ASEAN Community Building: The Countdown to 2015 ASEAN-ADB Engagement

1. The 8th Asia Economic Forum 17 March 2012 ASEAN Community Building:The Countdown to 2015 ASEAN-ADB Engagement Peter BrimbleDeputy Country Director/Senior Country EconomistADB Cambodia Resident Mission

2. Presentation Outline Context and content of existing ASEAN-ADB engagement, and recent developments Building a more focused ADB approach to assist ASEAN realize AEC by 2015: Subregional programs of GMS, BIMP-EAGA, IMT-GT as building blocs and test beds Master Plan on ASEAN Connectivity ASEAN Infrastructure Fund Planned Regional technical assistance on Trade Facilitation Support for AEC Blueprint

3. Context of ADB-ASEAN Engagement ADB’s own charter 1996 ADB RCI Strategy (2006): Pillar 1: Regional and subregional cooperation on cross-border infrastructure and related software; RDs) Pillar 2: Trade and investment (RDs and OREI) Pillar 3: Monetary and financial integration (RDs and OREI) Pillar 4: Regional public goods (RSDD) ASEAN Charter and “New” SERD (2007), including all ASEAN member countries ADB Strategy 2020 (2008): RCI is one of the three complementary strategic agendas, and one of the five core areas of specialization Institutional and operational goal of RCI activities accounting for at least 30% of all activities by 2020 ADB-ASEAN Secretariat MoU, 2006-2010; 2011-2015 MoU to be signed this April 4

4. Content ADB-ASEAN Engagement since 1997-1998 OREI & SEFM ASEAN & ASEAN+3 has been requesting ADB to support their initiatives on regional monetary and financial cooperation 2006-2010 ADB-ASEAN Secretariat MOU (policy dialogue, research, capacity building & institutional strengthening; support for subregional programs; narrowing development gap; support for regional public goods; knowledge sharing & dissemination) OREI & SERD since late 2000 RSDD TAs on health and food security started 2010 OREI & SERD TAs on ASEAN Community; Subregions as building blocks Proposed New ADB-ASEAN Secretariat MOU for 2011-2015: Focal areas – connectivity (physical & soft), environmental sustainability, financial & capital market integration; EAS process; macroeconomic surveillance; trade & investment; agricultural development through trade facilitation; Crosscutting Theme – narrowing the development gap 2011-2015 SERD OREI RSDD

5. New Strategic Focus for ASEAN-ADB ASEAN: Against backdrop of the global economic crisis and member country vulnerabilities, need for macro rebalancing externally and narrowing development gaps internally New strategic focus on: Prioritizing connectivity infrastructure projects and related software Extending financial & capital market integration; Environmental sustainability through climate change mitigation and adaptation/disaster risk management issues; and Results-based approach Continuing Cooperation on: Economic ASEAN Secretariat process, macroeconomic surveillance, trade and investment, and planned Trade Facilitation Support to AEC Blueprint Implementation Recent ADB assistance to ASEAN-led Initiatives: Master Plan on ASEAN Connectivity, and ASEAN Infrastructure Fund (AIF);

6. Speeding-Up AEC Opportunities • Establishing new strategic compact between national, sub-regional and regional connectivity • Extending and enhancing physical connectivity to transform transport corridors into economic corridors, and linking to rural areas • Complementing with targeted software from sub-region groupings (e.g. transport and trade facilitation, SPS, and logistics; power purchase agreements), consistent with ASEAN agreements and protocols • Improving sub-national, national and cross-country policy coordination, and strengthening institutions • Engaging all key stakeholders; especially private sector • Borders divide, sub-regions connect, and regions bridge sub-regional and global agendas

7. Subregional Programs and ASEAN TA: Promoting Links and Improving Coordination Among GMS, BIMP-EAGA, IMT and ASEAN Improving the strategic and institutional linkages between the subregional groupings and ASEAN Building blocks to ASEAN Test beds for ASEAN ASEAN BIMP-EAGA • Linkage with • Initiative for • ASEAN integration • (IAI) - CLMV GMS IMT-GT

