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ASEAN Needs to Get Out in front of Megatrends’

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When Australia became ASEAN’s first dialogue partner in 1974 and began the economic cooperation programmes, they couldn’t have predicted that ASEAN would dramatically outpace the rest of the world on GDP growth per capita from the late 1970s onwards.

Following this sustained period of economic growth and financial stability, ASEAN’s collective GDP now stands at a remarkable US$2.43 trillion, Australian Ambassador to ASEAN, Mr. Simon Merrifield said yesterday in Vientiane.

The next phase of the ASEAN economic integration story may be just as difficult to predict – but a number of trends are already taking shape and the AEC blueprint recognises that ASEAN will need to get out in front of these megatrends’ to capitalise on them, he remarked at the opening of the AEC Symposium 2016, ASEAN-BIS 2016.

Regional integration and sustainable economic development will be timely because we can see around the world that public opinion on globalisation and economic integration is shifting, he said.

We need to better communicate the benefits of trade and investment openness but it should also remind us of the importance of ensuring those benefits are actually felt by our people.

It’s therefore no longer sufficient to argue that globalisation and economic liberalisation have produced decades of growth at the national level.

Going forward, we as governments will need to put more focus on the supporting social and economic policies that will ensure such growth is broad based and sustainable. And we also need to bring our people along with us.

We strive to take advantage of global megatrends, we need to properly explain the transitions that will be necessary in our economies and what we will do to manage them. On this front, the world can learn from ASEAN’s economic integration journey.

ASEAN has delivered a durable form of integration because it’s been done at a pace comfortable to all. Brexit has demonstrated that if you don’t take the people with you, integration and openness can be unpicked even when it is enshrined in law, Mr. Merrifield said.

ASEAN’s gradual process of entrenching habits of cooperation, building norms and fostering integration over the long term is a lesson for the rest of the world and it will be a challenge to continue this trajectory in the current global context.

Regarding technology and the AEC, arguably no other region holds more promise for technology than Southeast Asia.

A huge middle class, increasing urbanisation and high levels of mobile penetration support predictions that disruptive technologies could produce up to US$625 billion a year in Southeast Asia.

Global technologies are not all good news – along with new customers and new products come increased competition, changes to labour markets and regulatory and security challenges.

But if well harnessed, technology could be part of the solution to the region’s productivity challenges, Mr. Merrifield said.

The technology revolution accompanies another megatrend- the rise of entrepreneurs. The two are related because the global marketplace is no longer the reserve of established corporations- anyone with a laptop and a great idea can build a global business.

He said Micro-SMEs (MSMEs) are the backbone of ASEAN economies, generating up to 53 percent of total ASEAN GDP and an average of 79.6 percent of jobs across member states. MSMEs are critical to the employment of young people and women and they foster a more inclusive economic growth.

ASEAN has done a lot of heavy lifting in this policy area. The promotion of entrepreneurship is one of the core strategic goals of ASEAN’s current MSME Action Plan and this is supported by a suite of capacity building and policy work.

Access to finance is the primary obstacle for entrepreneurs, so it is great to see that ASEAN is also undertaking research on crowd funding and alternative financing for MSMEs.

Australia is supporting entrepreneurs in ASEAN to bridge the financing and scaling gap by creating a network of angel investors from within and beyond ASEAN to provide finance and mentorship to budding ASEAN entrepreneurs.

Source: Vientiane Times