Bridging the Development Gap among Members of ASEAN
As integration with the world economy increases, ASEAN finds itself facing important opportunities and challenges including the need to better integrate the new members into the regional and global economy. ASEAN leaders have agreed to develop a Roadmap for Integration of ASEAN (RIA) in order to put the objective of regional integration at the centre of ASEAN’s cooperation and provide a framework for more coherent implementation of the regional integration programme. A stable, prosperous and highly competitive ASEAN Economic Region is envisioned, in which there is a free flow of goods, services and investments, a freer flow of capital, equitable economic development and reduced poverty and socio-economic disparities.
Among ASEAN’s greatest challenges in the new millennium is the one it faces within: the integration of market diversity and the transitional economies of its new member countries - Cambodia, Laos, Myanmar and Vietnam (collectively known as CLMV countries). In November 2000, the ASEAN Leaders agreed to launch an ‘Initiative for ASEAN Integration’ (IAI) programme, which gives direction to and sharpens the focus of collective efforts in ASEAN to narrow the development gap between ASEAN’s older and newer members. To realise the objective, the ASEAN Leaders, at their Summit Meeting in Phnom Penh in November 2002 endorsed a Work Plan (with 48 projects) that will ensure dynamic and sustained growth of the sub region and prosperity of the peoples.
With the rapidly changing socio-economic global landscape, there is a greater sense of urgency and commitment among ASEAN countries to push ahead with fresh approaches to ensure that the newer members - Cambodia, Laos, Myanmar and Vietnam (CLMV countries) - are not left behind. Widening of the development gap between the older ASEAN-6 members and the CLMV countries could undermine regional solidarity.
Besides the CLMV countries, there are also pockets of underdevelopment in the ASEAN-6 countries. Due cognizance must be given to such sub regions which are in dire need for development assistance. The Initiative for ASEAN Integration (IAI) to bridge the development gaps in the VAP will be broadened to include development efforts not only for the CLMV but also the poorer sub regions in the ASEAN-6 countries. This will be reflected in the forthcoming ASEAN Action Progarmme (VAP) to be launched in November 2004 in Vientiane
The current six-year IAI Work Plan (July 2002 – June 2008) for the CLMV countries has been developed to assist these countries which are lagging behind catch up with the rest by ensuring that the economic wheels of their economies move at an accelerated pace. Furthermore, this Work Plan, if implemented successfully, will instil confidence in these countries to face the economic challenges ahead such as globalisation and liberalisation. The programmes, activities and projects under the Work Plan are directed at strengthening the CLMV countries’ capacity, capability and resolve in meeting the challenges ahead such as reducing poverty, preparing them to face global competition and also assisting them to gain some competitive edge in world markets. (A similar work plan is expected to be developed for the underdeveloped sub regions)
ASEAN’s experience in the last three decades has shown that measures to reduce inequality in income and wealth distribution can contribute to faster economic growth. The programmes, activities and projects in the Work Plan are intended not only to enhance the productive capacity of the peoples in the CLMV countries but also make their economies more competitive in facing the new realities in the global economy. In all of these efforts, cooperation from all quarters is needed.
ASEAN-6 assisting the CLMV countries
The launching of the IAI Work Plan is the response of ASEAN in assisting its less fortunate members bridge the development gap among members. Concerned on the well being of their fellow members, ASEAN-6 countries have committed to make significant contributions to uplift the standards of living of the CLMV countries in line with the concept of SELF HELP. ASEAN-6 will assist the new members by capitalising on their broad spectrum of strengths, resources and abilities. Contribution of member countries could take various forms including training, provision of technical experts and supply of equipment, just to name a few. ASEAN-6 has taken the lead to ensure that the new members join in the mainstream of development by implementing various types of training courses to beef up the capacity and capability of a core group who will lead the development efforts. These efforts will undoubtedly lead to a speedier integration of ASEAN.
Four Priority Areas
The current IAI Work Plan for CLMV focuses on four priority areas, namely infrastructure development, human resource development, information and communication technology and promoting regional economic integration in the CLMV countries.
The development objective in infrastructure development is to improve access, efficiency and quality of transport and energy infrastructure networks of CLMV in order to enhance their regional economic competitiveness and integration.
The current inherent weak human resource capabilities in the CLMV countries together with weak or absent policy, institutional and legal frameworks make it difficult for these countries to raise their productive capacities; it also constraints the effective absorptive capacity of making optimum use of foreign aid. The Work Plan will strengthen the productive capacities of the CLMV countries with an improved enabling environment and strengthened support capacities
Information and communications technology offers the CLMV countries a vital opportunity and means to leapfrog the historical stages of development. In line with the e-ASEAN initiative, the CLMV countries will have in place the policy, institutional, legal and regulatory frameworks and this IAI Work Plan will assist them in this process.
The information age poses the danger that those who are already well advanced will go faster and even further ahead. This means that ASEAN has to deliberately intensify efforts to assist the CLMV countries in ICT so that the ICT gap is not widened further.
The development objective in regional economic integration is to build institutional capacity and HRD in the CLMV countries to expedite their regional economic integration into ASEAN especially in the areas of the ASEAN Free Trade Area including customs and standards, the ASEAN Investment Area and liberalization of trade in services.
The regional economic integration projects collectively will reinforce the development of a single market and production base. The less developed members will be provided with support to:
When markets integrate, increased economies of scale and scope, competition and productivity at the company level all lead, at the regional level, to higher investment flows, increased intraregional trade and prosperity. The newer members will also share in the benefits of the larger cake and experience larger foreign direct investments (FDI). Closer and deeper economic integration will play a critical role in rebuilding ASEAN’s competitiveness and pave the way for higher rates of growth and wealth creation.
It is clear that ASEAN economic integration includes not only removing of trade barriers but also binding economies closer through infrastructure linkages such as highway networks, rail networks, power grids and gas pipelines just to name a few.
Focus on ‘Soft’ Infrastructure
A well developed and efficient physical infrastructure will lead to increased economic activities and welfare of the nation. The CLMV countries not only lack hard physical infrastructure also the ‘soft’ infrastructure that would serve as prerequisites for next stage of the actual construction of the physical infrastructure projects (roads, rail, etc) and installing hardware for the ICT systems. In short, the first stage will focus on addressing the ‘soft’ issues such as conducting training to build up to capacity, assisting in developing policy, institutional, legal and regulatory frameworks, conducting feasibility studies etc before the hard physical infrastructure can be constructed/installed in the next phase.
Soft projects do not mean that they are less important than hard projects. If successfully implemented, they will facilitate the development of legal, institutional and regulatory frameworks and will increase the technical capabilities and capacities of CLMV countries. It will also lay the groundwork or foundation for deeper ASEAN integration.
Conclusion
All of the above efforts and realisation of the benefits of the projects will take time. Hence ASEAN has given the CLMV countries a six- year timeframe to nurture, evolve and develop clean and efficient administrative systems managed by experienced, competent and proactive officials who are quick to respond to changes. The IAI process will continue to reflect ASEAN’s commitment, priority and responses to changing circumstances such as addressing the development needs of all underdeveloped sub regions.
‘Initiatives for ASEAN Integration” Unit
ASEAN Secretariat