AEC Blueprint 2025 Analysis: Paper 17 | An analysis of the ASEAN cooperation in transport
Transport cooperation plays a very important role in realizing a more integrated and cohesive ASEAN, promoting the region’s economic competitiveness, enhancing sectoral cooperation, and bridging ASEAN with the global economy. To really achieve a comprehensive cooperation in the transport sector, member states need to look into harmonizing their transport regulations, secure financing for the development, and consider the environmental impacts of more rapid development. Nonetheless, greater transport cooperation will enhance connectivity across ASEAN that is crucial in supporting trade and investment, and promoting ASEAN’s competitiveness in attracting foreign businesses into the region.
The following report is part of a series which attempts to provide a detailed analysis on the ASEAN Economic Community (AEC) Blueprint 2025. Each report will cover a single element of the blueprint, providing a comprehensive look at past achievements, present problems, and the future plans of the AEC. Special attention will be placed upon the strategic measures outlined in the AEC Blueprint 2025. This report aims to provide insight into the viability surrounding regional economic integration under the AEC.
ASEAN Transport Cooperation
Currently, connectivity is one of the most prominent issues that are shaping the future of the AEC. Given the geographical proximities of ASEAN member states, transport cooperation plays a very important role in realizing a more integrated and cohesive economic region, in promoting ASEAN’s competitiveness, in enhancing sectoral cooperation, and in bridging ASEAN with the global economy. In the new AEC Blueprint 2025, the ASEAN transport cooperation is officially housed under the third pillar of the AEC, which is a new pillar not covered in the previous blueprint, called “enhanced connectivity and sectoral cooperation.” The establishment of connectivity as its own pillar shows how imperative it is as a major factor that would contribute significantly in achieving the objectives set out in the other AEC pillars. Transport, together with the other sectors supporting connectivity, plays a pivotal role in facilitating trade, investment, finance and skilled labour across the region.
This report has been prepared to provide some analysis on the importance of connectivity and infrastructure and how transport contributes to improving the connection within a member state, among member states and across the economic sectors in ASEAN.
A. Targets under the AEC 2015 Blueprint
In the previous blueprint, transport cooperation was under the second pillar of the AEC that is establishing ASEAN as a competitive economic region as part of infrastructure development. Basically, transport cooperation under Blueprint 2015 was aimed at
- Developing an efficient, secure and integrated transport network in the region to realise the full potential of the ASEAN Free Trade Area, to enhance the attractiveness of the region as a single production, tourism and investment destination and to narrow the development gaps among member states;
- Enhancing transport facilitation and logistics services, promoting multimodal transport infrastructure linkages and connectivity, facilitating transport and tourism integration, and further liberalizing the air and maritime transport sectors;
The ASEAN Transport Action Plan (ATAP) 2005-2010, which guided the ASEAN cooperation on multi-modal transport and transport facilitation, covers the three modes of transport: land, maritime and air transport. The actions involved in the action plan that were expected to be completed by 2010 include:
- Implementation of the ASEAN Framework Agreement on the Facilitation of Goods in Transit (AFAFGIT) by 2009
- Implementation of the ASEAN Framework Agreement on Multimodal Transport (AFAMT) by 2010
- Finalization of the ASEAN Framework Agreement on the Facilitation of Inter-State Transport (AFAFIST) by 2008 for its implementation beginning 2010
The focus on land transport cooperation was on the completion of the Singapore-Kunming Rail Link (SKRL) and the ASEAN Highway Network (AHTN) projects. The major measures involved include:
- Complete the development of all the missing links in the SKRL
- Complete the implementation of the AHN projects, in particular road construction/improvement of below Class III road (two narrow lanes with double bituminous treatment) sections of the designated Transit Transport Routes (TTRs) of the AHN
- Enhance road safety in ASEAN
On maritime and air transport, the priorities included adoption of the general principles and framework for an ASEAN Single Shipping Market (ASSM), and development and implementation of the ASEAN Single Aviation Market (ASAM), to be carried out through the following measures:
- Implement relevant International Maritime Organisation (IMO) conventions
- Implement the Roadmap towards an Integrated and Competitive Maritime Transport in ASEAN
- Implement the ASEAN Open Sky Policy (Roadmap for Integration of the Air Travel Sector)
- Implement the ASEAN Single Aviation Market
In November 2010, the 16th ASEAN Transport Ministers (ATM) Meeting adopted the next phase action plan (2011-2015), called the ASEAN Strategic Transport Plan / Brunei Action Plan (BAP). The BAP identified the strategic actions and measures that would serve as the main guidance to the ASEAN transport cooperation up until 2015. With the adoption of the BAP, member states would continue their commitments to implement the necessary strategic measures to achieve the objectives of developing an efficient, secure and integrated transport network in the region, and enhancing transport facilitation, logistics services, and multimodal transport infrastructure linkages and connectivity, as mentioned above.
B. Significant Achievements To Date
Significant progress has been made in the areas of land, maritime and air transport sectors, and
transport facilitation. The table below summarizes the important developments to date.
C. Current Issues and Challenges
From economic point of view, better quality infrastructure is beneficial to improve ASEAN’s readiness to become more integrated and cohesive as a single market and production base, by significantly reducing transportation cost and improving logistics deliveries. However, from environmental point of view, this may result in higher congestions and pollutions, which may suggest that focus should be geared towards environmentally friendly means of transportation.
