1. ASEAN ROADMAP
FOR INTEGRATION

2.  Focus is on the creation of an ASEAN
Economic Community where there is
a free flow of goods, services,
investment, and free flow of capital,
equitable economic development,
and reduced poverty and socio-
economic disparities in year 2020.

3. Economic
Implications

4. Favorable Implications
 the benefit of expanding markets
and promoting competition by
eliminating barriers to trade
among member-countries
 “trade creation effect”

5. Risks
 may give rise to welfare losses (“trade
diversion effect”)
 limited investment resources are diverted
to the larger-scale integrated market
(“investment diversion effect”)
 concerns on the “noodle bowl effect”, the
potential problems that may arise as a
result of lack of coherence among
different overlapping agreements

6. Evolution of
ASEAN
Economic
Integration

7. ASEAN Free Trade Agreement
(AFTA)
 Put in place in 1992
 aims to promote the region’s competitive
advantage as a single production unit
 commits members to free trade within a 15-year
timeframe through the elimination of tariff and
non-tariff barriers with the end in view of
promoting greater economic efficiency,
productivity and competitiveness

8. ASEAN economic community:
the ultimate goal in 2020
 Was recommended by the ASEAN
Heads of Government last November
2002
 In 2003, ASEAN founded on the three
pillars of political and security
community, economic integration
and socio-cultural cooperation

9. ASEAN economic community:
the ultimate goal in 2020
 ASEAN Security Community (ASC),
the ASEAN Economic Community
(AEC) and the ASEAN Socio-Cultural
Community (ASCC) was formed
based on the three pillars

10. Monetary and Financial
Integration
 sought to promote closer monetary and
financial cooperation by way of the conduct
of an economic review and policy dialogue as
well as the establishment of regional
financing arrangements
 The ASEAN Surveillance Process was
established on October 1998

11. Monetary and Financial
Integration
 May 2000- the ASEAN+3 Finance Ministers agreed
on the Chiang Mai Initiative (CMI) and to expand the
ASEAN Swap Agreement (ASA) to all ASEAN
members
 “all swap providing countries can simultaneously
and promptly provide liquidity support to any
parties involved in bilateral swap arrangements at
times of emergency”