ASEAN 2015: economic integration and sustainable development a priority

The Petronas Twin Towers in Kuala Lumpur, Malaysia

The Petronas Twin Towers in Kuala Lumpur, Malaysia

ASEAN 2015: economic integration and sustainable development a priority

30/12/14

By Patricia Díaz Martínez de Marañón

Malaysia takes over the rotating chair of the Association of Southeast Asian Nations (ASEAN) beginning January 1, 2015 amid high expectations.

With the end-2015 deadline for the realisation of the ASEAN Community approaching, the chair’s to-do list will no doubt be long and complex. As a founding member of ASEAN, Malaysia is expected to rise to the occasion.

ASEAN leaders will need to look inwards in the year ahead. Accelerating economic integration will be high on the agenda, as will strengthening the institutional framework, charting a post-2015 vision and making ASEAN more inclusive. Yet, external issues will also be barging their way to the agenda as the group grapples with territorial disputes and seeks to strengthen ties with its dialogue partners.

On the economic front, efforts to meet the targets for the ASEAN Economic Community (AEC) will be closely watched. The AEC – one of the three pillars of the envisaged ASEAN Community – is set to transform the 10-nation group (Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam) into a dynamic region with free movement of goods, services, investment, skilled labour and capital, opening up new opportunities for investors.

Significant developments have been made in areas like tariff reduction, trade facilitation and investment liberalisation, reflecting the commitment of ASEAN members to economic integration. But much remains to be done.

According to the AEC Scorecard, a monitoring mechanism measuring the progress made towards achieving the roadmap, only 76.5 per cent of the targets that were due by March 2013 were met. The Asian Development Bank Outlook 2014 says that progress appears to have slowed as negotiations touch on difficult issues, some of which may entail change in national legislations.

Malaysia’s focus as chair will be to inject new momentum into the regional integration agenda in order to accelerate the process and ensure it is on track. Whether all targets are met by the end of the year deadline or not, 2015 could prove to be a milestone in the journey rather than a missed opportunity. Strong and effective leadership will be required throughout the year and beyond.

In fact, the real test will be setting the necessary groundwork for a comprehensive and ambitious post-2015 strategy. Work on the 10-year roadmap for community building has already started. The Nay Pyi Taw Declaration on the ASEAN Community’s Post-2015 Vision adopted at the 25th ASEAN Summit will serve as the basis for developing the programme for 2016-2025.

A key priority in crafting the post-2015 vision will be to ensure that regional integration fosters sustainable development across the region, said Prime Minister Datuk Seri Najib Razak at the recent ASEAN-Republic of Korea CEO Summit held in December 2014. “We must deepen financial integration and inclusion. And we must ensure all sectors of our economies are fully engaged in the ASEAN Economic Community,” he said.

Under the chairmanship theme ‘Our People, Our Community, Our Vision’, Malaysia will also seek to make ASEAN more relevant to its citizens.

We hope to “steer ASEAN closer to the people of Southeast Asia to make this institution part of people’s daily lives, by creating a truly people-centred ASEAN”, said Malaysian Prime Minister Najib Razak at the end of the 25th ASEAN Summit in November 2014. “We will prioritise public communication to help more people appreciate the benefits of economic integration.”

Malaysia will host the 26th and 27th ASEAN Summits in April 26-27 2015 and November 19-21 2015 respectively. The first meeting that Malaysia will chair in 2015 will be the ASEAN Foreign Ministers’ Retreat on January 27-28. Discussions are expected to explore ASEAN’s priorities for 2015 and the post-2015 vision.

Aside from domestic concerns, international issues will also require ASEAN´s attention. Maintaining ASEAN centrality and unity against internal and external challenges will remain a challenge.

The coming year will mark the 10th anniversary of the East Asia Summit (EAS), the main regional security forum which was first held in Kuala Lumpur. As the host again, Malaysia will have the opportunity to drive the agenda and reinforce the region’s global standing. Having also a non-permanent seat at the United Nations Security Council (UNSC), Malaysia could help strengthen ASEAN’s voice in international affairs.

For Europe, the year ahead could bring a boost in ties with Southeast Asia. Good progress has been made in recent years. “We are working towards the establishment of a Strategic Partnership with ASEAN,” said former European Council President Herman Van Rompuy in a speech at the European Chamber of Commerce in Singapore last November. “We would like to engage even more with ASEAN, including on political and security issues also in the context of the East Asia Summit.” The European Union will soon have its first Ambassador accredited exclusively to ASEAN, he added.

Demands for reviving negotiations on the stalled EU-ASEAN free trade agreement (FTA) are back on the table and Malaysia appears keen to revive the discussions as it takes up the chair. Both sides will also explore ways to strengthen cooperation on connectivity following the ASEAN-EU Policy Dialogue on Connectivity held in Brussels in February this year. Building a solid partnership will demand more efforts by both regions.

There will be no time for rhetoric in ASEAN in 2015. The task ahead is huge and distractions will surely come along the way. Leaders will need to roll up their sleeves, deliver on reforms and craft a bold and ambitious post-2015 agenda.

patricia.diaz@asiahouse.co.uk

Don’t miss our next Breakfast Briefing on 7 January when Sir Julian King KCVO CMG, Director-General, Economic and Consular at the Foreign & Commonwealth Office, will give a private briefing exclusively for Asia House corporate members focused on China. For more information click here.

Our next signature conference is Asia’s Digital Transformation on 28 January which will explore which countries are leading the digitisation of the region and what impact it will have on the overall economy of the region and beyond. Speakers at the conference, held in partnership with McKinsey & Company, include Dominic Barton, Managing Director McKinsey & Company and Parminder Singh, Managing Director Twitter Southeast Asia/India/MENA. For more information click here.