ASEAN Roundtable Series: Connecting the Region through the Master Plan on ASEAN Connectivity 2025
Published on 13 January 2017
Mr. Lim Chze Cheen
Head, ASEAN Connectivity Division, ASEAN Secretariat
Before joining the ASEAN Secretariat in 2005, Mr. Lim was a Senior Research Officer at the Malaysian Institute of Economic Research (MIER), specialising in macroeconomics and industrial studies. His publications include, among others, a case study prepared for the WTO Secretariat (2004) “Malaysia: Strategies for the Liberalisation of the Services Sector”, and a paper in the Asia Pacific Development Journal (2001) “Mobilising Domestic and External Resources for Economic Development: Lessons from the Malaysian Experience”.
Mr. Lim holds a University Malaya Master in Economics and a BSc (Economics) from the University of London.
Dr. Raymond Kwong
Chief Executive Officer & Group Managing Director, Silverlake Axis Ltd.
Dr. Kwong has over 36 years of experience in Information Technology, Business Transformation and Solution Implementation in Financial Services, Utilities and Technology Industries. He has a Bachelor of Commerce (Honours) from the University of New South Wales (Australia) and Ph.D in Information Systems. He is a Certified Practicing Accountant (Australia).
He is a Board Member of Global InfoTech Co. Ltd., an associate company of Silverlake Axis Ltd listed in the Shenzhen Stock Exchange. He is also a Non-Executive Director of Finzsoft Solutions Limited, an associate company of Silverlake Axis Ltd listed in the New Zealand Stock Exchange.
Ms. Hanim Hamzah
Regional Managing Partner, ZICOlaw Network
Senior Foreign Counsel, Roosdiono & Partners
She has been recognised as a ‘Leading Lawyer’ in Indonesia, in Corporate & Commercial, Cross Border, Mergers & Acquisitions and Project Infrastructure Finance (Islamic Finance News, 2011, 2012, 2013) as well as a ‘Leading Lawyer’ by Asia Law Profiles in 2015 and Asialaw in 2016. She has written articles and essays including ‘A Giant in the Making – Recent legal and regulatory developments for Islamic banking and finance in Indonesia’ in Guide to Islamic Banking and Finance (Imperial College Press, 2010).
Ms. Flora Loh Abdullah
CEO, ASEAN Tourism Association
She graduated from Edith Cowan University, Perth, Australia with a Bachelor of Business and Double Major in Tourism Management and Marketing. Ms. Flora also an honorary member of the National Golden Key Society of Australia which is an honorary membership granted to top ten students in the university. She was also awarded the Excellence Award in Tourism by Tourism Council of Australia for being the top student in Tourism Management in 1999. Her academic interests are in the areas of tourism and marketing.
Tan Sri Dr. Munir Majid
Chairman, CIMB ASEAN Research Institute
President, ASEAN Business Club
On his return to Malaysia at the end of 1978, Tan Sri Dr. Munir joined The New Straits Times Press (NSTP) as a lead writer and progressed to become its Group Editor. He left The NST in 1986 to become the CEO of a small merchant bank, Pertanian Baring Sanwa (PBS), which then became Commerce International Merchant Bankers, the genesis of today’s CIMB Group. He left CIMB in 1993 at the invitation of the Government of Malaysia to set up the Securities Commission and became its first Executive Chairman until 1999. He continued with his illustrious career, serving in various capacities, including as Chairman of both Celcom and Malaysia Airlines System at different times. He was the founder and President of the Kuala Lumpur Business Club (2003-2008), and was the chairman of its Advisory Council. Dr. Munir, an Honorary Fellow, is Visiting Senior Fellow at LSE IDEAS (Centre for international affairs, diplomacy and strategy).
Tan Sri Dr. Munir Majid opened the session by setting the tone for the discussion, “As always the most important thing is execution. Master Plan on ASEAN Connectivity (MPAC) 2025 does admit that there were some failures in the execution of the 2010 plans among the successes. Execution is so critical and has become more critical with the new Trump administration. At the very least we can expect difficulty in terms of free trade agreements.” He continued, “At the last roundtable we talked about the anaemic world economic growth and how ASEAN integration must compensate for some of this. This compensation now becomes a necessity so the integration effort has got to be real and serious, and not just a plan.”
Mr. Lim Chze Cheen, Head of the ASEAN Connectivity Division, ASEAN Secretariat, gave an overview of the MPAC 2025. He explained the process behind the creation of the new Master Plan which included identifying trends that will impact ASEAN over the coming years, analysing how they would impact the three dimensions of connectivity (institutional, people-to-people and physical) in ASEAN and, engaging with various stakeholders from the public and private sectors.
