand-in-hand with each other to overcome the threat from

communist insurgencies.

The Treaty of Amity and Cooperation (TAC) in Southeast Asia and the Declaration of ASEAN Concord were

signed, which sought to uphold the 4 crucial principles of (1) respect for state sovereignty, (2) freedom from

external influence, (3) non-interference in internal affairs of each member, and (4) always resort to peaceful

settlement of disputes. The ASEAN Concord aimed to strengthen economic and social cooperation between

every member and establish an ASEAN Secretariat.

After 10 years, the second ASEAN Summit was held where the existing members agreed to expanding econom-

ic relations with other neighbouring countries.

European Economic Community (EEC) was the first dialogue partner of ASEAN and led to a cooperation agree-

ment between the two blocs.

On 8th of January, Brunei Darussalam was integrated into ASEAN

The ASEAN Summit was carried out the third time in Manila, Philippines. The main conclusion of the summit

was to amend the TAC. One of the most important amendments involved Article 18, Paragraph 3 which dictated

that ‘’This treaty shall be open for accession by States outside Southeast Asia and regional organisations whose

members are sovereign States subject to the consent of all the members.’’ (GOV.UK, 2012)

The Fourth ASEAN Summit led to the formulation of the ASEAN Free Trade Area (AFTA), which aimed to re-

move trade tariffs through the Common Effective Preferential Tariff (CEPT) Scheme between member states to

ensure ASEAN products remain competitive in global market.

The ASEAN Regional Forum (ARF) was initiated to promote security interdependence in Asia-Pacific region.

Vietnam became part of ASEAN on 28th of July. Existing members decide to hold the Summit on an annual

basis and the Nuclear Weapon-Free Zone Treaty was signed.

ASEAN alliance was enlarged again with the joining of Laos and Myanmar on 23rd July. This year also witnessed

the first ASEAN-China Summit being held in Kuala Lumpur, Malaysia. This was followed by second informal

ASEAN Summit which proposed the ASEAN Vision 2020 in the hope of achieving greater integration with its

current members, which later became the precursor of AEC in realizing the spirit of equality and partnership.

The Southeast Asian Nuclear Weapon Free Zone Treaty was signed to prohibit member states from developing,

manufacturing, possessing or controlling nuclear weapons.

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Timeline of ASEAN integration

1998 –

1999 –

2001 –

2002 –

2003 –

2004 –

2006 –

2007 –

2009 –

2011 –

2012 –

2014 –

2015 –

The Sixth ASEAN Summit in Hanoi, Vietnam marked the adoption of the Hanoi Declaration and Hanoi Ac-

tion Plan in the effort of implementing ASEAN Vision 2020 which focused on economic recovery based on

free-market policies.

On 27th of November, Cambodia, the latest member of ASEAN, joined the family. All the members agreed to

form the “East Asia Forum’’ which strengthened cooperation with China, Japan and South Korea which is com-

monly known as ASEAN Plus Three (ASEAN+3).

With human rights activism going strong during this period, ASEAN Ministers responsible for social welfare

decided to adopt the Declaration on the Commitments for Children in ASEAN which was modelled on the UN

Convention on the Rights of the Children.

The Declaration on the Conduct of Parties in the South China Sea was signed between Malaysia, Philippines,

Vietnam and Brunei to prevent conflict from arising in the disputed South China Sea and Spratly Islands.

ASEAN state members considered launching the ASEAN Community which comprised of 3 pillars, namely se-

curity, economic and socio-cultural cooperation, in conjunction with the signing of Bali Concord II.

The East Asia Summit was attended by ASEAN Plus Six (ASEAN+6) which included the representatives from

ASEAN members, China, Japan, South Korea, India, Australia and New Zealand.

ASEAN was granted observer status at the United Nations General Assembly.

Leaders from member states decided to accelerate the realization of ASEAN Community by 2015. The ASEAN

Charter entered into force with guiding principles and conducts enshrined in it which signified ASEAN’s transi-

tion from a loose regional grouping into a rule-based regional organization.

To better enhance the formation of the ASEAN Community, the Roadmap for the ASEAN Community 2009-

2015 was implemented. It is comprised of all blueprints of the Economic Community, Political-Security Com-

munity and Socio-Cultural Community along with the Second Initiative for ASEAN Integration (IAI) Work Plan.

However, the vision to create the single economic bloc faced hurdles due to concern over Myanmar whose

military rulers have defied international calls to restore democracy.

On the opening day 14th November of the 19th ASEAN Summit at Bali, Cambodia accused Thailand for invad-

ing its territory. The East Asia Summit was held in Bali, Indonesia which was attended leaders from 18 nations,

including the US President Barack Obama. The summit mainly centred on territorial disputes in the South China

Sea, democratic reforms in military-dominated Myanmar and efforts in mitigating natural disasters.

Negotiations for the Regional Comprehensive Economic Partnership (RCEP) was formally launched on 18th No-

vember at the 21st ASEAN Summit held in Cambodia – a proposed trade agreement between ASEAN member

states and six states which ASEAN has existing FTAs with, such as Australia, China, India, Japan, South Korea

and New Zealand. It was expected to conclude by 2015 year-end.

Vietnam and Philippines both pushed for stronger action to counter recent aggressive Chinese actions in the

South China Sea.

China and ASEAN would set up a foreign ministers’ hotline to resolve emergencies in the disputed South China

Sea. A significant milestone in ASEAN integration was reached in the formation of its regional economic union,

the long awaited ASEAN Economic Community which aims to intensify trade and investment opportunities.

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The ASEAN Community

Research Officer: Lim Su Tian

Since ASEAN’s inception 49 years ago, the ASEAN Community marks the culmination of years of efforts in economic inte-

gration. A delicate definition of the ASEAN Community is given as “people-oriented, people-centred and socially responsible

with an aspiration to achieve enduring solidarity and unity among the nations and peoples of ASEAN by forging a common

identity and building a caring and sharing society which is inclusive and harmonious, and where the well-being, livelihood,

healthy lifestyle, access to healthcare and welfare of the peoples are enhanced.” (Joint Communiqué, 2015). The cornerstone

of the ASEAN Community is to create a competitive single market which relies on the free flow of goods, services, capital

and skilled labour to cater to the demand of the unifying cluster of 600 million people who share a common political, secu-

rity and economic roof.

The AEC Blueprint was adopted at the 13th ASEAN Summit on 20th November 2007, serving as the road map towards the

formal establishment of the AEC in 2015. The AEC Scorecard was implemented to assess the progress of each member state

in completing the measures set out in the AEC Blueprint. The ASEAN Secretariat reported that 67.5% of targets have been

achieved under Phase I and II. The Progress and Key Achievements report indicated that 92.7% of deliverables have been

achieved by October 2015 but the actual completion rate of deliverables as per the full AEC Scorecard was 79.5%. With 20%

of the AEC Blueprint measures yet to be implemented, the AEC is still a work-in-progress.

AEC Scorecard MeasuresSource: ASEAN Secretariat, 2015

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ASEAN Economic Community - at a glanceSource: ASEAN Secretariat, 2015

The combined GDP of ASEAN in 2014 rose by 36% from USD 1.9 trillion to USD 2.6 trillion within 4 years. ASEAN achieved

USD 1.3 trillion in exports of goods, with its top 3 export goods in the categories of electrical machinery, petroleum products

and office machines. Exports of services was valued at USD 291.9 billion and imports of services amounted to USD 298.6

billion, with the top 3 services exports being tourism, other business and transportation. Seven priority trading integration

sectors were identified, namely the textiles and apparels, fisheries, agro-based, wood-based, rubber-based, automotive and

electronics industries. In 2014 itself, the total FDI flow into ASEAN was USD 136 billion, an increase of 15.7% from 2013. The

inward FDI flow was attributable to the EU (USD 29.3 billion), Japan (USD 13.3 billion), US (USD 13.0 billion), China (USD 8.9

billion) and Korea (USD 4.5 billion).

Eight groups of professionals would be likely to benefit from integration, namely engineers, architects, nurses, doctors,

dentists, accountants, surveyors and tourism professionals. Apart from achieving a single market and production base, the

AEC aims to promote a highly competitive economic region which will bring equitable economic development to ensure the

region can be fully integrated into the global economy. Removal of trade barriers and enhancement of trade facilitation are

among the initiatives undertaken by ASEAN to achieve greater integration. Implementation of ASEAN lanes in airports will

boost ASEAN connectivity. By bringing down tariffs and non-tariff barriers, the AEC also seeks to strengthen internal securi-

ty and generate greater cooperation on maritime disputes and terrorism. With the launching of the ASEAN Community, it is

deemed as one of the most diverse regional associations in terms of economic development, political, ethnic, religious and

cultural backgrounds, and it is expected to grow into the world’s fourth biggest economy by 2030.

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Aspects of the AEC

Trade

The ASEAN-Six member nations eliminated 99.2% of tariff lines, literally meaning that most goods are traded with a max-

imum of 1 percent of trade duties. On the other hand, a reduction of 97.52% of tariff lines to 0-5 percent trade duties, with

measures to reduce technical barriers, has been achieved by Cambodia, Lao PDR, Myanmar and Vietnam (CLMV). Intra-ASE-

AN trade has been soaring upwards at an average rate of 10% per annum, brought about particularly by the effect of the

ASEAN Free Trade Area. Inter-regional trade was also further boosted by the formation of the ASEAN+3, which includes

China, Japan and South Korea, bringing further benefits to the economic bloc.

The establishment of the Self-Certification System, which gives exporters the right to determine whether their goods or

services have met prerequisite requirements, will greatly reduce the trade costs and expedite the whole process. The ASEAN

Single Window Gateway (ASW) requires the connection of all of the respective National Single Windows (NSW) to ensure

the sharing of trade data and information, which further reduces transaction times and eases custom clearance. In an effort

to reduce technical barriers, the Mutual Recognition Arrangements (MRAs) harmonises 170 technical standards to offer

mutual recognition of testing and certification for electrical and electronic equipment. In terms of services, the free flow of

services is emphasized through the implementation of the ASEAN Framework Agreement on Services (AFAS). It is an ambi-

tious attempt at easing cross-border restrictions to promote market liberalisation in as many as 80 subsectors.

Singapore Exchange and Stock Exchange of Thailand.

