asian integration

8/9/2019 Asian Integration

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INDIA - ASEAN ECONOMIC COPERATION IN

EMERGING GLOBAL ECONOMIC SCENARIO

Dr. Harish Anand

NATIONAL CONFERENCE ONEMERGING GLOBAL ECONOMIC SCENARIO: ASEAN

AND INDIA

Department of Economics,Kurukshetra University Kurukshetra

19th and 20th of March,2010


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Broad outlook of Global Economic Scenario

Consumption Vs Saving/investment driven economies

Cheap Money policy Vs(and) Saving Gut

Existing and emerging Global financial architecture

Slow Vs Fast growing economies

Growing Regionalism for balanced growth

High degree of complexities and uncertainty


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55% of world population will continue to stay in Asia

with 46 per cent in 7 Asian countries only

196 0 2009 205 0

Wo r l d 3 .02 6.83 9.1

Developed countries 0.71 1.02 1.1

Developing countries 2.06 5.5 7.8

e ve l o p i n g c o u n t r i e s 196 0 2009 205 0

Asia 1.6 3 .9 5.02

Africa 0.28 1 2

America 0.21 0.577 0.723

Oceania 0.003 0.09 0.07

196 0 2009 205 0

A s i a 3 .9 5

East Asia 1.4 1.5

South Asia 1.7 2.4

South East Asia 0.6 0.8

Western Asia 0.2 0.3

A s i a 2009 205 0

China 13 0 140

India 120 160

Indonesia 20 29

Phillipines 6.7 7.3

Thailand 18 3 3

Pakistan 16 22

Bangladesh 9 15

Total of above 3 20 406

n c r o r e

n bn


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With de eloped countries accounted for 7 % of world GDP,

Asia has hi hest share in de elopin economies GDP

1970 1990 2008

World GDP- USD trillion 3.3 12 60

Developed countries 70 79 69

Developing countries 17 17 28

Transition economies 13 4 3Asia developing countries( % share) 9 10 18

Asia developing countries share in world

developing countries( % share) 53 57 67

Percent shareinWorldGDP

1 8

3 9

1 5

1 11 2

8

1 6

1 3

2 0

1 4

0

5

1 0

1 5

2 0

2 5

3 0

3 5

40

Ch in a In d ia Ko r e a A S EA N S o u t h

A s i a

hare in Asia de elopin countriesGDP(%)

1 9 9 0

2 0 0 8


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Asia, ASEAN, China, India witnessing rising sharein world trade

1948 1983 1993 8

World trade-USD BN 59 1838 3 15717

North America 28 17 18 13South and Central America 11 4 3 4Europe 35 43 45 41

Africa 7 4 3 4

Middle East 2 7 4A

sia 14 19 26 28China 1 1 2 9Japan 0 8 10 5India 2 0.50 0.6 1.1Six East Asian traders 3 6 10 9

Australia and New Zealand 4 1 1 1

Re ionwise world merchandise exports % share)


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Though USA and EU remains largest importers, importsin Asian countries have been growing

W o r ld m e r c h a n d is e im p o r t s % s h a r e )

0 .0

5 .0

1 0 . 0

1 5 .0

2 0 . 0

2 5 .0

3 0 .03

5.0

4 0 .0

4 5 .0

5 0 .0

N orthA m e r i c a

E u r o p e A s i a C h in a J a p a n In d ia S i x E a s tA s i a n

t rade rs

1 9 4 8

1 9 8 3

1 9 9 3

2 0 0 8


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Across the world geographical proximity is visible ininter-regional trade flow

Ori i

rt

ri

t

tr l

ri r I fri

i l

t iWorld 17 4 43 3 3 4 25

North America 50 8 18 1 2 3 18South and

Central

America 28 26 20 1 3 2 17

Europe 7 1 73 4 3 3 8

Africa 22 3 39 0 10 3 20

Middle East 11 1 12 1 4 12 56

Asia 18 3 18 2 3 5 50

DESTINATION


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Emergence ofASEAN to its present status

Erosion of Japan manufacturin competiti eness

Unilateral tariff reduction to attract FDI by leading ASEAN economies

Later on Korea and leading ASEAN economies followed suit

Re ionalism delayed

APEC 1995 BY USA and East Asian Economic Cooperation

One agreement means 10 agreements

ASEAN-China FTA possi ility emer ed in

Arrival ofAFTA

ASEAN crisis and China joining WTO

Japan and Korea moved on Domino Theory

Hollowing out effects createdASIA MANUFACTURING MATRIX


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The genesis ofASEAN export led growth lies in FDI and theircountry of origin

7

4 3

5

5

5

3

E apan ASE AN USA AsiaNIE's ong

ong

+ orea+Taiwan

hina

Origin wise FDI flow in ASEAN 2000-08( % share)

5 % of U SD 34 bn FDI received in - 8 came in Singapore,Malaysia % , Thailand 8% Vietnam 8%


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ASEAN : Major Trading partners

.

