ASEAN Community Building:

The Countdown to 2015

ASEAN-ADB Engagement

Peter BrimbleDeputy Country Director/Senior Country EconomistADB Cambodia Resident Mission

The 8th Asia Economic Forum

17 March 2012

Presentation Outline

• Context and content of existing ASEAN-ADB engagement, and recent developments

• Building a more focused ADB approach to assist ASEAN realize AEC by 2015:

• Subregional programs of GMS, BIMP-EAGA, IMT-GT as building blocs and test beds

• Master Plan on ASEAN Connectivity• ASEAN Infrastructure Fund• Planned Regional technical assistance on

Trade Facilitation Support for AEC Blueprint

Context of ADB-ASEAN

Engagement • ADB’s own charter 1996• ADB RCI Strategy (2006):

• Pillar 1: Regional and subregional cooperation on cross-border infrastructure and related software; RDs)

• Pillar 2: Trade and investment (RDs and OREI)• Pillar 3: Monetary and financial integration (RDs and OREI)• Pillar 4: Regional public goods (RSDD)

• ASEAN Charter and “New” SERD (2007), including all ASEAN member countries

• ADB Strategy 2020 (2008):• RCI is one of the three complementary strategic agendas,

and one of the five core areas of specialization• Institutional and operational goal of RCI activities

accounting for at least 30% of all activities by 2020

• ADB-ASEAN Secretariat MoU, 2006-2010; 2011-2015 MoU to be signed this April 4

Content ADB-ASEAN

Engagement since

1997-1998ASEAN & ASEAN+3 has been requesting ADB to support their initiatives on regional monetary and financial cooperation

OREI&

SEFM

2006-2010ADB-ASEAN Secretariat MOU (policy dialogue, research, capacity building & institutional strengthening; support for subregional programs; narrowing development gap; support for regional public goods; knowledge sharing & dissemination)

OREI&

SERD

since late2000 TAs on health and food security RSDD

2011-2015

Proposed New ADB-ASEAN Secretariat MOU for 2011-2015: Focal areas – connectivity (physical & soft), environmental sustainability, financial & capital market integration; EAS process; macroeconomic surveillance; trade & investment; agricultural development through trade facilitation; Crosscutting Theme – narrowing the development gap

SERDOREIRSDD

TAs on ASEAN Community; Subregions as building blocks

started 2010

OREI&

SERD

New Strategic Focus for ASEAN-ADB

• ASEAN: Against backdrop of the global economic crisis and member country vulnerabilities, need for macro rebalancing externally and narrowing development gaps internally

• New strategic focus on:• Prioritizing connectivity infrastructure projects and related

software• Extending financial & capital market integration; • Environmental sustainability through climate change mitigation

and adaptation/disaster risk management issues; and• Results-based approach

• Continuing Cooperation on: Economic ASEAN Secretariat process, macroeconomic surveillance, trade and investment, and planned Trade Facilitation Support to AEC Blueprint Implementation

• Recent ADB assistance to ASEAN-led Initiatives: Master Plan on ASEAN Connectivity, and ASEAN Infrastructure Fund (AIF);

Speeding-Up AEC Opportunities Establishing new strategic compact between

national, sub-regional and regional connectivity Extending and enhancing physical connectivity to

transform transport corridors into economic corridors, and linking to rural areas

Complementing with targeted software from sub-region groupings (e.g. transport and trade facilitation, SPS, and logistics; power purchase agreements), consistent with ASEAN agreements and protocols

Improving sub-national, national and cross-country policy coordination, and strengthening institutions

Engaging all key stakeholders; especially private sector

Borders divide, sub-regions connect, and regions bridge sub-regional and global agendas

6

Subregional Programs and

ASEAN

ASEANGMS

IMT-GT

BIMP-EAGA

Building blocks to ASEAN

Test beds for ASEAN

Linkage withInitiative for

ASEAN integration(IAI) - CLMV

TA: Promoting Links and Improving Coordination Among GMS, BIMP-EAGA, IMT and ASEAN

Improving the strategic and institutional linkages between the subregional groupings and ASEAN

ADB’s Multi-faceted Role in the GMS

• ADB worked with the 6 countries of the GMS in launching a program of subregional economic cooperation (GMS Program) in 1992 to enhance their economic relations

• Since then, ADB has been the program secretariat and coordinator

• Serves as a financial (loans and technical assistance), technical (capacity development), and increasingly a knowledge supporter

• An honest broker of subregional dialogue at both political and operational levels, and among stakeholders

• As a catalyst by bringing together different participants in the program and helping them reach a consensus

• New GMS Strategic Framework, 2012-2022 focused on so-called second-generation projects and software

9

Thailand

Land area: 51,312,000 ha

Population: 65.5 m.