ASEAN Economy InfographicSource: ASEAN Secretariat, 2015

Investment

The ASEAN Comprehensive Investment Agreement (ACIA)

seeks to bolster liberalisation and protection of cross-bor-

der investments operations, coupled with best practices

in treatment for foreign investors. To further facilitate free

flow of capital, stock exchanges from Indonesia, Malaysia,

Philippines, Singapore, Thailand and Vietnam are current-

ly working on forming ASEAN Exchanges which envisage

boosting capital markets across the region. A follow-up

endevour is the launching of the ASEAN Trading Link,

rendering a shortcut for investors to participate in the ex-

changes of Bursa Malaysia, Singapore Exchange and Stock

Exchange of Thailand.

Labour

In promoting free flow of skilled labour, the ASEAN Agree-

ment on Movement of Natural Persons (MNP) aims to fa-

cilitate the movement of skilled labour across borders of

member states. The ongoing MRA seeks to provide a com-

mon platform for certain professions, such as doctors, en-

gineers, dentists, accountants, nurses, surveyors, architects

and tour guides, to move around in the region, required

them to sit for only one specified test to get their skills

recognised. However some issues are called into question,

especially when this policy will promote migration of la-

bour to certain developed countries, which might worsen

the brain drain scenario.

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Competitive Economic Region

Competition policies and laws are adopted to promote a culture

of fair play amidst fierce competition. Following theories of mar-

ket competition, it is forecasted that consumers would receive the

most benefits as competition leads to a higher level of produc-

tivity and efficiency. The law set out will also protect consumers

and provides guarantees for intellectual property rights. In order

to support trade facilitation, investment as well as tourism oppor-

tunities, the collaboration between the ASEAN member states has

designed the ASEAN Highway Network (AHN), with the “Transit

Transport Route” strategically connecting the route in mainland.

Furthermore, the ASEAN Power Grid (APG) has been set up to

build a regional power transmission network linking all member

countries. The ongoing project has successfully connected six

of out the sixteen cross-border interconnections, along with the

connection of gas pipeline infrastructure. Cross-border electricity

trade is expected to be given a boost, with 11 bilateral pipeline con-

nections with total length of 3,020km. ASEAN state members also

agreed on the Open Skies Policy for both cargo and passenger

services which provide greater liberalisation of air services. A key

development in the telecommunications sector was the effort in

reducing roaming rates within ASEAN. The best example was the

bilateral agreement between Malaysia and Singapore to reduce

roaming rates by half in recent years.

Equitable Economic Development

The flagship projects under the Strategic Action Plan for ASEAN SME Development (2010-2015) aims to promote devel-

opment among the Small and Medium Enterprises (SME) in ASEAN. The thirty business incubators and innovation centres

which comprise the ASEAN Business Incubator Network (ABINet) seeks to promote business matching and development

(ASEAN, 2015). Currently with all the member states in ASEAN enjoying different levels of economic development, the Ini-

tiative for ASEAN Integration (IAI) was set up to develop approaches to aid in promoting more evenly shared economic and

development benefits between all member states. It coincides with the ASEAN Framework for Equitable Economic Devel-

opment (AFEED) to act as a guideline for members to work on the principles of inclusive and sustainable growth, poverty

alleviation and narrowing the development gap.

Integration into the Global Economy

“One of the important success stories of the AEC is ASEAN’s integration into the global economy” (ASEAN, 2015). Follow-

ing various “ASEAN+1” free trade agreements with partners such as China, Japan, Korea, India, New Zealand and Australia,

ASEAN has successfully acquired a strategic seat in global trade linkages. Meanwhile, ASEAN is on its way to negotiating

the ASEAN-led agreement, the Regional Comprehensive Economic Partnership (RCEP), focusing on mutually beneficial

economic partnerships with its FTA partners. Improvements to market access, trade facilitation, regulatory reform and more

liberal rules of origin as expected after the conclusion of the project.

ASEAN Population InfographicSource: ASEAN Secretariat: UN Population DIvision - World Populations

Prospect, 2015 Rev

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Increased business interest in the AEC

With vast amounts of Foreign Direct Investment (FDI) being injected into ASEAN, it is clear that ASEAN has exploited the

momentum of ASEAN integration to the fullest extent. Business interest has developed immensely, as proven by the emer-

gence of the ASEAN Business Club. The largest consulting firms across the ASEAN region have jumped on the bandwagon to

raise the awareness of the AEC (ASEAN, 2015). Based on the survey on competitiveness conducted by the ASEAN Business

Advisory Council (ABAC), 48 percent of businesses take into consideration the investment attractiveness offered by ASEAN,

implying that they always hold onto an “ASEAN strategy” perception.

AEC 2025: The Way Forward

As things stand today, the AEC is definitely not the ultimate goal of ASEAN since it has not been explored to its full extent

yet. The AEC Blueprint 2025 has been adopted in order to guide this supra-national cooperation to greater heights from

2016 to 2025, along the road of transformation which will be fraught with uncertainty and difficulty. The central focus will

be based on following characteristics:

ASEAN Trade InfographicSource: ASEAN Secretariat, 2015

1) A highly integrated and cohesive economy

2) A competitive, innovative and dynamic ASEAN

3) Enhanced connectivity and sectoral cooperation

4) A resilient, inclusive and people-oriented, peo

ple-centred ASEAN

5) A global ASEAN

Since ASEAN is a dynamic region constantly challenged

by external forces, it should constantly employ new initia-

tives to maintain its relevance. The proliferation of ASE-

AN-based multilateral institutions has demonstrated well

the commitments of each member state which they have

pledged to do. While holding onto the dual principles of

sovereignty and non-intervention, these two principles

arguably should be relaxed to allow greater inclusivity and

convergence under one single roof. The modus operandi

of non-interference, dubbed as ‘The ASEAN Way’ (Sukma,

2010), is given by the definition of governments not airing

their differences in public when conflict arises. Instead,

they work closely, often behind the closed doors, to iron

out those differences, and try their best to keep the media

out of the process. Respect is greatly earned when each

country resolves to solve conflicts without interference

from other members.

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Addendum

Research Officer: Seet Qinhong

“It is not a question of if but when the ASEAN Economic Community will rival the EU”. (World Economic Forum, 2015)

The establishment of the ASEAN Economic Community (AEC) is seen not only as a milestone for the ASEAN region but also

a platform on which to build a strong foundation for long-term development. ASEAN as a regional bloc has hitherto existed

in the shadow of the more established and influential European Union. However, ASEAN will prove to be a formidable rival to

the EU in the years to come as GDP growth in the former is forecast to clock at 5.4% per annum from 2014-2018 (OECD, 2013)

compared to Europe’s 2%, and there are many indications that it would not just stop there (World Economic Forum, 2015).

While the prospect of ASEAN as a unified economic bloc like that of the EU remains distant, there have been improvements

with regards to tourism and the removal of tariffs, which could see that become a reality (World Economic Forum, 2015).

The AEC might not be perfect as a few ASEAN countries face challenges such as poor competitiveness and subpar infra-

structure (KPMG, 2014). The four pillars of the AEC – namely, a single market and production base, establishing a competitive

economic region, equitable economic development and integration in the global economy – however, symbolise the next

step of economic development for the Southeast Asian region.

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Research Themes

1. International Relations

Pragmatism Now? - ASEAN Diplomacy in the 21st Century

Research Officers: Edward Eng and Eugene Chong

“What is ASEAN?” is a question just as intricate and pertinent today as it was back on 8 August 1967 in the midst of a trans-

national communist insurgency and the announcement of a new federation of states known as Malaysia. ‘ASEAN’ seems

intuitive, and on some levels, rightly so – the 8th August document proclaimed that the aim for member countries was to

cooperate in the ‘economic, social, cultural, technical, education and other fields, and in the promotion of regional peace

stability’ in adherence to United Nations Charter principles. All Southeast Asian states could join as long as they were willing

to adhere to the same aims, principles and purposes (Flores and Abad, 1997). This conception of ASEAN was deemed nec-

essary, according to then Thai Foreign Minister Thanat Khoman, who was among the five foreign ministers at the Bangkok

Declaration. Firstly, an organisation was needed to fill the power vacuum suddenly left behind by former colonists – the Thais

seemed best suited to broker regional contract with their physical weight and already-independent monarchy.

Secondly, there was a need for a more cooperative community exempt from the influences of superpower members as the

American-led Southeast Asia Treaty Organisation (SEATO) proved entirely inept during conflicts such as the Laotian Civil

War. Thirdly, there was a need for the Southeast Asian countries themselves to be heard amidst the rivalries between the su-

perpowers and former colonialists (Khoman, 1992). ASEAN today has come far in shrugging off the shackles of its past – per-

haps this is good evidence to argue for a constructivist resurgence? Although empirically convincing in the recent past, ASE-

AN’s trajectory towards greater armament under the overtones of international terrorism, a changing balance in superpower

clout and new macroeconomic trends contend most strongly for a shift toward something just short of a security regime.

Constructivists argue that ASEAN has indeed made the region a safer, richer place by avoiding institutionalisation and

working through a softer community-based approach. As a unique example for international relations, ASEAN claims good

success in fostering community through nationalism as its nations have a shared history in their encounters with colonialism

in all its forms (even monarchist Thailand encountered the hostile French and was forced to cede Laos to French Indochina)

(Ooi, 2004). The lack of bloody wars between ASEAN countries in recent decades pays reasonable testament to the success

of community building – even when arguments such as the Pedra Branca territorial dispute arise, they are resolved non-vi-

olently in international courts.

Wendt’s newer formulation of constructivism does seem to encapsulate this – organised cooperation tends to lead gradually

to a single, positive identity formed among a community of states as they become more inclined to shape their interests in

the context of others (Wendt, 1994). Moreover, it can be argued that even as many ASEAN states consider defence arrange-

ments with external militaries as integral to their defence, most of them were largely fashioned from historical relations (such

as the Five Power Defence Agreement and post-SEATO defence agreements between the US and Thailand, and the US and

the Philippines) (Busse, 1999). Interestingly enough as well, the 1980s and 1990s were periods of relatively low absolute and

relative defence expenditure for ASEAN countries, with only the Philippines spending more on defence as a percentage of

GDP in 1995 than in 1985 (refer to table below). This presents a somewhat convincing pre-21st century attack on the realist

view on armament, especially when we consider that this stagnancy in expenditure took place amidst a pre-crisis economic

boom and extremely tense relations in the South China Sea involving half of the ASEAN nations.

