Coming Into the Spotlight, ASEAN Can Drive Asia’s Growth

May 03, 2016

The continuing integration of the 10 economies and the liberalization of trade across the region is a game changer for many ASEAN nations. The Trans-Pacific Partnership, for instance, will make a difference for the group as a whole, but it also poses a challenge. Once the pact is implemented, its four ASEAN members will gain a huge advantage over the rest. Cesar Purisima, the Philippines’ secretary of finance, implored the TPP nations to invite the rest of ASEAN into the charmed circle, which he believes would strengthen the region and benefit the rest of the world.

Security also poses a concern, especially the disputes in the South China Sea and the region’s complicated ties with China. How does that situation affect ASEAN economically? Territory may be a sore point, but Chinese trade and tourism are growing. Purisima likened the relationship to marriage. “There may be issues, but people tend to remain married,” he said.

Helped by that marriage, ASEAN is slowly coming into its own as a growth engine, the panelists said. As a unit, ASEAN boasts the world’s third-largest population, seventh-largest GDP and good macroeconomic fundamentals. The region’s current crop of political leaders also looks promising in the effort to promote growth.

Myanmar’s new leadership, the country’s first democratic government, has raised concerns about its effectiveness. Tycoon Serge Pun believes that as long as there are “good” people in government, which he defined as “honorable” and “void of corruption,” they will serve the interests of the nation as a whole. He expressed optimism about his country’s future and admonished the audience not to underestimate the political savvy of Aung San Suu Kyi, the former political prisoner and Nobel Peace Prize winner who leads Myanmar’s governing party.

In Indonesia, President Joko Widodo has become increasingly pro-business and established strong goals for his administration, including cutting Indonesia’s 42,000 business regulations by half. Milken Institute Asia Fellow Dino Patti Djalal warned, however, that his biggest challenge will be attacking corruption, which has been making an unfortunate comeback.

Despite the uncertainties, ASEAN is looking at a colossal opportunity. Thakran explained: Known as the “factory of the world,” Asia produces 93 percent of watches yet contributes only 11 percent of the industry’s value. The region needs to learn finesse and salesmanship to improve its position in timepieces and many other industries, he said. “Tell a story, build a concept and present it well.… Once Asia learns that, there will be a huge transfer of value back to Asia.” 

Also, Thakran added, “no one works as hard.”

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