Polytechnic University of the Philippines

College of Accountancy and Finance

DEPARTMENT OF BANKING AND FINANCE
Sta. Mesa, Manila

ASEAN INTEGRATION

Central Banking (FINA 3123)

Submitted By
Conwi, Emandi Ross D.
Dagta, Rica S.
Laprades, Genesis P.
Nual, Jessica C.
Pablo, Jan Vernadeth M.
Pascua, Norielle
Ramos, Danielle Stephen Dwight J.

BBF 4 – 4
Professor Rolando Fernandez
 Table of Contents

History .............................................................................................................................. 3
About ASEAN .................................................................................................................. 3
Members of ASEAN......................................................................................................... 5
Myanmar ........................................................................................................................... 5
Cambodia .......................................................................................................................... 7
Laos .................................................................................................................................. 10
Brunei ................................................................................................................................ 13
Indonesia........................................................................................................................... 15
Thailand ............................................................................................................................ 16
Philippines ......................................................................................................................... 17
Vietnam ............................................................................................................................. 20
Malaysia ............................................................................................................................ 21
Singapore .......................................................................................................................... 22

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Asean Integration History

The Association of Southeast Asian Nations, or ASEAN, was established on 8

August 1967 in Bangkok, Thailand, with the signing of the ASEAN Declaration (Bangkok
Declaration) by the Founding Fathers of ASEAN, namely Indonesia, Malaysia,
Philippines, Singapore and Thailand.

Brunei Darussalam then joined on 7 January 1984, Viet Nam on 28 July 1995,
Lao PDR and Myanmar on 23 July 1997, and Cambodia on 30 April 1999, making up
what is today the ten Member States of ASEAN.

About ASEAN

Aims and Purposes

As set out in the ASEAN Declaration, the aims and purposes of ASEAN are:

1. To accelerate the economic growth, social progress and cultural development in

the region through joint endeavors in the spirit of equality and partnership in
order to strengthen the foundation for a prosperous and peaceful community of
Southeast Asian Nations;
2. To promote regional peace and stability through abiding respect for justice and
the rule of law in the relationship among countries of the region and adherence to
the principles of the United Nations Charter;
3. To promote active collaboration and mutual assistance on matters of common
interest in the economic, social, cultural, technical, scientific and administrative
fields;
4. To provide assistance to each other in the form of training and research facilities
in the educational, professional, technical and administrative spheres;
5. To collaborate more effectively for the greater utilization of their agriculture and
industries, the expansion of their trade, including the study of the problems of
international commodity trade, the improvement of their transportation and
communications facilities and the raising of the living standards of their peoples;
6. To promote Southeast Asian studies; and

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 7. To maintain close and beneficial cooperation with existing international and
regional organizations with similar aims and purposes, and explore all avenues
for even closer cooperation among themselves.

Fundamental Principles

In their relations with one another, the ASEAN Member States have adopted the
following fundamental principles, as contained in the Treaty of Amity and Cooperation in
Southeast Asia (TAC) of 1976:

1. Mutual respect for the independence, sovereignty, equality, territorial integrity,

and national identity of all nations;
2. The right of every State to lead its national existence free from external
interference, subversion or coercion;
3. Non-interference in the internal affairs of one another;
4. Settlement of differences or disputes by peaceful manner;
5. Renunciation of the threat or use of force; and
6. Effective cooperation among themselves.

Pillars

 Single Market and Production Base: the region as a whole must become a
single market and production base to produce and commercialize goods and
services anywhere in ASEAN
 Competitive Economic Region: the region must emphasize on the
competitiveness of its production and capacity for export, as well as the free
competition inside of its frontiers
 Equitable Economic Development: to receive the benefits of the AEC, the people
and businesses of ASEAN must be engaged into the integration process of the
AEC
 ASEAN’s integration into the globalized economy: ASEAN must not be isolated
but an integrated part of the global economy
Asean Charter

The ASEAN Charter serves as a firm foundation in achieving the ASEAN

Community by providing legal status and institutional framework for ASEAN. It also

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codifies ASEAN norms, rules and values; sets clear targets for ASEAN; and presents
accountability and compliance.

The ASEAN Charter entered into force on 15 December 2008. A gathering of the
ASEAN Foreign Ministers was held at the ASEAN Secretariat in Jakarta to mark this
very historic occasion for ASEAN.

With the entry into force of the ASEAN Charter, ASEAN will henceforth operate
under a new legal framework and establish a number of new organs to boost its
community-building process.

In effect, the ASEAN Charter has become a legally binding agreement among
the 10 ASEAN Member States.

Members:

1. Indonesia
2. Malaysia
3. Philippines
4. Singapore
5. Thailand
6. Brunei Darussalam
7. Viet Nam
8. Lao PDR
9. Myanmar

MYANMAR (BURMA)

Joined ASEAN on July 23 1997 at ASEAN’s 30th anniversary.

