ASEAN and Pacific Alliance in the Dynamic Asia

Dr.SuthadSetboonsarng20June2017San,ago,Chile

Topics

1.  Introduc,on2.  ThedynamicAsia3.  TradebetweenASEANandthePacific

Alliance

4.  Conclusion

I.Introduc3on•  Theglobaleconomiclandscapeischangingfastbecauseofnewtechnologiesandgovernmentpolicies.

•  Eachgovernmentandbusinessconcernshoulddefinetheirfuturedesirableposi3onanddetermineac,onstheyshouldtakeindividuallyandjointlywithpoten3alpartnerstoaKainthetarget.

•  Therearemanynichesforpartnershipbetweenmediumsizegroupinthetwocon,nentslikeASEANandPacificAlliance(PA).

II. TheDynamicAsia•  Asiaisthesourceofglobaleconomicgrowthinthenext–almost50%;

•  Asianeedstobemoreintegratedtorealizethispoten,al.

•  ManyfactorswilldefinethefutureofAsia.

•  ASEANisthenaturalhubforthisexercise.

-Top20countriescontribute81%,astop10countriescontributes69%andtop5countriescontributes59%-Amongtop5,3arefromAsiaandcontributeabout37%.-ASEANcontributesUS$1,328billionor6%,withIndonesiaandPhilippinesinthetop20.-Thailandranks34with0.4%contribu,on.-Chileranks40with0.32%contribu,on.

SourceofGlobalGDPGrowth

FactorsAffec3ngtheFutureofAsia

Popula'ondynamics•  Unevengrowth,aging,urbaniza,on,middle-classTechnologicaladvances•  Informa,on,energy,othersScarcityofResources•  Land,water,minerals,•  Eco-system,climatechange;InadequateIns'tu'ons-  Needefficientgovernancesystemforsustainableoutcome.

Implica3onsandResponsesNewdirec'onofcommerce•  Tradeingoods,services•  Capitalandinvestment•  LabormovementHarnessingPopula'onDynamic•  Managingmigra,onNon-tradi'onalSecuri'es•  Food,energy,finance,connec,vity,healthDeployingNewTechnology•  Connec,vityinfrastructure,improvingappropriateskillsCrea'ngappropriateins'tu'ons•  Involvingtheprivatesectors•  Adop,ngprincipleofgoodgovernanceinboththeprivateandpublicsector

GrowthofWorkingPopula3on

Source:WorldDevelopmentIndex,WorldBank,2013andWorldEconomicOutlook,IMFApril2017.

•  Asiashareabout45%ofglobalpopula,onincrease,withSouthAsiashare27%oftheincrease.

•  AginginNEAsiaandnotinSouthAsia.•  Workingpopula,oninNEAsiawilldeclineandbecome

nega,veby2030.

Unit:Millionpeople

36

111513

2633

384548

100

131921

3337

495556

100

43

Singapore ASEANCambodiaMyanmarLaosVietnamPhilippinesThailandIndonesiaMalaysia

More than 90 million people are expected to move to ASEAN cities by 2030

Shareofcountrypopula3onlivinginci3esofmorethan200,000inhabitants,2013–301%

Cities with >200,000 inhabitants in 2013

SOURCE: McKinsey Global Institute Cityscope database; national statistics offices; McKinsey Global Institute analysis

1Bruneinotincludedasthecountryhasnoci,eswithpopula,on>200,000.NOTE:Numbersmaynotsumduetorounding.

128 11 15 934 1531 1 235

2013

2030

Urbaniza3on

TechnologicalAdvances•  DigitaleraandInforma,onmanagement

–  FINTEC,InternetofThings(IOT),Robo,c–  Newmanagementsystemforindividual,businessandstates.

•  Newagricultureandfoodmarket–  Farmers’accesstoproduc,onandmarke,nginforma,on–  Consumersaremoreeducated,healthconsciousandaccesstoproduc,oninforma,on.

•  Energytechnology–  Energyproduc,on,u,liza,onandstorage

•  Nanotechnology–  Food,tex,le,energy

Emergingmarkethasmorechancetoadoptnewtechnologybecausetheycanjumpstart.Forexample,ElectricVehicle(EV),GRAB,etc.

