This document discusses opportunities for partnership between ASEAN and the Pacific Alliance. It notes that while trade in goods is limited by distance, there is potential in other areas like trade in services, investment, and capital markets. Specific sectors mentioned include construction, tourism, and digital services. Case studies of ongoing infrastructure projects in ASEAN countries like Iskandar Malaysia, MRT Jakarta, and Thailand's Eastern Economic Corridor are provided. The document concludes that ASEAN and the Pacific Alliance should further explore potential sectors for cooperation, especially using the "Bridge" concept in services.

1. ASEAN and Pacific Alliance
in the Dynamic Asia
Dr. Suthad Setboonsarng
20 June 2017
San,ago, Chile

2. Topics
1. Introduc,on
2. The dynamic Asia
3. Trade between ASEAN and the Pacific
Alliance
4. Conclusion

3. I. Introduc3on
• The global economic landscape is changing fast
because of new technologies and government
policies.
• Each government and business concern should
define their future desirable posi3on and
determine ac,ons they should take individually
and jointly with poten3al partners to aKain the
target.
• There are many niches for partnership between
medium size group in the two con,nents like
ASEAN and Pacific Alliance (PA).

4. II. The Dynamic Asia
• Asia is the source of global economic
growth in the next – almost 50%;
• Asia needs to be more integrated to
realize this poten,al.
• Many factors will define the future of
Asia.
• ASEAN is the natural hub for this exercise.

5. - Top 20 countries
contribute 81%, as top
10 countries contributes
69% and top 5 countries
contributes 59%
- Among top 5, 3 are
from Asia and contribute
about 37%.
- ASEAN contributes
US$1,328billion or 6%,
with Indonesia and
Philippines in the top 20.
- Thailand ranks 34 with
0.4% contribu,on.
- Chile ranks 40 with
0.32% contribu,on.
Source of Global
GDP Growth

6. Factors Affec3ng the Future of Asia
Popula'on dynamics
• Uneven growth, aging, urbaniza,on, middle-class
Technological advances
• Informa,on, energy, others
Scarcity of Resources
• Land, water, minerals,
• Eco-system, climate change;
Inadequate Ins'tu'ons
- Need efficient governance system for sustainable outcome.

7. Implica3ons and Responses
New direc'on of commerce
• Trade in goods, services
• Capital and investment
• Labor movement
Harnessing Popula'on Dynamic
• Managing migra,on
Non-tradi'onal Securi'es
• Food, energy, finance, connec,vity, health
Deploying New Technology
• Connec,vity infrastructure, improving appropriate skills
Crea'ng appropriate ins'tu'ons
• Involving the private sectors
• Adop,ng principle of good governance in both the private and
public sector

8. Growth of Working Popula3on
Source: World Development Index, World Bank, 2013 and World Economic Outlook, IMF April 2017.
• Asia share about 45% of global popula,on increase, with
South Asia share 27% of the increase.
• Aging in NE Asia and not in South Asia.
• Working popula,on in NE Asia will decline and become
nega,ve by 2030.
Unit: Million people

9. 36
11
1513
26
33
38
4548
100
13
1921
33
37
49
5556
100
43
Singapore ASEAN Cambodia Myanmar Laos Vietnam Philippines Thailand Indonesia Malaysia
More than 90 million people are expected to move to ASEAN cities by 2030
Share of country popula3on living in ci3es of more than
200,000 inhabitants, 2013–301
%
Cities with
>200,000
inhabitants
in 2013
SOURCE: McKinsey Global Institute Cityscope database; national statistics offices; McKinsey Global Institute analysis
1 Brunei not included as the country has no ci,es with popula,on >200,000.
NOTE: Numbers may not sum due to rounding.
128 1 1 15 9 34 15 31 1 235
2013
2030
Urbaniza3on

10. Technological Advances
• Digital era and Informa,on management
– FINTEC, Internet of Things (IOT), Robo,c
– New management system for individual, business and states.
• New agriculture and food market
– Farmers’ access to produc,on and marke,ng informa,on
– Consumers are more educated, health conscious and access to
produc,on informa,on.
• Energy technology
– Energy produc,on, u,liza,on and storage
• Nano technology
– Food, tex,le, energy
Emerging market has more chance to adopt new technology because
they can jump start. For example, Electric Vehicle (EV), GRAB, etc.

11. Scarcity of Resources
Increase in demand from more popula,on and
higher income are set against:
• Produc,on resources
– Land, water (in China and India), minerals
• Worsening global climate
– Global warming
• Expansion of demand
– Intensifica,on of consump,on as income rises.

12. Inadequate Ins,tu,ons
• More poli,cal tensions – inequality, injus,ce,
religious difference;
• Needs innova,ve economic, poli,cal and
social ins,tu,ons at local, na,onal and
interna,onal levels to ensure good
governance.
• Public sector adjustment is slow and need to
delegate more roles to private sector.

13. Andean
NAFTA
Mercosur SACU
EU
ASEAN
SAARC
New Trend of Trade: Recent Years
Source: Trade Maps database, ITC, June 2016
Trade between East and South Asia
- New industrial development opportuni,es, e.g., auto
- New infrastructures to support the trade route* -
road, rail, broadband, airports, seaports, energy grid
etc.

14. Needs Involvement of Private Sector
SOURCE: ASEAN Secretariat; World Bank
8
4
3
2
2
3
2
2
9
2
2
52
4
22
Total
40
1
3
1
Thailand Lao PDR Philippines
9
Viet Nam Indonesia
7
1
1
Myanmar
2
1
1
Malaysia Brunei
2
1
1
Cambodia
Energy Port Airport Rail Road
Number of projects1
1 Infrastructure projects were priori,sed by the World Bank based on 2 criteria: (1) Relevance for ASEAN connec,vity; and (2) A high or medium priority for
ASEAN Member States.
The World Bank has iden,fied 40 poten,al PPP projects which have strong regional relevance in ASEAN

15. III. ASEAN and Pacific Alliance
• Although, trade in goods is and will remain limited because of
the distance, both sides can be a springboard for each other
to access others markets.
• Other areas that may have more poten,al – not affected by
distance.
– Trade in services
– Investment
– Capital market
• Other areas of coopera,on
– Global and regional financial market.

