The Philippine Star

While most Metro Manilans look forward to a long weekend (five days for government employees and three days for those in the private sector) and security preparations are underway for the 30th ASEAN Summit, change is a word that is definitely not high on the agenda.

Not that the word change carries the same importance that catapulted a small city mayor to become the president of the Philippines, or for a billionaire with little political hands-on experience to be voted as CEO of the largest economy of the world.

For the 10 member states of the Association of Southeast Asian Nations, the last 50 years has been marked by a truly Asian demeanor: patient but precise, non-confrontational, adverse to risk taking, slow but sure-footed, and highly clannish.

‘Golden’ year

It is, perhaps, by these very traits that ASEAN placidly enters its golden year, although this phrase is not to be confused as a high point in its history — because there is still a lot of work that needs to be done if this geo-political bloc should become a true powerhouse in the world milieu.

Significantly, the combined population of all ASEAN members counts as the biggest force in similar aggrupation of nations. Accounting for close to 10 percent of the world’s population, its 630 million population represents a young and vibrant economic force.

As an economic powerhouse, the combined worth of ASEAN member states is now at $2.5 trillion in GDP. More significant is the fact that this value has increased by more than 75 percent over the last seven years, a mouth-watering statistic for any dyed-in-the-wool investor.

ASEAN’s economy was the third largest within Asia, and the seventh in the world. Another salivating statistic is the fact that half of its population is under 30 years old.

One Asean economy

If we are to refer to the World Economic Forum’s Global Competitiveness Report 2016–2017, almost all of the ASEAN member states have shown impressive growth as evidenced by their improvement in competitiveness rankings over the last decade.

The Philippines leads the pack, having leapfrogged 17 places from its standing a decade ago. To a lesser degree, Malaysia, Indonesia, Vietnam, Lao PDR, Cambodia and Myanmar have also shown remarkably strong performances.

With the formal start of the ASEAN Economic Community (AEC) in 2015, the member states — however, diverse in living standards — have started reaping from trade deals painstakingly started in 2007 and concluded by 2013 with most of the world’s biggest economies, i.e., China, Japan, South Korea, India, Australia, and New Zealand.

Thinking as one economic entity, ASEAN has been leveraging on its 630 million population, of which more than half are young people who are upwardly mobile, ambitious, and are in the best position to create the best value for the region.
Aside from its human resource, the AEC is the number one producer of palm oil and rubber in the world, and second in the value of foreign investment flows. It ranks third in mobile phone subscriptions and fifth biggest market in the world for cars.

Infrastructure challenges

The AEC is designed to boost trade within ASEAN nations as well as with the biggest trading economies in the world with which it has entered agreements. As such, one of its biggest goals is to improve the transportation and infrastructure networks amongst the member nations.

Doing so would facilitate the free flow of goods, services, investment, capital, and skilled labor between country members in the hopes that this would strengthen the overall growth of the region to ensure equal economic development and further integration into the global economy.

The level of infrastructure among ASEAN members is as diverse as the cultures of its people. For newly emerging economies like Laos PDR, Cambodia, and Myanmar, there is a starkly huge gap in its infrastructure requirements.
For more developed countries like Indonesia, the Philippines, and Vietnam, it has been a constantly unending task of finding funds to bridge the infrastructure requirements needed to match their respective economic growth.

When we talk about infrastructure challenges, this includes highways, seaports, airports and rail links, power grids and gas pipelines, and information technology and communication networks.

Massive investments will be needed to build the needed infrastructure. But the timing seems to be right. Banking on momentum and opportunity, investors are pleased at what they see in the performance of ASEAN members.

Consensus building

For a political and economic organization aimed at promoting economic growth and regional stability among its members, some say that ASEAN — which started in August 1967 with just five members (Indonesia, Malaysia, the Philippines, Singapore and Thailand) — has made extraordinary progress.

Perhaps the current crisis that the European Union, with 28 member states mostly found in Europe, faces is what casts a favorable platform upon which to compare ASEAN. The EU is now under pressure to defend its common economic programs despite having been in existence for close to seven decades.

The culture of consensus building could be regarded as one of the best assets of ASEAN members where differences are patiently ironed out — even over decades, but never aggressively demanding — so that an amicable agreement could be arrived at.

Examples of this that come to fore are the Code of Conduct on the South China Sea and the instrument on the ASEAN protection of migrant workers’ rights. Both have been on the discussion table for years now without any substantial progress. 

Many other challenges remain, but despite all the difficulties encountered in trying to hammer out agreements, optimism continues to be strong. And why not? For these struggling small- to medium-sized economies, the only way to move is forward.

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