ScarcityofResources

Increaseindemandfrommorepopula,onandhigherincomearesetagainst:•  Produc,onresources

– Land,water(inChinaandIndia),minerals

•  Worseningglobalclimate– Globalwarming

•  Expansionofdemand–  Intensifica,onofconsump,onasincomerises.

InadequateIns,tu,ons

•  Morepoli,caltensions–inequality,injus,ce,religiousdifference;

•  Needsinnova,veeconomic,poli,calandsocialins,tu,onsatlocal,na,onalandinterna,onallevelstoensuregoodgovernance.

•  Publicsectoradjustmentisslowandneedtodelegatemorerolestoprivatesector.

Andean

NAFTA

Mercosur SACU

EU

ASEAN

SAARC

NewTrendofTrade:RecentYears

Source:TradeMapsdatabase,ITC,June2016

TradebetweenEastandSouthAsia

-Newindustrialdevelopmentopportuni,es,e.g.,auto-Newinfrastructurestosupportthetraderoute*-road,rail,broadband,airports,seaports,energygridetc.

NeedsInvolvementofPrivateSector

SOURCE:ASEANSecretariat;WorldBank

8

4

3

2

23

2

29

2

2

52

4

22

Total

40

1

3

1

ThailandLaoPDRPhilippines

9

VietNamIndonesia

7

1

1

Myanmar

2

1 1

Malaysia Brunei

2

1 1

Cambodia

EnergyPort AirportRailRoad

Numberofprojects1

1Infrastructureprojectswerepriori,sedbytheWorldBankbasedon2criteria:(1)RelevanceforASEANconnec,vity;and(2)AhighormediumpriorityforASEANMemberStates.

TheWorldBankhasiden,fied40poten,alPPPprojectswhichhavestrongregionalrelevanceinASEAN

III.ASEANandPacificAlliance•  Although,tradeingoodsisandwillremainlimitedbecauseof

thedistance,bothsidescanbeaspringboardforeachothertoaccessothersmarkets.

•  Otherareasthatmayhavemorepoten,al–notaffectedbydistance.–  Tradeinservices–  Investment–  Capitalmarket

•  Otherareasofcoopera,on–  Globalandregionalfinancialmarket.

TradeingoodsbetweenASEANandPacificAlliance

Tradeinservices•  Tradeinserviceshasmanyopportuni,estooffer:

–  ASEANimportsUS$324billionandexportsUS$322worthofservicesin2016.

–  ChileimportsUS$13.07billionexportsUS$9.6billion–  ColombiaimportsUS$10.81billionsandexports$7.79billion–  MexicoimportsUS$31.9billionandexportsUS$24.07billion–  PeruimportsUS$7.96billionandexportsUS$6.3billion.

•  Servicetrademaynotbeaffectedbydistanceasmuchasgoodstrade.

•  Newkindofservicesarefollowingtheadvanceindigitaltechnology.

Sometradi3onalservicesectors•  Construc,on

–  Inthecomingdecade,ASEANwillbeinves,ngheavilyoninfrastructure.

– Newinnova,vefinancialandarrangementofcross-borderprojectscanbeaniche.

•  Tourism– Hotelmanagementandtouristdes,na,ons.

•  Sportsandentertainment– FootballfromChileandMuayThaifromThailand

IV.Someongoingprojects

•  Regionalconnec,vityprojects:– EconomicCorridors-GMS

•  EachASEANcountryiscrea,ngprojecttolinkintotheASEANsystem:–  IskandarMalaysia– PublicprojectsinIndonesia–Port,MetroandFlyover;

–  InfrastructureprojectsinthePhilippines– EasternEconomicCorridor(EEC),Thailand.

EconomicCorridors:GMSandIndiaGMS:1)  3East-WestEconomic

Corridors(EWEC);2)  3North-SouthCorridors

NSEC);India-Myanmar-Thailandhasbeencompleted.

