3. international commodity trade, the improvement of

3. Functions of ASEAN

a)    
To accelerate the economic growth, social progress and cultural
development in the region through joint endeavours in the spirit of equality
and partnership in order to strengthen the foundation for a prosperous and
peaceful community of Southeast Asian Nations.

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b)    
To promote regional peace and stability through abiding respect for
justice and the rule of law in the relationship among countries of the region
and adherence to the principles of the United Nations Charter.

c)     
To promote active collaboration and mutual assistance on matters of
common interest in the economic, social, cultural, technical, scientific and
administrative fields.

d)    
To provide assistance to each other in the form of training and research
facilities in the educational, professional, technical and administrative
spheres.

e)    
To collaborate more effectively for the greater utilisation of their
agriculture and industries, the expansion of their trade, including the
study of the problems of international commodity trade, the improvement of
their transportation and communications facilities and the raising of the
living standards of their peoples.

f)      
    To promote Southeast Asian
studies in their call for a “strong and resilient Southeast Asia”. This is due to
the need to realise the validity of the regional concept of Southeast Asia,
which from a convenient geographical expression to the regional concept has
both political and intellectual dimensions.

g)    
To maintain close and beneficial cooperation with existing international and
regional organisations with similar aims and purposes, and explore all avenues
for even closer cooperation among themselves.

 

4. ASEAN Economy

4.1 ASEAN Economic Community Blueprint 2015

Formally established on 31 December 2015.

–     A major milestone
in the regional economic integration agenda in ASEAN.

–     Offers
opportunities in the form of a huge market of US$2.6 trillion and over 622
million people.

–     AEC Blueprint
2025, adopted by the ASEAN Leaders at the 27th ASEAN Summit on 22 November 2015
in Kuala Lumpur, Malaysia, provides broad directions through strategic measures
for the AEC from 2016 to 2025.

o    It succeeded the
AEC Blueprint (2008-2015), which was
adopted in 2007.

o
   The new Blueprint will not only ensure that the 10 ASEAN
Member States are economically integrated, but are also sustainably and
gainfully integrated in the global economy, thus contributing to the goal of
shared prosperity.

4
pillars of AEC 2015

a)              
A single market and production base

The
first AEC pillar seeks to create a single market and production base through
free flow of goods, services, investment, skilled labour and freer flow of
capital. These aim for greater opportunities to trade and do business within
the region, with reduced trade costs and improved investment regimes.

b)              
A highly competitive economic region

The
second pillar helps to create a business-friendly and innovation-supporting
regional environment. That is achievable through the adoption of common
frameworks, standards and mutual co-operation across many areas. In turn, such
developments provide the impetus to start new businesses, expand the existing
market base, encourage strategic sourcing of goods and services within the
region as well as create employment.

c)               
A region of equitable economic
development

The third
pillar seeks to achieve sustainable and balanced growth and development through
equitable economic development. This is done through creative initiatives that
encourage SMEs to participate in regional and global value chains, and focused
efforts to ensure their effective integration into the economic community.

 

d)              
A region fully integrated into the
global economy

The
final pillar envisages nothing less than ASEAN’s full integration into the
global economy pursued through a coherent approach towards external economic
relations and enhanced participation in global supply networks.

4.1.1
Areas to improve

There were
criticisms on AEC for being “too slow” and some observers have said that the
issues that have been delayed were those of importance and could make or break
the success of the integration. 

Some specialists
also commented about the lack of leadership on this issue – the role of Asean
chairmanship is a rotating position and a series of officials from the poorer,
less developed Asean countries will be the chair of Asean for the next few
years which means that leadership will be inexperienced and possibly be less
interested in pushing ahead quickly with integration on all fronts.

There is also too
much concentration on both hard and soft infrastructure.

Hard infrastructure: Many countries’ governments have
plans to upgrade their infrastructure. E.g Thailand’s government has also been
talking to China about the high-speed train project linking Laos and Thailand’s
Nong Khai to the southern border and Malaysia.

