Towards inclusive and sustainable growth in the ASEAN economic community

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Presented at an event hosted by the OECD "Countdown 2015: Towards Inclusive and Sustainable Growth in the ASEAN Economic Community" at the 2014 World Economic Forum

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Towards inclusive and sustainable growth in the ASEAN economic community

  1. 1. COUNTDOWN 2015: TOWARDS INCLUSIVE AND SUSTAINABLE GROWTH IN THE ASEAN ECONOMIC COMMUNITY OECD High Level Working Dinner, Davos 24 January 2014
  2. 2. In light of the growing importance of Southeast Asia’s economy • How can participants of the dinner support the creation of the ASEAN Economic Community (AEC) in 2015? • How can participants of the dinner help to make AEC contribute to inclusive and sustainable growth in Southeast Asia? • What can the OECD do to help? 22
  3. 3. Agenda 1. AEC 2015: Opportunities and Challenges 2. OECD’s contribution 3. Areas for discussion a. Trade and Investment b. Connectivity and Infrastructure c. Inclusive and Sustainable Growth 3
  4. 4. 1. AEC 2015: Opportunities and Challenges 4
  5. 5. Southeast Asia remains a dynamic growth region… Real GDP growth of Southeast Asia (Annual Percentage Change) 7.9 7.2 2012 7.7 6.8 6.8 6.2 6 2.2 trillion in 2012, composed 6.8 6.5 5.1 mostly 4.9 5.2 5.4 5.5 5.4 1.3 0 young, growing middle class. • 2.3 of populations and an expanding 3.3 1 Market of 600 million people and a combined GDP of USD 2014-2018 5.8 5.6 • Real GDP growth rate in the Southeast Asia region is projected with an average growth of 5.4% per annum. Indonesia will be the fastestSource : Economic Outlook for Southeast Asia, China and India 2014, OECD growing economy among the ASEAN-6. 5
  6. 6. … but SEA faces challenges for inclusive and sustainable growth Selected challenges for Southeast Asia: • To reduce social and economic development gaps between ASEAN member countries, poverty reduction and human development measures remain key challenges, particularly in the CLMV countries (Cambodia, Lao PDR, Myanmar, Viet Nam). • Develop more efficient infrastructure and connectivity to facilitate cross-border and intra-regional exchange. • Reduce barriers to trade and investment. • Strengthen institutional capacity for human capital development and innovation in order to avoid the middle income trap. 6
  7. 7. The 2015 ASEAN Economic Community offers great opportunities to support growth ASEAN Economic Community (AEC) has the goal of the region’s full economic integration by end of 2015, including: • A single market and production base, which promotes a free flow of goods, services, investment, skilled labour and a freer flow of capital • A highly competitive economic region • A region of equitable economic development with a narrowing development gap • A region fully integrated into the global economy and attractive for FDI • Deeper regional integration within ASEAN will: • enable a more efficient division of labour and allocation of resources in the region, improving private sector efficiency and competitiveness. • • • facilitate capital account liberalisation and exchange rate flexibility. provide incentives for national liberalisation efforts. ASEAN is well positioned in the geographic center of the world’s growth corridor, from East Asia through ASEAN to India. 7
  8. 8. 2. OECD’s contribution 8
  9. 9. OECD is ready to support the ASEAN economic integration process and… OECD collaboration with ASEAN Secretariat: • Investment: ASEAN-OECD Investment Programme conducts country-level Investment Policy Reviews and regular regional investment dialogues. • Regulatory Reform: ASEAN Regulatory Reform Agenda is positioned as one of ASEAN’s flagship activities to foster good regulatory practices. • Small and Medium-Sized Enterprises (SME): Evaluation of SMEs progress and SME policies based on the SME Policy Index. • Economic Outlook for Southeast Asia, China and India: The Outlook, an OECD - ASEAN joint annual publication, analyses economic growth, development and regional integration process. • Initiative on Employment and Skills Strategies in Southeast Asia (ESSSA) promotes co-operation and sharing of knowledge and experiences for job-rich growth. • Connectivity/PPPs: Development of a database of risk mitigation instruments for private investments into long-term infrastructure projects. 9
