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KONDISI EKONOMI REGIONAL/GLOBAL DAN

KEKUATAN ASEAN

Oleh : DR. Makarim Wibisono

Disampaikan pada

Seminar ASEAN , Lt. 3 Kampus UKI, Cawang 22 November 2011

A reaction to the ongoing Cold War.

A fear of communism.

A vehicle to promote economic development.

Indonesia, Malaysia, The Philippines, Singapore and Thailand.

The dynamics of ASEAN changed with the accession of :

Brunei Darussalam (1984),

Vietnam (1995),

Laos and Myanmar (1997)

Cambodia (1999)

The economic road towards peace.

The Bangkok Declaration stated :

“The ASEAN Leaders have placed economic and

social cooperation at the forefront of the

Association’s stated purposes in order to give

material content to Southeast Asian solidarity.”

The Establishment of ASEAN community (AO).

The IX ASEAN Summit, Bali, 2003 : Bali Concord II: 3 pillars of ASEAN community.

The X ASEAN Summit, Vientiane, 2004: Vientiane Action Program leading to AO.

The XI ASEAN Summit, Kuala Lumpur, 2005: Declaration on the establishment of ASEAN charter.

The XII ASEAN Summit, Cebu, 2007: Cebu Declaration on the Acceleration of the Establishment of an ASEAN Community by 2015.

The XIII ASEAN Summit, Singapore, Nov 2007:

Signing ASEAN Charter. The XIV ASEAN Summit, Hua Hin, Thailand,

March 2009: Adoption of APSC and ASCC Blueprint

3 Pillars of ASEAN Community:

“The shift of economic power from West to East will continue, and Asia-Pacific will remain the most attractive economic region for the next 20 years”, HIS Global Insight, 2011

Asia economic growth will continue to outpace that of the West. Led by China and India, but also influenced heavily by the likes of Japan, South Korea, Indonesia and Viet Nam. The center of the wealth is clearly shifting eastwards.

The Global Economic Centre of Gravity Shifts East

Source: The Economist

Asia’s rise will be led by PRC, India, Indonesia, Japan, Republic of Korea, Malaysia, and Thailand.

In the 2010 these seven economies had a combined total population of 3.1 billion (78 percent of Asia) and a GDP of $14.2 trillion (87 percent of Asia)

By 2050 their share in population is expected to fall to 73 percent of Asia, while the share of GDP rises to 90 percent. These seven economies alone will account for 45 percent of global GDP.

Their average per capita income of $45,800 (PPP) would be 25 percent higher than the global average of $36,600.

The Asia-7 Economics

2010 GDP (MER trillions)

2050 GDP (MER trillions)

PRC 5.7 62.9

India 1.4 40.4

Indonesia 0.7 11.4

Japan 5.4 8.2

Republic of Korea

1.0 3.7

Thailand 0.3 3.2

Malaysia 0.2 2.6

Total Asia-7 14.8 132.4

By 2034, the economic centre of Asia could account for 57% of global output.

Despite three giant economies (China, India, and Japan), ASEAN countries like Indonesia and Viet Nam would also have significant economic mass.

Thailand and Malaysia could have economies larger than France has today.

The ASEAN Resurgence

World Economic Output Over 50 Years, 1984 – 2034

(2005 PPP Dollars)

Source: OECD, January 2010

Technological advance

Catch-up technology in a group of fast-growing

converges who are in the midst of a process of shifting resources from low to higher

productivity activities.

Capital accumulation Country specific

demographic changes of the 15-64 age group.

Asia-Pacific has the biggest share (25.1%) of Twitter users in the world

Four of top ten countries with the highest Twitter penetration are in Asia-Pacific (Japan, Indonesia, Philippines, Singapore)

Indonesia at 19% has the 4th highest proportion of its home and work Internet audience visiting Twitter.com

ASEAN as a Dynamic Region: Changing Lifestyle

ASEAN as a Dynamic Region: Changing Lifestyle

Asia-Pacific region has 122 million users or 18% of worldwide Facebook users

35 million of these Asia-Pacific users are in Indonesia

Indonesia has the 2nd largest Facebook users in the world.

A survey result by AmCham in 2011 states that ASEAN markets importance is to increase in global business in the next 2 years (from 70% in 2010 to 73% in 2011)

There has been business expansion in ASEAN in the past 2 years

Most business in ASEAN plan to expand in the next 2 years, with Indonesia and Viet Nam as the most popular countries for expansion.

ASEAN integration is key for ASEAN companies to ASEAN to do business and grow in the region.

Importance of ASEAN to the World: Increase in Global Business

Every year there are over 71,359 ships passing the Malacca Strait, carrying 1/3 of world’s sea trade.

The biggest contribution to volume of traffic in Malacca Strait comes from container vessel, followed by oil tankers.

There are 5 international ports in the area: Singapore, Klang (near Kuala Lumpur), Johor, Penang, and Belawan (Medan)

There are also a number of smaller ports and ferry terminals that have significant value to the area.

There is a large ship passing the Malacca Strait every 7 to 8 minutes everyday.