Lim emphasised that this Master Plan is much different to its predecessor. He listed five features that set it apart from MPAC 2010; MPAC 2025 is
i) focussed and action orientated
ii) consistent and aligned with ASEAN Community Blueprints and relevant Sectoral Work Plans
iii) adding value to existing ASEAN initiatives,
iv) emphasising on implementation arrangements and< v) based on a results-orientated monitoring and evaluation mechanisms.
This, he said is evident in the Master Plan which covers the following five strategic areas:
1) Sustainable Infrastructure
2) Digital Innovation
3) Seamless Logistics
4) Regulatory Excellence, and
5) People Mobility
In fact, MPAC 2025 has 15 initiatives as opposed to the 122 outlined in the MPAC 2010.
It was clear through Lim’s explanation of the 15 initiatives that ASEAN member states had attempted to address the shortcomings of MPAC 2010. For example, where relevant various indices will be used to track the progress of the initiatives, platforms will be used to share best practices and frameworks of best practices will be created for use across the 10 nations. He said these were set to make the process more transparent, accountable and create a more conducive business environment. Lim emphasised that ASEAN is in the process of clarifying the details of each initiative including the roles and responsibilities of the sectors involved and preparing project briefs, both of which will allow for smoother implementation and monitoring.
Lim ended his overview with the following, “The Master Plan can only be implemented effectively if we have the cooperation of our stakeholders, Dialogue Partners, private sector, and the implementing agencies.”
Dr. Raymond Kwong, Chief Executive Officer & Group Managing Director of Silverlake Axis Ltd. spoke about digital innovation. He presented the barriers and constraints for businesses within the ASEAN context using the example of a medium-sized insurance claims management company.
The first barrier identified through the example was a lack of clarity on cross border data accessibility within ASEAN. The second barrier identified was the cost of connectivity, which still remains high despite various infrastructure developments. The final constraint was that business-to-business connectivity continues to remain low.
Kwong pointed out that the business environment should be made more conducive for all SMEs as they make up a large portion of the ASEAN economy. Aside from the MPAC initiatives he emphasised that it would greatly benefit SMEs if ASEAN were to identify sector-specific barriers. Removing these barriers would propel companies like the one in his example to higher levels of growth.
Ms. Hanim Hamzah, Regional Managing Partner at ZICOlaw Network and Senior Foreign Counsel, Roosdiono & Partners, touched upon the two initiatives under the strategic area of Regulatory Excellence:
i) harmonisation of laws and
ii) reduction of tariffs.
Hanim pointed out that the reduction of tariffs was much easier to track than harmonisation of laws as the former was more quantitative in nature. She went on to further elaborate on the area of harmonisation of laws, noting that many efforts have been made under this area especially with regards to transportation. She took the example of the signed ASEAN Framework Agreement on the Facilitation of Goods in Transit (AFAFGIT). She pointed out that despite the fact that AFAFGIT had been signed it has yet to be ratified by many member countries hence these countries lacked the corresponding regulations, which she noted was a weakness. She concluded that it is important that such agreements are not only signed but also ratified and implemented across ASEAN.
Hanim also shared the experiences of ZICOLaw Network and how the company overcame the challenge of setting up in various ASEAN countries – each with its distinct rules in business ownership. She suggested that it should not be so cumbersome to setup a business which seeks to operate across ASEAN borders.
Ms. Flora Loh Abdullah, Chief Executive Officer of ASEAN Tourism Association (ASEANTA), noted that non-ASEAN tourists to the region would reach 150 million people in the next 10 years. She explained that memorable hospitality services would be key in bringing tourists to the region. Flora shared the plans that ASEANTA had developed to ensure travellers experience this hospitality.
The first plan is to have a common ASEAN visa which would entice more non-ASEAN tourists. The second plan is to reduce the gap between demand and supply of workers with vocational skills and to reduce the barriers to labour mobility across member nations. The third plan is to work with ASEANTA members to create tour packages which cut across ASEAN countries to increase intra-ASEAN tourism.
Flora concluded that ASEAN has many advantages including a young population, a strategic location and technological innovations which can all be utilised to fulfil the initiatives under the strategic focus area of People Mobility.
Tan Sri Dr. Munir suggested that the ASEAN-X concept could be one way to expedite implementation of ASEAN agreements. While some countries have signed and ratified agreements, some may have only signed them. Here, ASEAN has a mechanism which allows for the states that have ratified the agreement to run pilot projects moving implementation forward instead of being held back by member states that refuse to ratify. The example given was that of AFAFGIT where Thailand, Malaysia and Singapore are piloting a project, specifically a trading link, between them as they are the three countries that have ratified the agreement.
