#OpportunitiesofASEANEconomicIntegration

[cdlwkf]

The Opportunities of ASEAN Economic Integration

by Thomas Kwon

October 16, 2014

Speakers:

Eric John, President, Boeing Korea, Vice President, Boeing International

Siow Yue Chia, Senior Research Fellow, Singapore Institute of International Affairs

The Association of Southeast Asian Nations has a tight deadline to fully establish its ASEAN Economic Community: December 31, 2015.  In a presentation at the 2014 World Economic Forum, Eric John, president of Boeing Korea, vice president of Boeing International, and former U.S. ambassador to Thailand, and Siow Yue Chia, senior research fellow at the Singapore Institute of International Affairs, discussed the ten-nation cooperative’s progress thus far. 

“You don’t have any conversation about regional institutions in East Asia that don’t begin with ASEAN,” said Mr. John.

Dr. Chia began by highlighting the strengths of ASEAN.  She named robust economic growth, a young growing population with 60 percent under the age of 35, and an abundance of natural resources, among other things.

“ASEAN as a region has been very dynamic in economic growth, so the growth has been on average 5.3 percent since 2009,” she said.

Another boon, Mr. John added, is the fact of outside parties negotiating solely with ASEAN.  He gave the example of open skies agreements liberalizing strict rules in the aviation industry, which have resulted in projections that over the next twenty years, of the 36,000 airplanes sold globally, 14,000 will be sold in the Asia-Pacific region, driven by ASEAN carriers.

“With ten separate countries, it becomes very complex…the freedoms of open skies agreements have led to an incredibly robust market,” Mr. John said. 

Of course, ASEAN also has its shortcomings.  Dr. Chia outlined the widening development gap amongst member countries, limited governmental harmonization, and vulnerability to external shocks.  She believes that this can lead to increased fracturing and intra-regional competition.

To support her point, Mr. John cited Indonesia’s step back in governance in removing local Parliamentary elections, Thailand’s history of military coups, and allegations of widespread corruption in many ASEAN nations.

“You’ve got a plethora of religions.  You have ten countries, but dozens of languages.  You’ve got ten countries with separate economies, but that have a lot of overlapping competitive interests,” he acknowledged.

Overall, however, the two remain optimistic.

Dr. Chia singled out the ASEAN+1 free trade agreements with China, South Korea, and Japan as indicators of progress toward the four objectives of a single market and production base, a competitive economic region, equitable economic development, and integration into the global economy.

“There is some trepidation that we will not be able to achieve, or set up to achieve, but the general conclusion is we are moving in the direction,” she said.

There has also been encouragement from other sources.  Dr. Chia admitted, “We have been beating ourselves in the last few years ever since the ASEAN scorecard was published…but outsiders tell us, ‘don’t be so hard on yourselves.’”

Mr. John took a moment to recognize the value of even having such a cooperative in place, without which agreements and dialogue might not occur at all.

“I would say actually one great strength that ASEAN has is simply that it exists.  A lot of times that’s taken for granted,” he said.

In evaluating the accomplishments of ASEAN, Mr. John considered the alternative.

“Look at it in the negative.  What would it be like if there were no ASEAN?  Right now we argue about if the glass is half-full or half-empty with regard to ASEAN…but just think about if there weren’t even a glass?”