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That being said, the turn of the new millennium marked a drastic change in traditional defensive and offensive realist views

with a new security paradigm in Southeast Asia. Fluid threats such as secessionist groups and militant terrorism have evolved

for worse with the growing influence of external Islamist groups (now made even more rapid with the Islamic State situa-

tion in the Middle East), forcing security agencies to cooperate where they would otherwise have not cooperated (ASEAN,

2016). Some of these threats have solidified and deadly attacks by Islamist-linked groups have occurred in heavily populated

Mindanao and Jakarta in recent months. Stagnancy in military spending, thus, is no longer a sufficient indicator of positive

views on security.

Another striking reminder that the idea of ASEAN being made cohesive by social identity is overly idealistic is that ASEAN

today almost seems like an arms race. Military spending in the region has grown sharply in the past half-decade with ASEAN

countries increasing their spending by an average of 37.6% in USD terms and 44% in local currencies between 2010 and 2014.

Countries like Vietnam have developed navies with sophisticated missile systems and Kilo-class submarines formidable to

not just neighbouring militaries but also to the ever-growing Chinese leviathan (Abuza, 2015). A convenient reason for this

growth simply is that ASEAN is building its firepower in order to negate the Chinese build-up – if taken as a whole, ASEAN’s

firepower has become considerable and ranks just behind the established powers. Indonesia, Thailand and Vietnam place

at 12th, 20th and 21st respectively in the 2016 Global Firepower rankings, while Japan, South Korea and Taiwan, the other

stabilising powers in the region, all fall within the top 15 and as a loose collective pose a potential threat to China if it were to

take large steps in the sea dispute (Global Firepower, 2016).

The arms race however, does include states not only not involved in the South China Sea dispute but also actively avoiding

joining it. Part of this rise can be explained by internal instability in countries like Thailand where coups have overturned

short-lived civilian leaderships that now see a real necessity in exchanging military spending for compliance. Singapore and

Indonesia’s strengthening militaries may also be a reaction to the major threat of maritime piracy in the region as Southeast

Asian waters, the lifeblood of critical regional trade, become by far the most-afflicted by piracy in the world (The Economist,

2015). However, the majority of spending seems to only be justified with neoclassical realist claims that ASEAN countries

have simply become more concerned with threats on sovereignty. Political theorist Morgan Potts argues strongly against

the conception of ASEAN as a security community in this sense, claiming that even though ASEAN may have ‘security’ and

‘community’, it does not fit the constructivist claim that ‘community’ is causally linked to ‘security’. Potts also claims that

community in ASEAN is not as strong as often suggested, given that disputes still do occur between member states (Potts,

2015). Arguably then, the ‘community’ in ASEAN becomes more of a term used to encourage economic peace between the

states. Even as ASEAN countries do significantly more business with foreign powers such as the EU (ASEAN is the EU’s 3rd

largest trading partner outside Europe and is listed as a ‘priority region’ in the 2006 Global Europe Communication), states

do see the need to cooperate in ensuring good business conditions and security on an ASEAN level, particularly to compete

with other emerging market blocs (European Commission, 2006).

US$ millions (1995 constant prices) As a % of GDP

1985 1994 1995 1985 1994 1995

Brunei 280 263 268 6.0 6.0 6.0

Cambodia N.A. 133 126 N.A. 5.0 4.7

Indonesia 3,197 2,486 2,751 2.8 1.6 1.6

Laos 75 77 73 7.8 4.9 4.2

Malaysia 2,409 3,142 3,514 5.6 4.4 4.5

Philippines 647 1,117 1,151 1.4 1.7 1.6

Singapore 1,622 3,118 3,970 6.7 5.0 5.9

Thailand 2,559 3,630 3,896 5.0 2.5 2.5

Vietnam 3,277 922 910 19.4 5.1 4.3

Defence Expenditure in Southeast AsiaSource: Busse, 1995

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A stronger case against the socially constructed community argument is that ASEAN countries do pressure each other into

cooperation when facing transnational problems with serious economic impacts, poking holes in ASEAN’s otherwise gen-

erally successful non-interventionist culture. Indonesia, the region’s largest contributor to the haze crises in Southeast Asia,

only ratified the uniquely binding ASEAN Agreement on Transboundary Haze Pollution in September 2014 after prolonged

regional pressure (Nguitragool, 2011), more than a decade after it was signed. With the haze still costing the region tens of

billions of dollars despite the ratification of the Agreement by every ASEAN country, what follows surely is greater dialogue

on the existing incapacity of ASEAN to enforce regulations in self-interested states (Chan, 2015). This difficulty in interven-

tion and inability to enforce regulation undermines the solving of the haze problem – a simple Prisoner’s Dilemma in which

payoffs are assumed to be similar for each country, showing that the dominant strategy would to avoid cooperation and

take the incentive of acting as a free rider. Given that a number of ASEAN nations are still developing, including the primary

haze contributor Indonesia, the solution to rebalancing the game theory matrix would be for the richer countries to provide a

greater share of benefits to poorer countries if they cooperate – this is very unlikely considering the physical diminutiveness

of ASEAN’s developed economies relative to the neighbouring behemoth that is Indonesia (Chuang and Rajan, 2000). What

is more important and mostly under-discussed until recently in analysing ASEAN’s poor track record with regard to the haze

problem may be that the existing Agreement does little to address the link between the environment and development.

With societal and economic security in question and the stakes potentially as high as in the haze crises, ASEAN will almost

certainly need to move away from its community-based approach towards regimentation.

Yet, ASEAN’s standing as a regime or community is most certainly not as clear-cut as the ‘organised hypocrisy’ of non-in-

terference suggests. Even with conversation driven by the haze situation and the Rohingya refugee crisis, ASEAN’s history

seems to suggest that acts of interference in sovereigns are not one-off and do happen on a case-by-case basis depending

on how much a portion of ASEAN society stands to gain in preserving its place at the top of the social order. ASEAN’s Zone

Of Peace, Freedom And Neutrality (ZOPFAN) Declaration, for instance, was conceived explicitly as a regional order to free

the region from the influence of external powers during the Cambodian Civil War, effectively internalising the lengthening

conflict and segregating Cambodia from essential foreign aid (ASEAN, 1971). ZOPFAN was a compromise following a pro-

posal by Indonesia and Malaysia to allow Vietnam to continue to possess ‘effective veto power over much of Cambodian for-

eign and defence policy’. This proposal had been rejected by Singapore and Thailand on the basis that it might ‘encourage’

Hanoi. The resulting ZOPFAN eventually enshrined ASEAN diplomats with the decision-making power previously held by

foreign nations. Instead of working with the goal of evicting prolonged foreign interference from Cambodia in mind, heavy-

weight ASEAN nations worked largely through self-interest during intervention (Jones, 2009).

In conclusion, there seems to be a normative consensus that ASEAN does need to move toward greater interference when it

comes to intra-regional foreign policy. Community, as much as constructivists may claim, is dubitable even when it seems to

explain periods of peace and the missing arms race before the turn of the century. Interference has not just been an irregular

practice hidden away by ASEAN but is now also seen more readily as a natural solution to persisting intra-regional problems.

Bilahari Kausikan, current Singapore Ambassador-at-Large and an ardent proponent of realist pragmatism for Singapore’s

foreign policy puts this culture of sporadic transnational intervention most bluntly: ‘Frankly, we have been interfering merci-

lessly in each other’s internal affairs for ages, from the very beginning’ (Jones, 2009). ASEAN seems to have had its track re-

cord in dealing with intra-regional conflicts marred seriously by the non-cooperation favoured by even payoffs and will likely

stay stuck in this quagmire as it is its richer members that have historically dictated ideals and payoffs. On the other hand,

only time will tell if ASEAN is able to hold its own in external conflicts as it has with China’s navy for the past few decades.

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2. ASEAN: Rising Industries

Research Officer: Passawan Popueannoi (Beau)

There are four key industries for investment in ASEAN:

1. Tourism

• Southeast Asia is one of the fastest growing regions for tourism

in the world.

• Natural resources, diverse cultures, job opportunities and medical

purposes make the region appealing not only to people from the

region itself but also across the world, with approximately 98 million

international tourist arrivals in 2015 (Rozario, 2016).

• According to the World Travel and Tourism Council, travel and

tourism sector directly contributed to 4.8% of the region’s GDP and

7.4% of total investment in 2014.

• Medical tourism is also a growing, competitive industry. Thailand

attracted around 2 million tourists yearly for medical services such as

plastic surgery and annual checkups. The Philippines has also striven

to improve its medical equipment and facilities, in part to welcome

medical tourists.

• With the huge number of tourists coming to ASEAN and the po-

tential to attract more of them to the region in the foreseeable fu-

ture, this is a great opportunity for investors to have a thorough look

at, and start considering investing in, tourism and service industries

such as accommodation, transportation and restaurants in Southeast

Asia.

• However, how will tourism affect local peoples and natural re-

sources? Will a booming tourist sector contribute to environmental

degradation?

• Concerns about this have recently been addressed. In January 2016, ASEAN tourism ministers launched a new ASEAN

Tourism Strategic Plan (ATSP) 2016-2025, with the hope to ensure that the region’s tourism will be sustainable and inclusive.

• The ATSP also include plans to improve air, sea, road connectivity and infrastructure and travel facilities in destinations that

are less developed and outside the main gateways, particularly in poorer member states in order to increase their potential

in attracting more tourists and encourage competition.

• According to the Associated Press, Philippine Tourism Secretary Ramon Jimenez Jr. anticipated that a common ASEAN

visa, which will enable tourists to travel anywhere across the region, may be possible within the next 5 years.

• If the plan is fully enforced, it is predicted that by 2025 the ASEAN tourism sector could increase the region’s GDP by 15%

and its share of total employment could rise from 3.5% to 7%.

ASEAN Connectivity InfographicSource: ASEAN Secretariat, 2015

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2. Electronics

• Electronics industry is a major force in ASEAN’s economic development, accounting for around 12% of total exports in the

region in 2010 (Zito, Lynn and Liu, 2014).