  10. 10. … the new OECD Southeast Asia Regional Programme scales up OECD members’ engagement in the region… At the 2007 Ministerial, member countries identified SEA (Southeast Asia) as a region of strategic priority. The Resolution asked the OECD to strengthen relations with the region in light of its growing importance in the world economy and “with a view of identifying countries for possible Membership.” At the 2013 Ministerial meeting, the OECD received a mandate to establish a comprehensive Southeast Asia Regional Programme (SEARP). It would support domestic reform processes and contribute to regional integration initiatives.  The new SEARP programme will be officially launched by OECD and Southeast Asian officials at the 2014 MCM.  The substance of the Programme will be developed by Regional Policy Networks (RPNs) with experts from SEA and OECD countries.  The RPNs will draw on the work programme of substantive OECD bodies and draw upon OECD working methods in order to ensure effective policy exchange and accountability for outputs.  All efforts will be made to build on existing regional processes and networks. Engagement with regional institutions, including ADB, ADBI, APEC, ASEAN, UNESCAP and ERIA.  Country-specific reform implementation support complements the regional work. 10
  11. 11. … by focusing on policy fields related to the AEC blueprint to support inclusive and sustainable growth SEARP will focus on four clusters, which will be implemented by six Regional Policy Networks: The fields of work will also include: • Trade Initiative • Gender Initiative Priorities in these policy areas will be refined at the Davos working dinner and the OECD Southeast Asia Regional Forum (25-26 March 2014 in Bali, Indonesia). 11
  12. 12. Tonight's table discussions provide essential input to the thematic focus of the SEARP Regional Networks and Cluster: Topics for the table discussion: Investment Business Climate Trade and Investment Connectivity and PPPs Connectivity and Infrastructure Inclusive Growth SME Education and Skills Inclusive and Sustainable Growth We welcome you to the policy discussions to shape the new SEARP programme and develop new initiatives to foster ‘inclusive and sustainable growth’ in the region! 12
  13. 13. 3. Areas for Discussion: a) Trade and Investment 13
  14. 14. Trade and Investments flows are increasing in the region FDI in the region:  Increasing FDI inflows (8% of global flows in 2012)  FDI focus diverges in the region: • Mining: Brunei and Myanmar • Manufacturing: Indonesia, Malaysia, Thailand and Vietnam. • Services: Singapore, Laos, Philippines FDI landscape shaped by new developments:  Emergence of new sources of FDI  Boost in intra-regional investment  Increase of regional production networks  Greater influence of reg. integration on FDI Challenges:  FDI inflows focused on five countries: 95% of FDI goes to Singapore, Indonesia, Malaysia, Thailand and Vietnam, whereas Singapore alone accounts for 51%. Opportunities:  Ease of regulatory restrictions on investment as a driver of economic growth. TRADE in the region:  ASEAN countries export destinations are diversified.  However: intra-regional trade flows in SEA lower than in other regions. Challenges:  OECD export credit ratings show still high risk perception in selected countries.  Comparative advantages in exported goods diverge in the region and are below the level of direct competitiors.  Removal of regulatory barriers essential to spur trade in services, thereby improving supply and competitiveness. Opportunities:  Regional integration has the potential to increase intra-regional trade.  Expansion of regional production networks would support economic growth. 14
