Narrow Results

The stages and economic effects of economic integration in the theoretical literature draws from the empirical integration experiences in Europe and may not be entirely suited to developing country groupings. Economically, ASEAN comprises largely middle and low income countries with priority on national and economic development, emphasizing attracting investment and technological resources and globally competitiveness. ASEAN and the ASEAN Economic Community (AEC) is characterized as a region with wide geographic expanse, diverse economic development levels and pursuing economic integration led by its leadership rather than the private sector. Economic integration has proceeded on two simultaneous fronts — the market-driven proliferation of regional production networks and value chains and the FTA-driven trade and investment facilitation and liberalization. Economic cooperation and integration has been pursued with increasing intensity since the late 1970s. Much has been achieved as seen in the growing density of movements of goods, services, capital and investments and movements of labor and people well as schemes for closer and deeper cooperation. The still-incomplete AEC will be declared on 31 December 2015. But there is still much “work in progress”. The AEC Blueprint 2025 highlights the priorities for the AEC for the next decade, eschewing deeper integration through customs union (CU) or common market but taking due consideration of the challenges from globalization and digitization and the clarion call for inclusive and sustainable development.

This paper explores the long-term challenges for economic integration of the Association of Southeast Asian Nations (ASEAN) through trade and foreign direct investment (FDI). The region has emerged as an important production base for global multinational corporations by joining East Asia’s supply chains. While proceeding to establish the ASEAN Economic Community (AEC) by the end of 2015, ASEAN has also forged five major free trade agreements (FTAs) with its dialogue partners (China, India, Japan, Republic of Korea, and Australia–New Zealand) and is currently negotiating the Regional Comprehensive Economic Partnership. In addition, four ASEAN member states have completed Trans-Pacific Partnership negotiations. Econometric evidence suggests that (i) trade flows and inward FDI mutually reinforce each other, i.e., an increase in trade flows stimulates inward FDI and vice versa; (ii) a larger market tends to attract more inward FDI; (iii) FTAs tend to help stimulate inward FDI; and (iv) strong institutions, good physical infrastructure, and low costs of doing business are critical in boosting inward FDI. The paper suggests that in the long run it is ASEAN’s interest to further integrate itself with the rest of Asia and the world (through a Free Trade Area of the Asia-Pacific and an Asia–Europe FTA), while substantially deepening its internal integration (by moving from the AEC to a customs and economic union) and thereby maintaining ASEAN centrality.

Launched as a political bloc and security pact in the aftermath of the Viet Nam War, the Association of Southeast Asian Nations (ASEAN) has evolved to embrace an ambitious economic agenda. Its latest project was the establishment of the ASEAN Economic Community (AEC) on 31 December 2015. Fulfilling these commitments would promote predictability in ASEAN, as well as strengthen its credibility. But to what extent has ASEAN met this deadline? The blueprint for achieving the goal envisages the AEC standing on four pillars and meeting the deadline depends on progress on each of them. Each pillar presents a demanding set of challenges to be met before the AEC can be fully realized. We find that although ASEAN has come a long way toward realizing its goal, considerable challenges remain. Accommodating AEC accords will not be easy when they require changes to domestic laws or even the national constitution. The flexibility that characterizes ASEAN cooperation, the celebrated “ASEAN way”, may hand member states a convenient pretext for non-compliance. How to enforce the accords remains an issue. If the AEC is to be more than a display of political solidarity, ASEAN must find a way to give the commitments more teeth. The real test for the community, therefore, will lie in the years ahead.

This article investigates interactions between institutional designs and values upheld by states on institutional effectiveness, for the purpose of understanding why particular institutions perform better than the others in extracting compliance and cooperation from countries. I contend that institutional effectiveness — defined as the ability to extract states’ compliance and foster cooperation — is explained by dynamics between institutional functions and actors’ governing principles. The higher the compatibility between these two factors, the higher the degree of institutions’ effectiveness, and vice versa. This argument was validated through cases of non-tariff barrier (NTB) elimination and trade facilitation under the ASEAN Economic Community framework.

Tapping on ASEAN'S Healthcare Opportunities through Singapore by Dr Derrick Tan

ASEAN – The New Playing Field for Global Medical Device Companies by Ms Cecelia Zhou

The Burden of Great Potential: the ASEAN Economic Community & Biopharmaceuticals by Dr Ross Horsburgh

Impact of the ASEAN Economic Community on the Region's Healthcare Market by Dr. Umapathy Panyala

This paper identifies key features of the Thai mutual fund industry and analyzes determinants of those characteristics using unique survey data from 45% of fund managers registered in Thailand in 2012. The Thai mutual fund industry has some unique characteristics. It has experienced rapid growth and is dominated by bank-related funds that are mostly fixed income funds. Equity allocation of the fund industry and our sample funds are below optimal allocation benchmarks. However, country-level allocation is close to optimal, suggesting that Thai investors who invest in equity prefer to do so directly rather than through equity mutual funds. Fund managers perceive that too much regulation, investors’ preference for deposits and insufficient liquidity limit growth in their equity investments. Managers in our survey indicate that investors do not consider expense ratio and management fee important in determining mutual fund investments. This is contrary to general investment recommendations. Thai bank-related fund managers believe that investors place more importance to brand reputation than performance, whereas foreign fund managers view performance as more important. Thai bank fund managers are more concerned about local interest rates than Thai non-bank and foreign fund managers.

In 2015 ASEAN has become a community which rests on three pillars: political-security, economic and social-cultural (Jetin and Mikic, 2016). The underlying assumption is that economic development will be fostered by a regional integration deepening, namely a “single market and single production base” which should lead to a convergence of social-cultural development thanks to a catching up process of the late-comers and poorest member states vis-à-vis the more advanced ASEAN Member States (AMS) (Jetin, B. 2016a). This implies a convergence of living standards and a strong decline of poverty. The purpose of this paper is precisely to verify the existence of such a process of convergence among AMS and the nature of this convergence. Which countries are converging? How did poverty evolve and what is the social dynamics implied? Section 1 checks if the existence of ASEAN has favoured a process of convergence of living standards or in other terms a reduction of inequality between countries. In section 2, we show that in several ASEAN countries, absolute poverty has receded but has been replaced by relative, poverty which creates its own set of expectations and potential frustrations. Finally, in section 3, we focus on the emergence of the middle classes and their potential effect on the socio-economic dynamic of ASEAN countries.