STREAMS

CORPORATE DEVELOPMENT

This workstream aims to strengthen ASEC organisational capacity

The ASEAN Secretariat (ASEC) was established in February 1976 by the Foreign Ministers of ASEAN, and its basic function is to increase efficiency in the coordination of ASEAN and to facilitate more effective implementation of ASEAN projects and activities. With the ASEAN Community set for 2015, ASEC was given the additional task of coordinating the regional effort. In order to deliver these services to its stakeholders, ASEC needs to be highly-effective. AADCP II partners with ASEC to identify and implement strategic efforts to strengthen ASEC’s organisational capacity.

List of Projects

MONITORING & EVALUATION

To strengthen ASEC’s overall M&E capacity and specifically capacity in monitoring progress towards the AEC establishment

One of the ASEAN Secretariat’s basic functions is to provide for greater efficiency in the coordination of ASEAN bodies and for more effective implementation of ASEAN projects and activities. With the ASEAN Community establishment set for 2015, the ASEAN Secretariat had been elevated from its basic function to carry an even broader mandate of initiating, coordinating and facilitating the community building agenda of ASEAN. It is therefore imperative that the ASEAN Secretariat has a strong M&E capacity to be able to accurately assess ASEAN’s progress in establishing the Community, and to utilise M&E results to inform future actions at the regional and national level.

AADCP II supports efforts to strengthen ASEC’s capacity to monitor and evaluate its overall performance in implementing projects and activities towards the Community establishment. This includes improvement to the current M&E practices within the Secretariat, as well as data generation and analysis for measuring progress specifically towards the establishment of the AEC.

List of Projects

SERVICES

This workstream will support ASEAN in implementing the ASEAN Framework Agreement on Services by enhancing the capacity to assess, measure and better understand the economic importance of services. It will support the implementation of Mutual Recognition Arrangements and the mobility of skilled labour, especially within the tourism sector

Services are important industries for building growth and competitiveness in today’s open global economy. In most industrialised economies, services contribute to around 80 percent of GDP. In open economies, imports deliver low cost products and competitive exports generate income. As well as becoming important traded industries, services are also important inputs to other services and goods. For example, lower cost transport and telecommunications services reduce the costs of other products and increase competitiveness. For developing countries to continue to generate the growth necessary to reduce poverty and lift living standards, the services sector needs to grow and be globally competitive. Growth of services also helps increase employment opportunities for women, who are the majority in the tourism, retail, health and education services workforce. Small and Medium Enterprises (SMEs) also benefit from growth of services particularly in CLMV countries, as some services sectors (e.g. tourism, transport, distribution) create demand for goods and services produced by SMEs.

Services have been growing as a major contributor of GDP in the ASEAN region. It is estimated that approximately 50 percent of foreign direct investment in ASEAN Member States is in the services sector1 and it contributes 40 to 50 percent of GDP in ASEAN Member States2. ASEAN trade in services (both export and import) has been consistently strong. Between 1990 and 2007, services export grew at around 350%, import grew 450%. This caused a US$24 billion trade deficit in 20063. Improving the share of services in total balance of trade is important for boosting CLMV economies; it is currently accounting for close to 45% percent of Vietnam’s GDP4 and nearly 5.5 percent of Cambodia’s GDP5. The free flow of services is a key step in the ASEAN Economic Community Blueprint’s goal to create an ASEAN single market and production base. ASEAN Member States signed the ASEAN Framework Agreement on Services (AFAS) in 1995. Under the AFAS, seven packages of commitments have been negotiated and agreed upon to liberalise business services, environmental services, professional services, healthcare, construction, maritime transport, distribution, telecommunication, education and tourism.

AADCP II works together with the ASEAN Secretariat to further expand on these commitments, and provide capacity building and technical assistance to create an enabling environment for the implementation of commitments in the ASEAN Member States.

