Asean economies roar
On many fronts, 2010 could be considered a watershed year for Asean.
Beyond the formal framework and structure of meetings and agreements leading to the full implementation of the Asean Economic Community by 2015, what brought a focus on Asean was the strength of its economies as compared to the lower growth rates of developed countries.
ASEAN ECONOMY SOARS
The currency appreciation triggered memories of the 1997 “bubble” economy crisis that triggered the memorable Asian financial meltdown and raised the fears of domestic manufacturers with in each Asean country that their products would not be competitive in price in western markets.
The Asean countries all took steps to slow capital inflows of hot money, short of the draconian measure of installing a fixed exchange rate. The Philippine central bank doubled the limit on over-the-counter foreign exchange purchases by residents, and Thailand starting taxing bond purchases by foreign investors. (See our Hot Money article, page 28)
At year’s end, the prevailing sentiment in the financial communities of the individual countries was that Asean currencies would continue to appreciate, although at a slower rate, in 2011.
U.S. GETS INVOLVED
On July 23 U.S. Secretary of State Hillary Rodham Clinton attended the Asean Regional Forum and also the Asean Summit in Hanoi on October 30, and President Barack Obama hosted a summit of Asean leaders in New York City on September 24.
The joint statement released after the September 24 summit between President Barack Obama and Asean leaders was rather comprehensive and a positive one, demonstrating both sides’ paramount goodwill without antagonizing their friends and alliance. It contains two clear messages:
First of all, from now on Asean and the U.S. are strategic partners in principles and policies. This represents a great-leapforward commitment, given the condescending view Washington used to have towards the grouping and its stands on global issues. The Asean-US strategic partnership was not aimed at China but for peace and stability in the region, the statement said, and it avoided mentioning the specific problem in the South China Sea.
Vietnam assumed the chairmanship of Asean at the start of 2010 and all went smoothly except for civil society groups that were forced to move their meetings to Bangkok because of alleged intimidation in Hanoi. The groups also noted that Vietnam in its chairmanship role kept the issue of Myanmar (Burma) off the Asean agenda.
On 1 January, Asean-China and Asean- Republic of Korea free trade agreements, and the Asean-Australia-New Zealand and the Asean-India Trade in Goods Agreements, went into effect.
While these are benchmark achievements for Asean, the will have implications for the work of customs administrations in Asean. Customs will be the frontier for the successful implementation of these agreements. In that regard, the difficult task of smoothing out the different customs regulations of the 10 countries began as Asean moved toward the Asean Single Window for Asean E-customs by 2015.
The “single window” would allow all of the customs declaration agencies to use the same software, so that Asean member countries could easily integrate with each other.
Asian Development Bank’s board approved the establishment of the Credit Guarantee and Investment Facility (CGIF) as a trust fund with a capital contribution of $130 million. The ASEAN+3 governments will provide a combined $570 million to create the $700 million facility.
Another important program is the Connectivity plan to bring Asean people in the 10 individual countries closer together through people to people contact, physical connectivity, institutional connectivity and resource mobilization.
With the growing importance of Asean’s economies, there was a consensus that Asean should play a more important and active role in the G20 process during the November 11-12 G20 Summit in South Korea. Asean’s concerns about the global financial crisis will be a key issue on the agenda at the upcoming G20 summit, with the regional bloc increasingly seen as a promising recovery vehicle for the global economy...........................
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