IskandarMalaysiaIskandarMalaysiaaimstobe“AStrongandSustainableMetropolisofInterna,onalStanding”bytheyearof2025.2,217squarekilometresPopula,on:1.8million2015-3million2025GPP/captoincreaseto$31,100by2025ZoneA,afinancialdistrict,thecentralbusinessdistrict,thewaterfrontcity,amixeddevelopmentattheMalaysia/SingaporeCauseway.ZoneBisamedicalhub,an"educity",aresortforinterna,onaltourismandanindustriallogis,cclusterandresidence.ZoneCfocusesonthesecondtransporta,onlinkportforMalaysia/Singaporeandafreetradezone.ZoneDfocusesontheportandindustrialzone,TechnologyParkandaregionaldistribu,oncentre.ZoneSenai-Skudai,focusesontheSenaiInterna,onalAirport,hubsforcargoandknowledge,amul,modalcentreandtheMSCCyberportcity hKp://iskandarmalaysia.com.my/

PublicProjectsoftheIndonesianGovernment

NewPriokPort,JakartaAnextensionofthecurrentTanjungPriokharbourinNorthJakarta,Indonesia'sbusiesttradingport.ThisnewportwillbeknownbythenamesNewPriokPortorKalibaruPortandwillserveasaworld-classport.Theconstruc,onofthismega-projectstartedin2012andcomple,onisexpectedby2023.

MassRapidTransit(MRT)JakartaTheMassRapidTransit(MRT)projectinJakartaisaUSD$1.7billioninfrastructureprojectthataimstorelievegreattrafficconges,oninIndonesia’scapitalcity.Whenfullyopera,onal,theMRTwillbeabletotransportabout450,000passengersperday.TheMRTconsistsoftwocorridors:(1)theNorth-Southcorridorand(2)theEast-Westcorridor.Currently,theNorth-Southcorridorisbeingconstructed.Thiscorridorwillbebuiltintwophases.

FlyoverRoads(Non-Toll),JakartaTheFlyoverRoadsprojectinJakartacons,tutestwoaddi,onalnon-tollroadsonanal,tudeoftenmetersabovetheexis,ngroadsthatconnectBlokMtoAntasariinSouthJakartaandTanahAbanginCentralJakartatoKampungMelayuinEastJakarta.ThisUSD$140.8millionpublicprojectaimsatreducingtheconstantandgravetrafficconges,oninpartsofJakartabyaddingoversevenkilometersofroadtoitsinfrastructure.

InfrastructureprojectsinthePhilippines

ForpossibleJapanesefinancing,threeofwhich–collec,velyvaluedat$8.82billion–willbepriori,zedforfundingandimplementa,oninthenearterm,forofficialdevelopmentassistance(ODA)throughtheJapanInterna,onalCoopera,onAgency(JICA)

-$4.25-billionMegaManilaSubwaySystem,-$1.9-billionMalolos-TutubanNorth-SouthCommuterRailwayProject(NSCR)-$2.67-billioncommuterlineextendingtheNSCRfromTutubantoLosBaños.Amongother11projectsaretheMalitubog-MaridagaoIrriga3onProjectandtheCaviteIndustrialFloodManagementProject.Theotherprojectsinvolverailways,expresswaysandwatersupplyfacili3es.

EasternEconomicCorridor(EEC)

V.TheNextStep

•  Thereisneedtoexplorethepoten,alsectorsthatASEANandPAcanbenefitfromthejointeffort,especially,the“Bridge”conceptandintheservicessector.

•  Oncetheindustryisdetermined,theexis,ngASEANandPAarrangementshouldbestudiedtodetermine.

•  ShouldASEANandPAhaveaFreeTradeAgreement?–  Itmayormaynotbenecessarytohaveafullcomprehensiveagreementtocoverallthepoten,alprojects.

–  Innova,veins,tu,onisthewayforward.

VI.Conclusion

•  Asiaisrejuvena,ngandmanychallengesawait.

•  Newsetofins,tu,onisneededtotakeustothe21stcenturyworld.

•  ThereareeconomicarrangementbetweenASEANandPacificAllianceshouldbeastrategicundertakingthatfocusesontakingbothregionstoafutureposi,on.

THANKYOU

Ques3onandAnswer