• China and Japan are the largest markets for ASEAN’s electronics products.

• According to Invest in ASEAN, more than 80% of world’s hard drives are made in Southeast Asia.

• Singapore has long been the focal point of capital-intensive electronics investment in the region due to its business-friend-

ly policies and highly educated workforce.

• Vietnam, with its low wages and tax incentives, has emerged as an electronics exporter, making electronics as the coun-

try’s top export item in 2012. It has attracted investments from transnational corporations, such as Samsung and Mitsubishi

as their manufacturing base for their products, with Samsung alone making up 20% of total Vietnam’s exports in 2014.

• Even though Cambodia’s contribution to electronics exports is minor compared to other countries in the region, its low

cost of production would appeal to more investors and thus help increase its electronics exports in the future, particularly

insulated wire.

Regional Production Opportunities: 4 example countries

Singapore

Malaysia

Vietnam

Cambodia

Source: Asia Briefing Ltd




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3. Information and Communications Technology (ICT)

• The ASEAN ICT Masterplan 2015 (AIM 2015) is designed to expand the reach of services, such as broadband and telecom-

munications infrastructure to attract more FDI flows into ASEAN.

• ICT would be a key tool towards economic integration e.g. through online banking and other online services.

• Gartner predicted that corporate IT spending in Southeast Asia will reach $62 billion by 2018 even though there are a

number of limitations in terms of politics and the challenges imposed by the financial climate.

• Singapore is seen as the ICT hub in the region and would attract more investors to the country. As can be seen from the

table, it has the highest internet penetration, accounting for 73%.

• However, it can also be seen that internet penetration in less developed countries in the region such as Cambodia, Myan-

mar and Laos is still much lower compared to the rest of ASEAN.

• Therefore, the problem of digital divide among ASEAN’s member states still remains and thus ASEAN integration seems

difficult.

• Moreover, because of ASEAN’s diversity and the member states’ different standards, investment in different markets

across the region is marked by high costs in the form of time wastage.

• Nevertheless, according to AIM 2015, governments across the region realise the importance of ICT since people’s potential

would be more developed when they are connected, thereby they have tried to expand the access of ICT to as many people

as possible, even though there is much more to be done.

• The ICT sector is projected to increase the competitiveness of other industries as well (Yuwono, 2014). ICT opportunities

in ASEAN are therefore progressing.

4. Science, Technology and Development

• At the ministerial meeting on science and technology in November 2015, ministers advocated for more emphasis on sci-

ence and technology as well as greater collaboration among ASEAN member states

• Through the meeting, the ASEAN Committee of Science and Technology (COST) was also encouraged to implement

actions under the provision of the new ASEAN Plan of Action on Science, Technology and Innovation (APASTI) 2016-2025

• The APASTI will focus on ‘strengthening collaboration between academia and the private sector for capacity building,

technology transfer and commercialisation and also enhancing talent mobility and people-to-people interaction, especially

for women and young people in science, technology and innovation’ (The Brunei Times, 2015)

• An ASEAN Talent Mobility (ATM) Platform was welcomed and this would help the mobility of scientists and researchers

not only within ASEAN, but also between ASEAN and its dialogue partners such as the EU, Japan, Russia, South Korea and

the U.S. (ASEAN.org, 2015)

• However, according to Hunter (2012), ‘ASEAN nations need indigenous innovations to transform economy but do little

about it’. There is therefore little sign of regional cooperation in such a sector.

• He claimed that innovation has rarely been on the ASEAN agenda, and the region is seen by foreign manufacturers as a

production base rather than being able to initiate innovations itself.

• Therefore, advancements in science and technology in the region tend to be sub-contracted to foreign firms, which means

that ASEAN people are consumers rather than innovators of technology.

• Much research is ad hoc and based on previous research. This is one of the reasons that there are not many new indige-

nous innovations in the region.

• Another reason, with the exception of Singapore, is that the region’s educational standards are relatively low

• The region cannot fully benefit from honing its creative talents without upholding the unique norms and values of the

different member states. Therefore, we need to solve this through education. The region should focus on its talents through

diversity rather than conformity so that its people can maximise their full potential.

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3. Investment in ASEAN

Research Officer: Nur Husnina binti Mohamed Zamry

ASEAN is the United States’ third-largest Asian trading partner and the largest Asian destination for American investment

(J. P. Morgan, nd). ASEAN has the potential to become the world’s fourth largest market after the EU, the U.S. and China by

2030 due to increasing growth, supply of skilled labour, ample natural resources and a favourable location (J. P. Morgan, nd).

ASEAN was also the region for huge market-moving Initial Public Offerings (IPO) in 2013, such as the BTS Rail Mass Transit

Growth Infrastructure Fund in Thailand and Singapore’s Mapletree Greater China Commercial Trust. Home to 10% of the

world’s population, ASEAN can expect to experience 5% annual GDP growth by 2018 (Hodal, 2015).

According to ASEAN Investors (2015), factors that make ASEAN an attractive investment destination are sustained econom-

ic growth, a large young population (60% of ASEAN’s population is below 40 years old compared to Europe’s 40%) and high

estimated infrastructure spending (S$9.97 trillion) over next 15 years. Furthermore, the establishment of the AEC has the

potential to drive growth in the region. Under this topic, the following areas will be explored:

• Impact of the ASEAN Economic Community (AEC) on investment

• Foreign Direct Investment (FDI) in Indonesia, Vietnam and FDI

from New Zealand

• Benefits and problems of having a single market for ASEAN: ASE-

AN Economic Community (AEC)

• Infrastructure Investments in ASEAN

• Growth of E-Commerce

Impact of the ASEAN Economic Community (AEC) on investment:

• The implementation of the AEC will lead to liberalisation in the

flow of goods, services, capital and skilled labour within the region.

This is expected to increase the region’s competitiveness, gain future

investments as well as assist in increasing ASEAN’s GDP by 5% by

2030

Long term growth will be expected after the implementation of the

AEC due to three factors:

a) ASEAN is replacing China as a manufacturing location and the

demographics of the region promise ample supply of affordable la-

bour.

b) The region’s rapidly growing population represents an increase

in consumer-spending power. Moreover, Southeast Asians are also

becoming more affluent and this could lead to an increase in con-

sumer markets as a whole.

c) ASEAN is home to an established and trusted international financial centre (Singapore). Increasing financial liberalisa-

tion could help lower transaction costs and facilitate investment flows into ASEAN (Rikhye, 2015).

Foreign Direct Investment in ASEAN

• The ASEAN-5 countries (Indonesia, Malaysia, the Philippines, Singapore and Thailand) received more FDI ($128.4 billion)

compared to China ($117.6 billion) in 2013

• There is a striking increase in intra-regional trade both within ASEAN and among emerging Asia’s economies more

broadly

• FDI differs in the different ASEAN countries. For example, to sustain FDI inflow, Myanmar has to improve regulation and

increase transparency while other developed ASEAN countries have to remain competitive (J. P. Morgan, nd)

ASEAN Foreign Direct Investment InfographicSource: ASEAN Secretariat, 2015

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a) FDI in Indonesia

• ASEAN members who were least exposed to the stagnation of Chinese demand, such as Indonesia, had a larger share of

inward investment

• During the first half of 2015, it was reported that Indonesia attracted 31% of FDI in ASEAN

• Weak trade relations between Indonesia and China attracted investors to invest in Indonesia in order to mitigate the po-

tential risks associated with China.

• Due to low demand for Indonesian exports by ASEAN and India, industries in Indonesia may not be able to take advantage

of AEC’s reduction in trade barriers

• The implementation of the AEC, which removes the non-tariff barriers, could boost the profitability of Indonesia’s palm oil

as it is highly demanded by ASEAN, China and India

• The price stability of palm oil gave investors confidence to invest as they can expect a return on investment

• Besides that, Indonesia’s business climate offers the perfect condition for investment

• Indonesia’s profit margin from palm oil is not badly affected compared to Malaysia due to the implementation of the AEC

(ASEAN Briefing, 2015)

b) FDI in Vietnam

• FDI is increasing in Vietnam due to improvements in the macroeconomic environment and competitive wage levels com-

pared to coastal China (Hodal, 2015)

• Prospects for FDI inflows into Vietnam from ASEAN countries after the AEC takes effect depend on the absorptive capac-

ity of the Vietnamese economy, which in turn is determined by the annual FDI disbursement rate.

• Vietnam’s FDI disbursement has been increasing gradually from 2011 to 2015, during which it reached US$14.5 billion.

However, Vietnam would have to improve on their labour resources, infrastructure, and management capacity to tackle their

low rate of FDI disbursement.

• Even though investment into Vietnam by ASEAN countries and vice versa is expected to further increase after the imple-

mentation of the AEC, Vietnam is not expecting a breakthrough in investment due to high competition among the countries

in the bloc and around the world.

• Vietnam’s national competitiveness is still behind that of other ASEAN members such as Malaysia, Thailand, Indonesia

and the Philippines.

• Vietnam would require institutional reform, improving the quality of its workforce, competitiveness of the economy and

enterprises to sustain the FDI growth rate. (Foreign Press Center, 2016)

c) FDI from New Zealand

• In order to increase trade and investment links with ASEAN, New Zealand will inject NZ$200mil (RM562mil) into ASEAN

• The relationship between ASEAN and New Zealand would be upgraded from a “Comprehensive Partnership” to a “Stra-

tegic Partnership”.

• New Zealand is interested to invest in ASEAN due to its large population, expected increase in GDP to US$5.2 trillion by

2030 and strong growth in trade

• Funding will be focused on human capital and creating links between young leaders and emerging entrepreneurs

• On top of that, New Zealand will also increase trade and economic cooperation, capacity building efforts (which focuses

on ASEAN’s trade and agricultural expertise) and assist in improving ASEAN countries’ abilities to respond to natural disas-

ters. (Hamdan, 2015).

