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11. Achieving an Efficient AEC by 2015: A Perspective from Vietnam
- ISEAS–Yusof Ishak Institute
- Chapter
- Additional Information
11 Achieving an Efficient AEC by 2015: A Perspective from Vietnam1 Vo Tri Thanh In December 1997, the Association of Southeast Asian Nations (ASEAN) adopted a vision till 2020, aimed at “transforming ASEAN into a stable, prosperous, and highly competitive region with equitable economic development, and reduced poverty and socio-economic disparities”. In October 2003, the ASEAN member countries agreed on the establishment of the ASEAN Community by 2020, resting on the three pillars of security community, economic community, and sociocultural community. In order to accelerate the realization of the vision, the ASEAN leaders in 2007 expressed their commitment to establish an ASEAN Economic Community (AEC) by 2015 as a single market and production base. In line with this, ASEAN agreed to develop “a single and coherent blueprint for advancing the AEC” and the AEC Blueprint as an action plan was signed by ASEAN leaders in November 2007. For such a big move, ASEAN member countries certainly have a sizeable workload. There remain challenges and impediments to each country and the region as a whole, the most pressing of which lies in 162 Vo Tri Thanh whether the less-developed members can catch up with more advanced ones. Yet the progress of ASEAN so far, particularly in amalgamating themselves as a single block in negotiating and implementing free trade agreements (FTAs) with other major trading partners, brought about hopes for on-time realization of the AEC goal. This chapter attempts to provide a Vietnam perspective of the progress and challenges for ASEAN in establishing the AEC. Apart from the introduction, the chapter consists of four sections. The first briefly reviews the achievements ASEAN has recorded on the way from Vision 2020 to the AEC. The second describes the progress and the challenges in realizing the goal of the AEC. The third section covers Vietnam’s experience and challenges in ASEAN integration. Finally, the author draws some concluding remarks on realizing the AEC by 2015. Achievements on the Way from Vision 2020 to the AEC Thanks to the measures to liberalize regional trade and investment, trade growth of ASEAN countries has been impressive. The average growth rate of ASEAN trade reached 1.3 per cent per annum in 1995–2000, and 7.9 per cent per annum in 2000–2007. The corresponding figures for ASEAN Six member countries are 0.9 per cent per annum and 7.3 per cent per annum, whilst those for CLMV (Cambodia, Laos, Myanmar, Vietnam) are 11.9 per cent per annum and 16.5 per cent per annum respectively.2 An investigation into the pattern of intra-ASEAN trade growth meanwhile yields more impressive results. Intra-ASEAN trade growth averaged 2.8 per cent per annum in the period 1995–2000 and 9.3 per cent per annum in the years 2000–2007. The corresponding figures for the ASEAN Six (2.6 per cent per annum and 8.9 per cent per annum respectively) differ markedly from those of the CLMV (6.7 per cent per annum and 16 per cent per annum respectively) (Austria 2010). ASEAN has also proven to be a more attractive investment destination . Foreign direct investment (FDI) into the region increased quite considerably from 2002 to 2008. In the years from 2006 to 2008, FDI inflows to ASEAN member countries went up by 8.6 per cent. IntraASEAN FDI rose even faster — by 42.6 per cent. In 2008 alone, FDI into ASEAN reached almost US$59.7 billion, while intra-ASEAN FDI [44.192.51.19] Project MUSE (2024-03-28 09:00 GMT) A Perspective from Vietnam 163 equalled US$10.8 billion, or approximately 18.2 per cent of total FDI into ASEAN.3 Together with trade performance, this reflects stronger economic ties between ASEAN members. The expansion of trade and investment has made a significant contribution to ASEAN economic growth. Moreover, the newer ASEAN member countries in general registered faster GDP growth than the older ones, albeit GDP growth decelerated in all countries in 2009 due to the impact of the global financial crisis and economic recession. For the period 2000–2009 as a whole, average GDP growth rates of Cambodia, the Lao PDR, Myanmar, and Vietnam were higher than those of other ASEAN member countries (Figure 11.1). In relative terms, there has been a tendency for income convergence between the ASEAN Six and CLMV. Table 11.1 indicates that the FigurE 11.1 gDP growth of ASEAN Countries, 2000–09 –5 0 5 10 15...