 

 

4.2 ASEAN Economic Community Blueprint 2025

Adopted by the ASEAN leaders at the 27th ASEAN Summit on 22 November
2015 in KL, Malaysia

Consists of five interrelated and mutually reinforcing characteristics
(i.e. a highly integrated and cohesive economy; a competitive, innovative and
dynamic ASEAN; enhanced connectivity and sectoral cooperation; a resilient,
people oriented, and people centred ASEAN; a global ASEAN)

Strategic measures under each of the 5 characteristics of AEC 2025 are
implemented through the work plans of various sectoral bodies in ASEAN

 

4.2.1 Highly Competitive Economic Region

4.2.1 A culture of fair competition

Indonesia, Malaysia, Singapore, Thailand, and Vietnam
have enforced their respective Competition Policy and Law (CPL). The
Philippines-while yet to introduce a competition law, has established the
Office for Competition under the Department of Justice even though they have
not established a law of competition. A CPL is expected to create a level
playing field and foster a culture of fair business competition.

 

4.2.2 Efficient and integrated transportation network

ASEAN member states have concluded three transport
facilitation agreements namely, the ASEAN Framework Agreement on the
Facilitation of Foods in Transit (AFAFGIT), ASEAN Framework Agreement on
Multimodal Transport (AFAMT), and ASEAN Framework Agreement on Facilitation of
Inter-State Transport (AFAFIST). Once these measures are fully in place,
investors will see simplified and harmonised transport procedures and
documentation, uniform guidelines and requirements for registration of transit
transportation, and ICT-driven applications for cargo transfers.

One of the key projects of ASEAN is the completion of
the ASEAN Highway Network (AHN) and the Singapore-Kunming Rail Link (SKRL).

AHN is a network of 23 designated routes
totalling about 38,400 kilometres in 10 ASEAN countries connecting seaports,
airports, as well as investment and tourism areas.

SKRL will run through
Singapore-Malaysia-Thailand-Cambodia-Vietnam-and Kunming, China. It will have
spur lines in Thailand-Myanmar and Thailand-Lao PDR.

 

4.2.3 Energy security

ASEAN is currently implementing the US$5.9 billion
ASEAN Power Grid (APN) project which requires 16 cross –border transmission
interconnections among ASEAN countries. To date, nine interconnections have
been constructed and are running while the others are in varying stages of
planning and construction. Meanwhile, the US$7 billion Trans-ASEAN Gas Pipeline
(TAGP) project, which will enable Southeast Asia to transport gas across ASEAN
countries, has completed eight bilateral gas pipelines.

 

4.3 Equitable Economic Development

ASEAN is committed to reducing development gaps in the
region. It aims to develop small and medium enterprises (SMEs) through the
ASEAN Blueprint for SME Development. It seeks to strengthen the implementation
of technical assistance and capability building programmes for public and
private sectors needing assistance in some ASEAN countries through the
Initiative for ASEAN Integration (IAI).

Strong participation of SMEs in the building of
regional production network which in turn will provide businessmen with wider
options for suppliers and partners from supporting industries. Investors can
benefit from the Initiative for ASEAN Integration as beneficiary ASEAN
governments will be more capable to develop and implement economic policies
that would further boost the positive effects of the AEC.

 

4.4 Fully Integrate into a Global Economy

ASEAN has signed 5 Free Trade Agreements (FTA)- one each with China,
Korea Japan, Australia and New Zealand, and India.

The FTAs help push for trade liberalisation and
facilitation, with others being more comprehensive and including provisions on
investments and movement of natural persons. 
Other provisions are focused on rules of origin, customs procedures, and
dispute settlement.

ASEAN and its dialogue partners continue to discuss
ways and negotiate on how the FTAs can be enhanced and best maximized.

