The ASEAN Community 2015 is a community of opportunities under three community pillars: Political Security Community, Economic Community, and Socio-Cultural Community. Its launch in 2015 is a historic milestone and a culmination of ASEAN’s resilience and dynamism throughout a journey of nearly half a century, and signals to the world how far and how well the ASEAN Member States have achieved in coming together as one community.
The ASEAN Community ascertains that the goal of ASEAN’s founding fathers of improving the lives of its people is reflected on the region’s economic and cultural development, social progress, regional peace and security, collaboration, mutual assistance in training and research, improvement of living standards, promotion of Southeast Asian studies and cooperation with regional and international organisations.
The organisation recognises the importance of ensuring the safety of its citizens from such threats as climate change, pandemics, natural disasters and transnational crimes, offering new opportunities to the region and the world of peace and stability, of bigger, more open and rules-based market for business, of better health and education; and of sustainable development.
Recognising the twin visions of peace and prosperity, ASEAN sustained peace in Southeast Asia by integrating harmonious inter-state relations through the Treaty of Amity and Cooperation in Southeast Asia (TAC) for ASEAN Member States and more than 20 external parties, the Declaration on the 2002 Conduct of Parties in the South China Sea (DOC) and the Code of Conduct in the South China Sea (COC) that guide ASEAN and China to exercise self-restraint, refrain from the use of force, undertake practical maritime cooperation, and promote peaceful settlement of disputes in the South China Sea.
Southeast Asia is free of nuclear weapons and weapons of mass destruction through the Treaty on the Southeast Asia Nuclear Weapon-Free Zone (SEANWFZ) that also protects the region from environmental pollution and the hazards of radioactive and toxic waste materials. The ASEAN Convention on Counter Terrorism (ACCT) is ASEAN’s regional cooperation framework to counter, prevent and suppress terrorism and deepen counter-terrorism cooperation.
Defence and military cooperation is gearing up with the establishment of the ASEAN Defence Ministers Meeting (ADMM) and the ADMM-Plus that provide Member States with counter-terrorism, maritime security and humanitarian assistance and disaster relief exercises, fostering understanding and improving capability and readiness.
The ASEAN Coordinating Centre for Humanitarian Assistance (AHA Centre) is at the forefront of ASEAN’s strategy to instill resilience and face its vulnerabilities through a systematised regional disaster risk management and climate change adaptation that is harmonised with national and local policies and laws.
Already an international organisation by virtue of the ASEAN Charter in 2008, ASEAN has built and strengthened its institutional frameworks towards greater effectiveness, efficiency, better synergy and coordination, paving the way for a rules-based and comprehensive institutional infrastructure commensurate with the needs of regional integration and community building.
Implementation of the ASEAN economic integration measures has led to the establishment of the ASEAN Economic Community (AEC), which provides ASEAN people with an open and integrated market where there are more product choices at competitive costs. The AEC initiatives have also supported businesses to explore markets and extend their market reach at reduced costs through simplified cross-border trading processes and improved investment climate. At the same time, ASEAN economic integration is pursued not only through internal integration but also integration to the global economy; the latter is anchored on forward-looking free trade and comprehensive economic partnership agreements and initiatives to enhance global value chain participation. The AEC has also put in place frameworks and legal structures on competition, consumer protection and intellectual property as well as improved transportation and infrastructure networks, contributing to an improved environment for business. Last but not least, the AEC also strives to be a community that is inclusive and equitable, with focused efforts to facilitate and support the active and gainful participation of small and medium enterprises and newer ASEAN Member States in the economic community.
The ASEAN Socio-Cultural Community has put efforts to lift the quality of life of ASEAN peoples through cooperative activities that are people-oriented, people-centred, environmentally friendly, and that foster inter-cultural understanding and mutual respect. The ASCC’s activities have resulted in a deepening of the sense of ASEAN identity, and collectively accelerating socio-cultural growth and progress by:
The ASEAN Inter-governmental Commission for Human Rights (AICHR), established in 2009 as the first sub-regional human rights institution in the Asia-Pacific, and the ASEAN Human Rights Declaration adopted in 2012 have established a framework for human rights cooperation in the region and continued to mainstream the issue of human rights in all three pillars of ASEAN.
Over the next ten years, the regional grouping will enter the next phase of consolidation, further integration and stronger cohesiveness as a Community. ASEAN is working towards a Community that is “politically cohesive, economically integrated, and socially responsible”. Moving forward, ASEAN Community will continue to provide opportunities to its citizens and ensure that improvements in their lives are sustained under a common vision and identity.