Characteristics

Myanmar’s advantages include its abundant natural resources and low-cost

workforce. It is also strategically located. Myanmar is neighbor to a number of ASEAN
countries and a gateway to the huge markets of China and India.

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 Investors looking at Myanmar will find tons of opportunities in the country’s
agricultural sector. Myanmar’s rich fertile lands, agriculture-skilled population, and low
labor cost are keys to advancing industries, and investors are encouraged to be part of
upcoming expansions. Infrastructure is another priority area as Myanmar strives to keep
pace with developments in other countries and continue its growth momentum.

The Top Exports:

• Petroleum Gas ($4.42B)

• Precious Stones($2.03B)
• Dried Legumes ($1.05B)
• Tin Ores ($367M)
• Pearl Products($332M)

The Top Imports:

• Refined Petroleum
• Special Purpose Ships
• Broadcasting Equipment
• Telephones

Benefits from Joining ASEAN

Myanmar’s economic boom is primarily the result of trade and investment from
ASEAN members and other East Asian economies. Data for May 2014 through April
2015 – the most recent period available at time of publication – shows that more than
40% of Myanmar’s exports went to ASEAN member states, and nearly 45% of imports
came from the bloc, according to data provided by Myanmar Customs and compiled by
AHK (the Delegation of German Industry and Commerce in Myanmar). These figures
jump dramatically when trade with China, Japan and South Korea – which account for
the additional markets in the ASEAN+3 grouping – is factored in.

During the 2014/15 period around 87% of Myanmar’s exports went to ASEAN+3
countries, while around 90% of imports came from the same group.

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 Myanmar’s single largest trading partner is China, which accounted for 30.2% of
imports and 37.3% of Myanmar’s exports by value in 2014/15. Myanmar’s second-
largest trade partner is Thailand, which accounted for 10.1% of imports and 32.2% of
exports in 2014/15, according to AKH data. This was followed by Singapore, with 24.9%
of imports and 6.1% of exports; Japan, with 10.5% of imports and 4.4% of exports; and
India – Myanmar’s largest non-ASEAN+3 trade partner – with 3.6% of imports and 6%
of exports. Rounding out the top-10 are Malaysia, South Korea, Indonesia, the US and
Hong Kong.

CAMBODIA

Cambodia has become the last ASEAN member in April 1999; it is now 18 years
for Cambodia in ASEAN

Characteristics

• Strong trade and international relations

- Cambodia can leverage on its membership of the Association of South-

East Asian Nations (ASEAN). Tariffs on most Cambodian exports to and imports from
ASEAN member countries have been reduced to zero to five percent by 2010 and will
be abolished by 2018.It has entered into bilateral investment treaties to provide
reciprocal national treatments to investors, preclude expropriations and guarantee the
repatriation of investments.

• Strengthened financial sector and system

- Over the last decade, developments in the banking sector have been
generally remarkable, following the completion of bank restructuring programs in 1999.
This was witnessed by banking and financial stability, increased financial services
promoted through the institutional and legal reforms under the financial sector blueprint.

• Inflation remains under control

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 - Despite high fuel prices, the Cambodian Government has been successful
in keeping inflation in check. The tight fiscal policies and the growing influence of
monetary policy in controlling money supply expansion have contributed to this stability.

• Investment incentives in special economic zone

- Cambodia's investment law offers up to nine years tax holiday, zero

percent rate on value-added tax and full import duty exemption on raw materials,
machinery, and equipment. In addition, it guarantees free repatriation of profit that
investors earn

• Investment protection

- Cambodian government ensures equal treatment to all investors and free

remittance of foreign currencies abroad. There is no requirement for investors to
participate in the local equity.

Benefits from Joining ASEAN

Key Economic Data of Cambodia

2000 2012 2013

Total GDP (USD) 3,649 14199 15250

Avg GDP per 295 971 1043

capita

Total Trade 2772 14442 18479

FDI Inflows 218 2283 4483

Population in 13 14.37 14.6

Millions

Poverty Rate 37 18.9

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Enhancement of Human Resources

Besides, Cambodia’s ASEAN membership contributes to the increase in human

resources. During the last decade, Cambodia has greatly developed its human
resources through exchanging knowledge, experiences, sciences, and technologies
with other ASEAN members. For instance, Cambodian government officials have been
sent to participate in various visits, study tours, workshops, and seminars involving
ASEAN affairs both locally and abroad, and some officials are sent to attachments to
the some ASEAN Secretariat and in-country training on various topics related to
ASEAN, English language skills, negotiations, and international relations (Kao & Jeffrey,
1988). Similarly, Cambodian students have been granted with full scholarships to
pursue high education in ASEAN countries and ASEAN dialogue partners. What is
more, Cambodian youths are provided with many academic opportunities to join many
ASEAN activities such as ASEAN Varsities’ Debate, AUN Education Forum, AUN Youth

Speaking Contest, and so on for improving students’ knowledge on various aspects

related to ASEAN and global issues.

