More Consolidated Partnership Needed to Drive ASEAN Forward

10:10:56 AM | 11/3/2020

“It is time to rethink and reshape our global supply chain model, to foster greater economic resilience and sustainability in the long-run," said Ms. Dato’ Shariffah Norhana Syed Mustaffa, Ambassador of Malaysia to Vietnam, when asked about the post-pandemic recovery efforts for stronger ASEAN business communities. Thu Ha reports.

How do you evaluate the development path of ASEAN since its inception to the present?

Fifty-three years into the establishment of the Association of South East Asian Nations (ASEAN), and five years into the launch of the ASEAN Community, ASEAN is confident in its standing as the fifth largest economy in the world, a trade powerhouse, and a compelling investment destination. Such achievements are not to be taken for granted, as they are the outcomes of decades of trust-building, cooperation, and mutual market opening.

Each ASEAN member has been making great efforts in realizing the strategic goals set out in the Declaration on ASEAN Community Vision 2025 on ensuring peace, security, and long-term resilience with an active, competitive, and intensively-connected economy based on a strong sense of cohesive and common features. With its increasing central role, solidarity, and prestige, ASEAN is becoming steadily stronger, and expanding its multifaceted relations with powerful countries, as well as regional and global partners in order to materialize shared goals on peace, stability, and equal and sustainable development.

Under the ASEAN economic pillar, for instance, ASEAN has developed the ASEAN Economic Community (AEC) 2025 Monitoring and Evaluation (M&E) Framework to ensure the timely and effective implementation of the AEC Blueprint 2025. The AEC 2025 M&E Framework serves as a key reference for institutionalizing and implementing monitoring and evaluation mechanisms in the AEC, as well as a reference for AEC sectoral bodies in developing and operating the M&E mechanisms and its respective sectoral work plans. The AEC 2025 M&E Framework also helps the development of sound M&E plans and the implementation of relevant activities to assist in understanding and analyzing the progress and dynamics of regional economic integration.

Moreover, ASEAN has also developed the AEC 2025 Consolidated Strategic Action Plan (CSAP) that complements the AEC 2025 Blueprint by serving as a single reference document intended to inform stakeholders of the key action lines that will be implemented in pursuit of ASEAN economic integration agenda from 2016 to 2025. It will be reviewed and updated periodically to take into account developments over the ten-year period of the AEC Blueprint 2025 implementation and facilitate stakeholder feedback on ASEAN economic integration priorities.

As part of the review process, a Mid-Term Review on the implementation of the AEC Blueprint 2025 is also in place, which is being undertaken this year.

 How do you assess Vietnam as Chair of ASEAN in 2020?

As ASEAN Chair during this time of unprecedented challenges, Vietnam’s theme of ‘Cohesive and Responsive’ is best suited to the current situation. Indeed, Vietnam’s handling of the Chairmanship with the introduction of video-conferencing was effective in bringing the ASEAN Leaders together to agree on common policies for greater regional integration.

Vietnam’s success in containing Covid-19 enhances the credibility of Vietnam’s leadership role as ASEAN Chair in the regional fight against the Coronavirus.

What are the economic prospects of ASEAN in the coming time?

With its growing economic prowess, ASEAN is becoming a significant global player in its own right. ASEAN’s enhanced role in the global economic community is more important today than ever, given increased global uncertainties.

ASEAN should continue to leverage existing and future ASEAN-led or ASEAN-centered mechanisms. The timely conclusion of the RCEP is one such mechanism. Once implemented, RCEP will not only represent the largest free trade area in the world, but also serve as an ASEAN-led framework for regional trade architecture. This is also a true testament of a strong economic partnership between ASEAN and the RCEP Participating Countries’ commitment in keeping markets open for trade and investment, as well as strengthening the sustainability and resiliency of regional and global supply chains.

Furthermore, as multilateral trade comes under pressure, there is a need for ASEAN to play a more active role in upholding the open and rules-based multilateral trading system under the World Trade Organization (WTO). ASEAN’s priority should be in ensuring that the WTO remains effective, including in its dispute settlement function, and also that it remains relevant by taking into consideration changing trade realities.

In terms of ASEAN’s effort to create a highly integrated and cohesive economy, greater focus should be given to initiatives beyond market opening, with specific efforts on improving trade facilitation, transparency, and regulatory cooperation as well as providing efficient financial services. Efforts are still needed for ASEAN to improve its intra-ASEAN trade and investment linkages, placing urgency for ASEAN to accelerate the full operation of its various trade facilitation initiatives. Similarly, reform efforts in the area of investment must be continuously pursued, especially given the fact that other competing markets are vigorously pursuing their own reform efforts.