Benefits and problems of having a single market for ASEAN

Benefits:

• Anticipate lucrative benefits from deeper trade and economic integration

• Companies are attracted to Indonesia and Burma as they were named possible factory locations

• An increasing proportion of middle class people across the region indicating healthy domestic markets

• Increasing potential for ASEAN as there are sources of both skilled and unskilled workers (Hodal, 2015)

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Problems:

• Risk of human rights being sacrificed to the imperatives of big business

• Each country in ASEAN has different scopes and aims

• Border issues, customs, immigration and different regulations

• Certain countries already benefit more from the united marketplace than others

• Regional challenges such as religious extremism and human trafficking

• ASEAN People’s Forum listed problems in the region: grave human rights violations (slavery), corruption and poor gover-

nance, state-sanctioned land grabs, authoritarian and military regimes, police brutality, torture and enforced disappearances

and lack of corporate responsibility and accountability (Hodal, 2015).

• Differences in the way the countries are administered, per capita GDP, currency regulation and political conditions (J.P.

Morgan, nd).

Infrastructure Investments in ASEAN

• The rise of Foreign Direct Investment (FDI) into ASEAN ($117.7 billion in 2013 to $136.2 billion in 2014)

• FDI flows from the majority of ASEAN’s Dialogue Partners have been strong

• Intra-ASEAN investment also rose by 26% to $24.4 billion in 2014 from $19.4 billion in 2013 (ASEAN is the second largest

investor in the region after the EU in 2014)

• The private sector plays an important role in bridging the infrastructure gap in ASEAN

• Increasing transfers of labour-intensive manufacturing activities from higher-cost locations in other Asian economies and

within ASEAN to the CLMV (Cambodia, Lao PDR, Myanmar and Vietnam) countries, as well as other ASEAN member states

such as Indonesia.

• Investment in improving old infrastructure, i.e. expanding or upgrading existing infrastructure, is important to assist the

rapid growth in demand

• Steps involved in this are finding resources and suitable projects and the participation of different players to make it

happen

• ASEAN member states took steps to expand their industries by the deregulation of some sectors, privatisation of infra-

structure assets (telecommunication and power generation) and encouraged involvement of the private sector (Invest in

ASEAN, 2015)

Importance of infrastructure investment to ASEAN

• Infrastructure is one of the main factors to make AEC a reality (greater connectivity among the member states, logistical

efficiency, increase trade, commerce and investment)

• Improve quality of life in the region, reduce poverty and support development

• Provision of adequate infrastructure in services such as electricity and transportation can help boost GDP

• Lack of infrastructure is hindering economic development in some member countries, such as Cambodia, Lao PDR, Myan-

mar and Indonesia.

• Infrastructure investment also provides employment opportunities (Invest in ASEAN, 2015)

a) Indonesia could save $70 to $80 billion a year in logistics costs and can increase their GDP rate between 7% and 9% if

their islands are more accessible and improvements in overcrowded ports are made.

b) Investment in power plants in Lao PDR, increased electricity provided to homes by 70% today compared to only 16% in

1995. Besides that, Lao PDR also exported their electricity to Thailand showing that they could generate long term revenue

from investment in infrastructure

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Growth of E-Commerce in ASEAN

• Start-ups in ASEAN are becoming more successful in attracting investors especially in e-commerce (ASEAN Up, 2015).

• According to Balea (2016), start-ups in ASEAN managed to secure a total of US$1.61 billion in funding last year. Investment

in 2015 is 43% higher than 2014.

• More seed and series-A funding was secured by the region’s start-ups showing that they managed to pass scrutinisation

by venture capitalists. This certainly brings good news as our start-ups are gaining more recognition and may be able to

compete in the bigger market in future.

• According to Vanzyl (2015), there are many factors that drive e-commerce in ASEAN. The most obvious is the region’s

massive population of 625 million, a big consumer market.

• There is no denying the fact that increasing internet penetration in ASEAN is the fundamental factor that contributes to

this sector. Internet penetration has gone up to 33% in 2014 compared to 25% in 2010. Southeast Asians are quickly adapting

to changes in consumption methods from traditional walk-ins to online shopping.

• Major member states of ASEAN such as Singapore, Thailand, Vietnam and Malaysia have surpassed the global average in

mobile penetration.

• The increasing young population in ASEAN can help e-commerce grow in ASEAN due to their continuous engagement

with social media and the Internet.

• Besides that, the growth of the middle class in ASEAN is also contributing to the growth of this sector.

• Most successful start-ups in ASEAN incorporate e-commerce into their business, such as Go-Jek and Tokopedia in Indo-

nesia, GrabTaxi in Malaysia, Foody in Vietnam.

• Nonetheless, e-commerce penetration in ASEAN is still considered low compared to South Korea, the U.S. and globally in

general. It is only 1-2% of the total retail sales in ASEAN.

• Mittal (2015) states that challenges in this sector include managing customer expectations and the perception of speed

and reliability of the services offered.

• Besides that, before one can start a business related to e-commerce, it is also vital to take into account cross-border is-

sues, infrastructure and transportation costs involved in this sector.

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4. Education in ASEAN

Where are we now?

Research Officer: Jaideep Singh

The ASEAN region is characterised by a diverse range of education systems, ranging from high-performing Singapore to

countries with tremendous scope for improvement, namely Cambodia, Laos and Myanmar (UNESCO, 2014). Disparities in

the educational capabilities of the ten member states are in fact so pronounced that the institution’s progress in terms of

harmonisation in line with the ASEAN Economic Community (AEC) has been slow (ASEAN, 2013). It was not until the ASE-

AN 5-Year Work Plan on Education (2011-2015) – and its predecessor the complementary ASEAN Socio-Cultural Blueprint

(2009) – that the organisation demonstrated concrete, long-term commitment towards improving educational quality

across Southeast Asia. The plan revealed a number of issues of concern in ASEAN education as well as setting goals to be

achieved by 2015. With the plan recently concluded, now is as good a time as any to assess these issues and the overall

performance of the region, which this article outlines.

Background

The role of education in shaping the community we call ASEAN can be traced back to its early days. During its inception

nearly fifty years ago, ASEAN made the provision of training and research facilities among its founding pillars (ASEAN

Declaration, 1967). In this regard, the Southeast Asian Ministers of Education Organisation (SEAMEO) was founded, which

facilitated the opening of regional centres for research and the learning of science and mathematics, languages and

technology from the 1970s through to the 1990s and beyond (SEAMEO, 2015). Yet ASEAN lacked particularly large-scale

endeavours in education until the ASEAN University Network’s establishment (AUN) in 1995. The first substantial initiative

to unify and regionalise education in ASEAN, the AUN is a tertiary education framework bringing together 30 universities

across Southeast Asia through scholarships, internships and credit transfer schemes (asean, 2013). Even then, there was lit-

tle ambitiousness for education in the region prior to the ASEAN 5-Year Work Plan on Education (2011-2015), which strived

to raise awareness of ASEAN, with an eye to increasing quality and internationalising education (ASEAN, 2013).

Issues and Assessment

Provision of basic education

Education in ASEAN cannot be considered a success if member states fail even in the basic role of providing primary and

secondary education. How does ASEAN fare in this regard? On paper, all ASEAN member states have ratified the Conven-

tion on the Rights of the Child (CRC), meaning they have officially committed to providing free primary education for all

children (UNESCO, 2014). Citizens in all member states are legally entitled to free, compulsory basic education, the dura-

tion of which is outlined in the graph below:

Years of free and compulsory education across ASEAN, 2011Source: UNESCO (2014) and International Bureau of Education (2011)

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However, in violation of the CRC, there are hundreds of thousands of stateless, undocumented or migrant children who

continue to be denied access to state schools in Cambodia (Yoon Lee and Whittaker, 2013), Malaysia (Allerton, 2014),

Myanmar (United Nations Information Centre, 2014) and Thailand (Thawdar, 2009) among others. Therefore, except for

marginalised non-citizens, net enrolment rates in primary education are not a serious concern, as evidenced by the table

below. This shows that ASEAN member states come close to – but do not entirely succeed in – achieving universal basic

education with youth literacy rates standing at 98.5% (ASEAN, 2013).

Gross enrolment ratio across ASEAN , or the total number of students of a given age in primary education as a percentage

of the total population in that age groupSource: World Bank (2016a)

Country Year Gross enrolment ratio (%)

Brunei 2013 91

Cambodia 2012 98

Indonesia 2012 92

Laos 2013 97

Malaysia N/A N/A

Myanmar N/A N/A

Philippines 2013 90

Singapore N/A N/A

Thailand 2009 96

Vietnam 2013 98

Cross-border mobility

The next area of interest under the AWPE is cross-border mobility.

Though the AEC aims to improve economic integration through

greater intra-ASEAN labour mobility, there remains a major barrier

to implementation in the form of unstandardised educational quali-

fications (VietnamNet, 2016). The region is essentially underutilising

its human capital. Granted, this is due in part to the lack of empha-

sis on the development of skills through technical and vocational

education and training (TVET), given that the share of TVET as a

proportion of total government expenditure on education tended

to decrease in the last decade (UNESCO, 2014). However, what

exacerbates the situation is that workers who are skilled end up

facing tedious licensure processes as well as requirements to repeat

education in different member states (Susantono, 2015). Such a

problem is perhaps inevitable due to the varying nature of education systems in ASEAN. Still, ASEAN expressed its inten-

tions to resolve this non-comparability through the creation of an ASEAN Qualifications Reference Framework (AQRF).

Proposed in 2010 (Manzala, c.2013), the AQRF aims to ensure that qualifications will be recognised, credit transfers pro-

moted and student and worker mobility advanced (ASEAN, 2013).

An examination of ASEAN reports reveals a significant amount of praise lauded at this initiative, but how much progress

has actually been made in terms of the AQRF’s realisation and implementation? The framework’s referencing process is

expected to begin this year or by 2018 at the latest. However, judging by the ‘unequal competitiveness’ of member states,

in addition to differing competency and efficiency levels across the region, ASEAN is only as strong as its weakest link. It is

thus highly likely that the AQRF will miss the early deadline of 2016 for implementation (Katigbak, 2015).