Tourism Development

In addition, Cambodia can remarkably develop its tourism sector. With its natural
resorts and ancient temples as well as its political stability in regional and global
context, Cambodia attracts more foreign tourists. Most recently, Cambodia has
welcomed a large number of international visitors mostly from Vietnam and from
ASEAN dialogue partners such as South Korea, China, and Japan. Besides, the tourism
development is much relevant to the increase in local jobs opportunities. Based on the
study by Hing Thoraxy, the tourism contributed to 100,000 jobs and earned US$ 777
million in the local economy in 2004, and this figure was up around US$ 1.4 billion in
2005 (Hing, 2003).

Economic Development

More importantly, Cambodia’s membership is very important for its economic

development. According to Cambodian P.M. Hun Sen, Cambodia recognizes the world

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trend toward economic interdependence and globalization and takes benefits when
Cambodia has entered the regional association as full-pledge member (Kao & Jeffrey,
1988). Sure enough, Cambodia has greatly benefited for its economic development
since its membership, regulations, and political stability have enhanced foreign direct
investors’ confidence to safely invest in Cambodia. Furthermore, based on the
AFTA/CEPT scheme, Cambodia is able to attract more regional foreign investors due to
the requirement of reducing import tariffs and removing non-tariff barriers such as
quotas and licenses. According to the 2005 survey by NIS and Ministry of Planning, the
economic growth average was 7.0% from 1993 to 1996, and it dropped to 5.0% in 1997
due to the internal political instability. Until 1999, economic growth reached its peak
12.6% (Hing, 2003). Consequently, Cambodia enjoys its economic growth, provides
more jobs for its peoples, and strengthens its production capacity in the regional and
global markets.

LAOS

-Lao People’s Democratic Republic (Lao PDR)

-Land of Ample Opportunities and Successes

-Laos joined ASEAN on the 23rd of July 1997 together with Myanmar

-Lao PDR is a unitary, communist, socialist, one-party state

-6th President Bounnhang Vorachith (since April 2016)

-Laos gained independence from France in 1954 and 63 years member of

ASEAN

-capital of Laos was Vientiane

-chair of ASEAN from 2004 and 2016

Characteristics

Lao prides itself with abundant natural resources. It is home to tons of coal,
hardwood lumber, gypsum, tin, gold, and gemstones. It shares 1,865-kilometers of the
great Mekong River stretch. It is blessed with rugged mountains, and hasmhuge forests

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and woodland, which covers 47% of Lao’s land area. Lao’s topography offers investors
great opportunities particularly in hydropower, mining, logging, and agriculture.

Its unspoiled natural resources make Lao PDR an interesting tourist destination.
In the recent years, Lao has been registering over 2 million tourist arrivals. Popular
tourist sites are Lao’s breathtaking wats and ruins, the UNESCO World Heritage Site
Luang Prabang, and the charming capital Vientiane.

The government’s opening of Lao to private enterprises and foreign investors

have steadily led to development and drove Lao’s more than 7% growth from 2008 to
2012. It became a member of ASEAN in 1997 and was admitted to the WTO in 2012.

Lao PDR, a lower-middle income economy with a GNI per capita of $1,740 in
2015, is one of the fastest growing economies in the East Asia and Pacific region and
the 13th fastest growing economy globally. GDP growth averaged 8 percent over the last
decade. Use of the country’s natural resources – mostly water, minerals and forests –
contributed one third to growth. Construction and services also expanded, with growing
regional integration boosting tourism and attracting foreign investment. The
macroeconomic environment remains challenging, reflecting both domestic, and
increasingly external risks, and needs careful management. Growth contributed to
lowering the number of poor people to an estimated 23.2 percent of the population in
2012/13 from 33.5 percent a decade ago. However, poverty has been declining slowly
compared with some regional peers.

The Lao economy is projected to expand at around 7 percent in 2017-19

supported by a healthy pipeline of power projects and growing opportunities for the non-
resource sector resulting from closer ASEAN integration. In addition, some recovery in
commodity prices can support mining and agriculture output, while improved
connectivity facilitates tourism growth. However, the country continues to face a
challenging macroeconomic situation. The fiscal deficit widened significantly in 2016
and brought public debt to close to 70 percent of GDP. The current account deficit
narrowed in 2016, but is projected to widen as a few large infrastructure projects are
launched, while foreign reserve buffers are low. Parts of the banking sector have weak
capital buffers and deteriorating portfolios. Maintaining macroeconomic stability will
require concerted efforts to reduce the fiscal deficit, strengthen public debt management
and address weaknesses in the financial sector.

Benefits from joining ASEAN

As a member of the Association of Southeast Asian Nations (ASEAN), Lao PDR

is increasing its integration into the regional and global economy, and served as the
chair of ASEAN in 2016. Lao PDR has been a member of the World Trade Organization
since February 2013.

