The document discusses the formation and evolution of ASEAN, highlighting its significant economic potential with a population of 600 million and a collective GDP of $2.4 trillion. It emphasizes the unique challenges and disparities among member countries, such as varying life expectancies and healthcare expenditures, while also detailing the ASEAN Economic Community's initiatives for connectivity and free trade. The document points out the need for stronger institutional mechanisms and engagement strategies to navigate ASEAN's political landscape and enhance collaboration among member states.

1. Let A Hundred Flowers Bloom!
Introducing
ASEAN; Changes in
2015; & Free Trade
‘what it means’

2. ASEAN
nearly 30% of China’s
10 countries $2.4 trillion GDP600 Million people

3. 199919971995199719841967
How ASEAN came about
Bangkok Declaration
5 ASEAN founding
members - Indonesia,
Singapore, Philippines,
Malaysia and Thailand –
in a display of solidarity
against Communist
expansion in Vietnam
and communist
insurgency across the
region
Brunei
joined
Myanmar
joined
Vietnam
joined
Laos
joined
Cambodia
joined
Southeast Asia is a post World War II political concept as much as a
geographic one
An example of Jaw-jaw to prevent war-war – e.g. Indonesia/Malaysia conflict 1963-
1966
ASEAN Secretariat is in Jakarta, Indonesia

4. What ASEAN is not
ASEAN is not a Southeast Asian EU and never wants to be:
EU is about limiting national sovereignty and obliging compliance with
directives determined by Qualified Majority Voting (with some opt-outs)
The ASEAN way:
 Legally-binding decisions on members,
yes. But based on unanimity.
 Means decision-making runs at the pace of
reaching consensus
 Fierce preservation of national sovereignty

5. An Association of Unequal Equals
• Indonesia & Thailand are Premiership
• Malaysia; Vietnam and Philippines 1st division
ASEAN is a GDP success but it’s
relative
Singapore’s financial sector far outweighs its real economy and population
size
While a tad larger than India’s economy, across 10 countries it is expensive
and complex to access the ASEAN market

6. DEMOGRAPHIC BONUS
• Compared to other Economic regions
ASEAN benefits from a young
population:
• good for macro-economics (bigger
workforces to support seniors)
• good for companies selling to
consumers in terms of medium-long
term demand growth
• posing unique challenges for higher
and technical education / training, in
terms of both infrastructure and
teaching resources

7. ASEAN Population
There are other significant differences between
ASEAN members:
• Life expectancy ranges from a high of 80.7
years in Singapore, to a low of 62.3 and 62.7
years in Cambodia and Myanmar respectively
• UN Human Development Index scores rank
from a high (Singapore) of 0.85 out of 1.0,
27th in the world, to lows of 0.45 (132nd); 0.49
(124th) and 0.50 (122nd) for Myanmar,
Cambodia and Laos respectively
• Healthcare spending/GDP is low:
• USA 17.5%
• OECD average 9.5%
• China >5.5%
• Asian average 4.5%
• ASEAN <4%
• Indonesia <3% before „leakage‟
• Malaysia <4%
Indonesia, 244.
47
Thailand, 64.38
Malaysia, 29.46Singapore, 5.41
Philippines, 95.8
Vietnam, 90.39
Myanmar, 63.6
7
Brunei, 0.4
Cambodia, 15.2
5
Laos, 6.38
In millions of people, by country
IMF 2012 estimates

8. ASEAN Connectivity
ASEAN Economic
Community 2015
ASEAN Connectivity is a
three part initiative
- physical
- Institutional
- People

9. ‘CONNECTIVITY’ MEANS
– Regional power transmission grid
– Single maritime and aviation market (& ATC
coordination)
- Development of end-to-end road/rail/port transportation networks:
“I put my exports from my new low-cost factory in Cambodia on a train;
and it goes to Singapore via Thailand and Malaysia – no customs; no
tariffs – and gets shipped to the US from Singapore‟s container port”
- Mobility for high-skill labour (but not free-movement of labour)
- Corporate „passporting‟ between members states (registration;
licensing; contracting and investment capital)

10. ASEAN Economic Community 2015
10 ASEAN countries have the potential to be a manufacturing and trade market as big as
India
- Singapore‟s financial market
- Indonesia‟s raw materials
- Thai manufacturing
• 600 million consumers
Raw material sourcing; manufacturing base to export worldwide
BUT
- Some areas of national protectionism and Non-Tariff Barriers (NTBs)
- A democratic deficit? Most ASEAN citizens don‟t know about 2015
- ASEAN is a purely „top-down‟ national leadership issue: who will control ASEAN in the future?
• Single supply-chain
• Single Market

11. Current pan-regional FTA negotiations
• RCEP is the ASEAN-led plan
(a „twentieth century solution to a
twenty-first century challenge‟), due
2015
• TPP – a ‘space age solution’
within, but separate to, APEC
• TPP - extensive regulatory alignment
over labour law, environmental and
intellectual property protection.
• RCEP „sets the bar low’

12. Reach of Free Trade Agreements
RCEPTPP ACFTA

13. APEC
World’s Biggest Trade Bloc
44% global trade
21countries
40% world’s population
54% world GDP

14. China & ASEAN
ACFTA (aka CAFTA)
ASEAN China free trade
agreement
• $400bn in 2012
• $850bn by 2020
China wants $1 trillion by 2020
MARKET of 2 BILLION people
90% of
ASEAN
exports to
China are
tariff-free
$500m fishing, environment & maritime fund
150,000 scholarships to China by 2018
Trans-Asian Railway project to link China, India &
ASEAN

15. The Paradox at the heart of ASEAN’s future
• “Southeast Asia is not a
country and ASEAN is not an
Asian EU”
• The „ASEAN way‟: consensus
& unanimity for legally-
binding outcomes, but
ASEAN‟s WTO-like dispute
mechanism has never been
triggered
• ASEAN “must prepare for
the establishment of the
ASEAN Community with
robust mechanisms to
support a rules-based
community”
• “[ASEAN] must wake up
from its archaic top-down
approach & begin building
strong institutions…”
What impact will the centrifugal force of the ASEAN Economic
Community, from 2015, have on an Association that has member
state sovereignty at its core?
2015

16. Engaging with ASEAN
• Because of the sovereignty enshrined in the ASEAN Charter, for
detailed policy dialogue it is recommended to engage with
member states.
• So too engaging with countries with a track record of detailed
policy engagement with ASEAN especially the „+3‟
(China, Korea & Japan)
• Although quite siloed – which can make internal mapping
complex – so much can be learned from the ASEAN
Secretariat as it manages the work-flow of member
states‟ committees e.g. ASOMM – the ASEAN senior
Officials Meetings on Minerals - amongst very many
• ASEAN is not the EU: the Secretariat (unlike the EU
Commission) doesn‟t drive policy development or have its
own policy agenda

17. Engaging with ASEAN
• The ASEAN business advisory council is not so much directly
influential on policy thrust as it is a superb way of getting
collective member state „temperature‟ on policy issues. Its
events have excellent networking potential, including with
high-level policy-makers
• The ASEAN Foundation works on ASEAN awareness
amongst member state populations; poverty reduction;
capacity building and education. More MNCs are working
with the Foundation as part of their CSR programs.
Needs more ambitious reach?