ASEAN buoys connectivity, woos investment

Published : Nov 14, 2016 - 20:05 Updated : Dec 11, 2016 - 22:32

In line with the Association of Southeast Asian Nations’ Economic Community Blueprint 2025, the regional bloc of 10 countries aims to enhance their physical, institutional and societal connectivity over the next 10 years to navigate the volatile world economy.

Bolstered by the launch of the ASEAN Community last year, which comprises of security, economic and socio-cultural dimensions, the association envisions a “more comprehensively and seamlessly connected” Southeast Asia through state-of-the-art infrastructure, logistics and regulations.

In this regard, public-private partnership is increasingly prioritized, analysts say, pointing to the diverse, specialized expertise of bureaucracy and market that can be harmonized for synergy.

Diplomats, government officials and corporate representatives from the Association of Southeast Asian Nations and Korea join hands at the fourth ASEAN Connectivity Forum on Tuesday at the Federation of Korean Industries Conference Center in Seoul. (ASEAN-Korea Center)

To help enable this vision, the ASEAN-Korea Center and the Federation of Korean Industries jointly held the fourth annual ASEAN Connectivity Forum on Tuesday, where public officials and corporate representatives from ASEAN and Korea met.

“The forum will allow participants to not only share valuable information, but find common ground and build solid networks,” said the ASEAN-Korea Center secretary-general Kim Young-sun in a speech.

The symposium’s core issue was public-private partnership, the former Korean diplomat noted, citing the Master Plan on ASEAN Connectivity 2025 and financing and procurement strategies for joint projects.

The master plan encompasses five strategic areas of sustainable infrastructure, digital innovation, seamless logistics, effective regulation and people’s mobility.

In the afternoon session, member states’ representatives provided up-to-date information on current and future infrastructure projects, followed by business meetings between ASEAN officials and potential Korean investors.

ASEAN-Korea Center secretary-general Kim Young-sun (ASEAN-Korea Center)

“ASEAN’s efforts to enhance connectivity will help narrow the development gap, the main obstacle to achieving a genuinely integrated bloc,” argued Lee Tae-ho, Korea’s Deputy Foreign Minister for Economic Affairs. “These efforts will serve as a foundation for the sustainable growth of ASEAN.”

Cooperation through connectivity-related projects will also strengthen the ASEAN-Korea relations, the diplomat argued, noting that the two sides have pushed forward their ties since establishing the Sectoral Dialogue Partnership in 1989.

Over the last 25 years, the total two-way trade volume increased 15-fold, Korea’s investment in ASEAN 21-fold, and people-to-people exchange 29-fold.

The two sides have a “close, symbiotic relationship” according to the minister, who mentioned the ASEAN has become Korea’s second-largest trade partner and investment destination after China.

Last month, the ASEAN Connectivity Coordinating Committee and its Dialogue Partners gathered in Vientiane, Laos, where the Master Plan on ASEAN Connectivity 2025 was adopted.

Highlighting that financing and resource mobilization are “the most critical elements” of the master plan, Lee said ASEAN needs to invest a minimum of $110 billion in infrastructure each year to sustain its future growth.

In an effort to contribute to these projects, Seoul has provided some $500 million in official development assistance to ASEAN, which accounts for more than one-third of the country’s overseas contributions.

“Despite public financing’s importance, national budget and development assistance cannot wholly satisfy the rapidly rising demand for connectivity schemes,” he claimed. “Public-private partnerships are becoming more important, as they complement government contributions and utilize the private sector’s efficiency, expertise, experience and technology.”

The newly established Asian Infrastructure Investment Bank is likely to expand the scope of bankable projects under the master plan, the envoy added.

The fourth annual ASEAN Connectivity Forum (ASEAN-Korea Center)

Thant Sin Maung, Myanmar’s Union Minister for Transport and Communications, said “smooth and seamless” intraregional transportation facilitates trade and economic growth, reduces regional gaps and fortifies relations and integration.

The master plan for the feasibility study on establishing the ASEAN Roll-On Roll-Off Network and Short Sea Shipping, ASEAN Highway Network Projects and Singapore Kunming Rail Link Projects has been implemented.

Air transport services have been liberalized toward a single aviation market, and intraregional shipping services have been streamlined, according to Thant.

Latsamy Keomany, Lao PDR Permanent Representative to ASEAN and Chair of ASEAN Connectivity Coordinating Committee, said “significant progress” has been made in fleshing out the master plan, but there were challenges in mobilizing the resources and harmonizing regional initiatives with national plans.

“The productivity of infrastructure needs to improve rapidly,” Latsamy said, adding that new approaches should be sought in guiding the sustainable growth of mid-sized cities across the region.

There are ample examples of “smart urbanization” initiatives across ASEAN, he underscored, referring to George Town’s heritage protection, Medan’s efforts at curbing automobile dependency and boosting pedestrian-friendly transportation and Da Nang’s institutional strengthening and corruption fighting.

By Joel Lee (joel@heraldcorp.com)