Lao PDR has made good progress on a number of Millennium Development

Goals (MDGs), including halving poverty, reducing hunger, and improving education
and health outcomes. However, certain MDGs remain off track, most crucially on

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nutrition, with an estimated 44 percent of under-five children being stunted. Total fertility
rates are high, with a high unmet demand for family planning. Lao PDR still has a high
maternal mortality rate and limited skilled birth attendants and could also do more to
place gender equality at the center of its national development plans. The Sustainable
Development Goals (SDGs) provide a framework for the Government to monitor and
evaluate the progress in its development plan implementation and commitments. Lao
PDR is one of the first countries in the world to localize the SDGs into the national
development plan.

Laos has placed the narrowing of the development gap in ASEAN, the promotion
of ASEAN connectivity and the promotion of small and medium-sized enterprises as top
priorities under its chairmanship of ASEAN this year. Others include trade facilitation,
the promotion of decent work and transition to the formal economy, and the
preservation and protection of ASEAN cultural heritage.
Beyond these immediate aims, Laos has a special task to handle in three
important special summits with the United States, Russia and China. At the Sunnylands
summit hosted by US President Barack Obama in February, Laos did well in pushing for
an all-encompassing declaration with ASEAN-centred principles. The document will
serve as a new foundation for strengthening ASEAN-US cooperation in the years and
decades to come. In May 19-20 special summit in Sochi, Russia, which marks the 20th
anniversary of ASEAN Russia relations, Laos will again lead the ASEAN colleagues in
holding discussions with
President Vladimir Putin, who has personally assured that he would attend this summit.
This is signi􀃒cant, because Putin has missed the past special two summits with
ASEAN. Russia, along with the US, joined the East Asia Summit (EAS) – the leaders-
only premier security forum – in 2010. But since then, Putin has failed to attend any
EAS meeting, while Obama has attended two out of three. During the Cold War, Laos
had good ties with the former Soviet Union, and that a􀃒nity continues until today.
In the first quarter of its year as ASEAN chair, Laos has shown that it can be
impartial and act independently in handling sensitive issues such as the South China
Sea disputes. The chair’s statement, released after the ASEAN Foreign Ministers’
Retreat in Vientiane in February, was good indicator of Laos’ steadfastness as it
incorporated all pertinent points mentioned by ASEAN members regarding the maritime
disputes. Of all the three summits this year, the one with China would be the most
pivotal and difficult. As the international community watches closely the role played by
Laos, the ASEAN chair is mindful of its historic task to maintain a good balance of all
major powers in their relations with ASEAN. As a small and landlocked country, Laos
has learned, throughout its long history, how to survive among big powers. With a new
Cabinet to be announced over the third week of April, Laos’ leadership by newly elected
Prime Minister Thongloun Sisoulith, a veteran former foreign minister, augurs well for
ASEAN’s ongoing integrative process with the regional community. At the National
Congress of the Lao People’s Revolutionary Party in January, Laos came out with its
2030 Vision, which calls for a big push for the country to graduate from the list of
Least Developed Countries and become an Upper Middle-Income Country by
2020— just five years away. That is a tall order. But given the country’s ongoing
economic reforms and accelerated efforts to move into a fully market-based economy,
Lao leaders are con􀃒dent that through sustainable and green growth strategies, Laos
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can develop into a niche area within Southeast Asia. The World Bank has already
named Laos as a young tiger economy, one that has scored annual growth rates of
nearly 10 percent in the last two years.
Finally, the new leaders in Vientiane are enthusiastic about the strengthening of
rulesbased, good government to ensure greater transparency and accountability. It is
remains to be seen how all these new developments, coupled with the ASEAN
chairmanship, will play themselves out under the Thoungloun-led administration.
Lao national expert group exchanged good practices on soil and nutrient
management as a contribution to the development of the ASEAN Regional Guidelines
on Soil and Nutrient Management (ASEAN Regional GLs on SNM) at the 3rd National
Expert Group Meeting on Soil and Nutrient Management conducted on 24 March 2016
at the Agriculture Land and Nutrient Management Center in Vientiane.

BRUNEI DARUSSALAM

-Nation of Brunei; the Abode of Peace

-joined ASEAN on 8th of January 1984; youngest member in ASEAN
-capital of Brunei was Bandar Seri Begawan
-Head State Sultan Haji Hassanal Bolkiah Mu’izzaddin Waddaulah (29th current
Sultan)
-wealthiest monarch in the world
-gained independence from UK in 1984

Characteristics

Government
Brunei is an absolute monarchy, ruled by the Sultan and Yang Di-Pertuan of
Brunei Darussalam. The Sultan is the Head of State, Head of Government, and also
serves as the Minister of Defence and Minister of Finance. The Sultan is advised by,
and presides over, five different councils that assist with Brunei’s governance. The
Council of Ministers supports the running of government, and there are Councils to
advise the Sultan on religious issues, state custom and official appointments. In 2004,
the Legislative Council was reconstituted after 20 years dormancy. The Council meets
at least once a year and supports the Sultan on legislative matters. The Council is
comprised of up to 30 Ministers and distinguished persons, and up to 15 district
representatives. All Council members are appointed by the Sultan.