ASEAN ECONOMIC COMMUNITY – A Transformational Economic Agenda
The Association of Southeast Asian Nations (ASEAN) has made extraordinary progress since it was founded in 1967. It has been transformed into an increasingly well-regulated, dynamic and creative platform for trade and commerce across what many regard as the world’s fastest-developing economic region. ASEAN’s Member States comprise Brunei Darussalam, Cambodia, Indonesia, Lao PDR, Malaysia, Myanmar, the Philippines, Singapore, Thailand, and Viet Nam.
The year 2015 is a key milestone in the ASEAN integration agenda
Economically, ASEAN as a region has achieved significant progress and prosperity. GDP has nearly doubled since 2007 (when the AEC Blueprint was first adopted) to the present, with a combined GDP of over US$2.5 trillion, while average GDP per capita grew by almost 80% to over US$4,000. Over the same period, ASEAN has also become more influential, with widening markets regionally and globally. By 2014, it is Asia’s 3rd largest, the world’s 7th largest, and among the most advanced integrated markets. With a combined population of over 622 million, ASEAN has a vast consumer base, behind only China and India globally. Over 50% of ASEAN’s population is under the age of 30, making up a large portion of both the current and future workforce.
“ASEAN has become more influential, with widening markets regionally and globally”
Particularly noteworthy, and standing out in the figures, has been the cumulative effect of intra-regional trade and investment. Collectively, the intra-ASEAN market is the largest for ASEAN trade at 24.1% in 2014. Likewise, the region has become one of the world’s fastest growing investment destinations, accounting for 11% of total global foreign direct investment (FDI) inflows in 2014 as compared with just 5% in
2007. At 17.9%, ASEAN’s intra-regional FDI inflows is second largest by partner, lagging behind only the EU-28
Road Towards the AEC
Since it was founded nearly 50 years ago, ASEAN has evolved into one of the world’s most dynamic regions with accelerated economic performance in recent years. That has been attributable to ASEAN’s economic co-operation and integration initiatives taking concrete shape over the past two decades. Apart from the ASEAN Preferential Trade Agreement signed in 1977, most regional economic integration initiatives have taken place only since the 1990s.
From a historical perspective, the first articulation of the concept of ASEAN economic integration is revealed in the Framework Agreement on Enhancing ASEAN Economic Cooperation signed in Singapore in 1992. The Agreement highlighted the importance of co-operation in the areas of trade; industry, minerals and energy; finance and banking; food, agriculture, and forestry; as well as transport and communications.
This Framework Agreement eventually led to the establishment of ASEAN’s earliest key agreements. The Agreement on the Common Effective Preferential Tariff Scheme for the ASEAN Free Trade Area was signed in 1992, which was superseded by the ASEAN Trade in Goods Agreement in 2010, while the ASEAN Framework Agreement on Services was signed in 1995. ASEAN had also put in place a number of investment- focused agreements: the ASEAN Investment Guarantee Agreement (ASEAN IGA) and the Framework Agreement on ASEAN Investment Area (AIA Framework Agreement), later, superseded by the ASEAN Comprehensive Investment Agreement, which came into effect in 2012.
It was not until 2003, at the 9th ASEAN Summit, that ASEAN Leaders first declared the formation of an‘ASEAN Economic Community’as the agreed goal of regional economic integration, as stated in the Bali Concord II. This was in line with the ASEAN Vision 2020 (adopted in 1997), which aimed to transform ASEAN into a stable, prosperous and highly-competitive region with equitable economic development, reduced poverty, and socio-economic disparities, progressing in tandem with the establishment of the ASEAN Political Security Community and the ASEAN Socio-Cultural Community.
The AEC Blueprint 2015 was initiated at the 38th ASEAN Economic Ministers Meeting (AEM) in Kuala Lumpur. The AEM agreed to develop a single and coherent plan progressing step by step to the AEC. In essence, this was undertaken by identifying the characteristics and elements of the AEC consistent with the Bali Concord II, involving clear targets and timelines for implementation, while taking into account ASEAN Member States’ varying levels of development.
In January 2007, at the 12th ASEAN Summit, ASEAN Leaders collectively agreed to accelerate the establishment of the ASEAN Community from 2020 to 2015, as formally articulated in the Cebu Declaration on the Acceleration of the Establishment of ASEAN Community by 2015.
“The AEC Blueprint has served as a comprehensive master plan to chart the region’s journey towards the formal establishment of the AEC”
The joint vision for an integrated future was adopted by Leaders in November 2007 at the 13th ASEAN summit and culminated in the ASEAN Economic Community (AEC) Blueprint. It is a Blueprint that has served as a comprehensive master plan to chart the region’s journey towards the formal establishment of the AEC.
