The 13th Asean Summit in Singapore will confer legality on the association as it gets ready to go on an eight-year community-building economic journey, writes S. PUSHPANATHAN
TOMORROW’S 13th Asean Summit in Singapore will transform the loosely-formed “buddy club” into a rules-based and integrated Asean Community through the signing of the Asean Charter.
The Asean Charter will establish rules-based systems and structures to conduct Asean business, which has more than 700 meetings in its annual calendar. It will confer on Asean a legal personality that will allow it to act in the interest of the community in regional and international forums and engage its dialogue partners in co-operative endeavours.
This transformation is crucial for Asean to stay relevant. It can leverage on its collective strength to compete in an increasingly dynamic Asia and interdependent world, and play a leading role in regional processes such as Asean+3 co-operation and the East Asia Summit.
Asean has a unique opportunity to steer East Asia integration, given its experience in forging regional alliances and its goodwill towards all countries in the region and beyond.
Asean’s dialogue partners are upbeat. Even before the charter is concluded, they are making their moves to woo the “new” Asean. While member countries will be having their own permanent representatives to Asean in Jakarta as enshrined in the charter, the United States has announced its intention to appoint an Asean ambassador. Other dialogue partners are expected to follow suit.
The charter will see the strengthening of the roles of Asean secretary-general and the Asean secretariat, based in Jakarta, in co-ordinating and monitoring the implementation of integration initiatives and in regional policy research and analysis.
Another key document to be concluded at the summit will be the Asean Economic Community Blueprint, a coherent and do-able master plan to establish the economic community by 2015.
The Economic Community can be envisioned as a “four- wheel drive” vehicle, with each tyre representing a crucial foundation moving the community forward at constant and consistent speed on a metal road and sometimes dirt track filled with challenges towards 2015.
The 10 member countries and the Asean secretariat are the passengers in the Asean jeep, with each member country taking its turn to steer the jeep with the support of the secretariat.
The front right tyre represents the Asean single market and production base, where there will be free flow of goods, services, investments and skilled labour, and freer flow of capital, and where focus will be given to vertically integrating the 12 priority economic integration sectors identified by Asean leaders, including electronics, automotive, tourism, and logistics.
Trade facilitation will be emphasised to reduce business-related transaction costs and to support the building of a competitive Asean. It is estimated that with more efficient facilitation measures, transaction costs could be reduced by 20 to 30 per cent.
Trade in services, which contributes about 60 per cent to Asean’s gross domestic product, will be boosted with efforts to remove impediments to such trade by 2015 and promote the flow of skilled labour and professional talent through mutual recognition arrangements of qualifications in certain professional and technical fields.
A new comprehensive investment agreement will be concluded possibly by next year, which will provide more incentives and protection to all Asean-based investors.
The front left tyre represents the development of a competitive economic region where competition policy and intellectual property will become important elements so that a level playing field for all businesses and investors can be established. This will attract value-added industries with cutting-edge technologies to the region. E-commerce and infrastructure development will also be promoted to ensure efficient flow of economic activities.
The rear right tyre of the car represents equitable economic development, which will focus on bringing the less-developed Asean countries to speed up with Asean’s integration so that they will reap benefits from economic integration.
Another area will be the development of the small and medium-sized enterprises, which account for about 90 per cent of all Asean businesses. They will need to be strengthened if they are to operate in a competitive environment and pursue value-added activities such as research and development and innovation to move up the value chain.
The rear left tyre symbolises the efforts towards full integration of Asean into the global economy and supply chain. This is in recognition of the fact that Asean depends more on external trade and investment, unlike the European Union.
Several strategies will be used to integrate Asean with the global economy. Free trade agreements (FTAs) will be one strategy to gain greater market access into partner countries and attract investment to Asean.
FTAs are being negotiated with China, the European Union, India, Japan, South Korea Australia and New Zealand. By 2013, all these FTAs would be fully implemented. The Asean-US Trade and Investment Framework Arrangement to facilitate market access and investment is being implemented.
On plugging itself to the global supply chain, Asean economic ministers have concluded a logistic agreement and a road map which will integrate Asean into a single logistics hub.
This will involve several agencies working together, such as trade, transport, Customs, standards and information communication to promote a seamless flow of goods within the region as well as to connect the region to the world.
A strategic schedule will be attached to the blueprint, which identifies targets to be achieved within specific timelines towards 2105. There will be active monitoring, tracking and analysis of the implementation of the blueprint to maintain momentum of integration. A communications plan is also being drafted to gain wider public support for the blueprint.
The Asean jeep is at the starting line of the eight-year economic community-building journey guided by the Asean charter.
While the journey will be a testing one, it should be able to seize the opportunities and meet the challenges through its strong political will, planning, implementation of integration targets and the support of its dialogue partners.
S. Pushpanathan is principal director of the Bureau for Economic Integration and Finance at the Asean Secretariat. The views expressed are persona