Economy
Brunei’s economy is heavily dependent upon the oil and gas sector. Brunei has
the second highest per capita gross domestic product of the ASEAN Member States.
Brunei joined the United Nations (UN) on 21 September 1984, after gaining full
independence from Britain, and since then has actively engaged with the different UN
funds, programs, and specialized agencies. Brunei is also a member of various
international organizations. Brunei became a member of; the International Monetary
Fund (IMF), World Bank and Word Trade Organization (WTO) in 1995; the Asian

13
Development Bank in 2006; and the International Labor Organization in 2007. Brunei is
also a member of the Asia Cooperation Dialogue (ACD), Asia-Middle East Dialogue
(AMED), Asia-Pacific Economic Co-operation (APEC), Asia-Europe Meeting (ASEM),
Commonwealth, Forum for East Asia-Latin America Cooperation (FEALAC),
International Maritime Organization (IMO), Non-Aligned Movement (NAM), New Asia-
Africa Strategic Partnership (NAASP) and the Organization of Islamic Cooperation
(OIC).

Performance as Chairmanship country and the Contributions to ASEAN

Brunei were faced a number of problems. Brunei had to help managing tensions
regarding the strategic South China Sea following last year’s spite after then-chair
Cambodia, a major recipient of assistance from Beijing, twice sought to limit discussion
of China’s assertive actions in the disputed sea. This provoked protests from several
Southeast Asian countries.

Second, with the collective goal of achieving an ASEAN Economic Community

(AEC) by the end of 2015, Brunei needed to observe and may trigger them on
implementing the agreed-upon economic road map.

A third task involved keeping China and the United States engaged in the East
AsiaSummit(EAS). Many Southeast Asians wonder what impact the departure of
Secretary of State Hillary Clinton and Assistant Secretary of State for East Asia and the
Pacific Kurt Campbell would have on the U.S. rebalance to Asia and U.S. relations with
ASEAN.

Brunei has chosen as the theme for its chairmanship “Our people, our future
together.” The Prime Minister wanted to organize some 400 meetings throughout last.
These would include two ASEAN leaders’ summits in April and October, the ASEAN
Regional Forum attended by the foreign ministers of 27 Asia Pacific countries in June,
and the 18-member East Asia Summit, which brings together ASEAN and its most
important partners, including the United States, in October.

The statement of Bruneian officials was to put priorities on the youth of ASEAN in
order to promote a region-wide sense of belonging. Other themes were discussing
environmental issues like climate change and natural disasters, tackling food and
energy security, and addressing poverty eradication, sustainable development, and
closing the income gap within ASEAN

Benefits

Brunei has opportunities to play a key role in ASEAN even though it belongs to
the smallest countries within ASEAN but its potentials are there. Since Brunei is a
member of the common wealth, they could try to use their relation with other members.
Due to the fact that on every continent is at least on member of the common wealth
means Brunei has a good connection to the world and has close relations to every

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continent. Brunei could be the negotiator between ASEAN and common wealth
countries to enhance or further maintain relations to other countries. [4.
http://thecommonwealth.org/member-countries]

Another of Brunei’s potentials is the possibility to become world R&D hub. This is
at least the opinion of a foreign firm who will invest in a three-year project with Brunei in
bio-food and pharmaceutical. Important arguments, for the external company, are the
literacy rate is 100 per cent and generally people are bilingual and have greater excess
to free education but more importantly for them is the view on the government which
has “a vision to be a major player in the ASEAN region”. Moreover, the government of
Brunei has liberal trade policies, low company tax and excellent incentives and not
overly regulated. Additionally, the government’s scholarship program for its citizens to
get the best education abroad from top universities in the world is another important
point for foreign investors. [5. http://www.bt.com.bn/business-
national/2013/12/23/weighing-out-brunei%E2%80%99s-potential-become-world-class-r-
d-hub]

Brunei belongs to the richest countries within ASEAN and has therefore the
opportunity to invest money in their own country to further enhance their development.
Since they are largely dependent on their oil and gas resource I already explained that
Brunei needs to diversify their economy and enlarge other sectors. Brunei could, for
example, invest in their financial sector and can also try to occupy new jobs by
immigrants from ASEAN countries. In this case Brunei could be the country to bring
forward the plan of easier labor migration within ASEAN member states.

