World Economy

Integrative Economy Can Further Boost Asean Growth

Integrative Economy Can Further Boost Asean Growth
Integrative Economy Can Further Boost Asean Growth

Growth, technology and developing the youth should be regarded as three key issues to drive the Asean community amid fast-changing global challenges, former Asean secretary-general Ong Keng Yong said.

Economic growth was critical to ensure political stability, Ong said, adding that a rising middle class across Asean had seen 5% growth since last year.  That growth, which Ong expected to top 7%, could be furthered by integrative mechanisms, he said.  The most prominent example was the Asean Free Trade Area pact signed in 1992, followed by the formal debut of the Asean Economic Community, which has helped to realize tariff reductions and facilitated cross-border trade, investment and the transfer of capital, CNA reported.

Asean should also keep working on the Regional Comprehensive Economic Partnership, a proposed FTA among Asean member countries as well as Australia, China, India, Japan, South Korea and New Zealand, which all have existing FTAs with Asean.

“A study from McKinsey & Company shows that a fully integrated Asean economy could raise our economy by 10%,” Ong said. “Without integration, Asean will eventually lose out from competition between India and China.”

To accelerate economic progress, he said, efficient implementation of technology should be considered. Already a digital industry hub, Asean had the potential to be ranked among the world’s top-five digital economies by 2025, he said.

With hundreds of thousands of new mobile phone users in Asean countries, modernization should boost growing markets and not instead hinder traditional employment in industry, allowing job creation to prosper, he said.

Sophisticated technology would also help to balance supply and demand in growing Asean labor markets as well as regulate trans-boundary issues, including the rise of extremism that needed to be checked, he added.

Asean must also pick the right instruments to develop young people as a vital element of Asean’s future, Ong said.

A majority of the 630 million people in Asean, excluding Singapore and Thailand, are young people. The younger generation would not only help maintain dynamic growth in Asean, but also enhance Asean’s capacity to invest, given that economies cannot be wholly reliant on natural resources but also depend on human resources, Ong said.

Ong, a Singaporean diplomat who served as secretary-general from 2003 to 2007, spoke during a special lecture at his country’s foreign ministry on Monday as a part of commemorative activities on the occasion of the 50th anniversary of Asean.

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