  15. 15. INVESTMENT: Strong FDI flows to the SEA region boost growth, but there are wide disparities FDI flows to Southeast Asia (by industry, 2010 and 2011) Mining and quarrying 84.0% Trade and commerce 9.6% Finance 30.8% Cambodia Manufacturing 26.1% Agriculture, fishery & forestry 20% Manufacturing 39.8% Indonesia Mining and quarrying 17.5% Services 16.9% Services 46.0% Lao PDR Mining and quarrying 13.3% Manufacturing 48.9% Malaysia Finance 18.2% Mining and quarrying 16.1% Brunei Destination of FDI in Southeast Asia Net inflows of 450 billion USD from 2006 to 2011 Vietnam, 9.3% Brunei, 0.7% Myanmar, Cambodia 0.8% , 1.0% Lao PDR, Indonesia 0.4% , 13.1% Thailand, 11.3% Malaysia, 9.9% Singapore, 50.9% Philippines , 2.6% Myanmar Mining and quarrying 99.6% (2010) Services 19.3% Philippines Real estate 11.7% Finance 10.6% Finance 23.1% Singapore Real estate 16.7% Trade and commerce 15.7% Manufacturing 52.8% Thailand Finance 21.4% Real estate 12.4% Manufacturing 39.2% Vietnam Services 24.3% Real estate 17.6% Source: ASEAN Investment Report 2012 Findings: • Singapore receives more than 50% of all FDI. • Less developed Cambodia, Laos, Myanmar get only 2.2% of total FDI. Source: ASEAN Factsheet on the ASEAN Economic Community (AEC) Southeast Asian share on global FDI increased from on average 4.8% between 2003 - 11 to 8.2 % 2012. The share far exceeds the SEA share on global GDP of 3.2% in 2012. 15
  16. 16. INVESTMENT: OECD products help improve the investment climate and increase FDI FDI Restrictiveness Index The Index accesses regulations relevant for FDI and includes four areas of restrictions: • Foreign equity limitations in investments • Screening or approval mechanisms • Restrictions on the employment of foreigners as key personnel • Operational restrictions (branching, capital repatriation or on land ownership) 0.5 OECD FDI Restrictiveness Index 0.4 0.3 0.2 0.1 0.0 Source: OECD 2013. OECD staff calculations OECD research and standards on investment: OECD Investment Policy Reviews (IPR) • Objective: Assessment of the investment climate. • Approach: Review of the policies on FDI and the role of FDIs in the Economy. • IPRs in Southeast Asia: Indonesia (2010), Malaysia (2013), Viet Nam (2009). Forthcoming : Myanmar, Philippines, Lao PDR Policy Framework for Investment (PFI) • The PFI is the most comprehensive approach for improving investment conditions ever developed. • 10 policy areas to support governments to design policy reforms to create an attractive investment climate. • OECD conducts trainings with ASEAN on investment policy making using the PFI. 16
  17. 17. TRADE: Diversified export destinations, but some countries have low number of exports with revealed comparative advantage Number of products exported with a revealed comparative advantage (RCA) Intra-regional trade comparison Region Intra regional exports ASEAN (2011) 25.0 % EU 27 (2011) 64.3 % North America (2007) 51.3% East Asia (2007) 52.1% Source: eurostat, WTO, Comtrade, ASEAN 300 250 200 150 100 50 0 ASEAN Trade Partners (2011) Others, 21.4% USA, 8.3% ANZ, 2.8% Canada, 0.5% Russia, 0.6% Pakistan, 0.3% Republic of Korea, 5.2% Intra ASEAN, 25.0% China, 11.7% Japan, India, 2.9% EU-27, 11.4% 9.8% Source: ASEAN: Factsheet on the ASEAN Economic Community (AEC) Source: OECD staff caluclations using COMTRADE data Main findings: • SEA countries differ in the export of goods with a revealed comparative advantage (RCA). • Thailand exports the highest number of products with a RCA. 17
  18. 18. TRADE: OECD instruments to facilitate trade and improve access to export credits OECD Export Credits Arrangements • Purpose: Setting minimum premium rates for transactions based on country risk. • Content: Measuring the country risk composed of transfer/convertibility risk and cases of force majeure. Code 0 to 7 , with 0 the lowest country risk. • Outcome: - Cambodia, Laos and Vietnam face a score above 4, corresponding to major challenges to access export credits. - Singapore, Brunei and Malaysia have good scores. - Remaining countries belong to middle risk countries. 7 6 Classifications above 3 are considered high. OECD trade facilitation indicators • Purpose: Basis for governments to prioritise trade facilitation reforms and assess potential impact of reforms. • Content: Sixteen trade facilitation indicators (TFIs), corresponding to the main policy areas under negotiation at the WTO. • Methodology: Values drawn from publicly avail able data and subsequently fact checked with concerned governments. Covers 133 countries across income levels, geographical regions and development stages. 5 Trade in Value-Added (OECD-WTO) 4 The TIVA-database analyses the value added by a country in the production of any good or service that is then exported, and offers a fuller picture of commercial relations between nations. Thus, TIVA provides information business competitiveness and export 18 performance. 3 2 1 0 Source: OECD