“ASEAN unified after Brunei’s positive term at helm”

All in all Brunei performed, for some critics surprisingly, good as the
chairmanship country in ASEAN in 2013. Even though Brunei was facing quite a
number of obstacles they handled it in a very professional way and tried to be
interactive between countries which you could see through the large number of
meetings the Sultan scheduled. Especially the South Chinese Sea conflict was seen
and probably was one of the major points Brunei’s Prime Minister had to work on. More
surprising is then the outcome they agreed on to actively work toward a binding Code of
Conduct. Furthermore, Mister Bolkiah was also focusing on the collective goal of AEC
by the end of 2015. After the last East Asia Summit, when all ASEAN members noticed
that only 79.7 percent of the AEC blueprint has been completed, he really pushed all
member leaders to fulfill the implementation in order to achieve the cooperative
objective. Finally, Brunei can play a key role within ASEAN by the usage of its potentials
which are mentioned above such as the educational filed with their scholarships and
also the opportunities to invest in their own economy by creating a strong financial
sector which creates new jobs. All this points will lead Brunei into a great position in
ASEAN.

INDONESIA
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  Indonesia has been a member of ASEAN since August 1967, when it joined
Malaysia, the Philippines, Singapore and Thailand in signing the ASEAN
declaration to form an inter-governmental association aimed at improving
cooperation in economic, social, cultural, technical and educational development.
 The main problem of Indonesia is that the country does not have a well-
developed manufacturing industry. In terms of productivity and growth,
Indonesia's manufacturing industry is being outperformed by its regional peers.
This situation is due to inadequacies in areas such as technology, infrastructure,
gas/electricity supplies and slow reform within the industry.
Possible Opportunities

 The implementation of this ASEAN single market could benefit Indonesia in

terms of its potential prospects and opportunities such as 1). Getting information
easier and quicker; 2). Creating as well as enhancing jobs and employments
opportunities; 3). Stimulating improvement of local and national economy
stability; 4). Enhancing domestic productivity both in quality and quantity; 5)
Increasing the national income (domestic foreign exchange) through export-
import taxes.
 Thus, Indonesia is expected to be more competitive and could make best use of
the opportunities offered in the AEC, considering Indonesia has a huge potential
to appear as a new economic power in Southeast Asia and even in the Asia-
Pacific region. Indonesia will be prepared their national human resources,
because if those isn’t prepare, it’s become a more serious problem for Indonesia.
Whatever will be happened in AEC era, we must take our national interest as the
first priority.
Present Status

 GDP expanding 5.2% in 2017, which is unchanged from last month forecast. In
2018, GDP growth is expected to pick up further to 5.4%.
 Exports grew nearly 25% in May.
 Core inflation has trended down.
 Unemployment Rate in Indonesia averaged 6.10 percent from 1982 until 2017.

THAILAND

 ASEAN has been and will continue to be a cornerstone of Thailand’s foreign

policy. Thailand attaches great importance to enhancing cooperation within
ASEAN frameworks to build trust and confidence among ASEAN Member States,
as well as to promote peace, stability and prosperity in the region.
 Thailand’s contribution to ASEAN has been continuous and active. Under our
chairmanship in 2008‐2009, the ASEAN Charter entered into force and

16
 transformed ASEAN into a truly rules‐ based organization. Thailand is thus fully
committed to the effective implementation of the ASEAN Charter, which is vital to
the ASEAN community‐building process.
Possible Opportunities

 Move Thailand from low labor cost to knowledge, technology and services. A key
to this is Quality. In a high tech and high cost environment, ‘good’ is not good
enough.
 An already existing and well expanding industry is the automobile manufacturing.
New industries could be alternative energies, such as solar energy and wind
energy.
 Helps to facilitate investment and trading activities in other ASEAN members as it
is now more freely and easier.
 They can also be the center of national conferences, meetings, exhibitions, and
telecommunication. Furthermore, AEC helps Thai manufacturers reduce the cost
of production as they can outsource cheaper raw materials from ASEAN
members.
Present Status

 GDP growth figure to be 3.3%

 Exports of goods expanded by 2.6% year over year, the highest growth over the
past 4 years
 Number of tourists in the first quarter grew 12%
 Public investment grew steadily at 9.7% year over year following the investment
in infrastructure projects both ongoing and starting this year.
 Unemployment rate in Thailand rose to 1.32% in May of 2017 from 1.2%

PHILIPPINES

The Philippines is one of the five founding members of ASEAN. Together with
Indonesia, Malaysia, Singapore, Thailand, the Philippines signed the Bangkok
Declaration on 8 August 1967 in Bangkok, Thailand, which formally established ASEAN.

Characteristics

The Philippines’ more than 90 million people are the country’s key assets. The depth
and the quality of its human resources make the Philippines an attractive place for
people doing business.

The second most populous country in Southest Asia, the Philippines consistently has
one of the fastest economic growth in the region and the world. With a high level of

17
proficiency in English and a population eager to work abroad or with foreigners, the
Philippines’ economy is also rapidly advancing in global services and trade.
GDP: USD 873.966 Billion

The English proficiency of Filipinos has enabled the country to become a global leader
for the BPO sector. A key to Philippines’ economic growth, BPO brings laser revenues
and investments from abroad in the Philippines. The Philippines has resolutely engaged
towards sustainability. Profiting from its natural resources, the Philippines has notably
become a global leader in geothermal energy.