Divergence in educational quality

This brings us to the most pressing educational issue at the regional level: the divergence in educational capabilities

across member states. McGillivray and Carpenter (2013) noted that there exists a ‘development gap’ between the original

ASEAN-6 group of nations – that is Brunei, Indonesia, Malaysia, the Philippines, Singapore and Thailand – and the CLMV

countries – namely Cambodia, Laos, Myanmar and, to a lesser extent, Vietnam. This gap extends to education, specifically

years of schooling, as illustrated in the figure below:

Differences in the mean years of schooling (aver-age duration of education for people aged 25 and older) and expected years of schooling (number of schooling years that a child of schooling age is expected to receive, provided age-specific enrol-ment rates at that time persist) for ASEAN-6 and

CLMV countries as of 2013. Source: UNESCO Institute for Statistics (2013) and

McGillivray and Carpenter (2013)

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The information above demonstrates that children in ASEAN-6 are typically more likely to finish their basic education, and

to complete more advanced levels of study, than those in CLMV countries (except Vietnam). This can be attributed to the

reduced ‘financial capacity’ of the CLMV nations that inhibits effective investment in education as well as high poverty

rates – except, recently, in booming Vietnam – leading to lower school life expectancies compared to the more developed

ASEAN-6 nations (ASEAN, 2013). These findings are tabulated in the table below :

Primary school retention rate (the percentage of a cohort of students enrolled in Grade 1 of primary school expected to reach Grade 5) and education expenditure by governments in ASEAN as a percentage of GDP

Source: World Bank (2016b) and UNESCO (2012)

Country Year Primary school retention rate (%) Year Education expenditure (% of GDP)

Brunei 2010 99 2014 3.8

Cambodia 2012 70 2010 2.6

Indonesia 2011 90 2012 3.6

Laos 2012 73 2010 2.8

Malaysia 2011 99 2011 5.9

Myanmar 2009 75 N/A N/A

Philippines 2009 79 2009 2.7

Singapore 2009 99 2013 2.9

Thailand N/A N/A 2012 4.9

Vietnam 2012 94 2012 6.3

At the core of the matter, the CLMV countries, especially Cambodia, have education systems that do not yield high enough

returns on education in terms of skilled employment and career advancement due to limited professional employment

opportunities, thereby reducing incentives to stay in education (OECD, 2013). In an attempt to bring CLMV closer to par

in overall developmental terms, ASEAN listed 182 actions under the Initiative for ASEAN Integration Work Plan II (2009-

2015). These include capacity-building measures in the form of training, workshops on skills development, language train-

ing and scholarships (ASEAN, 2013). It is therefore evident that the ASEAN community is perfectly aware of the education-

al inequality in the region, which compounds already challenging efforts to integrate the member states.

But how effective are these measures? McGillivray and Carpenter (2013) argue that countries ought to focus on minimising

dropout rates and maximising student retention through ‘regional education cooperation’. In this context, any attempts to

develop the skills of stakeholders in education in CLMV will be ineffective unless accompanied by wide-ranging reforms

of the education systems themselves, including the decentralisation of institutions to give educators greater autonomy to

plan curricula. In other words, the work plan simply does not go far enough to seriously address issues on returns to edu-

cation in the CLMV countries.

There also appear to be “little divergences” in educational quality among the ASEAN-6 nations, with Singapore ahead

of the rest of the pack. The Singaporean model of education has been deemed one of the most successful in the world

because of high teaching quality (World Economic Forum, 2013) while Indonesia, Malaysia and Thailand often perform in

the bottom third of the Program for International Student Assessment (PISA) (Asadullah and Pereira, 2015). In this regard,

there is acknowledgement of the need to replace teacher-centric rote learning with greater focus on student engagement

and problem solving skills in those countries (ASEAN, 2013). However, because of the inevitably persistent nature of insti-

tutions and resistance to change, ministries of education across ASEAN have yet to walk the walk.

Conclusion

The ASEAN region has come a long way in terms of education and economic growth since its establishment. While there

is considerable room for educational improvement in almost all member states, even the poorest of states have generally

succeeded in the provision of compulsory, basic education with literacy rates close to world averages. For the AEC to be

a truly transformative effort, however, the countries that make up ASEAN need to work more closely together and imple-

ment deep-seated reforms, such as decentralisation to ensure high teaching quality and to incentivise pupils to stay in

school. Otherwise, ASEAN integration will be nothing more than a superficial, half-hearted notion.

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Country Focus: Myanmar

Research Officer: Seet Qinhong

Myanmar is a country rich in jade and gems, oil, natural gas and other mineral resources. In 2014, the country had a nom-

inal GDP of USD 64 billion. Led by strong domestic demand, it grew at 8.5% in real terms in 2014/15. This is a far cry from

the previous decade, where it only had a GDP of USD14.5 billion in 2006. Fiscal policy and expanded credit are contrib-

uting to growth, though both fiscal and monetary policy will likely need to be tightened in the forecast period to dampen

inflationary pressures and to stabilise exchange rate expectations.

Despite holding the mantle of the largest country in mainland Southeast Asia, Myanmar has one of the lowest population

densities in the region, with a mere 76 people per square kilometre in 2014. The sovereign state stretches 676,578 square

kilometres in size and has a recorded population of 53 million in 2015. Putting things into perspective, Myanmar holds

8.68% of the total 608 million people in all of the ASEAN countries, falling behind countries such as Thailand, Laos, Indone-

sia Vietnam and the Philippines.

The inflation rate was 10% in July 2015 and was largely the result of insufficient domestic rice supply resulting from

flooding and a depreciating currency. The effect of inflation is also exacerbated by political instability. Strikes in Myanmar

usually result in wage increases that lead to an increase in commodity prices. According to local food prices index, prices

of meat, fish, fruits and vegetables increased about 20% in the second quarter of 2014.

The Myanmar kyat depreciated against the US dollar by 24%, from MK965 in April 2014 to MK1275 in early September 2015,

largely the result of a widening current account deficit and a stronger US dollar. Gross official reserves remain low at less

than 3 months of imports.

As the democratically elected parliament convened its first session at the start of 2016, impediments still remain to the

realisation of a full democratic and civilian government. Myanmar’s political circles are rifled with speculation surrounding

the popular political candidate, National League for Democracy (NLD) leader Aung San Suu Kyi, as she is barred from the

constitution from the presidency.

In addition, the constant fighting amongst ethnic minorities and the struggle over the extraction of natural resources con-

tinue to plague Myanmar despite the new political landscape. This internal strife will definitely have economic ramifications

and it is unclear whether Suu Kyi’s government will have the means to deal with it.

The country’s economy as a whole, however, continues to expand at a robust pace on investment stimulated by structural

reform and generally strong domestic demand.

Myanmar held its first general election on 8 November 2015 since the 2010 vote that ended half a century of military rule

and led to the formation of a quasi-civilian government. The opening of Myanmar has led to a flood of foreign investment

and some of the most sustained economic growth in Southeast Asia. Foreign investment rose tenfold to USD 4.1 billion

between 2009 and 2014.

The authorities allocated as many as 10 banking licenses to foreign banks to start limited operations in the country. Invest-

ments will also flow into the oil and gas industry, with the recent granting of offshore licenses. The opening of the telecom-

munications sector will also drive mobile phone penetration, which currently sits at only 9% at the end of 2014. Tourism

has also benefitted from the reforms, with almost 2 million foreign tourists arriving in Myanmar in 2013, almost double the

numbers in 2012.

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While global multinational corporations poured in, uncertainty about investment rules, poor condition of infrastructure and

concern about the political situation have dampened some enthusiasm.

The advent of new government is likely to provide a short-term boost to GDP, but long-term inclusive economic growth

will be more difficult. Although Myanmar has posted robust GDP growth, which is projected to moderate levels due to

slowing investments, the benefits have accrued to only a small proportion of the country. Issues of corruption, weak eco-

nomic laws, regulations and policies would prevent significant economic growth in the coming years.

Myanmar faces major challenges of endemic corruption, consistently ranking near the bottom of Transparency Internation-

al’s Corruption Perceptions Index. Little is known on the specific forms and patterns of corruption in the country, but the

scale of the informal and illicit economy suggests strong links between the ruling elite and organised crime activities such

as drugs, human trafficking and illegal logging. In the absence of sound democratic institutions and an effective system of

checks and balances, the legal and institutional frameworks against corruption appear rudimentary and likely to be mis-

used by the junta for political reasons.

Myanmar has been known as one of the most daunting places to do business due to widespread corruption and with large

sectors being dominated by companies with links to the military. However, the NLD pledged to curb corruption in the bu-

reaucracy and crack down on tax evasion, which has been a longstanding problem in Myanmar.

Arguably, one of the biggest difficulties in creating institutions and developing businesses in Myanmar is the dearth of

skilled individuals. After years of economic isolation, neglect of human capital formation and fact that many Burmese

professionals have been residing overseas meant that the government are not finding people with the right skills. Other

impediments include poor infrastructure, outdated technology and poor enforcement of contracts.

For overall ease of doing business, Myanmar has leapt up the World Bank’s Ranking – moving from 189th out of 189 coun-

tries last year, to 167th place. Although it is clear of the bottom tem countries in the world, it still remains the lowest ranked

ASEAN member. The government of Myanmar has removed minimum capital requirements for starting a local company

and streamlined incorporation procedures in order to achieve this. Conversely, the regression of taxes in Myanmar has

made corporate tax payments more expensive and complicated.

Towards the end of 2015, the bells of the Rangoon Stock Exchange – Myanmar’s first modern stock exchange – rang for the

first time, heralding what many hope will be its arrival on the international investment scene.

In 2013, there were only 40 people in Myanmar who own more than USD 30 million in personal wealth. By 2022, this num-

ber is projected to increase to 307. This still ranks Myanmar as one of the poorest in East Asia, with an estimated GDP per

capita of USD 824 in 2011. Income disparity between the rich and poor is expected to grow as there is uneven access and

opportunities in the market place due to poor competition laws. Such income inequality can lead to political instability and

lower growth in the future.

In 2015, the government of Myanmar established a national minimum wage of 3,600 kyat (USD 2.91 at current exchange

rates) for a standard eight-hour day, which translates to about 35 cents an hour.

Trade volumes in the second half of 2015 reached USD 20.76 billion, a billion lower than the same period the previous year.

This drop was attributed to a decline in export revenue, which is USD 1.1 billion lower. Investment in the agricultural sector

has been lacking, which has affected production and in turn hurt agricultural exports.

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Trade volumes in the second half of 2015 reached USD 20.76 billion, a billion lower than the same period the previous year.