  19. 19. 3. Areas for Discussion: b) Connectivity and Infrastructure 19
  20. 20. Infrastructure and connectivity development facilitates trade and economic growth • ASEAN member countries are confronted with a number of challenges with respect to their connectivity, i.e. poor quality of roads and incomplete road networks, missing railway links and incompatibility of gauges, inadequate maritime and port infrastructure including dry ports, inland waterways and aviation facilities and widening of digital divide, and a growing demand for power. • With the Master Plan on ASEAN Connectivity towards 2015 and beyond, ASEAN member countries are engaged in strengthening their infrastructure in order to response to the need of increasing number of cross-border exchanges. 15 Projects on connectivity cover the infrastructure development in 3 dimensions: 1. Physical infrastructure: ASEAN Highways Network, Singapore- Kunming Rail Links. 2. Institutional connectivity: ASEAN Community building programme, Operationalize all National Single Windows (NSWs), Develop ICT skill standards; 3. Free movement of ASEAN citizen: Easing visa requirement for ASEAN nationals However, implementation of the Master Plan remains an issue of concern. • Around USD 600 billion are required for infrastructure investments in ASEAN between 2010 to 2020 (power, transport, telecommunication and water and sanitation). 20
  21. 21. Infrastructure projects need to attract further private financing… ASEAN’s total infrastructure investment needs, 2010-2020 Sector Amounts (US$ billion) Power 216.3 Transport 159.4 Telecommunications 63.6 Total 596.1 • • 70% financed by the public sector 10% financed by ODA funds 20% from the private sector 156.8 Water and Sanitation Sources of financing for projects: PPP in SEA: Thailand, Indonesia and Philippines have some PPP experience with mixed success in development and execution of PPP projects. Future steps: improved operating environment and institutional capacities. Source: ADB, ASEAN Secretariat ASEAN Infrastructure Fund (AIF) has been established in 2012 to finance critical infrastructure needs in the region. – The fund will finance about six projects a year, with a $75 million lending cap per project. Criteria for investments include their potential to cut poverty, increase trade and bolster investment. – AIFs equity contribution will be funded by ASEAN (69%) and ADB (31%) at the total amount of USD 485.2 million. 21
  22. 22. … to close infrastructure gaps and improve connectivity in the region and beyond Missing transport links in the Singapore Kunming rail link project Route Distances (KM) Lao PDR (Vientiane – Thakek – Mu Gia) 466 Viet Nam-Lao PDR (Mu Gia – Tan Ap – Vung Ang) 119 Cambodia (Poipet – Sisophon) 48 Cambodia- Vient Nam (Phnom Penh – Loc Ninh) 254 Viet Nam (Loc Ninh – Ho Chi Minh, ) 129 Myanmar-Thailand (Thanbyuzayat – Three Pagoda Pass) 110 Thailand (Three Pagoda Pass to Nam Tok) 153 Source: Master Plan on ASEAN Connectivity, ASEAN 22
  23. 23. OECD instruments to strengthen institutional capacities for PPP infrastructure investments Publications: OECD PPP support on: Project Life Cycle • • Upstream Policy Assistance Pre-Tendering (RFP) Capacity support to government on regulatory frameworks for PPPs Testing bidder interest in the project… End of OECD Project Identification Selecting viable infrastructure projects through screening criteria – ‘marketability’ Strengthen institutional capacities involvement OECD Principles for Private Sector Participation in Infrastructure OECD Principles for Public Governance of Public-Private Partnerships for infrastructure investment Pre-Qualification Advising on conformity with market needs and requirements Project Specification Pre-Feasibility Support government in designing optimal legal, regulatory and guarantee-related framework for the project Selecting a suitable procurement method (through value for money test ) 23
  24. 24. 3. Areas for Discussion: c) Inclusive and Sustainable Growth 24
