Transcript AEC Integration Report

AEC Integration Report
Economic Growth
•
•
ASEAN’s economic performance has
been quite robust. Economic growth in
the region rose from 4.8% in 2011 to
5.7% in 2012, before some moderation
in 2013 (Figure 1). This is noteworthy
given slowing global economic growth
during this period, from 3.9% in 2011
to 2.9% in 2013. Resilient domestic
demand, as well as the recovery of the
advanced economies, underpinned
overall regional growth.
In the medium term, ASEAN’s
economic growth is expected to
remain robust, again anchored by
strong domestic demand particularly
private consumption and infrastructure
investment.
Trade
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•
Total trade in ASEAN was
resilient, reaching USD 2.5 trillion
in 2012, which represented an
increase of more than USD 900
billion from 2009 and three times
its value in 2000 (Figure 2). ExtraASEAN trade accounted for 76
percent of total, and intra-ASEAN
trade the remaining 24 percent.
With the recovery of export
demand in the second half of 2013
and world trade expected to
further gain momentum in 20142015, ASEAN exports should
contribute more to the region’s
growth performance.
FDI Inflows
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•
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FDI into ASEAN has also risen
significantly to USD 110 billion by 2012.
This is twice the 2009 level and five times
the net FDI inflows in 2000 (Figure 3).
Prospects for FDI flows to ASEAN also
remain promising as more FDI is
expected in a wide range of sectors such
as infrastructure, finance and
manufacturing.
Overall, the region has fared well in the
aftermath of the 2008 global financial
crisis. But these trends highlight that
while the region has benefited immensely
from its linkages with the rest of the
world, ASEAN also remains vulnerable to
external shocks and to abrupt changes in
investor sentiment from factors which
may be unrelated to the region’s
fundamentals.
Impacts of ASEAN Economic Integration
Trade Openness
Real Interest Rates
•
Figure 8 shows that real interest
rates amongst the member
countries between 2003 to 2011
exhibited a large degree of
variability, with negative real
interests in some countries and
positive in the range of 10-16
percent in others. However, this
variability has been greatly
reduced after the global financial
crisis due to responsive monetary
policy resulted to greater financial
stability in the region.
Co-movement of Composite Stock Price Indices
•
The degree of co-movement of
the returns also indicates the
level of financial integration in the
region. Figure 9 indicates strong
co-movement of the composite
stock price indices of the ASEAN
5, implying a fairly high degree of
financial integration among them.
Intra-regional FDI
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•
Figure 10 shows an increasing share
of intra-ASEAN FDI inflows since
2006. The increasing inflows were
interrupted by the global financial crisis
in 2008 – 2009. Since then, intraregional FDI flows had bounced back
and continued to grow since 2010.
Looking at the trends for each country,
Indonesia and Singapore displayed
an increasing trend for inward intraregional FDI flows while Thailand
showed a decreasing trend. For CLMV
countries, after a decline in FDI inflows
in 2009, the level of intra-regional
inward FDI has been relatively stable
during 2010-2012.
FDI Inflows by Dialogue Partners
•
As for ASEAN’s external FDI sources,
particularly the EU, their FDI inflows to
ASEAN were adversely affected by the
global financial crisis that broke out in
2008. The levels have significantly
recovered in recent years (Figure 11).
It is worth noting that the share of
intra-ASEAN FDI inflows increased
during the crisis years, which partly
offset the decline in FDI inflows from
external sources. Overall, intra-ASEAN
FDI flows have been increasing in the
past decade and reached 18.3 percent
of total FDI inflows to ASEAN in 2012.