Importance of ASEAN to the World: Malacca Strait

ASEAN Member Countries have committed to the implementation of the ASEAN Economic Community by 2015

With AEC, ASEAN will transform into:

A single market and production base

A highly competitive economic region

A region of equitable economic development

A region fully integrated into the global economy

ASEAN Will Still Continue To Grow

Physical Institutional People to People

Key

Strategies

1. ASEAN Highway Network (AHN)

2. SK Railway Link (SKRL)

3. Inland Waterway Network (INL)

4. Maritime Transport Network (MTN)

5. Multimodal Transport for Transport Hub in

the Region (MULTI)

6. ICT Infrastructures & Services (ICT)

7. Resolve Institutional Issues in Energy

Infrastructure Project (ENERGY)

1. Framework Agreement on Transport

Facilitation (FATF)

2. Inter-State passanger land

transportation (LT)

3. ASEAN Single Aviation market (ASAM)

4. ASEAN Single Shipping Market

(ASSM)

5. Eliminate barriers for Trade (TRADE)

6. Competitive logistics sector (LOG)

7. Trade Facilitation (TF)

8. Border Management (BOR)

9. Open Investment (INV)

10. Institutional Capacity and Regional-

Sub regional Coordination (INS)

1. Intra ASEAN Social &

Cultural Understanding

(SOC-CUL)

2. Intra ASEAN People

Mobility (MOB)

TOTAL: 7 Key Strategies TOTAL: 10 Key Strategies TOTAL: 2 Key Strategies

Key

Actions

1. AHN – 5 Key Actions

2. SKRL – 4 Key Actions

3. INL- 1 Key Actions

4. MTN – 1 Key Actions

5. MULTI – 4 Key Actions

6. ICT – 7 Key Actions

7. ENERGY – 6+4 Key Actions

1. FATF – 4 Key Actions

2. LT – 2 Key Actions

3. ASAM – 5 Key Actions

4. ASSM – 1 Key Actions

5. TRADE – 4 Key Actions

6. LOG – 2 Key Actions

7. TF – 6 Key Actions

8. BOR – 3 Key Actions

9. INV – 2 Key Actions

10. INS – 3 Key Actions

1. SOC-CUL – 10 Key

Actions

2. MOB – 10 Key Actions

TOTAL: 32 Key Actions

TOTAL: 32 Key Actions

TOTAL: 20 Key Actions

Key Strategies for Enhanced ASEAN Connectivity

Physical Connectivity

•Completion of the ASEAN Highway Network (AHN) – Land Transport

•Completion of the Singapore – Kunming Rail Link (SKRL) – Land Transport

•Establish ASEAN Broadband Corridor (ABC) – ICT

•Malaka – Pekan Baru Interconnection – Energy

•West Kalimantan – Sarawak Interconnection – Energy

•Study on RORO Network and Short Sea Shipping – Maritime Transport

Institutional Connectivity

•Develop and Operationalize Mutual Recognition Arrangements (MRAs) – Free Flow of Goods

•Establishing Common Rules for Standards and Conformity Assessment Procedures – Free Flow of Goods

•Operationalize all National Single Windows (NSWs) by 2012 – Free Flow of Goods/ASEAN Single Window

•Options for a Framework Modality towards Phased Reduction and Elimination of Scheduled Investment Restrictions – Free Flow of Investments

•Operationalization of the ASEAN Agreements on Transport Facilitation – Transport Facilitation

People-to-People Connectivity

•Easing Visa Requirements for ASEAN Nationals – Movement of People, Tourism

•Development of ASEAN Virtual Learning Resource Centres (AVLRC) – Culture

•Develop ICT Skills Standards – ICT

•ASEAN Community Building Programme – Culture, Education

15 Priorities Projects for ASEAN Connectivity

To connect archipelagic ASEAN, a study for the ASEAN RORO network and Short- Sea Shipping in ongoing and due to be completed in 2012 for implementation thereafter. This network should cover areas which have limited or no access to international trade lanes, thus giving them ability to participate in regional trade.

Completion of SKRL (Singapore – Kunming Rail Link) is due in 2020, possibly to extend to Surabaya, Indonesia. When these links are built, the mainland of ASEAN will be connected.

AHN (ASEAN Highway Network) is targeted for completion in 2015. This connectivity will also extend beyond ASEAN, with plans to extend the AHN to China and India.

US Continue to be in problem – USA lost its AAA rating for the first time – continue economic problem post housing bubble burst. High unemployment

Eurozone problem – with Greek debt problem, Spain, and Italy

Japan continue to struggle with post-Tsunami and Nuclear Crisis – coupled with political turmoil

Never in the recent hitory 3 of 4 largest world economic center are in serious problem

Even though the world is entering into recession however impact to the Emerging Asia is relatively mild

Foreign banks withdrawn their

funds from emerging market

The global crisis in the United States and Europe forcing foreign banks to

withdraw their funds from ASEAN to fill their internal

balance

Negative sentiment of the investors

The global crisis cause the economic

uncertainty, so investors tend to move their funds

into safer investments

Government to set priorities

The Government should restore the credibility

and confidence – market is expecting for radical

measure.

Equilibrium if domestic connectivity is strong

Resource drain if domestic connectivity is weak, thus the gap remains or widens.

Negative implications possibly occur in the early period of a well-connected region. It is possible that the larger economies will crowd out the smaller economies.

The negative effects could be subsequently diminished, when smaller economies reorganize themselves around their larger counterparts.

Challenge #2: Resource Drain

Lagging Region

Advanced Region

Connectivity

Labor

Capital

• Human capital development, deeper engagement of local companies in the production networks

Develop Regional Capacity

• Through proactive approach in engaging external partners, strengthen its centrality role to pursue wider cooperation schemes with external partners, and raise voice and influence on critical issues in international forum

Engage ASEAN Centrality

• Make the economies resilient against shocks and strive to be green, through resiliency in resource security (incl. food), carbon reduction policies

Sustainable Development

• Treat the region (or pockets of the region) as a special case with extra accountability measures would augment the region’s attractiveness amongst foreign investors

Clearing administrative

bottlenecks

• Enhancing connectivity and remove bottlenecks Inclusiveness