Asean Rising: 'The sky’s the limit'

The forum was held as geopolitical and trade tensions between China and more economically developed democratic nations – including the United States, Japan, Australia, Canada and some member countries of the European Union – continue to rise.

This is a great opportunity for Asean to deepen its engagement with global supply chains, speakers told the C Asean Forum 2023. It is time to think of Asean as one, they agreed.

"It is time to think differently and innovatively about what works, and what requires changes in delivering [greater] connectivity," said Lim Chze Cheen, director of the Asean Connectivity Division.

“The path forward is our path together. Achieving a connected region requires connecting with our peoples and our partners,” he added, referring to Asean’s dialogue partners, which include every economically advanced nation, as well as the world’s largest markets.

Pham Quang Vinh, president of the Vietnam-USA Society, noted that Asean is a uniquely strategic region. It is the epicentre of growth and vitality in the world and, as a result, Asean must enhance its connectivity in order to thrive, he added.

"In terms of Asean connectivity, we need to do more together in order to strengthen and enhance Asean's power in the region, as well as Asean's power to connect itself with the world," he said.

Executives from global corporations say Asean has a demographic advantage. Its 10 nations have a combined population of more than 620 million people and their median age is 28.9 years, compared to Japan’s 46.5 years. By 2030, 65% of Asean’s population will be in the middle class, according to projections by regional and global banks.

The forum had five panelists from Asean nations. The audience included large contingents of Chinese and Indian business people.

It’s theme – “Strategy for Change” – was based on Asean’s “Masterplan on Asean Connectivity 2025”. The masterplan focuses on five key themes: developing sustainable infrastructure, increasing digital innovation, creating seamless logistics, ensuring regulatory excellence, and increasing labour mobility.

Many practical steps already taken demonstrate progress is being made in connectivity, but more are required to to achieve a robust Asean community, the panelists agreed.

 

The shift to cities

Lim noted that 19 sustainable infrastructure projects in the transportation, energy, and digital sectors have already received about US$15 billion in investment, but said the focus is now shifting from basic infrastructure to sustainable urbanisation.

Asean is assisting cities of various sizes in the region to develop tools for sustainable urbanisation, he said.

An Asean-wide study on micro, small, and medium-sized enterprises focused on digital innovation has been completed, Lim said. The Asean working group on digital innovation is creating a diagnostic instrument to assess their digital readiness, he added.

A framework on Asean supply-chain efficiency and resilience, and an analysis of the supply chains for 10 product categories was approved in March to create seamless logistics, Lim said.

A plan is also being implemented to accelerate the post-pandemic economic recovery and increase Asean's competitiveness in global value chains. Building and construction, as well as digital trade, have been designated as key industries for regulatory excellence. Digital trade standards are being implemented regionwide, Lim said.

Greater efforts are underway to facilitate travel and learning.

Asean is developing a website for the Chinese market that presents Asean as a single destination. The website is expected to be completed this year.

Asean is also working with South Korea to expand standardised vocational education and training that will allow Asean citizens greater mobility for work.

Lim said more investment in people will be leveraged for a more sustainable and resilient Asean community. More scholarships will be granted within Asean to ensure greater access to higher education, he added.

 

Cambodia’s transformation

Cambodia's ambassador to the Kingdom of Thailand, Hun Saroeun, spoke about his country’s massive investment in transport infrastructure. This includes two new deep-sea ports and three new international airports, most of which are under construction.

These megaprojects will meet both rising domestic and international demand, as well as help elevate Asean to the status of a global hub for tourism, trade, and investment, the ambassador said.

Cambodia is also upgrading highways to enhance connections between Thailand and Vietnam, and is studying the feasibility of an express railway from Phnom Penh to Laos and China.

Hun said he was confident these investments will ensure that Cambodia – which was classified as one of the world’s least developed countries a decade ago – will become an upper-middle income country by 2030, and a high-income country by 2050.