In some cases, member states are still not able to reach an agreement on the issues that are hampering the conclusion of transport negotiations, for example Protocol 2 of the AFAFGIT on establishment of frontier posts have not been signed because some countries have not yet agreed on the terms.
Financing may be an issue for some countries on the completion of the transportation projects.
D. Plans under the AEC 2025 Blueprint
As mentioned before, in the new blueprint, connectivity is now a pillar of the AEC, considering its importance in integrating the ASEAN economies and connecting ASEAN with the global economy. Developing quality transport facilities across ASEAN is imperative in ensuring that establishing ASEAN as a single market and production base, and enhancing its competitiveness can happen according to the agreed timeline.
The Brunei Action Plan has been replaced by the Kuala Lumpur Transport Strategic Plan (KLTSP) which was adopted by the 21st ATM Meeting in November 2015. The document aims at supporting the regional economic development and integration through enhanced land, air and maritime transport in the next ten years. It also aims at pursuing the development of sustainable transport and enhancing ASEAN’s connectivity with China, Japan and Korea.
The AEC 2025 vision for transport is geared towards greater connectivity, efficiency, integration, safety and sustainability. In addition to the priority areas as before: land transport, air transport, maritime transport and transport facilitation, ASEAN has now included sustainable transport as a new priority that will support sustainable development in the region.
Strategic measures for transport cooperation for 2016-2025 include:
i. Land transport aims at establishing an efficient and integrated regional transport network within ASEAN and with neighbouring economies by following the key measures:
- Achieve land transport infrastructure integration and inter-modal connectivity, with principal airports, ports, and inland waterway and ferry links;
- Promote concerted and coordinated efforts at policy and operation level to develop ASEAN land transport trade corridors.
ii. Air transport focuses on strengthening the ASAM by implementing the measures:
- Advance safer and more secure skies in ASEAN;
- Enhance air traffic management efficiency and capacity through a seamless ASEAN sky;
- Foster greater connectivity, including the conclusion of aviation agreements with Dialogue Partners
iii. Maritime transport aims at establishing the ASSM and promoting maritime safety, security and strategic economic corridors through the following measures:
- Continue to strengthen ASEAN maritime connectivity through establishment of ASSM and implementation of conventions of the International Maritime Organization (IMO);
- Develop strategic maritime logistics corridor.
iv. Transport facilitation continues the efforts to establish an integrated, efficient and globally competitive logistics and multi-modal transportation system by implementing the measures as follows:
- Operationalise the AFAFGIT, AFAFIST, and AFAMT;
- Operationalise the ASEAN Framework Agreement on Facilitation of Cross-Border Transport Passengers by Road Vehicles (CBTP);
- Enhance capacity and skills development to further progress regional transport facilitation cooperation and transport facilitation beyond ASEAN.
v. Sustainable transport will be developed based on a regional policy framework that includes low carbon modes of transport, efficiency in the use of energy, integration of transport networks, and better land-use planning.
In addition, the Master Plan on ASEAN Connectivity (MPAC) 2025 provides a grand guidance on improving and promoting ASEAN Connectivity in five key areas:
- sustainable infrastructure,
- digital innovation,
- seamless logistics,
- regulatory excellence and
- people mobility.
In relation to transport cooperation in ASEAN, perhaps areas (i) and (iii) are most relevant. Under those two area, there are some measuresthat could be highly relevant:
- Establish a rolling priority pipeline list of potential ASEAN infrastructure projects and sources of funds
- Establish an ASEAN platform to measure and improve infrastructure productivity
- Strengthen ASEAN competitiveness through enhanced trade routes and logistics
- Enhance supply chain efficiency through addressing key chokepoints
E. AEC 2025 Blueprint Analysis
- The table below attempts to evaluate the progress made under each measure outlined in the AEC Blueprint 2025 for transport cooperation.
F. Conclusion: Moving Forward with the AEC 2025 Plans
- It was a good decision by the ASEAN leadership to give a higher priority to connectivity and make it a separate pillar under the AEC. However, this should also mean greater commitments by the authorities to implement the agreed measures to improve the quality of transport modes, transport infrastructure and transport facilitation to enhance integration and competitiveness of ASEAN. The pending conclusion of the agreements and protocols, and ratifications of those agreements will require that ASEAN governments expedite their efforts to ensure adherence to the agreed timeline. In addition, feedbacks from the private sector and other stakeholders could be useful in moving things forward.
- The objectives of realizing the shipping and aviation single markets may need to be revisited if some countries are not able to commit themselves to the idea of a single market. Liberalization is not an easy matter but the benefits could be gained if member states are prepared to enter that phase.
- Infrastructure financing could be an issue that needs to be dealt with as early as possible. ASEAN has established the ASEAN Infrastructure Fund (AIF) that has made some important contributions to infrastructure projects in the region. The current size of the AIF is now still quite small but more intensive communication with the finance side could encourage enlargement of the Fund to meet with the growing demand for infrastructure financing.
1This information is taken from ASEAN liberalisation: open skies achieves full ratification, May 201 , Holman Fenwick William
2 Information in this section was taken from ASEAN seeks port productivity improvements, Turloch Mooney, joc.com
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