This drop was attributed to a decline in export revenue, which is USD 1.1 billion lower. Investment in the agricultural sector

has been lacking, which has affected production and in turn hurt agricultural exports.

Myanmar boasts one of the highest literacy rates in Southeast Asia, despite being one of the poorest, with a striking 92.7%

literacy rate. A common explanation for this phenomenon is that Myanmar had one of the best education systems in Asia

until the 1950s. Recent initiatives by the government, which include an allocation of 1.7% of GDP investment into education,

show that the government has identified human capital formation as a key factor to future growth.

However, access to information and books remains a challenge in the country. Even though censorship was abolished in

2012, growth in the book publishing industry has been underwhelming so far. The current government has suffered as well

as they struggle with institutional reform and the need to catch up with their neighbours after so many years of isolation.

Unemployment has remained relatively stable at 4% from 2006 to 2013. Surprisingly enough issues actually stem from the

“unemployment” of elephants in Myanmar. With shrinking forests and legislation that prohibits the export of raw timber, an

estimated 40% or 2,500 elephants have been left unemployed in Myanmar. These elephants have been detrimental to their

owners due to their inability to generate profit and their high maintenance cost.

Myanmar has come a long way after decades of isolation. The newly elected NLD have a lot on their plate as the country’s

first ever parliament after 50 years of military rule. They have many obstacles to tackle and a lot of issues to address within

their five-year term. Critics would argue that the NLD’s lack of an economic blueprint and experience – coupled with the

ethnic strife that has gripped the nation for more than six decades – would steer the democratic state into the ground.

However, current macroeconomic data prove otherwise as Myanmar displays the kind of growth which most Asian nations

demonstrated in the 1990s. Currently, the outlook for the NLD is not too favourable due to the lack of established institu-

tions in Myanmar and the global economic slowdown.

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Selected Articles

1. A look into tourism in ASEAN, and how we can optimize this sector for growth

Editorial Officer: Eugene Chong Yuen Kit

Overview

Tourism accounts for roughly 4.6% of ASEAN GDP and 10.9% when taking into account all indirect contributions. It pro-

vides jobs for 9.3 million people, 3.2% of total employment, and indirectly supports approximately 25 million jobs (World

Economic Forum, 2012). With 9.7% growth from 2012 to 2013 in international tourism receipts, and 10.5% growth in interna-

tional tourist arrivals, the Southeast Asian region achieved the highest tourism growth rate in the world, above Europe and

America (UNWTO, 2014). Clearly, tourism is very important for ASEAN members.

However, deeper research finds perplexing patterns in tourism performances of individual ASEAN countries. Singapore, for

example, draws 20 times more tourists per capita and 30 times more receipts per capita than the ASEAN average. (World

Economic Forum, 2012). If ASEAN intends to exploit the tourism industry as leverage for strong economic growth, it needs

to look into patterns such as disparity in revenues, and focus on value tourism instead of attracting tourists but not their

money. This will likely create trade surpluses in individual ASEAN countries, enabling prospects of investments in capital.

Intuitively, high tourist arrivals with low revenues may even represent a loss to the host country, taking into account the

social and economic costs of providing the necessary services and infrastructure, such as immigration costs, airport main-

tenance costs and cleanliness costs.

Trends

We now turn to examining the problems in our tourism sector. Malaysia recorded 27,437,315 tourism arrivals in 2014, gener-

ating $16.69 billion in revenue. However, Thailand with lower tourism arrivals of 24,779,668 raked in double ($38.4 billion)

despite political instability. Another case of higher tourist arrivals but lower revenue includes Myanmar; with 3.05 million

arrivals, they generated $1.14 billion in revenues, double of Laos’ despite Laos bringing in more tourists. It should be noted

that Brunei, with its lack of tourism policies, has been the laggard in ASEAN with just 250,000 to 270,000 arrivals, which

poses a different problem of inadequate government initiatives (Saddique, 2015).

Issues

Our problems are now discerned as inefficient revenue generation and insufficient government efforts in tourism. For the

first issue, we can infer various reasons for this phenomenon. Turning to tourist compositions, we find that while Malay-

sia has consistently been one of the top contributors to tourist arrivals in ASEAN, a large proportion of these arrivals are

intra-ASEAN, with half of them coming from Singapore. In contrast, Thailand’s tourists hail mainly from outside Southeast

Asia, chiefly China (ASEAN, 2015).

Visitors to Malaysia spend RM465 per person per day on average, as compared to visitors to Singapore who spend SGD

471, more than twice the average spending when both are converted to US Dollars (Bahar, 2014). We can attribute this to

the fact that Singaporeans (who are the majority of tourists in Malaysia) are budget travellers, despite their significantly

higher purchasing power. This is because the geographical differences are nearly non-existent while the cultural differences

are relatively small. Singaporean tourists have remarkably similar travel patterns to the local travellers, meaning they visit

less paying-museums, fewer foreign tourist attractions and such other habits. We can form the conjecture that such tour-

ists who are familiar with the local lifestyles would tend to search for value rather than novelty.

Conversely, tourists from significantly different cultures tend to be larger spenders, which may explain the high tourist

expenditure in Thailand by Chinese tourists. Also, given the strong economic growth of China, a higher purchasing power

may help tourist expenditures.

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Analysing the Travel & Tourism Competitiveness Index 2015 (TTCI), we can find a significantly poor level of infrastructure,

in terms of air, ground and tourist services, in all the ASEAN countries with exception of Singapore (World Economic Fo-

rum, 2015). This pulls the rankings of ASEAN countries in the TTCI down, making us less competitive in tourism as a region.

This analysis also shows Singapore’s only major weakness is price-competitiveness, which should be looked into. Singapore

placed 11th in the Travel & Tourism Competitiveness Index (TTCI) in 2015, while Malaysia placed 25th. The rest are lagging

behind and need some improvement in competitiveness (Statista, 2015).

For the second issue, we can deduce lack of funding to make such policies unfeasible. Most countries cannot afford to

spend money promoting their tourism sector when there are more pressing domestic issues at hand, and those that can

usually channel their funds towards other sectors. For example, government spending in Myanmar is moving towards

education and social equality, which are more pressing issues. As shown below, with the exception of Indonesia, ASEAN

countries do not place much emphasis on investment in tourism.

ASEAN-6 Goverment’s Travel & Tourism ExpenditureSource: Arangkada Philippines, 2010

Solutions

Having identified our pitfalls, we now search for potential solutions to overcome these hurdles. China’s tourism expenditure

in 2013 topped the charts at $129 billion, making it the target country of consideration. The USA and the UK have also been

strong tourists, ranking 2nd and 5th in terms of tourism expenditure, making them good target markets. China, Russia and

Brazil have been major drivers of outbound tourism in recent years. In 2013, they accounted for some US$ 40 billion of the

total US$ 81 billion increase in international tourism expenditure (UNWTO, 2014). We can thus infer that our efforts should

be aligned to draw in tourists from these countries to raise our tourist expenditure per capita figures.

Connectivity

We can also consider facilitating tourism by establishing more low-cost carriers to Southeast Asia. Since December 19,

2015, Eurowings, another low-cost carrier, has been offering direct flights between Europe and Southeast Asia (Jaeng-

jamras, 2015). It is the second budget carrier to launch Southeast Asia flights after Norwegian started connecting Scandi-

navian cities with Bangkok in 2013. Eurowings serves Europe’s low-cost market by offering among the cheapest fares to

Bangkok and Phuket, with the airline claiming that its operating costs will be 40 per cent lower than its parent company

Lufthansa (Maierbrugger, 2015). This opens up greater connectivity between Europe and ASEAN.

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Tourism Policy

Another step to consider is the implementation of the ASEAN common visa and visa exemption for select countries.

Indonesian President Joko Widodo’s tourist visa exemption policy, now eligible for citizens of 45 countries, has positively

impacted arrival numbers in Bali. We need to note, however, that this visa exemption policy will require eligible countries to

provide reciprocity, implementing a visa-free policy for Indonesians to enter their country, as well. Some countries, such as

France, commented that they welcomed the visa-free policy to enter Indonesia, but are unable to provide the same policy

for Indonesians (Huang, 2015).

This brings us to the consideration of the common visa, of which smaller schemes such as the Cambodia-Thailand single

visa have already been implemented and they have proven to be successful. We should deliberate the possibility of such

an endeavour for ASEAN as a whole. Our visa-free travel policy between ASEAN countries have generated positive results

for intra-ASEAN tourism, so this should complement our existing policy to boost extra-ASEAN tourism. However, there are

numerous issues involved from management, security, education, training programmes and law enforcement to ecological

and environmental management, and greater research should be conducted on this first. (Joy, 2014)

Visit ASEAN Year

ASEAN will launch a Visit ASEAN Year campaign to promote the region, but it is not the first time that ASEAN has de-

clared a Visit Year. Past efforts, however, had a limited impact due to a lack of funding (Ngamsangchaikit, 2015).

Conclusion

To conclude, tourism is a crucial aspect of ASEAN’s economy; therefore, we need to rectify issues of revenue generation

and insufficient funding. We can somewhat neutralise them through focusing on non-ASEAN tourists, improving connectiv-

ity, common visa and visa exemption schemes and better campaigns.

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2. Gender Equality in ASEAN: Lesson from the Philippines and the Road Ahead

Editorial Officer: Araya Thongsame (Pure)

2015 marks a milestone of the ten ASEAN countries in regional integration with the “ASEAN Economic Community”

which upholds the mutual commitment and cooperation on three pillars; political-security, economy and socio-cultural to

strengthen regional capacity and growth. Besides, 2015 also marks two decades of global commitment and international

cooperation in promoting gender equality initiated by the UN Convention on the Elimination of All Forms of Discrimination

Against Women (CEDAW) which all ASEAN member states, with the Philippines as the first country in the region, rectified

in 1981 (UN Women). Furthermore, all ASEAN countries have rectified the Beijing Platform for Action (BPfA) in 1995 in

adopting the so-called ‘Gender Mainstreaming’ strategy to incorporate gender implications into planned actions, legisla-

tions, policies and national development programs in all areas and all levels (UN, 1995; Hafner-Burton and Pollack, 2002).