  25. 25. Social and economic conditions improved strongly in the region but challenges remain Most Southeast Asian countries made remarkable improvements in living conditions, measured in the UNDP Human Development Index: • Cambodia, Lao PDR and Myanmar had the strongest improvements in the region, increasing their HDI from 2000-2012 annually by on average 1.7%, 1.5% and 2.2% respectively. • Singapore improved its ranking by 7 positions between 2007 and 2012. Challenges remain: • Further reduce multi-dimensional poverty by improving access and quality of the educational and health system in several countries. • Improve education and job skills in the SEA region. Gains are essential for the six more advanced ASEAN economies to achieve gains in productivity and thriving technology-intensive industries. • Strengthen inclusive growth to enable all population groups to participate from economic growth and to reduce inequality in income and opportunity. • Foster sustainable development through the protection of the environment and rich biodiversity. • Beside strong economic improvements, a growing middle income population demand more political inclusion and freedom. 25
  26. 26. Human development improved but still diverges amongst Southeast Asian countries Human Development Scores 2012 Source : data.undp.org 0.498 0.543 0.543 0.554 0.617 0.629 0.654 0.683 0.69 0.694 0.769 0.855 0.895 0.906 0.909 0.912 0.938 Main findings in ASEAN: • Singapore and Brunei score well on human development. • Myanmar, Lao and Cambodia face comparably far lower level of human development. • Most other countries are close to the world average. Population in multidimensional poverty Country Percentage Cambodia 45.9 Indonesia 20.8 Laos 47.2 Philippines 13.4 Thailand 1.6 Viet Nam 4.2 Source : data.undp.org Findings: • Large multidimensional poverty in several ASEAN countries. • Further work required to improve health, education and standard of living. 26
  27. 27. SEA countries participating in PISA display differences in educational performances… OECD Programme for International Student Assessment (PISA) PISA score in Asia (2013) 700 Main findings in ASEAN: • Singapore ranks second and belongs to the five highest-performing countries in the three fields. 600 500 400 • Vietnam scores above the OECD average in the three fields. 300 200 • Thailand, Malaysia and Indonesia score below the OECD average. 100 0 • Results improved compared to the 2009 PISA scores in most ASEAN countries. Mathematics Reading Science Source: OECD Background: Education and skills are essential for innovation and competitiveness. PISA assesses the extent to which 15-year-old students have acquired key knowledge and skills for full participation in modern societies. • In Malaysia, the score for ‘Reading’ and ‘Science’ decreased. Indonesia received a lower score in ‘Science’. 27
  28. 28. Southeast Asia continues to face environmental challenges Environmental Performance Index Country (128 total) Strongest Performer Switzerland Norway Rank 1 3 Strong performer Malaysia Brunei Darussalam Thailand Philippines 25 26 34 42 Modest performer Singapore Cambodia Myanmar Indonesia Viet Nam 52 59 69 74 79 Source: WEF GCR and Yale Univeristy Background: The Environmental Performance Index (EPI) includes facets of environmental public health and ecosystem vitality in the countries. Thus, EPIs enable governments to measure their distance to established environmental policies. Findings: Modest performer • High developed Singapore only rank 52 out of 128 countries. • All included lower developed countries Cambodia, Myanmar and Viet Nam. ASEAN: • Southeast Asia contains one of the richest and most diverse natural environments in the world, namely Indonesia, Malaysia and the Philippines. • Economic development have been accompanied by damage of the environment (overpopulation, health degradation, encroachment on natural systems, air and water pollution). • Environmental challenges encompass: Deforestation rates are particularly high in the tropical regions of Southeast Asia. Further challenges are: limited safe water supplies; air pollution and overfishing. 28