Citation and References

  1. “Sustained FDI Flows Dependent on Global Economic Recovery”, ASEAN Investment Report 2009, p.12.
  2. ASEAN Secretariat. Services. [online] Available at <http://www.asean.org/6626.htm> [Accessed 26 January 2012]
  3. Plummer, Michael G., and Siow, Yue Chia. eds., “Realizing the ASEAN Economic Community: a Comprehensive Assessment”. Institute of Southeast Asian Studiesas, East-West Center, 2009, p.11.
  4. World Bank. “Taking Stock: an Update in Vietnam’s Recent Economic Development”, prepared by the World Bank for the Annual Consultative Group meeting for Vietnam ,Ha Tinh, 8-9 June 2011, p.9. [online] Available at <http://siteresources.worldbank.org/INTVIETNAM/Resources/TakingStockEng.pdf> [Accessed 26 January 2012]
  5. World Bank Cambodia Country Office. “Cambodia: Recent Economic Development. Seventh Edition, February 2011”, 2011, p.22. Available at <http://siteresources.worldbank.org/CAMBODIAEXTN/Resources/KH_Econ_Monitor_Feb2011.pdf> [Accessed 26 January 2012]

List of Projects

Development of the ASEAN Mutual Recognition Arrangement for Tourism Professionals (MRA-TP) Work Plan 2017-2020

Process refinement and training of ASEAN Tourism Master Trainers and Master Assessors

Supporting the transition phase in establishing the Regional Secretariat for the Implementation of MRA on Tourism Professionals

Toolbox Development for Tourism Labour Divisions: Travel Agencies and Tour Operation

Development of ASEAN Tourism Professional Registration System (ATPRS)

Development of Implementation/Action Plans to Enhance Mobility of ASEAN Professionals on Accountancy Services

Development of Implementation/Action Plans to Enhance Mobility of ASEAN Professionals on Surveying Services

Training of ASEAN Master Trainers and Assessors for Front Office, Food & Beverage Service and Food Production Divisions

Gap Analysis on Implementation of MRA on Tourism Professionals

Feasibility Study for the Establishment of a Regional Secretarial for Tourism Professionals

Training of ASEAN Master Trainers & Assessors for Housekeeping Division

Toolbox Development for Tourism Div.: Front Office, F&B Services, Food Production

Free Flow of Skilled Labour Study

Toolbox Development For Housekeeping Tourism Labour Division

Handbook on Core Competencies & Domestic Regulation for Architecture, Engineering, Accounting and Surveying Services

ASEAN Awareness Strategy for Services Liberalisation

Improving Schedulling Commitments of ASEAN Framework Agreement of Services (AFAS)

Service Diagnostic & Needs Assesments

Services Scoping Study

Enhancing Implementation of ASEAN Agreements

INVESTMENT

This workstream aims to strengthen capacity of ASEAN Member States to fully implement the ASEAN Comprehensive Investment Agreement, promote foreign investment, and strengthen knowledge and understanding of investment trends and best practices in the region

ASEAN Member States seek to develop their capacity to implement the ASEAN Comprehensive Investment Agreement (ACIA), and promote Foreign Direct Investment (FDI) through well informed policy-making. This will assist the creation of an open environment for investment and realisation of the initiative to integrate ASEAN Member State economies.

Investment has become a significant driver of economic growth in ASEAN. A recent study noted that “Between 1990 and 1996, FDI inflows to ASEAN grew at an average annual rate of just over US$ 19 billion, while outflows grew at a rate of US$ 6.6 billion during the same period. Even after the economic crisis, FDI inflows continued to rise during 1997 to 2005 at an average annual rate of well over US$ 20 billion, while FDI outflows rose to an average annual rate of US$ 10 billion”1. In 2010, FDI in ASEAN has risen to more than US$74 billion, an increase of 95.6% compared to last year. Despite the region’s ability to attract substantive FDI, ASEAN as an integrated region still needs to further enhance its investment climate to face present challenges, including increasing competition from other emerging economies. This need has been recognised by the ASEAN Member States and addressed through the conclusion of ASEAN Comprehensive Investment Agreement (ACIA) in 2009.

ACIA is a key agreement that supports the creation of a more open investment environment in ASEAN. However, not all ASEAN Member States, particularly CLMV economies are positioned to immediately benefit from the ACIA and take maximum advantage of the prospect of increased investment flows. Most ASEAN Member States, including CLMV economies, have made few formal commitments to reduce investment barriers. Significant restrictions still apply to foreign investment and domestic private investment in some industries. ASEAN Member State capacities in addressing these restrictions vary, and in cases, policy and regulations that do address restrictions are not publicly understood.