From the recent 2nd ASEAN Ministerial Meeting on Women in October 2015, ASEAN has demonstrated its commitment

and efforts through its proclaimed vision of “spirit of promoting gender equality and women’s empowerment as the hub

of ASEAN vision 2025” (Dumlao-Abdilla, 2015) to ensure that no woman is left behind under the unified regional economic

integration starting at year-end 2015. Hence, it is important to investigate the progress, efforts and constraints of ASEAN

countries in attaining gender equality which is regarded as a prerequisite of sustainable human development.

Gender Inequality in ASEAN

Under the social contexts of ASEAN, gender inequality is socially constructed in myriad dimensions in which it not only

impedes human development but also deepens social conflicts and vulnerabilities. Gender inequality reflects that women

possess limited power in many spheres of life namely inequality in accessibility of basic facilities, professional inequality,

ownership and household inequality which undoubtedly put women in cycle of disadvantage and vulnerabilities (Francisco,

2007). Pursuant to the definition of gender equality defined as “equal rights, responsibilities, and opportunities of women,

men, and girls and boys” (UN, 2001), the governments of ASEAN countries have made efforts in integrating gender issues

into development variedly through legislative reform and gender-specific policies including establishing specific govern-

mental bureaus as the main mechanism in advancing women’s status and gender equality (Hafner-Burton and Pollack,

2002; Rai, 2003).

Government efforts in attaining gender equality are measured annually by the World Economic Forum through an assess-

ment on gender gap closure in economic participation and opportunity, political empowerment, educational attainment

and health and survival (WEF, 2015). The recent Gender Global Gap Report 2015 indicates that The Philippines, ranked

the 7th on global index, is by far the best-performing of the 10 ASEAN members with 79% of gender gap closure. It is also

regarded as the only country in the region to make the top 10 globally with its progress on increasing women’s participa-

tion in economic and political spheres with a fully closed gender gap on health aspect (WEF, 2015). Noticeably, the report

demonstrates the high disparity of ASEAN governments’ performance in attaining gender equality with Lao PDR (52th),

Singapore (54th), Thailand (60th), Vietnam (83th), Brunei (88th), Indonesia (92th), Cambodia (109th) all ranking relative-

ly lowly while Malaysia is ranked the 111th, the lowest among the ten ASEAN countries with a regressed performance on

sub-indexes such as political empowerment and educational attainment (WEF, 2015).

The Philippines: Lessons

The progress of the Philippines in promoting gender equality could be analysed from various factors, namely the capa-

bility of its National Women’s Machinery – the Philippines Commission on Women (PCW), the vibrant civil society, strong

collaboration with international and donor agencies and the decentralised authority of local government units in promot-

ing gender local governance. Most importantly, the Philippines has enacted “efficient legislative and policy mechanisms” in

recognising women as the equal counterpart of men in building the nation (Constitution of the Philippines, 1987; Rai, 2003;

UN-HABITAT, 2008).

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Under the endorsement of Magna Carta for Women (MCW); regarded as the comprehensive women human rights law

aiming to eliminate discrimination against women in 2009, the Philippines Commission on Women (PCW) catalysed the

incorporation of gender implications into policy formulation, analysis and evaluation including program implementation

of all government sectors at all levels (PCW, 2009). Outstanding progress in promoting gender equality is reflected in

its initiatives in creating the gender focal point system as well as the five percent gender budget allocation enacted in all

government sectors (PCW, 1989; WB, 2012). In order to enhance women’s empowerment, the government has endorsed a

fifty-fifty gender balance in all civil and decision-making sectors (MCW, 2009). Even though the gender balance in deci-

sion-making sectors is not yet fully met, it has put remarkable efforts in strengthening the capacity of women’s employees

with an appointment of equally qualified men and women in high level executive positions (WEDGE, 2013). Thus, with the

government’s high commitment in driving to gender equality, its success story was shared during the 2nd ASEAN Ministe-

rial Meeting on Women that “Filipino women were transformed into leaders in their own families and communities, solving

problems, working on challenges, building up capacities, making the most of employment opportunities while still being

the primary source of care, love and guidance” (Dumlao-Abdilla, 2015).

Solutions for the Region

From the lessons learned from our regional peer, the Philippines, this outstanding story can also be achieved in other

countries through strong government commitment and efficient mechanisms in advancing women’s status, particularly

in legislative and policy making dimensions. Furthermore, linkages should be broadened between government and local

authorities, NGOs, communities as well as international organisations in order to promote women’s status, narrow gender

gap and achieve ultimate goal of gender equality.

With regard to regional attempts, based on a recognition of regional gender inequality and disparity in promoting gender

equality, the ASEAN Committee on Women (ACW) has updated its five-year work plan (2015-2020) towards achieving

gender equality. The committee will enhance gender equality through an emphasis in six areas namely changing social

norms; gender mainstreaming in different sectoral bodies; tracking and promoting women in leadership; ending violence

against women; protection and empowerment of vulnerable groups, and women’s economic empowerment.

Therefore, following the focus areas of ACW and visions from ASEAN Ministerial Meeting on Women to promote gender

equality and women’s empowerment as the hub of ASEAN in 2025, the ASEAN member countries should embark on bold

steps to empower women by integrating gender implications into their policies in all areas. With an emphasis on the link

between gender equality and economic growth (USAID, 2013), the member countries should take the advantage of region-

al economic integration under the ASEAN Economic Community as a supporting mechanism to promote gender equality

by taking initiatives to integrate gender perspectives into its economic development spheres.

A recent report by the World Bank Group in 2012 emphasised that improving women’s access and eliminating unequal

access to economic participation in Asia could enhance productivity in the region from 7-18 percent (WB, 2012). In order

to incorporate women into formal economic participation, the governments of ASEAN countries should take the initiative

by setting out strong legislative frameworks against discrimination against women on employment together with policies

strengthening women’s professional skills for wider accessibility in economic participation. Referring to the Philippines

with visions to increase employment from industry and services sector by 4.67 million during 2011 – 2016, the government

has made attempts to incorporate gender concerns through the labour code to address gender discrimination on unequal

wages, remuneration and biased accessibility to women (Women Empowerment Development and Gender Equality Plan,

2013). It also generated employment opportunities for women through incorporation into the workforce of the export-ori-

ented economic zones and business process outsourcing sectors (WB, 2012).

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Furthermore, the government has conducted capacity development programs for women through provision of gender-re-

sponsive vocational training and collaborated with industrial sectors and microenterprise to promote gender-responsive

training on women’s rights and work conditions in accordance with national labour standard (Women Empowerment

Development and Gender Equality Plan, 2013).

Conclusion

Consequently, with regional integration and a market capacity of more than 600 million people representing vast oppor-

tunities, ASEAN countries’ governments should strengthen women’s capacity, widen their accessibility and support their

contribution towards the formal economic sphere. An increasing level of formal economic participation will enable women

to possess equal access to resources, opportunities and facilities as their male counterparts which would eventually bring

about women’s empowerment and a narrowed gender gap.

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Country Focus: Myanmar

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factories/ [Accessed on 15 February (2016)]

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(2016)/01/25/can-the-nld-reform-myanmars-economy/ [Accessed on 15 February (2016)]

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A look into tourism in ASEAN

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http://www.slideshare.net/spireresearch/140614-franchise-international-malaysia-2014-conference-is-malaysias-local-market-saturated [Ac-

cessed 20 December 2015]

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• Jaengjamras, P., 2015. Phuket landing a first for European budget airline into Southeast Asia. Phuket Gazette, [online] Available at: http://

www.phuketgazette.net/phuket-news/Phuket-landing-first-European-budget-airline-Southeast/62685 [Accessed 7 January 2016]

• Joy, S., 2014. ASEAN countries working towards Common Visa. The Financial Express, [online] Available at: http://www.financialexpress.com/

article/travel/latest-updates-travel/asean-countries-working-towards-common-visa/18434/ [Accessed 20 December 2015]

• Maierbrugger, A., 2015. German budget carrier launches Thailand flights. Investvine, [online] Available at: http://investvine.com/german-bud-

get-carrier-launches-thailand-flights/ [Accessed 20 December 2015]

• Ngamsangchaikit, W., 2015. ASEAN Visit Year 2017. [online]. Available at: http://www.aseanvisa.com/ [Accessed 20 December 2015]

• Saddique, I., 2015. Malaysia keeps topping ASEAN tourism arrivals. Investvine, [online] Available at: http://investvine.com/asean-tourism-ar-

rivals-top-10/ [Accessed 20 December 2015]

• Statista, 2015. Leading countries in the Travel & Tourism Competitiveness Index (TTCI) in 2015. [online]. Available at: http://www.statista.com/

statistics/186639/best-ranked-countries-in-the-travel-and-tourism-competetiveness-index/ [Accessed 20 December 2015]

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Gender Equality in ASEAN

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antoday.com/2015/10/equality-for-asean-women/ [Accessed: 15 January 2016]

• Dumlao-Abdilla, D, 2015. No woman left behind for Asean. Philippine Daily Inquirer, [online] Published: 24 October 2015. Available at:

http://globalnation.inquirer.net/129884/no-woman-left-behind-for-asean#ixzz3wDiHKs9g [Accessed: 15 January 2016]

• Hafner-Burton, E and Pollack, M, 2002. Mainstreaming Gender in Global Governance. European Journal of International Relations, 8(3),

pp.339-373.

• Office of the Special Adviser on Gender Issues and Advancement of Women, 2002. Gender Mainstreaming: An Overview. [pdf] New York:

United Nations. Available at: http://www.un.org/womenwatch/osagi/pdf/e65237.pdf [Accessed: 15 January 2016]

• Philippine Commission on Women, 2014. Women’s Empowerment, Development and Gender Equality Plan 2013‐2016. [pdf] Manila: Philip-

pine Commission on Women. Available at: www.pcw.gov.ph/sites/default/files/documents/resources/womens_edge_plan.pdf [Accessed: 15

January 2016]

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http://www.pcw.gov.ph [Accessed: 15 January 2016]

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default/files/documents/1861/Gender.pdf [Accessed: 15 January 2016]

• World Bank, 2012. Philippines: Progress Made in Closing some Gender Gaps but Inequalities Remain. World Bank, [online] Published: 21

June 2012. Available at: http://www.worldbank.org/en/news/press-release/2012/06/21/philippines-progress-made-in-closing-some-gender-

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