  29. 29. OECD products to support Inclusive and Sustainable Growth SME Policy Index ASEAN 2013 Jointly conducted by OECD and ERIA* Dimensions covered: 1. Institutional framework 2. Access to support services 3. Cheaper, faster start-up and better regulation for SMEs 4. Access to finance 5. Technology and technology transfer 6. International market expansion 7. Promotion of entrepreneurial education 8. More effective representation of SMEs interests Note: ERIA - Economic Research Institute for ASEAN and East Asia Southeast Asian Economic Outlook with Perspectives on China and India • Assessment of medium-term macroeconomic trends and projections. Country-specific structural policy notes and a thematic focus. • In 2014, policy priorities for growing beyond “middle-income trap” in Emerging Asia OECD Guidelines for Multinational Enterprises • Guidelines for responsible business conduct to promote contributions by enterprises to economic, environmental and social progress worldwide. • The only multilaterally agreed and comprehensive standards. •42 OECD and non-OECD adhering countries. 29
  30. 30. OECD SME Policy Index findings: Institutional Framework Institutional Framework 6 Institutional Framework 5 Institutional Framework 4 3 SME definition 2 Intra-governmental coordination in policy formulation SME development strategy 1 SME policy implementation agency or equivalent 0 SGP MYS THA PHL IND VNM KHM LAO Source: OECD BRN MMR Facilitation for a transition from informal to formal (registered) sector Main findings in ASEAN: • Singapore performs well across the dimension (5.5) • MYS, THA, PHL, IND, VNM have developed a solid institutional framework (average 3.7) • In contrast, KHM, LAO, BRN and MMR are still establishing an institutional framework (average 2.3) • Policies could be strengthened to facilitate the transition from the informal to the formal sector 30
  31. 31. OECD SME Policy Index findings: Access to Finance Access to Finance 6 5 Access to finance for SMEs Legal and regulatory framework 4 Sound & diversified financial markets Cadastre (including land use right) 1 0 Source: OECD Credit bureau/registries Creditor rights 2 Credit guarantee schemes Collateral and provisioning requirements 3 Factoring Microfinance facilities Leasing Availability of risk capital Main findings in ASEAN: • Collateral Requirements: Most countries have adopted flexible collateral definitions, except LAO & BRN. However, high collateral requirements are the norm (>100% loan value). • Cadastre exist across the region: Only in the advanced group (THA, MYS & SGP) is land ownership fully documented 31
  32. 32. Summary • AEC presents a great opportunity for growth, but supporting policy mix must be right to achieve inclusive and sustainable growth. • Governments, private sector and international organisations need to work together to make AEC a success in 2015 and beyond. • The OECD Southeast Asia Regional Programme stands ready to support the AEC process as well as reforms on a country level. 32
  33. 33. Annex 1. Revealed Comparative Advantage in ASEAN countries 2. Medium-term policy challenges and responses for human development in ASEAN 3. Ease of Doing Business and possible policy reforms 4. Investments with private participation 33
  34. 34. Revealed Comparative Advantage of ASEAN countries Concept: Revealed Comparative Advantage (RCA) calculates the relative advantage or disadvantage of a country in producing certain goods or services, based on trade flows. Main export good Brunei Petroleum oils, crude Cambodia Unused postage, stamps etc Indonesia Lao PDR RCA Share Second export good 5.62 50.14% Petroleum gases RCA Share Third export good RCA Share 20.8 47.08% Acyclic alcohols 4.61 1.05% 637.4 20.87% Sweaters, pullovers etc 42.9 13.63% Women's suits 55.07 7.83% Coal; briquettes 13.39 10.16% Petroleum gases 3.36 34.07 6.62% Gold content 73.14 21.93% Refined copper and copper alloys 44.71 21.55% Electrical energy Malaysia Electronic integrated circuits Myanmar Petroleum gases 18.58 42.06% Dried legumes Philippines Electronic integrated circuits 14.01 39.73% Auto. data processing machines Singapore Electronic integrated circuits Thailand Auto. data processing machines 3.8 7.84% Electronic integrated circuits 1.72 Vietnam Petroleum oils, crude 0.7 6.20% Footwear, with leather body 15.81 4.87 13.80% Petroleum oils, refined 6.95 19.71% Petroleum oils, refined 7.60% Palm oil, crude 1.32 5.81% Petroleum gases 230.4 11.91% Wood in the rough 3.44 7.09% Diodes, semiconductor devices etc 4.32 18.91% Auto. data processing machines 4.88% Natural rubber 5.24% Other furniture and parts thereof 64.83 15.90% 2.46 5.57% 97.66 8.46% 6.26 4.84% 2.02 4.17% 22.99 3.68% 9.18 4.05% Main findings : • Low export diversification: Brunei (hydrocarbon products 98%) and Myanmar (Petroleum gases 42%). • Limited export diversification: Cambodia, Lao PDR, Philippines, Singapore • High export diversification: Indonesia, Malaysia, Thailand, Viet Nam RCA calculation: Export share of the product of the country divided by the global export share of the product. 34
