The document outlines a vision for ASEAN's economic integration by 2030, with the goal of realizing a "borderless economic community." It identifies key challenges such as reducing development gaps, boosting competitiveness, and managing natural resources. Specific policy options are proposed to strengthen macroeconomic coordination, promote equitable growth, foster innovation, and improve ASEAN's institutional framework. The overall message is that ASEAN needs bold reforms and cooperation initiatives to achieve its aspirations of a prosperous, resilient, inclusive, competitive and harmonious economic community by 2030.

1. 11
Masahiro Kawai
Dean and CEO
Asian Development Bank Institute
ERIA-Harvard-ASEAN Secretariat Symposium: Realizing a more
Integrated, Competitive, Equitable, and Resilient ASEAN Community
30 October 2012, Phnom Penh, Cambodia
ASEAN 2030
Toward a Borderless
Economic Community

2. Outline
 Key Messages
 SWOT Analysis
 Aspirations
 Challenges and Enabling Factors
 Policy Options
 Conclusions: Toward a Borderless
Economic Community

3. 3
 Economic issues have assumed central stage in ASEAN
since its creation 45 years ago => An ASEAN Economic
Community will be created in 2015
 Economic slowdown in the West and rising competition
from the PRC and India bring ASEAN at a crossroads =>
A RICH ASEAN by 2030: Tripling per capita incomes and
people’s increasing quality of life to OECD levels; or
Losing Centrality: Slowdown to 3% growth and a rise in
security and political tensions–depends on right policy mix
 Need for deep structural reforms and bold initiatives for
regional cooperation: ASEAN must evolve beyond the
AEC toward a truly borderless economic community
Key Messages

4. 4
Strong macroeconomic
fundamentals
Abundant natural resources
Young, growing population
and expanding middle class
Strong FDI record and
regional production networks
Ability to manage diversity
and solidify ASEAN
institutionalization
Huge development gaps within
and across countries
Low education attainments and
large unskilled workforce
Lack of regional strategy to
promote investment in R&D
Incomplete achievement of the
AEC by 2015 and lack of vision
for integration beyond 2015
Weak ASEAN Secretariat and
need for an efficiency update of
ASEAN’s governance principles
Main Strengths Main Weaknesses
ASEAN SWOT Analysis

5. 5
 Central, strategic location in
expanding Asia with huge
market potential
 Deep manufacturing and
technology links with Northeast
Asian economies
 Strong financial cooperation
initiatives to build on
 Potential to develop regional
hubs in various new areas
 Convener of Japan, PRC, Korea
& India, and regional groupings
 Loss of regional centrality due to
the rise of PRC and India
 Vulnerability to external shocks due
to high degree of economic
openness and trade dependence on
US and EU
 Loss of internal cohesion due to
competition with PRC and India
 Unresolved territorial disputes
 Inability to collectively manage
climate change, energy security,
disaster management
Main Opportunities Main Threats

6. 6
 Ambitious yet pragmatic 2030 targets
 Triple average per-capital GDP, with higher
growth in CLMV countries than elsewhere to
help close development gaps
 Increase average people’s quality of life to
reach today’s OECD levels
 Realize a Resilient, Inclusive, Competitive,
and Harmonious region – A RICH ASEAN
ASEAN 2030 Aspirations

7. 7
2030 GDP Projections & Aspirations

8. 8
Quality of Life: Dimensions & Indicators

9. 9
Reaching OECD Levels (2 examples)

10. 1010
A “RICH” ASEAN by 2030

11. Challenges and
Enabling Factors
11

12. 12
Singapore Brunei Dar. Malaysia Thailand Indonesia
Overcome Land
& Demographic
Constraints
Diversify the
Economy
Improve the
Business and
Investment
Climate
Foster Human
Capital
Strengthen
Macroeconomi
c Management
Increase Labor
Productivity
Improve the
Business and
Investment
Climate
Foster Human
Capital
Narrow
Inequalities
and Foster
Social
Cohesion
Develop
Economic
Infrastructure
Improve the
Business and
Investment
Climate
Foster Human
Capital
Cultivate
Technology
and Innovation
Capabilities
Diversify the
Economy
Improve the
Management
of Natural
Resources
Primary Challenges by Country - I

13. 13
Philippines Viet Nam Lao PDR Cambodia Myanmar
Improve the
Business and
Investment
Climate
Strengthen
Governance
and Institutions
Diversify the
Economy
Foster Human
Capital
Strengthen
Governance
and Institutions
Develop
Economic
Infrastructure
Develop
Economic
Infrastructure
Foster Human
Capital
Diversify the
Economy and
Develop the
Agricultural
Sector
Strengthen
Macroeconomic
Management
Strengthen
Governance
and Institutions
Foster Human
Capital
Improve the
Management
of Natural
Resources
Reduce
Poverty
Diversify the
Economy and
Develop the
Agricultural
Sector
Primary Challenges by Country - II

14. 14
2030 Challenges by Income Group

15. ASEAN-Wide Challenges and
Enabling Factors
Key 2030 Challenges
Enhancing macroeconomic and
financial stability
Promoting economic convergence and
equitable growth
Forging a competitive and innovative
region
Managing natural resources and
sustaining the environment
Enabling Factors
Broadening and deepening
financial markets
Harnessing human capital
Building seamless connectivity
Strengthening governance
Enhancing ASEAN's institutional
framework and empowering the
Secretariat
15
Beyond the realization of the AEC by 2015
Toward a borderless economic community by 2030