The ambassador also called on other Asean nations to help Cambodia's continue its transformation.

 

More than money

Pham, president of the Vietnam-USA Society, outlined a number of essential components to encourage greater Asean connectivity.

First, policy frameworks need to be linked and coordinated under the canopy of Asean’s masterplan for connectivity, he said.

Second, because the Asean Community was formed from sub-regional building blocks, like the Mekong region, strengthening subregions benefits all of Asean.

Third, Asean should ask for more than financing from its dialogue partners. Asean member states should seek technology transfers, administration guidance, and assistance in building the strengths its dialogue partners have.

"In order to do so, we need to work collectively as a region, as Asean, which we have been doing so far, but we need to do more and do it better … with our dialogue partners," Pham said. Asean should capitalise on its engagement with its dialogue partners and diversify its relationships, he added.

Fourth, Asean should enhance institutional connections, which he defined as coordination among Asean countries. This also includes developing the institutional structure of Asean and the Asean Secretariat.

“Institutional collaboration within each country will be critical, but we will need a focal point to connect the national focal point [in one country] with other national focal points of Asean member states at the regional level, so that we can better coordinate Asean connectivity as a region,” he said.

"Vietnam views Asean connectivity as part of community building, but also as part of empowering the region to prosper together and play an important role in this dynamic region ... We always believe that we are stronger together, but we are also stronger when we are more connected," Pham said.

 

 

Focus on logistics

Enhancing logistics and technology are the two essential components to strengthen Asean connectivity rapidly, Siam Cement Group president and CEO Roongrote Rangsiyopash told the forum.

Enhancing logistics will increase Asean’s competitiveness, he said.

Four elements must be considered to enhance regional logistics, Roongrote said.

These are: seamlessness, synchronisation, digital technology, and sustainability.

He provided examples based on his company’s experience.

Siam Cement Group synchronising the flow of products from manufacturing through distribution to the consumers. At the same time, logistics need to be seamless for customers, from procurement to payment for services. Smoothing connections from customers to suppliers is becoming a necessity, he said.

To ensure these processes function well, the company is using new technologies, not just for transportation and supply-chain management, but also for customs, real-time payment, and taxation, Roongrote said.

As sustainability becomes more critical, Roongrote proposed that technology be carefully used to make logistics and supply chains resilient enough to withstand external pressures while also ensuring logistics systems are friendly and effective for communities and the environment.

 

The sky’s the limit

Although Asean has made significant progress, there is still a significant gap in delivering connectivity in the aviation industry, Tony Fernandes, co-founder and managing director of Air Asia Airlines, told the forum.

Several governments are attempting to make their biggest cities aviation centres, and prevent foreign carriers from using second-tier airports.

This can reduce flights to second-tier cities, which can have negative impacts regionwide on tourism, SMEs, and logistics. All airports should be opened to international flights for greater connectivity, and an Asean aviation authority should be established to reduce costs, he said.

To increase Asean connectivity, the number of aircraft in the region should expand, he said.

All airports should be opened to international flights for greater connectivity, and an Asean aviation authority should be established to reduce costs, Fernandes said, adding that airport investment should flow to low-cost terminals. Ownership laws for airlines need a revamp, so that Asean nationals can hold 100% stakes in any Asean airline, he said.

Fernandes also called for what he described as an “Asean Sky”, explaining that aviation standards should be integrated. Specifically, he mentioned air traffic control systems, saying airlines it would benefit carriers if they only had to deal with one air-traffic control system instead of 10. Aviation will be faster, far more efficient, and require less fuel under an Asean Sky, he said.

Fernandes told the forum that Asean’s diversity is its strength, in terms of tourism:

“The amazing diversity [stretches from Thailand] to Indonesia to Singapore to Malaysia to Cambodia and the Philippines. There is so much to see in Asean. So, allow greater connectivity, allow greater investment, allow standardisation to reduce costs and Asean [will become] the world’s oyster."