The Four Pillars of ASEAN Economic Integration
The AEC Blueprint is built on four interrelated and mutually-reinforcing pillars: (a) a single market and production base, (b) a highly competitive economic region, (c) a region of equitable economic development, and (d) a region fully integrated into the global economy. As broad and multi-faceted as these are, the goals of the AEC have already been met on many fronts.
The first AEC pillar seeks to create a single market and production base through free flow of goods, services, investment, skilled labour and freer flow of capital. Cumulatively, these aim for a more liberalised market that provides its population with greater opportunities to trade and do business within the region, with reduced trade costs and improved investment regimes that make ASEAN a more attractive investment destination for both international and domestic investors.
The second pillar helps to create a business-friendly and innovation-supporting regional environment. That is achievable through the adoption of common frameworks, standards and mutual co-operation across many areas, such as in agriculture and financial services, and in competition policy, intellectual property rights, and consumer protection. It also supports improvements in transport connectivity and other infrastructure networks; these have facilitated cross-border transportation and contributed to reducing overall costs of doing business, while providing ASEAN people and businesses with better opportunities to work together more productively. In turn, such developments provide the impetus to start new businesses, expand the existing market base, encourage strategic sourcing of goods and services within the region as well as create employment.
“The goals of the AEC have been met on many fronts”
The third pillar seeks to achieve sustainable and balanced growth and development through equitable economic development. This is done through creative initiatives that encourage SMEs to participate in regional and global value chains, and focused efforts to build the capacity of the ASEAN’s newer member states to ensure their effective integration into the economic community.
The final pillar envisages nothing less than ASEAN’s full integration into the global economy. This is pursued through a coherent approach towards external economic relations, including through free trade areas and comprehensive economic partnership agreements, and enhanced participation in global supply networks.
A new and far-reaching milestone for the AEC Blueprint has been arrived at in 2015 but with ever more tangible results to come to make good on its promise.
As of feb. 2016, there are already 40 sectoral roadmaps submitted to the Bureau of Investments. Of the 40, 32 roadmaps have been completed and are currently being implemented or for implementation, while the rest are still subject to enhancement or finalization.
The Board of Investments (BOI) will continue sustaining the momentum it gained last year in implementing interventions for local industries and sectors in a bid to further elevate the development and growth of the local industries as competitive players in the global market.
The BOI will continue to pursue an integrated approach in implementing the Industry Development Program (IDP) including its partnership with the industries and sectors in the development and implementation of industry roadmaps through its Industry Roadmapping Project.
Further efforts in 2016
In the first quarter of 2016, two regional conferences on the localization of industry roadmaps are initially scheduled to be conducted in Ilocos and Leyte. The Ilocos localization will happen on March 4, 2016 with processed meat and fruits, cacao, and coffee as thriving industries in the area as core topics in the regional conference. The Leyte localization meanwhile which is set on March 10, 2016 will have copper and among other dominant sectors as center of the discussions.
An industry roadmap details a sector’s current situation and outlines the various interventions it needs to be globally-competitive. The roadmaps are crafted by the local industries themselves with the guidance of BOI and other government agencies.
The industry roadmaps also serve as basis for effecting policies and implementing programs that support the development and growth of industries including government funding to support its key initiatives. In 2015, the government allocated P239 billion to implement agency-wide programs and projects of manufacturing-related industry roadmaps under the Manufacturing Resurgence Program.
Projects and programs
Specific to the Department of Trade & Industry (DTI), a budget of P89.5 million was allocated for the implementation of the IDP. Some of the programs and projects implemented include the comprehensive automotive resurgence program (CARS), the die and mould training program, the localization and implementation of the rubber roadmap, the study on the impact of the ASEAN economic integration and other free trade agreements on Philippine manufacturing, enhancing the competitiveness of Philippine coffee project, the FabLab activities in Bohol, and the support program for the National Industry Cluster for Tourism Support Industries such as wearables, homestyle, and processed foods.
This year, the budget increased to P289 billion with a specific allocation of P110.75 million for DTI to fund projects including the transformation of the cottage industry technology center into a super shared services facility, the establishment of FabLabs/Innovation centers, and the implementation of the CARS program.
The BOI also went around the country last year to encourage localization of roadmaps in the regions especially those industries that are dominant or thriving in the area and its alignment and linkage with the national industry roadmaps.
The BOI, in coordination with the regional offices of the DTI, conducted nine regional conferences in Iloilo, Cebu, Davao, Baguio, Tagaytay, Pampanga, Zamboanga, Palawan and Naga. The regional conferences deepened the awareness of local industries on the importance of industry roadmaps in regional integration and the opportunities and challenges for Philippines industries with the integration of the ASEAN Economic Community this year.
—From the Bureau of Investments