Equally important is the deepening of financial integration, which is key to economic stability as well as economic connectivity. While the level of financial integration in ASEAN is rising, there is still ample room for further progress. ASEAN needs to make long-term investments in financial infrastructure and be supported by sound institutional and legislative frameworks. Given the right balance of policy mix and the availability of digital infrastructure, financial integration in ASEAN could accelerate in the years ahead.

It is also worth noting some key progress made towards further economic integration, such as the onboarding of 10 ASEAN Member States in the Live Operation for the exchange of the ASEAN Trade in Goods Agreement (ATIGA) e-form D via the ASEAN Single Window (ASW).

Digitalization and e-commerce are also becoming more important and proven as enabling tools for micro, small and medium enterprises (MSMEs) to access markets that were once out of their reach. In October 2019, the Report of Google, Temasek, Bain & Company on “e-Conomy Southeast Asia” indicated that the internet economy of Southeast Asia is forecast to triple its current size, to reach US$300 billion by 2025.

What should ASEAN countries do to build stronger communities, especially after the pandemic?

The Covid-19 pandemic has adversely impacted the well-being of the people and global socio-economic growth, and this has brought about disruptions to the economy, especially in sectors such as travel and tourism, manufacturing, retail and other services sectors, as well as supply chains and the financial markets. It is time to rethink and reshape our global supply chain model, to foster greater economic resilience and sustainability in the long run.

In responding to the Covid-19 pandemic, ASEAN has developed the Hanoi Plan of Action (HPOA) on Strengthening ASEAN Economic Cooperation and Supply Chain Connectivity in Response to the Covid-19 Pandemic, which was endorsed by the ASEAN Leaders at the 36th ASEAN Summit, held virtually on 26 June 2020. Having the HPOA in time is an evidence of ASEAN’s concerted effort, centrality and determination in identifying and addressing trade disruptions, with ramifications, on the flow of essential goods, including food, medicines, and medical and other essential supplies in the region. It is hope that this initiative will further strengthen the resilience of supply chain connectivity in this region in the future.

ASEAN is also developing the ASEAN Comprehensive Recovery Framework (ACRF) and its Implementation Plan, both of which are scheduled to be submitted to the Leaders at the 37th ASEAN Summit. Taking into account inputs from all three pillars of ASEAN, the Framework will guide ASEAN’s Covid-19 recovery efforts with a view to mitigating the profound and multidimensional impact of the pandemic, preserving supply chain connectivity, supporting economic recovery and improving the stability and resilience of the region’s economy, while staying vigilant of subsequent waves of infections.

ASEAN should also continue to cooperate with its Dialogue Partners, external partners and international organizations to address the challenges of the Covid-19 pandemic, emerging and re-emerging infectious diseases and other public health emergencies.

Besides that, enhancing collaboration and sharing of experience with ASEAN’s partners in research, development, production, and distribution of vaccines, providing access to medicines for Covid-19 and other diseases in future public health emergencies, and making them available and affordable to all as global public goods are extremely pertinent.

As ASEAN has a strong appetency for technology and innovation, there is great potential for digital and e-commerce platforms to be further enhanced to facilitate cross-border economic activities, especially during this challenging time of Covid-19 pandemic, where travel bans and restrictions are imposed by almost all countries around the world. This will allow businesses especially the MSMEs to operate and remain competitive in the regional and global markets in the face of global uncertainties.

For other emerging trends and issues that constantly arise like growing inequality, the emergence of disruptive technologies, climate change, unsustainable production and consumption, the shift in geostrategic balance, and demographic shifts, ASEAN will need to address these issues from a whole-of-community perspective that is inclusive and sustainable, taking into consideration various existing initiatives that are already in place, the diversity in its membership, and its collective standing in the global economy.

The private sector in this region also plays an important role in bolstering government initiatives in the post-pandemic recovery efforts, which include restarting the economy, rehiring, and restoring business and consumer confidence. In order to drive ASEAN forward in an international environment full of greater challenge and uncertainty posed by Covid-19, it is also crucial that the ASEAN forge greater Public-Private-Partnership (PPP) in this region.

Source: Vietnam Business Forum