Tourism is nonetheless on the rise because of the smart ways to promote the
Philippines, enabling a growing amount of visitors to explore Manila or the Philippine
UNESCO world heritage sites.

The Philippines’ export rely a lot on commodities, but also on manufactures goods for
the electronics, transport and garments sectors. (Exports: USD 58.827 Billion)

Export Goods:
 Semiconductors and electronic products
 Transport equipment
 Garments
 Copper products
 Petroleum products
 Coconut oil
 fruits

Philippines’ role in ASEAN

During the Aquino administration, he Philippines has been the frontliner of all ASEAN
claimant countries in the South China Sea against China. The Philippines was also the
main member-state campaigning for the regional organization to unite and call out
China for actions affecting ASEAN claimants.

Ambassador Narciso G. Reyes was the first Filipino to serve as Secretary General of
ASEAN on 1 July 1980.

The Philippines led in the adoption of the Manila Declaration during the Philippines’
chairmanship of the 3rd ASEAN Summit in Metro Manila from 14-15 December 1987.
The Manila Declaration aimed to foster closer political and economic cooperation
among its ASEAN Member States and Dialogue Partners.

Ambassador Rodolfo Severino, Jr. became the second Filipino to serve as the
Secretary-General of ASEAN on 01 January 1998.

The Philippines spearheaded the establishment of the ASEAN Center for Biodiversity
(ACB) on 27 September 2005 in the University of the Philippines Los Baños, Laguna
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during the 9th Informal ASEAN Ministerial Meeting on the Environment in Makati City.
The ACB is the first regional initiative that aims to preserve the rich biodiversity of the
ASEAN.

The Philippines took the lead in the adoption of the landmark ASEAN Declaration on the
Protection and Promotion of the Rights of Migrant Workers during the 12th ASEAN
Summit and Related Summits in Cebu City, Cebu from 09 to 15 January 2007. The
ASEAN Declaration on the Protection and Promotion of the Rights of Migrant Workers
provides protection to documented migrant workers and their families in the region.

At the same 12th ASEAN Summit, the Philippines led in the adoption of the Cebu
Declaration on the Blueprint of the ASEAN Charter, the Cebu Declaration on the
Acceleration of the Establishment of an ASEAN Community by 2015, and the ASEAN
Convention on Counter-Terrorism.

Eight of the 37 ASEAN Heritage Parks under the ASEAN Heritage Parks Programme
can be found in the Philippines: Apo Natural Park, Mount Makiling Natural Reserve,
Mount Hamiguitan Range Wildlife Sanctuary, Mounts Iglit-Baco Natural Park, Mount
Kitanglad Range Natural Park, Mount Malindang Range Natural Park, Tubbataha Reef
Natural Parks, and Timpoong and Hibok-Hibok Natural Monument.

The Philippines shepherded discussions that led to the adoption of the ASEAN
Convention against Trafficking in Persons (ACTIP) and its Accompanying Plan of Action
in 2015. The Philippines ratified ACTIP on 6 February 2017, paving the way for the
Convention to enter into force.

ASEAN 2017

The Philippines formally assumed the Chairmanship of ASEAN on 01 January 2017. It

will be the host of the 30th and 31st ASEAN Summits on April 2017 and November
2017, respectively. The Philippine chairmanship of ASEAN in 2017 centers on the
theme, “Partnering for Change, Engaging the World.” The Philippine chairmanship
coincides with the 50th Founding Anniversary of ASEAN

Benefits from joining ASEAN

 More trade and investment opportunities for the Philippines

 Investments on infrastructures such as ports, airports, and better road networks
will push down prices
 Tariff reductions for rice and sugar
 Foreign entry and participation in several business services
 Professional exchange in fields such as engineering, nursing, architecture,
surveying, medicine, dentistry, accountancy, and tourism
 Wholesale and retail trade distribution

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  Transport and communications, real estate, specifically, property management,
rentals, urban planning, and landscaping
VIETNAM

Vietnam joined the Association of Southeast Asian Nations as a full member on 28 July
1995.

For Vietnam, membership in the prestigious ASEAN group will help it gain wider access
to markets and increase its acceptability to investors.

Characteristics

The new Southeast Asian tiger economy, Vietnam has shown a robust growth in the last
years. With a large and dynamic population, the country has emerged to come at the
forefront of international trade and become a very attractive target for international
investments. Moving from a traditional and agricultural economy, the Vietnamese has
been slowly but steadily opening the economy to foreign investments and expats.

