Narrowing ASEAN’s Development Gap

Growing development gap between the member countries is a barrier to future development of ASEAN. Accordingly, the request to connect and support the four countries later joining ASEAN, including Cambodia, Laos, Myanmar, Vietnam (CLMV) to narrow the development gap, aiming at strengthening linkages and promoting regional integration has always been regarded as the top priorities of ASEAN cooperation.

Determined efforts to bridge the gap

In recent years, ASEAN’s economic cooperation has gained many considerable achievements. ASEAN countries have obtained high economic growth rate compared with other regions in the world with an annual growth rate of from 5 to 10 %. However, there are potential uncertainties in ASEAN, one of which is the current status of development gap between regions, especially between the more developed countries, including Brunei, Indonesia, Malaysia, Singapore, Philippines, Thailand (ASEAN-6) and 4 countries CLMV.

Income gap between ASEAN – 6 and 4 CLMV is from 17 to 50 times etc, which shows the income per capita of the ASEAN countries have very deep contrast, resulting in widening development gap between ASEAN countries. Although in recent years there have been many attempts to narrow this gap, the risk of increasing development gap has become the top challenge for the future development of ASEAN, especially in the context that economic integration of ASEAN is entering a strong development stage widely and deeply. Analysis of Vietnam Ministry of Industry and Trade pointed out apart from the huge gap of GDP, market size and the structure of the economic sectors of ASEAN are of much difference. While Indonesia’s GDP reached US$546 billion, that of Thailand, Malaysia, Singapore gained approximately US$200 billion, that of Laos, Myanmar, Cambodia was only between US$5 billion – 18 billion, less than 80-90 times compared with the other members.

In terms of trade, Singapore turnover is the largest with US$516 billion, accounting for 33.5 % of ASEAN’s total imports and exports, Thailand accounting 18.6 %, Malaysia accounting for 18.3 %. Meanwhile, export turnover of Vietnam is nearly US$23 billion, accounting for 1.47 % and that of all three countries of Laos, Myanmar, and Cambodia was only 2.2 %. Besides, the growing gap between the richest and poorest countries in the region could threaten the goal towards a common market in the region. Vietnam, Laos, Cambodia, and Myanmar are the countries that achieved high growth rates but with income per capita which is still considered the lowest of 10 ASEAN member countries. According to ASEAN General Secretary Surin Pitsuwan, ASEAN is moving toward establishing a common market of 600 million people in 2015, but the gap between rich and poor countries in the region can have negative impacts to these efforts.

Accordingly, supporting 4 CLMV to narrow the development gap to strengthen links and promote regional integration has always been regarded as the priorities of ASEAN cooperation. Mr Pham Gia Khiem, Deputy Prime Minister of Vietnam stressed narrowing the development gap is one of the leading programs which are crucial to the success of the agenda of building a dynamics, united and close-to-each-other ASEAN community.

ASEAN countries have been implementing a series of assistance projects in order to narrow the development gap, strengthen linkages and promote regional integration. Until this point, the number of projects is constantly increasing. If in 2002 there were only 48 ones being started, the number now reaches over 209 ongoing ones, of which there are only 165 ones funded. The project focuses primarily on supporting infrastructure, development of transportation systems, development of the basis for economic integration, information technology and telecommunications, human resources development; poverty reduction and hunger elimination, improvement of environment and tourism. Besides, ASEAN has established and implemented many programs of sub-regional cooperation such as Golden Triangle of Cambodia, Laos, Vietnam (CLV-GT), CLMV Cooperation, Ayawady-Chao Phraya- Mekong Economic Cooperation Strategy (ACMECS) etc. These programs not only help promote the economic potential of the four CLMV but also contribute effectively to build caring communities and connected community in the contents of the ASEAN community building.

Moreover, the gap narrowing activities are also conducted through the support of economic and technical bilateral of ASEAN-6 countries – partners. ASEAN – 6 Program has established preferential tariffs for ASEAN Integration (AISP) for 4 CLMV. Through the technical cooperation program in Malaysia, Thailand and Singapore conducted training courses, short seminars on management, economics, commerce, investment promotion, information technology, English and granted postgraduate scholarships, opened training centres in four countries and sent experts CLMV to support. Japan has actively supported the IAI projects, funded internships program for the young diplomats at the ASEAN Secretariat, supported equipment for the ASEAN Secretariat of the CLMV countries, established Japanese ASEAN integration fund (JAIF) and through the Office Japan International Cooperation Agency (JICA).

Reasonable approach needed

In the opinion of Secretary-General Pitsuwan, differences in development gap is a cause of inequality, limited opportunities to gain benefits from an effective integration. It is impossible to build up a community among ASEAN member countries if there is still a big gap in development. Need to narrow the development gap becomes essential when ASEAN accelerates the establishment of the ASEAN Economic Community by 2015. However, in the context that the CLVM are lagging behind while the other six are growing fast, the target of small gap becomes more difficult.

Therefore, finding particular and effective solutions to connect the two ends of the development gap is ASEAN central task in 2010 and subsequent years. According to Mr Surin Pitsuwan, the senior leaders of ASEAN have said that to narrow that gap, in the future ASEAN should focus priority programs and projects to develop infrastructure and human resource in four countries CLVM. ASEAN member countries should also call for assistance as well as expand cooperation with other developed partners in the world wishing ASEAN countries successful integration into the region and the world.

In 2009, total trade of ASEAN was over US$1.5 trillion, but the concern is the proportion of intra-regional trade accounted only for 20 % while the rest was external trade. Thus, the ASEAN countries; especially 4 CLMV should take full advantage of potential intra-cooperation (based on signed agreements on free trade, commitments to remove technical barriers, tax etc) to increase trade; facilitate the flow of goods between countries in ASEAN. With Full exploitation of intra-trade potential advantages, the share of intra-ASEAN trade will be able to reach over 30 % in 2015.

Particularly for Vietnam, along with the full utilization of preferences based on the Free Trade Agreement signed with ASEAN’s partners like China, Japan, Korea etc, the economists recommended Vietnam should take advantage of all the other important preference of the Preferential Trade Agreement between Vietnam and bilateral partners to find a sustainable and effective development direction, rapidly narrowing development gap with other countries in ASEAN.

Tags: 17th ASEAN Summit