16. 16
Macroeconomic & financial stability
Maintain macroeconomic and financial stability
Avoid future crises and contagion
Economic convergence & equitable growth
Narrow development gaps within & across
countries
Smoothen intra-ASEAN labor movements and
reduce inequalities, social tensions, and
discrimination
Challenges - I:

17. 17
Competitiveness and innovation
Reduce cost of doing business across ASEAN countries
Accelerate technological diffusion & absorption
Capture synergies between science & industry
Exploit comparative advantage in tropical agriculture
Capitalize on the increasing inflow of tourists
Natural resources and the environment
Protect the environment and manage climate change
Ensure energy supply & security
Manage natural resources and avoid their depletion
Challenges - II

18. 18
Develop efficient markets in
support of the real sector
Increase effectiveness of
financial intermediation
Improve the recycling of
regional savings for regional
investment
Cope with the aging
population and slowing work
force growth
Invest in higher quality
education systems, including
tertiary education and science
& maths in basic education
Financial markets Human capital
Enabling Factors - I
Connectivity
Foster ability to trade, travel,
& transit
Update existing facilities in
transport & communication
Harmonize rules, standards,
& regulations
Governance
Promote use of transparent
rules & regulations
Manage national institutions
effectively
Strengthen national civil
services

19. 19
ASEAN’s institutional framework,
governance and the Secretariat
 Power of the ASEAN Secretariat
 ASEAN’s decision-making processes
 National sovereignty and ASEAN
ASEAN’s regional and global roles
Enabling Factors - II

20. 20
Enhancing macroeconomic & financial stability
Strengthen ASEAN mechanisms to participate in wider regional
initiatives and create an ASEAN Financial Stability Dialogue
Start a dialogue and establish regional guidelines on fiscal
sustainability
Introduce a flexible coordination mechanism to maintain intraregional
exchange rate stability in normal times while allowing for flexibility in
times of stress
Promoting economic convergence & equitable
growth
Improve coordination to channel external assistance to CLMV countries
through the Framework for Equitable Economic Development
Introduce an ASEAN-wide system for freer, managed movement of
unskilled labor
Establish an ASEAN Convergence Fund by enlarging the ADF,
entrusting professionals for its administration
Policy Options - I

21. 21
Forging a competitive & innovative region
Create an ASEAN Competitiveness Institute to promote region-wide
yet country-specific R&D strategy and innovation policy
Establish an ASEAN agency for the certification & standardization of
Made-in-ASEAN products
Form an ASEAN Tourism Council to promote multi-country tours and
adopt a single ASEAN Visa for qualified tourists
Managing natural resources and sustaining the
environment
Adopt long-term development strategies that mainstream green
growth, reflecting regional priorities to protect the environment
Harmonize countries’ environmental laws & standards and promote
green products’ development using common standards
Adopt national policies to tax environmental “public bads” and
eliminate harmful subsidies that encourage inefficient use of natural
resources, especially fissile-based
Policy Options - II

22. 22
Create an ASEAN College
of Financial Supervisors
Invest in scientific &
technical skills
Expand scholarships and
student exchanges and
credit transfer system
Financial markets Human capital
Policy Options - III
Connectivity
Strengthen private sector
links and operationalize
the ASEAN Infrastructure
Fund
Expedite the
implementation of the
ASEAN Connectivity
Master Plan
Governance
Adopt an ASEAN-wide
competition policy & legal
framework

23. 23
Empower the ASEAN Secretariat
Enhance its legal capability to attain trust & respect in enforcing
commitments by member countries
Increase its financial & human resources (to match the operational
costs expected to rise to $200M by 2030)
Revisit the equal budget contribution principle based on contributing
capacity & expected benefits
Improve decision-making processes & efficiency
Adopt a more flexible decision-making system to allow operational
issues to be decided through qualified majority, while maintaining
consensus for fundamental issues
Enhance ASEAN’s institutional framework
Shift more responsibilities from national to ASEAN
Create new functional institutions based on members’ interest to
serve as regional champions, with the Secretariat’s coordinating role
Raise ASEAN’s global role
Speak with a louder voice in international forums by entrusting the
ASEAN Chair and the Secretary General more
Policy Options - IV

24. 24
The path beyond AEC 2015—to realize the aspirations of a
RICH ASEAN by 2030—requires a solid vision of a truly
borderless economic community
ASEAN leaders need to make the best commitments
possible today for meeting the aspirations of a RICH
ASEAN tomorrow
A right mix of deep domestic structural reforms and bold
cooperation initiatives is needed
Different country-specific solutions reflect the diversity of
ASEAN economies as part of a region-wide strategy
ASEAN leaders, policymakers and businesses need to think
globally, coordinate regionally, and act nationally
Conclusions: Toward a Borderless
Economic Community by 2030

25. Thank you!
For more information:
Dr. Masahiro Kawai
Dean & CEO
Asian Development Bank Institute
mkawai@adbi.org
+81 3 3593 5527
www.adbi.org