16. Trade in goods between ASEAN and Pacific
Alliance

17. Trade in services
• Trade in services has many opportuni,es to offer:
– ASEAN imports US$324 billion and exports US$322 worth of services
in 2016.
– Chile imports US$13.07 billion exports US$9.6 billion
– Colombia imports US$10.81 billions and exports $7.79 billion
– Mexico imports US$31.9 billion and exports US$24.07 billion
– Peru imports US$7.96 billion and exports US$6.3 billion.
• Service trade may not be affected by distance as much as
goods trade.
• New kind of services are following the advance in digital
technology.

18. Some tradi3onal service sectors
• Construc,on
– In the coming decade, ASEAN will be inves,ng
heavily on infrastructure.
– New innova,ve financial and arrangement of
cross-border projects can be a niche.
• Tourism
– Hotel management and tourist des,na,ons.
• Sports and entertainment
– Football from Chile and Muay Thai from Thailand

19. IV. Some on going projects
• Regional connec,vity projects:
– Economic Corridors - GMS
• Each ASEAN country is crea,ng project to link
into the ASEAN system:
– Iskandar Malaysia
– Public projects in Indonesia – Port, Metro and
Flyover;
– Infrastructure projects in the Philippines
– Eastern Economic Corridor (EEC), Thailand.

20. Economic Corridors: GMS and India
GMS:
1) 3 East-West Economic
Corridors (EWEC);
2) 3 North-South Corridors
NSEC);
India-Myanmar-Thailand has been
completed.

21. Iskandar Malaysia
Iskandar Malaysia aims to be “A Strong and
Sustainable Metropolis of Interna,onal
Standing” by the year of 2025.
2,217 square kilometres
Popula,on: 1.8 million 2015-3 million 2025
GPP/cap to increase to $31,100 by 2025
Zone A, a financial district, the central
business district, the waterfront city, a
mixed development at the Malaysia/
Singapore Causeway.
Zone B is a medical hub, an "educity", a
resort for interna,onal tourism and an
industrial logis,c cluster and residence.
Zone C focuses on the second transporta,on
link port for Malaysia/Singapore and a free
trade zone.
Zone D focuses on the port and industrial
zone, Technology Park and a regional
distribu,on centre.
Zone Senai-Skudai, focuses on the
Senai Interna,onal Airport, hubs for cargo
and knowledge, a mul,modal centre and the
MSC Cyberport city hKp://iskandarmalaysia.com.my/

22. Public Projects of the Indonesian
Government
New Priok Port, Jakarta
An extension of the current Tanjung Priok harbour in North Jakarta, Indonesia's busiest trading port. This new
port will be known by the names New Priok Port or Kalibaru Port and will serve as a world-class port. The
construc,on of this mega-project started in 2012 and comple,on is expected by 2023.
Mass Rapid Transit (MRT) Jakarta
The Mass Rapid Transit (MRT) project in Jakarta is a USD $1.7 billion infrastructure project that aims to
relieve great traffic conges,on in Indonesia’s capital city. When fully opera,onal, the MRT will be able to
transport about 450,000 passengers per day. The MRT consists of two corridors: (1) the North-South corridor
and (2) the East-West corridor. Currently, the North- South corridor is being constructed. This corridor will be
built in two phases.
Flyover Roads (Non-Toll), Jakarta
The Flyover Roads project in Jakarta cons,tutes two addi,onal non-toll roads on an al,tude of ten meters
above the exis,ng roads that connect Blok M to Antasari in South Jakarta and Tanah Abang in Central Jakarta
to Kampung Melayu in East Jakarta. This USD $140.8 million public project aims at reducing the constant
and grave traffic conges,on in parts of Jakarta by adding over seven kilometers of road to its infrastructure.

23. Infrastructure projects in the
Philippines
For possible Japanese financing, three of which – collec,vely valued at $8.82
billion – will be priori,zed for funding and implementa,on in the near term,
for official development assistance (ODA) through the Japan Interna,onal
Coopera,on Agency (JICA)
- $4.25-billion Mega Manila Subway System,
- $1.9-billion Malolos-Tutuban North-South Commuter Railway
Project (NSCR)
- $2.67-billion commuter line extending the NSCR from Tutuban
to Los Baños.
Among other 11 projects are the Malitubog-Maridagao Irriga3on Project and
the Cavite Industrial Flood Management Project. The other projects involve
railways, expressways and water supply facili3es.

24. Eastern Economic Corridor (EEC)

26. V. The Next Step
• There is need to explore the poten,al sectors that
ASEAN and PA can benefit from the joint effort,
especially, the “Bridge” concept and in the services
sector.
• Once the industry is determined, the exis,ng ASEAN
and PA arrangement should be studied to determine.
• Should ASEAN and PA have a Free Trade Agreement?
– It may or may not be necessary to have a full
comprehensive agreement to cover all the poten,al
projects.
– Innova,ve ins,tu,on is the way forward.

27. VI. Conclusion
• Asia is rejuvena,ng and many challenges
await.
• New set of ins,tu,on is needed to take us to
the 21st century world.
• There are economic arrangement between
ASEAN and Pacific Alliance should be a
strategic undertaking that focuses on taking
both regions to a future posi,on.

28. THANK YOU
Ques3on and Answer