In November 2012, heads of states of ASEAN, China,
Japan, Korea, Australia, New Zealand, and India officially started negotiations
for the Regional Comprehensive Economic Partnership (RCEP) in Phnom Penh,
Cambodia. RCEP is bound to be the largest regional trading arrangement as it
would create an integrated market spanning 16 countries with a combined market
of over 3 billion people and total GDP of about US$20 trillion. ASEAN leaders
expect the RCEP to keep the region’s growth momentum as it further opens up
markets and makes economies competitive.

 

5. Case Study- Terrorist Attack
in Marawi City

On May 23, militants from the Maute and Abu Sayyaf groups stormed into
the city of Marawi in Mindanao and occupied large parts of it. The battle for
Marawi began when the Philippine military tried to capture Isnilon Hapilon, the
head of the Abu Sayyaf group that has pledged loyalty to ISIS leader Abu Bakr
al-Baghdadi. But the army met fiercer than expected resistance. Allied with
another pro-ISIS brigade called the Maute Group, Hapilon’s fighters took a
priest and his congregation hostage, freed prisoners from the local jail, and
overran the city. More than three weeks later, the fighting persists, hundreds
have died—militants, soldiers, civilians—and hundreds more residents remain
trapped in the city. Many have no electricity or running water. Food stocks are
diminishing fast. As residents seek safety, much of Marawi has become a ghost
town.

 

What has ASEAN been doing to conquer this?

?       On June 19, Indonesia, Malaysia and the
Philippines agreed to fight trans-border terrorism activities on the
Sulu-Sulawesi-Celebes Sea by launching maritime patrols – to disrupt the
network of the illegal smuggling of weapons, humans and drugs – a network that
is now also used by militants

?       Singapore, for example, has offered to deploy
drones for intelligence and surveillance, and provide urban warfare training

?       Singapore has two types of unmanned aerial
vehicles (UAVs): the Heron 1, which has a range of 200km and can stay in the
air for 24 hours; and the Hermes 450, which has half the range and a shorter
flying time of 14 hours. Singapore is also offering to send a C-130 aircraft to
help transport humanitarian aid and supplies to evacuees from Marawi.

?       Defence Minister Ng Eng Hen said Singapore was
also willing to help train Philippine security forces in urban warfare and
fighting in “built-up areas”. He said he suggested to Mr Delfin
Lorenzana who is the Philippine Secretary of National Defense, the use of
“urban training villages” that the Singapore Armed Forces use to
train soldiers being sent to conflict areas in Afghanistan and Iraq.

 

6. Areas to Explore

 

6.1 Opportunities on ASEAN members:

6.1.1 More Competitive Region

Economic integration would make ASEAN a more competitive region within
the world economy. This would help improve standard of living by reducing
poverty through Economic development.

 

Open more regional cooperation (improve scale efficiency and competitiveness
of ASEAN members). This offers new ways to coordinate the supply chain and
grants more access to new products within ASEAN members. ASEAN countries will
be more attractive to foreign investors. Since they are considered as a single
large market, the Asean Free Trade Agreement will
be expanded to zero tariffs on almost all goods by 2015. 

 

6.1.2 Tourism Opportunities

Asians travels more
in the region and there are more travelers from other countries that have begun
to reach out to Asia as new visitors. The trends were evident at the recent Hub
City Forum, held by the Pacific Asia Tourism Association (Pata), where more
than 100 travel industry executives discussed the tourism potential, government’s
spending to upgrade facilities both for leisure attractions like museums; and
also MICE facilities such as convention centers, reported the newspaper. (MICE
tourism opportunities are particularly large and hopefully countries that have
the most experience in this area such as Thailand and Singapore will render
their assistance to those with weak MICE experience – recent examples of this
are Thailand with Vietnam and also some talk in Thailand about rendering
assistance in Laos and possibly Cambodia.)