The AADCP II program is supporting implementation of ACIA through activities to promote and raise awareness of FDI opportunities in the region and activities to support a strong knowledge base on investment trends and best practices to help inform policy making in the region. A special focus will be given to activities that support the needs of the CLMV countries.

Citations and References

  1. Hattari, Rabin et al. Understanding Intra ASEAN FDI Inflows: Trends and Determinants and the Role of China and India. 2008. p.3. [online] Available at http://www.freewebs.com/rrajan1/OFDIASEAN.pdf [Accessed 28 August 2011]

List of Projects

 

CONSUMER PROTECTION

This workstream aims to support the development and implementation of consumer protection laws and policies, strengthen the capacity of consumer protection institutions and deliver effective consumer education and awareness programs

ASEAN’s people centered approach is a reminder of the need to ensure that consumers are included in measures taken to achieve economic integration. Consumer protection in ASEAN Member States (AMSs) varies widely. In order to strengthen consumer protection in ASEAN, an ASEAN Committee on Consumer Protection (ACCP) was established in 2007. The ACCP adopted a strategic approach incorporating policy measures and detailed priority actions including the development of a (i) notification and information exchange mechanism by 2010; (ii) cross border consumer redress mechanism by 2015; and (iii) strategic roadmap for capacity building by 2010.

Consumer protection fosters fair competition and free flow of information in the marketplace. It increases consumer confidence, which ultimately boosts ASEAN economic activity. Strong consumer protections laws and policies help Small and Medium Enterprises (SMEs) who often are consumers of services and goods provided by larger operators. Measures which lift the standard of delivery to SME’s will benefit them. Women who are often tasked with purchasing household items and are major consumers of products that are typically covered by Consumer Protection laws will also benefit from enhanced consumer protection.

In 2010, AADCP II supported the preparation of the study, Road-mapping Capacity Building Needs in Consumer Protection in ASEAN, which took stock of each ASEAN Member States’ status in consumer protection, identified issues, and listed the necessary follow-on activities to strengthen consumer protection in each AMS. The study suggested that although the AMS have a different order of priorities for capacity development, there is broad agreement that capacity building efforts need to be focused on certain areas including: a) developing consumer policies, framework and laws; b) implementing, enforcing and monitoring consumer protection policies, framework and laws; c) establishing and managing effective redress mechanisms; and, d) developing, implementing and evaluating consumer protection programs including consumer education and awareness.

The AADCP II program works with the ASEAN Committee on Consumer Protection and other stakeholders in consumer protection to strengthen institutional capacity in implementing programs that put in place effective redress mechanism and increase consumer protection awareness. Priority will be given to ASEAN Member States that are in early stages of implementing national consumer protection laws.

List of Projects

AGRICULTURE

This workstream will support the region in developing and standardising ASEAN agricultural practices in order to increase product marketability and access and enhance international competitiveness; and support ASEAN to establish common positions and approaches to strengthen regional standing in international for a related to agriculture, food and forestry

The agriculture, food and forestry sector has been the backbone of the ASEAN economy and is a priority sector of the ASEAN Economic Community (AEC) Blueprint. ASEAN cooperation in food, agriculture and forestry is focused on food security, food handling, crops, livestock, fisheries, agricultural training and extension, agricultural cooperatives, forestry and joint cooperation in agriculture and the forest products promotion scheme.

Agriculture has significant socioeconomic implications for ASEAN. No less than 45 percent of the 524 million people of ASEAN still depend on agriculture for their livelihood. This is particularly significant for CLMV countries where over a third of the work force is engaged in agriculture, up to 72.3 percent in Cambodia in 201017.

Agriculture remains a significant source of growth for the national economies as a provider of investment opportunities for the private sector and a prime driver of agricultural related industries and the rural non-farm economy. In 2010, agriculture value added to the economy (as a percentage of total value) of ASEAN Member States ranged from 0.8 percent for Brunei to as high as 36.4 percent for Myanmar18. Improving agricultural productivity and competitiveness of agricultural products can increase the prospects and income of the ASEAN people.

For the period 2003-2005, women farmers comprised a significant proportion of the total agricultural labour force in most countries, ranging from 24.5 percent in the Philippines to 55.4 percent in Cambodia19. Increased effectiveness and efficiency will reduce the load of work for women farmers, and farmers in general. As farmers and rural communities prosper, SMEs will also benefit from increased demand for supplies and support for local industries. Rapidly expanding domestic and global markets coupled with institutional innovations in markets and revolutions in biotechnology and information technology offer opportunities to use agriculture to promote development. However, seizing the opportunities requires the will to move forward with reforms that improve the governance of agriculture.

