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Panel 21. ASEAN and Economic Development

Chair: Anne Booth (SOAS)

This panel explores economic development in the ASEAN region from the perspectives of trade and development. It examines the issues of trade facilitation, regulation and aspiration from both intra- and extra-regional perspectives. First the panel looks at ASEAN’s trade facilitation programme in support of the aspiration of achieving an ASEAN Economic Community by 2015. The focus is on Indonesia, a member of the wealthier ASEAN-6 nations which include Brunei, Malaysia, the Philippines, Singapore and Thailand. Free trade agreements – the proliferation of often conflicting bilateral FTAs and multilateral FTAs often resulting from major power posturing – are then examined for their effectiveness in stimulating trade in Southeast Asia.  The panel then turns its attention to ASEAN’s development gap, looking at the challenges faced by Cambodia, a member of the poorer ASEAN-4 nations (Cambodia, Laos, Myanmar and Vietnam). Cambodia’s complex history of colonisation and conflict has left it with structural challenges and, despite high levels of employment and Overseas Development Assistance (ODA), Gross Domestic Product (GDP) per capita remains low.

Paper 1: The ASEAN Trade Facilitation Programme: Influence on Indonesian and ASEAN Trade Performance

Ardhilla Parama Arta (Ruhr-Universitaet Bochum)

The economic cooperation between ASEAN Member States has achieved a substantial progress after the implementation of tariff liberalization and tariff reductions, as a part of a unity vision of the ASEAN Economic Community (AEC). In spite of this great achievement, there is still a need to boost trade across borders among the Members. The initiative of Trade Facilitation Programme of ASEAN in 2008 is seen necessary to enhance trade performance of the Members by eliminating non-tariff barriers (NTBs). As one of the big economy countries in ASEAN, Indonesia progressively has substantive improvement in a practice of trading across borders, where the Small-Medium Enterprises (SMEs) have experienced with doing business in its business environment and also played a vital role in its economy. The effectiveness of trade facilitation in ASEAN will be examined pre- and post- the implementation, to discover trade performance of Indonesian SMEs and the rest of AMSs.

Paper 2: The Rush Towards FTAs: Do They Deliver?

Alexander C. Chandra (International Institute for Sustainable Development)

Free trade agreements (FTAs) have become a common jargon in economic diplomacies of Southeast Asia in the last decade or so. Initially focused around the Association of Southeast Asian Nations (ASEAN) through the grouping’s own FTA initiative in the early 1990s, several variations to this trade pact can now be found in the form of bilateral state-to-state and bilateral region-to-state FTAs. Whilst ASEAN has taken the centre stage in the development of these FTAs for the purpose of ensuring the Association’s centrality amidst the emergence of these FTAs, as well as balancing the vast economic and political interests of the major power in the region, ASEAN member countries are increasingly also keen to set up their own bilateral FTAs to accelerate the pace of their economic integration with their strategic economic partners. Notwithstanding such developments, it remains questionable as to whether the emergence of multiple, and often conflicting, bilateral FTAs in Southeast Asia could actually deliver the promised political and economic benefits as they often potrayed by the region’s policy-makers. Moreover, it is also puzzling as to whether these FTAs could actually complement the immediate goal of ASEAN to turn itself into an economic community by 2015. This paper attempts to address these issues, and examines the existing alternatives currently being discussed between ASEAN and its major external economic partners.

Paper 3: Redistribution of Official Development Assistance to Improve Efficiency in Cambodia

Jae Hyun Lee (Prime Education Consulting)
Hong Gu Lee (University of Chicago)
Lewis Seagull (Kean University)
Lewin Kim (Horace Mann School)
Yoon Kee Lee (Hotchkiss School)

Cambodia is the result of colonization, imperialism, conflicts in idealism, and nationalism. With instability being the foundation, a lack of efficient infrastructure in the government and economic sectors has risen. This is mainly due to a lack of proper education, corruption within the government, and the state of depravity the country was forced to build upon. Despite this, Cambodia has the potential to enter a rapid development stage that would propel and enable its economy to begin to enter the forefront of the global economy.

To begin, Cambodia currently is not performing up to the same standards as its neighboring countries operating at a much lower GDP despite possessing similar demographics and resources. The subtle indication is that even a slight tweak in Cambodia’s mode of operation could improve its efficiency and push its development forward. Another comparison can be to the Far East countries – namely, Japan and Korea. Though the two countries are small and appear to possess a limited amount of resources, the two countries were able to restructure their private and government sectors in a way that pushed them into the elite class of international economics. Using the two countries as a model, there are similarities that co-exist between them and Cambodia. The biggest is potential.

Despite its low unemployment rate, high ODA, along with a relatively high real growth rate, it is unable to translate that into a respectable GDP per capital per person despite its overall GDP being at a solid level. This indicates that the economy is incredibly top heavy meaning that most of its capital remains within the top percentile that deal with its management and use skewing the GDP data in regards to its per capital per person. Therefore, a slight change in infrastructure, mainly regards to ODA, can help improve efficiency.