1995 2008 1995 2008

ASEAN 24 25 17 29

Major tradin partners 76 79 83 74

Japan 15 12 25 13

European Union- 5 15 10 14 14

China 2 12 2 10

USA 19 9 14 12

Repu lic of Korea 3 5 3 4India 1 2 1 4

Taiwan 3 1.6 3 1

TOTAL -USD BN 296 879 318 831

EXPORTS % SHARE) IMPORTS % SHARE)


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With different tariff structures, low MOP, East Asiaespecially ASEAN becoming Noodle owl of FTAs

K O R E A C H I N A

A S IA N C H I N A F T A

J A P A N A S E A N A S E A N + 3

A F T A A S E A N + 6In d o n esia E A S T A S IA F T A

M alay sia A P E C

Thai land E A E C

Singapore

Phi l ipp ines JA PA N -K O RE A

Vie tnam JA PA N -A S E A NC a m b o d i a K O R E A -A S E A N

L a o P D R

M yanm ar

B r u n e i

I N D I A


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Is future ofASEAN hinge on fragile trade arrangements

High level of vertical integration in ASEAN countries

Trade agreements based on private sector initiatives

ASEAN lack WTO type commitment- Article-2

Top level commitment is missing-Continuum of Supranationality

Overlapping FTAs and different tariff reduction schedules in

member countries in same FTA

ASEAN has not discrimination in tariff due to RTAs etc

The largest trade flow in East

Asia is not covered under any FT

A/RT

A/P

TA

Japan and China and Japan and Korea

Global crisis of 2008 endorse resilience and maturity

and mutual understanding


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Fact sheet: India-ASEAN Trade

India-ASEAN trade increased from $4 bn to $47 bn during 1995-2008

India exports to ASEAN and imports from ASEAN has increased by

about 20% CAGR during 1995-2008

Indias negative trade balance increased from less than USD one

billion to about USD 13 bn during the same period.

During the same period,A

SEAN

-China Trade increased by 23% fromUSD 13 bn to USD 192 bn and ASEAN Balance of Trade with China turnednegative from less than USD one bn to more than USD 21 bn

China share in ASEAN trade with world including intra ASEAN tradeincreased from 11% to 42% during 1995-2008


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India-ASEAN Free Trade Agreement: Key Issues

Immediate gains in terms of positive BOT are not visible in near

future

Japan and Korea presence in ASEAN and FDI in India

China-ASEAN FTA is already operational

Existing geo-political scene in ASEAN and East Asia not very

conducive for India

India face serious supply chain constraints

Low share of manufacturing in India GDP

High cost economy

Complementarities based on service sector strengths need validation


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From Regional Integration towards Multilateral TradingSystem: Framing India Strategy 2050

APECOR

EAEC

APECOR

EAEC

ASEANPLUS 3JAPANKOREACHINA

ASEAN

TransAtlanticEconomic

Cooperation

ASEANPLUS 3+

India+Oceaniccountries

Economic Cooperation has been an instrument to achieve widersocial-political objectives as well as a strategic intent in itself


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India ASEAN economic cooperation:Way to Asian Integration

( Impro in Connecti ity with ASEAN

( : Physical and Soft

(

Trade in oods and ser ices and In estment promotion

( Financial sta ility in the world especially Asia

( Promotin economic and social welfare

Environment, Health and Education

Orderly growth of the World economy and world tradeAddressing China factor


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India ASEAN economic cooperation:Internal policy imperatives

Streamline FTAs signed and in process of signing

SAFTA, BIMSTEC, India-Thailand

Standardized Rules ofOrigin

Increase the share of manufacturing sector in Indias GDP

Inorganic growth through FDI

Infrastructure development

(China strengths lies in China only)

Develop resources for FTA negotiations

Data collection and dissemination should be speed up

More focused research on impact of FTAs on different sectors of theeconomy industry, agriculture sector and services


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Need to create centers in Uni ersities for

trackin India-ASEAN and other re ional

economic co-operation related de elopments

THANK YOU

asian integration

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