Global Competitiveness Index
Table 2. WEF Global Competiveness Index
GCI 2013-2014
Country/Economy
Rank
Score
Brunei Darussalam
26
4.95
Cambodia
88
4.01
Indonesia
38
4.53
Lao PDR
81
4.08
Malaysia
24
5.03
Myanmar
139
3.23
Philippines
59
4.29
Singapore
2
5.61
Thailand
37
4.54
Vietnam
70
4.18
CLMV average
92-93
3.87
ASEAN average
45-46
4.44
Source: WEF Global Competitiveness Index
Note: the score 1-7(best)
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GCI 2012-2013
Rank
28
85
50
n/a
25
n/a
65
2
38
75
Change
2
-3
12
n/a
1
n/a
6
0
1
5
Table 2 compares the WEF’s
Global Competitiveness Index
between the period of 2013 –
2014 and the 2012-2013.
Singapore is ranked as the most
competitive economy in the
region, followed by Malaysia,
Brunei, Thailand, Indonesia, the
Philippines, Viet Nam, Lao PDR,
Cambodia and Myanmar.
Indonesia has made the biggest
jump in ranking from number 50 to
38 in 2013-2014. The other
Member States mostly improved
their rankings.
Indices for Quality of Infrastructure
Table 3. WEF’s indices for the quality of infrastructure
2010-2011 2011-2012
2012-2013
Brunei Darussalam
4.33
4.23
4.2
Cambodia
2.7
3.01
3.08
Indonesia
3.56
3.77
3.75
Lao PDR
Malaysia
4.97
5.22
5.09
Myanmar
Philippines
2.92
3.09
3.19
Singapore
6.22
6.33
6.5
Thailand
4.84
4.65
4.62
Vietnam
3.56
3.59
3.34
Average for CLMV
Average for ASEAN
4.1
4.24
4.22
Source: WEF Global Competitive Report
Note: Range between 1- 7 (best)
2013-2014
4.29
3.26
4.17
3.66
5.19
2.01
3.4
6.41
4.53
3.69
3.16
4.61
• In terms of infrastructure, the
WEF’s ranking of quality of
infrastructure (air, road, and
maritime transports, electricity,
and telephone) in ASEAN is
shown in Table 3. Several
countries in ASEAN have
made steady improvement in
the quality of their
infrastructure, particularly
Cambodia.
ASEAN6-CLMV Development Gap
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Table 5: ASEAN 6 – CLMV Development Gap, 2000 - 2010
Indicators
2000
ASEAN 6
CLMV
21.48
45.00
2005
ASEAN 6
14.33
CLMV
32.67
2010
ASEAN 6
CLMV
13.69
24.33
Absolute poverty
(percent)
Life expectancy
72.85
59.95
73.26
64.57
74.65
67.18
(years)
Infant mortality rate
12.97
64.45
13.27
50.08
13.82
36.12
(deaths per 1000
population)
Net primary school
95.84
79.63
93.71
88.05
95.69
91.64
enrollment rate
(percent)
Youth literacy rate
98.00
80.83
98.60
88.27
99.27
92.22
(percent)
Adult education
8.60
7.73
4.58
8.25
4.98
attainment (years of
schooling)
Source: ASEAN Community Progress Monitoring System 2012, ASEAN Secretariat 2013
Note: Compiled from NSOs’ submitted data, ASEAN Secretariat MDG indicators, and UNDP International Human Development
Indicators.
•
To measure how much the development gap
has been reduced in the region, several
indicators are presented in Table 5. Overall,
the results indicate that the gap between the
ASEAN6 and CLMV has narrowed in the
2000s, although there is still room for much
improvement.
The first indicator, absolute poverty, shows
the percentage of the population living on
less than PPP$ 1.25 a day. In particular, the
table shows a substantial decline in absolute
poverty in the region from 2000 to 2010, and
significantly more so for the CLMV
countries. Life expectancy in ASEAN 6 and
CLMV also improved gradually since 2000.
Infant mortality rate dropped rapidly in the
CLMV countries, which significantly
narrowed the gap between the two groups.
The gap has practically disappeared with
respect to net primary school enrolment rate
and youth literacy rate.