  35. 35. Medium-term policy challenges and responses for human development in ASEAN Recommendations from the OECD Southeast Asia Economic Outlook 2014 Country Field Policy Focus Brunei Human capital development Improve tertiary education attainment Cambodia Agriculture Improve productivity of agriculture, in particular rice production Social security reform Education Accelerate reform of the pension system to improve transparency and quality Widen access to education, in particular for low-income households Lao PDR Poverty Reduce poverty through inclusive growth Malaysia Education Improve the quality of education Myanmar Human resource development Upgrade education and anticipate future demands for skilled labour Human capital development Poverty Build holistic disaster risk reduction and management capacities to reduce vulnerability to natural hazards Create more jobs for sustainable poverty reduction Education Strengthen lifelong learning to increase labour market flexibility Education Upgrade human capital by improving the national curriculum and teaching standards Human capital development Increase access to education and strengthen TVET to improve the quality of human capital Indonesia Philippines Singapore Thailand Vietnam 35
  36. 36. Top 3 Priorities for DB - Enforcing Contracts (161) Brunei - Registering Property (116) Darussalam - Protecting Investors (115) Cambodia Indonesia Lao PDR Malaysia Myanmar - Resolving Insolvency (163) - Enforcing Contracts (162) - Dealing with Construction Permits (161) - Enforcing Contracts (147) - Resolving Insolvency (144) - Paying Taxes (137) - - Resolving Insolvency (189) Protecting Investors (187) Getting Credit (159) Dealing with Construction Permits (43) Resolving Insolvency (42) Paying Taxes (36) Enforcing Contracts (188) Protecting Investors (182) Getting Credit (170) - Paying Taxes (131) Philippines - Protecting Investors (128) - Registering Property (121) Problematic factors to DB - Access to financing - Poor work ethic in national labour force - Restrictive Labour regulations - Corruption - Inefficient government bureaucracy - Inadequately educated workforces Ease of Doing Business Rank In 2013 - Corruption - Inefficient government bureaucracy - Inadequate supply of infrastructure - Inadequately educated workforces - Access to financing - Inadequate supply of infrastructure - Inefficient government bureaucracy - Corruption - Poor work ethic in national labour force - Access to financing - Policy instability - Corruption - Inadequate supply of infrastructure - Corruption - Inefficient government bureaucracy Singapore - Registering Property (28) - Enforcing Contracts (12) - Getting Electricity (6) - Restrictive Labour regulations - Inflation - Insufficient Capacity to innovate Thailand - Getting Credit (73) - Paying Taxes (70) - Resolving Insolvency (58) - Corruption - Government instability/coups - Policy instability Viet Nam - Getting Electricity (156) - Protecting Investors (157) - Paying Taxes / Resolving Insolvency (149) COUNTRY ASEAN Brunei Darussalam Cambodia Indonesia Lao PDR Malaysia Myanmar Philippines Singapore Thailand Viet Nam Asia Pacific Australia China Hong Kong India Japan Korea, Rep. New Zealand RANK 59 137 120 159 6 182 108 1 18 99 11 96 2 134 27 7 3 - Access to financing - Policy instability - Inadequately educated workforces Source: Economy ranking, doingbusiness.org, 2013 and World Economic Forum; Global competitiveness Report 2013 36
  37. 37. Investments with private participation Private financing in infrastructure projects in 2012 (million US$) Country Energy Telecommunication Cambodia 1,863.5¹ 6.8 Indonesia 288 1,253.2 Lao PDR 501.4 1,250² Malaysia 4,386.2 798.9 1,177.1 1,113 Thailand 1,580.6 1,169 Vietnam 168.8 N/A Philippines Source: World Bank Note: 1: 2010 Data. 2: 2009 Data 37

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