Efforts to enhance cooperation and unity among ASEAN Member States and build consistency in agriculture practices and products must be supported. This will help bolster ASEAN’s position in international negotiations and increase ASEAN product marketability and access.

Citations and References

17. Asian Development Bank (2011). Key Indicators for Asia and the Pacific 2011 18. Ibid 19. World Bank (2007). World Development Report 2008: Agriculture for Development

List of Projects

CONNECTIVITY

Connectivity is a vital component in regional integration efforts. It is a cross-sectoral agenda that brings people, goods, services and capital together, boosting the cohesiveness and competitiveness of the region as a whole. With the rise of other emerging economies and the evolving regional architecture, connectivity is a key factor in enhancing the competitiveness and robustness of ASEAN. It also helps narrow the development gap among ASEAN Member States, by improving access to markets and supporting the development of SMEs in the less-developed countries.

Recognising the need to define a consistent and coherent approach to enhancing ASEAN Connectivity, a Master Plan on ASEAN Connectivity (MPAC) was adopted by ASEAN Leaders in October 2010. The MPAC is a strategic document that lays out the goals and objectives of ASEAN Connectivity and a plan of action to enhance physical connectivity, institutional connectivity and people-to-people connectivity. The MPAC encompasses strategies and key actions that complement the three ASEAN Community Blueprints, providing a framework of support for the establishment of ASEAN Community by 2015.

Enhancing ASEAN Connectivity requires support and participation from a broad range of stakeholders. This is an opportunity and a challenge at the same time, requiring a strategic and collaborative approach by the ASEAN Connectivity Coordinating Committee (ACCC) and the ASEAN Secretariat’s Connectivity Division. A clear and concerted effort will strongly improve the chance of successful implementation of MPAC .

AADCP II provides support in developing communication strategies along with tools to increase awareness and understanding of the various stakeholders on connectivity. The program also helps in enhancing the monitoring and evaluation system of the MPAC as well as strengthening coordination mechanism for financing MPAC and supporting the implementation of selected priority projects identified in the Master Plan.

List of Projects

FINANCIAL INTEGRATION

ASEAN financial markets have been growing in the last few years, particularly in the larger economies. Nevertheless regional financial integration is still limited, with significant variations existing in key financial services amongst the AMS. Regional financial integration is crucial to finance economic growth across the region. An integrated financial system will improve the region’s competitiveness and financial stability, protecting it against global financial volatility. Financial integration is a crucial step towards achieving the ASEAN Economic Integration.

Currently, there has been minimal effort focused on deepening integration in the financial sector, and no coherent and targeted financial market development initiatives. A well-developed strategy is required to ensure that financial integration benefits all AMS, not only the ones with strong institutions and developed financial markets, but also the lesser developed ones. Financial integration can bring adverse impact particularly to the weaker economies; higher degree of capital flow concentration and misallocation can disrupt macroeconomic stability and growth in the region.

In 2003, ASEAN have adopted the Roadmap for Monetary and Financial Integration of ASEAN that lays out concrete steps towards financial market integration in the region. Among the key initiatives within the Roadmap is the capital market development which aims to build capacity and lay the long-term infrastructure for development of ASEAN capital markets, with a long-term goal of achieving greater cross-border collaboration, linkages and harmonization between the various capital markets in the region. AADCP II is supporting capital market development by supporting ASEAN in deepening understanding of capital market development in AMS and progress in capital market integration, and identifying approach and strategies to facilitate and expedite capital market integration in ASEAN.

List of Projects

CROSS CUTTING ISSUES

This workstream aims to support cross-cutting areas within the AEC establishment and strengthen collaboration among the various ASEC divisions and ASEAN sectoral bodies and working groups working across the cross-cutting areas

AADCP II support to the establishment of AEC falls under four main workstreams: investment, services, consumer protection and agriculture. There are some activities that span across a number of the workstreams. These cross cutting issues often underpin or are complementary to work that is progressing in the workstreams.

The focus areas under this workstream currently consist of support to regulatory reform and narrowing the development gap in ASEAN.

List of Projects