GDP: USD 590.077 Billion (2016)

Heavily reliant upon agriculture, Vietnam has grown to become a leader in the
production and export of several commodities. Vietnam is also a leader in export for the
global textile industry and electronics. (Exports: USD 169.2 Billion)

Export Goods:
 Clothes
 Shoes
 Marine products
 Crude oil
 Electronics
 Wooden products
 Rice
 Coffee
 Machinery

Vietnam’s role in ASEAN

Vietnam has worked hard to secure peace and reconciliation among Southeast Asian
nations, which were once deeply divided.

Vietnam was the first Indochinese country to join ASEAN, and its move helped end
confrontation between the Indochinese bloc and ASEAN.

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Vietnam also led efforts within ASEAN to ensure regional security (signed the Treaty on
the Southeast Asian Nuclear Weapon Free Zone and was one of the founding members
of the ASEAN Regional Forum).

A direct claimant in the dispute, Vietnam, along with the Philippines, has made constant
effort to put the South China Sea on ASEAN’s agenda ensuring conflict is dealt with in a
constructive way.

Its leadership also drives efforts towards an ASEAN Economic Community.

Its efforts to encourage solidarity and unity have contributed to addressing major
regional issues and has helped advance the enforcement of the Declaration on the
Conduct of Parties in the South China Sea and the creation of the Code of Conduct.

Benefits from joining ASEAN

 ASEAN provided Vietnam with a perfect venue to socialize into the international
community and re-emerge from the isolation that it fell into the 1970s
 ASEAN has remained as one of the main pillars of Vietnam’s foreign policy
 Vietnam has benefited significantly from its trade and investment ties with fellow
ASEAN member states.
 ASEAN is Vietnam's bridge to the wider world and a safety net when the country
faces global and regional problems.

MALAYSIA

Possible Opportunities
 ASEAN is the cornerstone of Malaysian foreign policy. It is both of geo-political
significance and economic relevance to Malaysia and also to the nations within
this region. Its renunciation of the use of force and promotion of peaceful
settlement of disputes has been the foundation to its peace, stability and
prosperity in the region.
 Investment opportunities abound in services and manufacturing including, among
others, basic metal products, electrical and electronics, engineering support,
machinery & equipment, rubber products, medical devices, and petrochemical &
polymer.

Sources:
http://investasean.asean.org/index.php/page/view/asean-member-
states/view/709/newsid/791/malaysia.html
http://www.kln.gov.my/web/guest/md-strengthening

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Present Status
 Malaysia is your Profit Centre in Asia. It offers a favorable investment climate to
individuals and organizations wanting to do business. Government policies are
pro-investments and lean towards liberalization, incentives formulation, tax
minimization, and intellectual property protection.
 Malaysia is one of the more highly developed countries in the region, with GDP
growth of 5.6% in 2012 and a per capita income of over US$9,000.
Unemployment rate is low at 3.2% while inflation is maintained at a low of 1.9%.

Source:
http://investasean.asean.org/index.php/page/view/asean-member-
states/view/709/newsid/791/malaysia.html

SINGAPORE

Possible Opportunities

 The economy of Singapore is vastly diverse, but leans most on heavily on the
following sectors: electronic components, aircraft and parts, electronics industry
production/testing equipment, laboratory and scientific instruments, pollution
control equipment, electric power systems, construction equipment and building
products.
 Businesses in Singapore will soon be able to optimize costs by moving
production of their goods to other ASEAN states where labor is cheaper.
 In addition, local businesses also have the opportunity to dramatically grow their
consumer base. With the elimination of tariffs and the free flow of goods that will
ensue under the AEC, businesses in Singapore can market and sell their goods
and services more easily to the 630 million people that make up the population of
all 10 ASEAN states. These prospects are extremely beneficial to helping small
and medium enterprises in Singapore grow.
 Another benefit of the AEC would be job creation. It is predicted that the
economic growth and the increased workforce mobility arising from the AEC can
generate around 14 million new jobs in the region by 2025. This means that
Singaporeans will find it easier to look for employment not only within Singapore,
but also in ASEAN nations beyond our shores.

Sources:
http://www.seattletradealliance.com/blog/blog/post/singapores-economy-and-its-
role-in-asean
http://www.nlb.gov.sg/sure/how-the-asean-economic-community-will-change-
southeast-asia/

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Present Status
 Singapore is one of the most developed economies globally, with a GDP per
capita of over US$ 50,000. Businesses are enticed to invest in Singapore given
the country’s strategic policies, regulations, processes, and administration. In
Singapore, investors can expect integrity and respect for intellectual property
rights, support for research and development, connectivity and infrastructure, and
quality of life.
 Singapore’s pro-intellectual property stance earned it the title of having the best
IP protection in Asia and the second best in the world based on World Economic
Forum’s Global Competitiveness Report. Singapore values having world class
R&D facilities and knowledge and is resolved to become a global knowledge
capital. It is one of the world’s busiest transportation hubs with container ports
linking 123 countries and an international airport that caters to over 5,000 weekly
flights. It trades with different markets globally through its extensive network of
free trade agreements with Asia and other major economies.

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