1 - Understanding the MPAC

Summary

ASEAN leaders proclaimed to create an ASEAN Economic Community (AEC) by 2015. While the fundamentals for creating a single market and production base are a work in progress, it is also crucial for ASEAN to facilitate the realization of the ASEAN community through ‘connectivity’ (see Figure 1.1). This is because community building through physical, institutional and personal connectivity is not only expected to reduce business transaction cost, time and travel cost, but also to connect the “core” and the “periphery” in ASEAN, thus distributing the benefits of multifaceted growth wider in the region and reducing the development divide in ASEAN. Moreover, better connectivity within ASEAN is essential for further connectivity with other regions, such as East and South Asia, which will help ASEAN to maintain its centrality in the evolving regional architecture.

In 2010, during the 17th ASEAN Summit in Vietnam, the Leaders adopted the Master Plan on ASEAN Connectivity (MPAC). The plan strives to integrate a region of over 600 million people with a combined GDP of about US$1.5 trillion. The Master Plan identified several priority projects, including the ASEAN Highway Network, a roll-on roll-off network and the ASEAN Broadband Corridor. It reviewed the achievements made and the challenges encountered to build up the linkages in ASEAN. It also provided key strategies and essential actions with clear targets and timelines to address the challenges.

Three linkages and strategies

The MPAC has three components:

1. • physical connectivity;

2. • institutional connectivity and;

3. • people-to-people connectivity

(a) Physical Connectivity

Currently, in ASEAN, the physical infrastructure, particularly in the less developed members, is characterized by structural weaknesses — low responsiveness to users, organizational inefficiencies, insufficient funding, heavy dependence on official development assistance, low foreign direct investments, and lack of environmental awareness. Most ASEAN countries are also short of the “soft” infrastructure (ICT), which are important prerequisites for the next stage of development.