8. ADB’s Multi-faceted Role in the GMS ADB worked with the 6 countries of the GMS in launching a program of subregional economic cooperation (GMS Program) in 1992 to enhance their economic relations Since then, ADB has been the program secretariat and coordinator Serves as a financial (loans and technical assistance), technical (capacity development), and increasingly a knowledge supporter An honest broker of subregional dialogue at both political and operational levels, and among stakeholders As a catalyst by bringing together different participants in the program and helping them reach a consensus New GMS Strategic Framework, 2012-2022 focused on so-called second-generation projects and software

9. People’s Republic of China Land area: 63,100,000 ha Population: 93.6 m. GDP per capita: US$1,988 (figures for Yunnan and Guangxi only) The Greater Mekong Subregion (GMS) in 2011 Myanmar Land area: 67,658,000 ha Population: 50.5 m. GDP per capita: est. at US$340 Viet Nam Land area: 32,931,000 ha Population: 92.0 m. GDP per capita: US$1,032 Thailand Land area: 51,312,000 ha Population: 65.5 m. GDP per capita: US$3,893 Lao PDR Land area: 23,680,000 ha Population: 6.3 m. GDP per capita: US$940 • The GMS in 2011 • Land area: 256,758,000 ha • Population: 323.4 M • GDP per capita: US$1,477* • With estimates for Myanmar • Data for 2009 from World Bank Cambodia Land area: 18,104,000 ha Population: 15.5 m. GDP per capita: US$667 9

10. Enhancing Connectivity, Competitiveness And Community Strategic Thrusts Action Plan Goals Vision Strengthen infrastructure linkages • Transport • Telecommunications • Energy • Environment • Tourism • Trade • Investment • Human Resource Development • Agriculture • Accelerated and sustained economic growth • Reduced poverty & income disparities • Improved quality of life • Sustainable management of environment & natural resources Facilitate cross-border trade, investment & tourism More Integrated Prosperous Harmonious Subregion Enhance private sector participation & competitiveness Develop human resources & skills competencies Protect environment & promote sustainable use of shared natural resources GMS Strategic Framework: 2002-2012

11. GMS Results Connectivity 1992 Roads Telecommunications Power Transmission Line 11

12. GMS Results Connectivity 2008 Roads Telecommunications Power Transmission Line 12

13. GMS Results Connectivity 2015 Roads Telecommunications Power Transmission Line 13

14. The GMS Southern Economic Corridor Inter-Corridor Link Northern Sub-Corridor Southern Coastal Sub- Corridor Central Sub-Corridor • Economically diversified • Endowed with abundant natural and human resources • Has the necessary drivers of economic growth • Linking three key nodes – Bangkok, Phnom Penh, and Ho Chi Minh City Much progress in infrastructure; less on software!

15. Master Plan on ASEAN Connectivity ADB participated in the High-Level Task Force meetings and helped in the review process ADB drafted a chapter on mobilizing resources for enhancing connectivity in ASEAN ADB is featured in MPAC in two specific areas: (i) support to subregional cooperation in Southeast Asia; and (ii) as a key partner in mobilizing resources MPAC includes proposed flagship projects, two of which are ADB energy projects in Indonesia/Malaysia

16. ASEAN Infrastructure Fund (AIF) New instrument to help resolve paradox of ASEAN; namely massive infrastructure deficits, yet very large amounts of private savings and foreign exchange reserves Preparation of AIF coordinated by an ASEAN-led High-Level Task Force (Chaired by Malaysia), with assistance on technical financial design, operational structure, and governance framework from ADB ADB requested to manage the fund [http://www.aseansec.org/26643.htm]

17. Planned Regional TA on Trade Facilitation Support for AEC Blueprint Preparation in 2012 of the above technical assistance project Meet the AEC vision through enhancing transport and trade facilitation, through leveraging activities in the three sub-groupings Key proposed activities: Generating baseline data and analytical reports Capacity development for national single window systems, coordinated border management, strengthening risk management Assessing hardware and software systems

18. Concluding Thoughts Perceptions of ASEAN: Check out the website of the ASEAN Mekong Basin Development Cooperation (AMBDC) Need for ASEAN to: Support CLMV countries to leapfrog the development gap (in fact perhaps CLM – as V is rumored to be planning to join VIP) Support members that are lagging in implementing AEC Ongoing balancing of national interests and regional interests, and also subregional interests

19. Thank You!