ASEAN and the Dialogue Partners: From Strength to Strength Thein Swe 8 th Asia Economic Forum

1. ASEAN and the Dialogue Partners: From Strength to Strength Thein Swe 8th Asia Economic Forum Hotel Sofitel, Phnom Penh, Cambodia. March 18, 2012.

3. ASEAN and Dialogue Partners Dialogue Partners Australia Canada China India Japan Korea New Zealand European Union (EEC) Russia USA UNDP EAS - Australia - New Zealand - India ASEAN+3 - Japan - Republic of Korea - People’s Republic of China • ASEAN • -Indonesia • - Malaysia • - Philippines • - Singapore • - Thailand • - Brunei Darussalam • - Vietnam • - Myanmar • - Lao PDR • - Cambodia ASEAN+6 Other Groupings/Relations Pakistan South Pacific Forum Gulf Cooperation Council Rio Group SAARC SADC EFTA Mercusor NAFTA

4. How can ASEAN deepen further and expand its present state of cooperation and partnership with all its Dialogue Partners in the most constructive manner? • East Asia Summit (EAS) established in 2005 (most important annual gathering of leaders from Asia Pacific) • It is important that ASEAN continue to strengthen the current political and security environment. ASEAN should continue to be in the driver’s seat – centrality, with Dialogue Partners’ support in this initiative. • ASEAN Regional Forum (ARF) established in 1994 – the only political and security dialogue in the region, building confidence and trust - with constructive and in depth support from the Dialogue Partners should continue. • ASEAN Defense Ministers’ Meeting Plus (ADMM Plus) established in 2010 with 8 dialogue partners is the defense and security cooperation mechanism in the region. Further support is also strongly recommended

5. How can ASEAN maintain and rejuvenate its dialogue relations and its proactive engagement with the Dialogue Partners in order to encourage them to positively support the ASEAN Community building, ASEAN integration, and ASEAN Connectivity? • Bali Meeting in Nov 2011, pledged to boost ties and enhance cooperation in various fields. • ASEAN has been working with the Dialogue Partners and other regional groups in order to build Free Trade Agreements to accelerate trade and investments. • Significant steps taken with Dialogue Partners with ASEAN + 3 and ASEAN + 6, on Free Trade Agreements. • To maintain ASEAN centrality and ASEAN way, proactive engagement with Dialogue Partners and obtain support for the ASEAN Community building, integration and connectivity. • ASEAN Economic Community in 2015 is to become a single market and production base. It is important to be an ASEAN led community.

6. ASEAN’s Major Export Destination and Major Import Sources, 2010. • Exports Imports • China 14. 3% 1. China 17.3 % • Japan 12 .6 % 2. Japan 16.2 % • U.S.A. 12.6 % 3. U.S.A. 11.6 % • Hong Kong (S.A.R of China) 9.3 % 4. Republic of Korea 7.9 % • Republic of Korea 5.5 % 5. Saudi Arabia 3.7 % NOTE: ASEAN International Trade is mainly with non-ASEAN countries, but majority is with Dialogue Partners

8. What more can ASEAN do, both collectively, and individually, to raise the profile of partnership and level of cooperation with each of the Dialogue Partners? • For nearly 40 years, ASEAN has been working very closely with the support of the Dialogue Partners in various programs and projects that are mutually beneficial and also mutually connected. • ASEAN should continue both collectively and bilaterally enhance the level of cooperation with each of the Dialogue Partners but we need this to be ASEAN led or driven. • It is also to be ASEAN way of raising the profile of two-way partnership when ASEAN Secretary-general, Dr Surin Pitsuwan said, “When Dialogue Partners suffer, ASEAN also suffers along with them”, that it is ASEAN way to step forward and extend our hands to the people of Japan ..and New Zealand, during the recent tsunami and earthquakes..

9. It is important that it is ASEAN led of shared vision with synergy and solidarity with Dialogue partners. But also to strengthen “Unity in Diversity” within ASEAN! • Economic agenda and ASEAN Economic Community 2015, need to be closely monitored. FTAs with Dialogue Partners - to be mutually beneficial but also with ASEAN centrality - ASEAN led initiative and priority, instead of Dialogue Partners’ priority and initiatives. • Avoid NATO – No Action Talk Only. But also recognizing the need for more talk and to understand better, each country’s views and reasons. But it is also important to be action oriented with the participation of all inclusive within ASEAN –not only the policy makers but all the stakeholders in the ASEAN community – including NGOs, civil societies, and business communities – all inclusive participatory approach. • It is also crucial to strengthen the transparency and governance under the AEC 2015 and the Dialogue Partners as well.

10. It is important that ASEAN also recognize, the role of Greater Mekong Subregion and Economic Corridors which Dialogue Partners are supporting Two New Corridors Northwestern Corridor From Assam, India – thro’ Myanmar to Kunming North-South Economic Corridor (1) North-South Economic Corridor (2) Western Corridor from Sittwe, Myanmar to Kunming,PRC East – West Economic Corridor US led Lower Mekong Initiatives Members: Thailand Lao PDR Cambodia Viet Nam Myanmar (recently invited) South Economic Corridor (2) South Economic Corridor (1) 10

11. One more crucial area that ASEAN could do, is to raise the profile of partnership and level of cooperation with Dialogue Partners on the experience of economic integration among EU members and the Lessons Learned from Euro Zone debt crisis. • With ASEAN preparing for ASEAN Economic Community in 2015, ASEAN could request to the Dialogue Partner countries of European Union (EU), on Euro Zone debt crisis and lessons learned would be very beneficial for ASEAN. • EU and Euro zone countries could share their experience with ASEAN on the merit of integration between countries with different levels of economic development. • ASEAN members are also in similar situation with different levels of economic development. • The important lessons learned in the recent economic imbalances in the Euro Zone debt crisis would be very useful for ASEAN.

12. The inter-related factors resulted in the economic imbalances and Euro zone debt crisis were: • Disparity in economic competitiveness among Euro zone member countries; • Single currency of the Euro make cheaper borrowing costs, and increased borrowings for imports led to significant increase in debt to GDP ratios; • Weak monitoring of the Maastrich Treaty on limitation of (i) 3% of GDP borrowing limits (Budget Deficit), and • (ii) 60 % debt to GDP ratio to ensure stability in Euro zone. • This led to Portugal, Ireland, Italy, Greece and Spain (PIIGS) with economic imbalances. • Large (Germany and France) as well as medium and smaller Euro zone members (PIIGS) did not follow nor monitor closely the above limitation conditionality of Maastrict Treaty.

13. The Asean Economic Community main objectives are: • Create a single market and production base; • Highly competitive economic region; • Region of equitable economic development; and • Region fully integrated into the global economy….. by 2015. • Hence, ASEAN needs to raise the level of cooperation with the Euro zone Dialogue Partners to share their experience and the lessons learned in order that ASEAN could take necessary precautionary measures and avoid similar economic and financial imbalances, and enable to achieve the main objectives mentioned above of the ASEAN Economic Community by 2015, including strengthening ASEAN integration and connectivity .

14. THANK YOU