GDP per capita: US$3,893

Cambodia

Land area: 18,104,000 ha

Population: 15.5 m.

GDP per capita: US$667

Myanmar

Land area: 67,658,000 ha

Population: 50.5 m.

GDP per capita: est. at US$340

People’s Republic of China

Land area: 63,100,000 ha

Population: 93.6 m.

GDP per capita: US$1,988

(figures for Yunnan and Guangxi only)

Viet Nam

Land area: 32,931,000 ha

Population: 92.0 m.

GDP per capita: US$1,032

Lao PDR

Land area: 23,680,000 ha

Population: 6.3 m.

GDP per capita: US$940The GMS in 2011

Land area: 256,758,000 ha

Population: 323.4 M

GDP per capita: US$1,477*

• With estimates for Myanmar

• Data for 2009 from World Bank

The Greater Mekong Subregion (GMS)

in 2011

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Enhancing Connectivity, Competitiveness And Community

GMS Strategic Framework: 2002-2012

Strategic Thrusts

Goals Vision

Strengthen infrastructure

linkages

Facilitate cross-border trade, investment &

tourism

Enhance private sector participation & competitiveness

Develop human resources & skills

competencies

Protect environment & promote

sustainable use of shared natural

resources

More Integrated

Prosperous

Harmonious

Subregion

Action Plan

• Accelerated and sustained economic growth

• Reduced poverty & income disparities

• Improved quality of life

• Sustainable management of environment & natural resources

• Transport

• Telecommunication

s

• Energy

• Environment

• Tourism

• Trade

• Investment

• Human Resource

Development

• Agriculture

11

1992

GMS Results

Connectivity

Roads

Telecommunications

Power Transmission Line

12

2008

GMS Results

Connectivity

Roads

Telecommunications

Power Transmission Line

13

2015

GMS Results

Connectivity

Roads

Telecommunications

Power Transmission Line

14

The GMS Southern Economic Corridor

Inter-Corridor Link

Central Sub-

Corridor

Southern Coastal

Sub- Corridor

Northern Sub-

Corridor

• Economically diversified

• Endowed with abundant natural and human resources

• Has the necessary drivers of economic growth

• Linking three key nodes – Bangkok, Phnom Penh, and Ho Chi Minh City

Much progress in infrastructure; less on software!

Master Plan on ASEAN Connectivity

• ADB participated in the High-Level Task Force meetings and helped in the review process

• ADB drafted a chapter on mobilizing resources for enhancing connectivity in ASEAN

• ADB is featured in MPAC in two specific areas: (i) support to subregional cooperation in Southeast Asia; and (ii) as a key partner in mobilizing resources

• MPAC includes proposed flagship projects, two of which are ADB energy projects in Indonesia/Malaysia

ASEAN Infrastructure Fund (AIF)

• New instrument to help resolve paradox of ASEAN; namely massive infrastructure deficits, yet very large amounts of private savings and foreign exchange reserves

• Preparation of AIF coordinated by an ASEAN-led High-Level Task Force (Chaired by Malaysia), with assistance on technical financial design, operational structure, and governance framework from ADB

• ADB requested to manage the fund

[http://www.aseansec.org/26643.htm]

Planned Regional TA on Trade Facilitation Support for AEC Blueprint

• Preparation in 2012 of the above technical assistance project

• Meet the AEC vision through enhancing transport and trade facilitation, through leveraging activities in the three sub-groupings

• Key proposed activities:• Generating baseline data and analytical

reports• Capacity development for national single

window systems, coordinated border management, strengthening risk management

• Assessing hardware and software systems

Concluding Thoughts

• Perceptions of ASEAN:• Check out the website of the ASEAN

Mekong Basin Development Cooperation (AMBDC)

• Need for ASEAN to:• Support CLMV countries to leapfrog the

development gap (in fact perhaps CLM – as V is rumored to be planning to join VIP)

• Support members that are lagging in implementing AEC

• Ongoing balancing of national interests and regional interests, and also subregional interests

Thank You!