 

 

6.2 Challenges on ASEAN members:

For 2017

 

–       
By one
side, ASEAN will attract attention from international relations in the Asia –
Pacific region. On the other hand, ASEAN countries must find the way to balance the national interest and common
interest of one ASEAN. (Background info: The Philippines will be in charge
of chairmanship of ASEAN in 2017 and, besides, Manila would also promote a
major regional trade deal initiated by Beijing.)

 

–       
The
biggest challenge for ASEAN countries would be dealing with the newly elected US President Trump’s unpredictability.
While keeping this aspect in mind, the other aspect that brings our attention
would be “to keep the United States engaged in Southeast Asia to balance China
at a time when the Duterte government is moving in the opposite direction”

 

 

2016 ASEAN Economic
integration

 

–       
Managing wider income gap

ASEAN is an economic region which has diverse patterns of economic
development. The majority of ASEAN countries are categorized as low middle
income countries, whereas a few are positioned better economically.

The existing income inequality gap may also widen among some of the
ASEAN countries.

 

–       
Disparity and Diversity between ASEAN members

There is a high degree of political and socio-cultural diversity among
ASEAN countries.

 

ASEAN member countries have disparate existing levels of capital market
development and financial regulations. Some of the ASEAN member countries do
not have the appropriate financial sector regulation and infrastructure
necessary for a seamless integration process. We can expect that there will be
challenges associated with capital market development, financial services
liberalization, capital account liberalization, and an eventual ASEAN currency
cooperation.

 

 

Different National Interest

 

–          
ASEAN makes decisions in a consensual manner,
meaning that all member states must agree upon a certain plan or action before
ASEAN acts on it as a whole.

–          
With different national interests among member
states, there will be a lot of difficulties and delays in the implementation of
ASEAN initiatives.

–          
There is no mechanism to ensure
that commitments made by ASEAN members are implemented

–          
During talks regarding the Spratly
Islands dispute, different member states actually wanted control of the Spratly
Islands for themselves to their own benefit.

–          
ASEAN and China also had different
methods in mind for which to settle the Spratly Islands dispute.

–          
This led to increasing tension
between ASEAN and China.

–          
Also, although the U.S did step in
and call for talks between ASEAN and China, the talks still fell apart due to
squabbling within ASEAN itself.

–          
Increase in anti-globalisation, anti-immigration
and anti-elite sentiments.

–          
Little attention paid to small and medium-sized
enterprises, small-scale farmers and entrepreneur

–          
Lack of a sense of ownership of ASEAN among our
populations

–          
Increased urbanisation and demographic shifts.

 

 

 

7. ASEAN
Summit

 

What
is The ASEAN Summit?

The ASEAN Summit is a semi-annual meeting held by the member of
the Association of Southeast Asian Nations.

 

What does ASEAN
Summit aim to achieve?

The ASEAN Summit aims to
achieve political and security cooperation, economic cooperation, and
socio-cultural cooperation; For the purpose of ensuring durable peace,
stability and shared prosperity in the region.

 

Who attends the ASEAN Summit?

The ASEAN
Leaders and ASEAN dialogue partners.

 

ASEAN MEET 2018

 

SINGAPORE will chair the Association of South-east Asian Nations (ASEAN)
in 2018, the first time that it will helm the 10-member bloc since 2007.

 

Key theme: Resilience and Innovation

 

Key focus:

To pursue a set of tangible and
meaningful economic deliverables. They want to tap on global megatrends
such as digital economy and trade facilitation.
Aims to focus on ecommerce and the
digital economy (this would provide greater digital connectivity amongst
ASEAN countries, reducing barriers.
Also aims to work on the ASEAN Economic
Community 2025 (AEC) Economic integration are going steady
(continuation)  However, there are
more to be done for new areas relevant to modern business

 

Specific example:

·       
Work on
the Code of Conduct (COC) of Parties in the South China Sea

·       
Improve
trade facilitation measures to support the internationalisation plans (including
for SMEs). Work closely with the other ASEAN Member States towards the
realisation of an ASEAN-wide Self-Certification regime and the ASEAN Single
Window (ASW).