Ease of Doing Business
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Table 6. Ease of Doing Business Ranking of ASEAN between 2013 - 2014
Ease of Doing business ranking
2014
2013
Economy
59
79
Brunei Darussalam
137
135
Cambodia
120
116
Indonesia
159
163
Lao PDR
6
8
Malaysia
182
182
Myanmar
108
133
The Philippines
1
1
Singapore
18
18
Thailand
99
98
Vietnam
Source: World Bank's Doing Business
Change
20
-2
-4
4
2
0
25
0
0
-1
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ASEAN has also progressed in terms of
SMEs development to promote their
competitiveness in the region. One of the
indicators that help to capture the degree of
integration in this area is improvement in the
business regulatory environment.
Table 6 shows that Singapore still remains
the top performer in the regulatory
environment, followed by Malaysia and
Thailand at sixth and eighteenth place
respectively. A few countries have also
made progress in their rankings this year.
Particularly, Brunei Darussalam and the
Philippines have made a significant
improvement in ranking, especially
Philippines which improved 25 spots from
2013 whilst the ranking for Indonesia,
Cambodia and Viet Nam have retreated
slightly.
Financial Institutions and Accessibility to Finance
Table 8. Financial Institutions and Accessibility to Finance
Getting credit ranking
2014
2013
Economy
55
125
Brunei
42
52
Cambodia
86
82
Indonesia
159
154
Lao PDR
1
1
Malaysia
170
167
Myanmar
86
126
The Philippines
3
11
Singapore
73
71
Thailand
42
40
Vietnam
Source: World Bank's Doing Business
Change
70
10
-4
-5
0
-3
40
8
-2
-2
• The World Bank’s Doing
Business Report also
provides measures for the
strength of legal rights, and
the scope and accessibility of
credit information. Brunei
Darussalam and Philippines
have made a remarkable
improvement in the area of
financial institutions and
accessibility to finance as
shown in the improvement in
their rankings in Table 8.
Total Trade Value and Extra-ASEAN Trade Growth
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Figure 15 shows the value of ASEAN’s
total trade since 1998 after the Asian
financial crisis. Although trade growth
fell in the past couple of years, the
share of extra-ASEAN trade has been
increasing. Thus, ASEAN integration
has been trade creating: as intraASEAN trade expanded, the region’s
trade with the rest of the world also
increased proportionately. Regional
integration did not divert trade away as
efficiencies and competitiveness in the
global markets were maintained, and
the sophistication of the region’s
exports also increased through a widerange of intermediate goods.
AEC Scorecard and Prioritised Key Deliverables
82.1% of Prioritised Key Deliverables
188have
out of
229implemented
(82.1%)
by 2013
been
Prioritised Key Deliverables by 2013
have been implemented
Phase • 2008
1
• 2009
Phase • 2010
2
• 2011
Phase • 2012
3
• 2013
61 Key
Deliverables for
2014 to 2015
have been
implemented
Phase • 2014
4
• 2015
Status as of October 2014
Source: Chairman's Statement of the 25th ASEAN Summit: "Moving Forward in Unity to a Peaceful and Prosperous
Community," Nay Pyi Taw, Myanmar, 12 November 2014.
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Implementation Rates under Phases I - III
Pillar I
Single Market and
Production Base
Pillar II
Competitive
Economic Region
Pillar III
Equitable
Economic
Development
Pillar IV
Integration into
the Global
Economy
84.3%
69.6%
100%
100%
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Issues and Challenges
1. Delays in ratification and
alignment with domestic laws.
2. The legislative & regulatory
limitations that impede
commitments.
3. Failure of one country may
result in non-implementation of
regional measures
ISSUES &
CHALLENGES
4. Private sector engagement to
enhance the AEC integration.
5. An effective and wellfunctioning mechanism to
monitor the progress of the AEC
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What Lies Ahead
• ASEAN will not follow EU’s path.
• AMS are preparing blueprint for 2016-2025: all
stakeholders should participate in the development.
• Stronger relationship and more robust communication
among the stakeholders must be forged.
• AMS must continue to reduce the development gaps.
• Harmonization and alignment of regulatory framework
and infrastructure must continue.
• Impacts of integration measures should be more
measurable to assess the benefits/costs of ASEAN
integration.
Thank You
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