It was suggested that issues related to customs, tariffs, transit or transportation can be brought to the ASEAN Secretariats attention via the ASEAN Business Advisory Councils (ASEAN BAC). According to Lim, partners such as the European Union, Japan and the United States have frequently brought up such issues to the technical groups. Here engagement with senior government officials has the potential to result directly in policy decisions hence facilitating trade and business in ASEAN.
Datuk P. Ravidran, Senior Director of the ASEAN Economic Cooperation Division, Ministry of International Trade and Industry (MITI), suggested that ASEAN BACs have annual meetings with the ASEAN leaders in order to bring to light concerns impacting businesses in ASEAN and to secure mutually agreed upon responses to be implemented within the following year.
Hanim noted that the many “success stories” within ASEAN were not widely known which presented a missed opportunity. A suggestion was made to document such stories in order to raise more awareness of projects in ASEAN that were moving forward. An example of a success story given was that of the trading link between Malaysia, Singapore and Thailand formed under AFAFGIT. Additionally, she pointed out that general awareness on ASEAN plans is lacking and needs to be improved. She emphasised that there should be a focus on SMEs and whether they are aware of and aligned with the initiatives in MPAC 2025.
3. People Mobility
Flora shared her experience in cross border mobility while she was in the midst of applying for a work visa for a previous job. She recounted that she was unable to travel abroad, even within ASEAN, for meetings while her visa was being processed which resulted in her missing a Regional Sales meeting in Jakarta.
Hanim focused on the Mutual Recognition Agreements (MRAs) which are required for certain professions, including law, in order to work across borders within the region. She argued that instead of streamlining the process the MRA added more bureaucratic layers to it. In order to be able to work in ASEAN professionals have to obtain an ASEAN-based certification in addition to that of the host and home country qualifications, something she had to contend with.
The common ASEAN business visa was also discussed. It was noted that two countries, Malaysia and Singapore, have reservation towards a regional business visa as they feared that many who would eventually obtain the visa would overstay their welcome. The participants were disappointed at the news that the MPAC 2025 will not pursue the APEC Business Travel Card further.
4. Regulatory coordination
Hanim said that ASEAN needs to balance between regionalism and rising nationalist sentiments, which may make regulatory coordination a challenge but nonetheless very important. In terms of enforcement, ASEAN needs to ensure regulations in all countries are harmonised and that the judiciary systems in all countries are consistent and in line with the rule of law.
Coordination was also a topic that Kwong touched upon in his SME example, where he spoke about the high cost of connectivity within ASEAN and the lack of clarity of data sharing across borders. Both of these issues point to a lack of regulatory coordination between countries, which needs to be addressed especially in light of new and growing technology-based businesses in ASEAN.
The roundtable concluded that while the MPAC 2025 was a thorough and well-thought-out document, the key to successful ASEAN integration will rest on effective implementation of all the initiatives in each of the strategic areas. The main fear is that the people and businesses of ASEAN will lose out to the likes of China and Chinese companies such as Alibaba. Additionally, with the demise of the TPPA, regional integration will become increasingly important. ASEAN needs to work together as a regional bloc to allow its people to move freely between countries and to ensure that regulations are coordinated and streamlined. This will encourage businesses to grow and take advantage of the ASEAN market. In order to achieve this, a concerted and collective effort needs to be made to effectively implement MPAC 2025.
23 November, 2016
By Anette Appaduray, as appeared in The Edge Financial Daily
KUALA LUMPUR: With the possible rise in protectionist trade policies in the US under the Trump presidency, it is now more important for Asean countries to strengthen their economic integration, said CIMB ASEAN Research Institute chairman Tan Sri Munir Majid.
“The Asean economic integration assumes great importance to generate greater economic activity, especially because of slower world economic growth and now, more critically, because of potential anti-free trade and protectionist measures by the Trump administration,” he said after the Asean Roundtable Series on “Connecting the Region Through Master Plan on Asean Connectivity 2025” yesterday.
“Asean businesses must understand the challenges of the international political economic environment and should appreciate the objectives of growth that come from integration in Asean,” he added…
23 November, 2016
By CK Tan, as appeared in Nikkei Asian Review
KUALA LUMPUR — Southeast Asian policymakers should accelerate integration projects in the pipeline, such as infrastructure development and digital innovation, to meet a 2025 target, experts argued at a roundtable Tuesday.
Meeting to discuss the private sector’s role in the Master Plan on ASEAN Connectivity 2025, participants agreed that with barriers to integration substantially eliminated, the next step is to kick off projects already outlined by the 10 member countries of the Association of Southeast Asian Nations.
“Let’s step it up,” said Ravidran Palaniappan, a senior director at Malaysia’s Ministry of International Trade and Industry, referring to the 40 infrastructure projects identified by the ASEAN Secretariat for implementation across the region. These projects are being handled under public-private partnerships but have not taken off, primarily because of a lack of funding…