Preface

Summary

The Association of Southeast Asian Nations (ASEAN) Vision 2020, adopted in December 1997, envisaged “a stable, prosperous and highly competitive ASEAN economic region in which there is a free flow of goods, services, investment and freer flow of capital, equitable economic development and reduced poverty and socioeconomic disparities” by the year 2020. To realize this, at the Ninth ASEAN Summit in October 2003, the ASEAN leaders signed the Declaration of ASEAN Concord II (Bali Concord II) aiming at an ASEAN Economic Community (AEC) as an end goal of its economic integration. Later, that deadline was brought forward to 2015.

ASEAN achieved a major milestone at the November 2007 ASEAN Summit in Singapore when its leaders adopted the AEC Blueprint, which laid out a road map to accelerate economic integration, and included action plans, targets, and timelines to facilitate the process. It became a binding declaration of commitments by all Member Countries. The blueprint is organized along the AEC's four main characteristics, namely:

1. a single market and production base

2. a highly competitive economic region

3. a region of equitable economic development

4. a region that is fully integrated into the global economy.

The highlights of the blueprint are shown in Box 1. The blueprint envisions ASEAN as internationally competitive and integrated in the global economy, with benefits for all ten ASEAN member countriesIn view of the advanced target date, the AEC and its blueprint look ambitious and there is much to be done to achieve this goal. First, a single market and production base means a larger production and market place. This entails the removal of all kinds of trade barriers. While tariffs on intra-ASEAN trade have been lowered on paper, there still exist many non-tariff barriers to that trade. Secondly, to achieve a competitive economic region, the member countries have to develop their infrastructure. Thirdly, ASEAN is still grappling with the issue of the development divide, especially since the admission of Cambodia, Lao PDR, Myanmar, and Vietnam (CLMV). The CLMV countries need to narrow the gap dividing them from the ASEAN-6, that is, the earlier members, Brunei Darussalam, Indonesia, Malaysia, the Philippines, Singapore, and Thailand, so that they can participate more effectively in the AEC.