Jayant Menon - An Evolving ASEAN: Vision and Reality

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AN EVOLVING ASEAN

VISION AND REALITY

Edited by Jayant Menon and Cassey Lee

SEPTEMBER 2019

Creative Commons Attribution 3.0 IGO license (CC BY 3.0 IGO)

2019 Asian Development Bank

6 ADB Avenue, Mandaluyong City, 1550 Metro Manila, Philippines

Tel +63 2 632 4444; Fax +63 2 636 2444

www.adb.org

Some rights reserved. Published in 2019.

ISBN 978-92-9261-694-6 (print), 978-92-9261-695-3 (electronic)

Publication Stock No. TCS199043

DOI: http://dx.doi.org/10.22617/TCS199043

The responsibility for opinions expressed in signed articles, studies and other contributions rests solely with their authors, and publication does not necessarily reflect the views or policies nor constitute an endorsement by the Asian Development Bank (ADB) or its Board of Governors or the governments they represent, nor by ISEAS.

Neither ADB nor ISEAS guarantees the accuracy of the data included in this publication and accepts no responsibility for any consequence of their use.

By making any designation of or reference to a particular territory or geographic area, or by using the term country in this document, neither ADB nor ISEAS intends to make any judgments as to the legal or other status of any territory or area.

The mention of specific companies or products of manufacturers does not imply that they are endorsed or recommended by ADB or ISEAS in preference to others of a similar nature that are not mentioned.

This work is available under the Creative Commons Attribution 3.0 IGO license (CC BY 3.0 IGO) https://creativecommons.org/licenses/by/3.0/igo/. By using the content of this publication, you agree to be bound by the terms of this license.

This CC license does not apply to non-ADB or non-ISEAS copyright materials in this publication. If the material is attributed to another source, please contact the copyright owner or publisher of that source for permission to reproduce it. Neither ADB nor ISEAS can be held liable for any claims that arise as a result of your use of the material.

Please contact if you have questions or comments with respect to content, or if you wish to obtain copyright permission for your intended use that does not fall within these terms, or for permission to use the ADB logo.

Corrigenda to ADB publications may be found at http://www.adb.org/publications/corrigenda.

Notes:

In this publication, $ refers to United States dollars.

ADB recognizes China as the Peoples Republic of China, Korea as the Republic of Korea, and Hanoi as Ha Noi.

On the cover: Indonesia signed the ASEAN Declaration with Malaysia, the Philippines, Singapore, and Thailand in 1967 (photo from the ASEAN Secretariat Photo Archives).

This book is dedicated to former Ambassador

and ASEAN Secretary-General Rodolfo C. Severino.

27 April 193619 April 2019

TABLES AND FIGURES

TABLES

2.1	ASEAN Key Development Statistics, 2017
2.2	ASEAN Gross Domestic Product Growth Rates, 20002017
2.3	ASEANs 10 Major Export Markets by Value and Share of Total, 2017
3.1	Bilateral Visits between ASEAN Leaders
5.1	Ranking of ASEAN Competitiveness
6.1	Singapores Free Trade Agreement Partners
6.2	Most Favored Nation Tariffs on Nonagricultural Products of Singapores Free Trade Agreement Partners
7.1	Real Gross Domestic Product Growth Rates, 19712017
8.1	Key ASEAN Agreements on Economic Integration
8.2	Agreements and Time Lines
8.3	Illustrative Economic Agreements That Contribute to Key Areas in the ASEAN Economic Community
8.4	Illustrative Quality Indicators, 2011

FIGURES

2.1	Trade between ASEAN-5 and the Plus 6 Countries, 20042017
2.2	The Development Ladder
2.3	Growth of Total Factor Productivity, 1990 and 2015
5.1	The Value Chain of an Apple iPhone
8.1	Philippine Trade with ASEAN and Total
8.2	Export and Import Shares to Totals of ASEAN-6 Member States, 2015
8.3	Common Effective Preferential Tariff Rates, Original and Accelerated

FOREWORD

Although the formation of the Association of Southeast Asian Nations (ASEAN) in the 1960s was originally driven by political and security concerns, ASEANs ambit has evolved over the decades to include an ambitious and progressive economic agenda. Early attempts at economic cooperation among ASEAN member states included the adoption of the ASEAN Industrial Projects, the Agreement on ASEAN Preferential Trading Arrangements, the ASEAN Industrial Complementation scheme, and the ASEAN Industrial Joint Ventures in the 1970s and 1980s. The results from these ventures were mixed, perhaps reflecting the fact that ASEAN was not yet ready for effective trade liberalization and economic integration at that time.

In 1992, ASEAN took another bold step and adopted the Common Effective Preferential Tariff scheme under the ASEAN Free Trade Area. This solidified the foundation for ASEAN economic cooperation and spurred the adoption of more ambitious initiatives such as the ASEAN Framework Agreement on Services in 1995 and the ASEAN Investment Area in 1998. All of these efforts eventually culminated in a vision to create the ASEAN Economic Community (AEC) by 2015.

Despite recognized shortfalls in implementation in some areas, ASEAN formally launched the AEC in December 2015. With the discourse now having shifted to the vision and direction for ASEAN 2025, it is timely to reflect on the past and future of ASEAN regional economic integration. What has ASEAN already achieved, and how? Is the AEC headed in the right direction? And, more importantly, can it do a better job of binding ASEAN member states to their commitments?

To address these questions, the Asian Development Bank (ADB) and ISEASYusof Ishak Institute convened the High-Level Workshop on the Evolving Nature of ASEANs Economic Cooperation: Original Vision and Current Practice. ADB and ISEAS invited renowned economists and diplomats in the ASEAN region, many of whom were instrumental in the evolution of ASEANs economic agenda. This volume is a compilation of the papers presented at the workshop, containing the authors personal reflections on ASEANs journey toward economic integration. The papers review the historical evolution of ASEANs economic agenda, capture its achievements, examine the challenges that have surfaced in the last decade, and recommend a way forward. The papers in this volume emphasize that, while there have been notable successes, the remaining challenges suggest that ASEAN is still on its transition path in achieving full economic integration.

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