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1. Understanding the MPAC
- ISEAS–Yusof Ishak Institute
- Chapter
- Additional Information
1 Understanding the MPaC Sanchita Basu Das ASEAN leaders proclaimed to create an ASEAN Economic Community (AEC) by 2015. While the fundamentals for creating a single market and production base are a work in progress, it is also crucial for ASEAN to facilitate the realization of the ASEAN community through “connectivity” (see Figure 1.1). This is because community building through physical, institutional and personal connectivity is not only expected to reduce business transaction cost, time and travel cost, but also to connect the “core” and the “periphery” in ASEAN, thus distributing the benefits of multifaceted growth wider in the region and reducing the development divide in ASEAN. Moreover, better connectivity within ASEAN is essential for further connectivity with other regions, such as East and South Asia, which will help ASEAN to maintain its centrality in the evolving regional architecture. In 2010, during the 17th ASEAN Summit in Vietnam, the Leaders adopted the Master Plan on ASEAN Connectivity (MPAC). The plan strives to integrate a region of over 600 million people with a combined GDP of about US$1.5 trillion. The Master Plan identified several Sanchita Basu Das priority projects, including the ASEAN Highway Network, a roll-on roll-off network and the ASEAN Broadband Corridor. It reviewed the achievements made and the challenges encountered to build up the linkages in ASEAN. It also provided key strategies and essential actions with clear targets and timelines to address the challenges. Three linkages and strategies The MPAC has three components: • physical connectivity; • institutional connectivity and; • people-to-people connectivity FigUre 1.1 interaction between asean Connectivity and asean Community Source: MPAC, ASEAN Secretariat, June 2011. Resource Mobilization ASEAN Connectivity ASEAN Community APSC AEC ASCC Narrowing the Development Gaps Enhance rules and good governance for ASEAN Enhance integration and competitiveness of ASEAN Enhance the wellbeing and livelihood of ASEAN peoples People-toPeople Connectivity Physical Connectivity Institutional Connectivity [18.232.188.122] Project MUSE (2024-03-28 10:05 GMT) Understanding the MPAC (a) Physical Connectivity Currently, in ASEAN, the physical infrastructure, particularly in the less developed members, is characterized by structural weaknesses — low responsiveness to users, organizational inefficiencies, insufficient funding, heavy dependence on official development assistance, low foreign direct investments, and lack of environmental awareness. Most ASEAN countries are also short of the “soft” infrastructure (ICT), which are important prerequisites for the next stage of development. This calls for the upgrading of existing infrastructure, the construction of new infrastructure and the harmonization of regulatory framework. They are all vital for the seamless movement of goods and tradable services within the region and to the rest of the world. The key strategies for enhanced physical connectivity include the completion of the ASEAN Highway Network (AHN); fully implementing Singapore-Kunming Rail Link (SKRL); establishing an efficient and integrated inland waterways network; forming an integrated, efficient, and competitive maritime transport system; building integrated and seamless multimodal transport systems; accelerating ICT infrastructure and services development in member states; and prioritizing the processes to resolve institutional issues in energy infrastructure projects. (b) Institutional Connectivity While ASEAN has been successful in eliminating tariffs, it is still struggling with the issue of non-tariff barriers (NTBs) to trade and investment. While some such barriers are necessary — for example, to protect the environment or the health of humans, animals and plants — others unnecessarily distort trade flows and restrict competition. To address this, ASEAN must harmonize standards and conformity assessment procedures, and operationalize key transport facilitation agreements to reduce the costs of moving goods across borders. In addition, ASEAN member states must fully implement their respective National Single Windows towards realizing the ASEAN Single Window by 2015. Key strategies to enhance institutional connectivity include fully operationalizing the three Framework Agreements on transport facilitation ; implementing initiatives to facilitate interstate passenger land transportation; developing the ASEAN Single Aviation Market (ASAM); developing an ASEAN Single Shipping Market; eliminating barriers to merchandise trade to accelerate the free flow of goods within the Sanchita Basu Das region; accelerating the development of an efficient and competitive logistics sector, in particular transport, telecommunications, and other connectivity-related services in the region; substantially improving trade facilitation; enhancing border management capacities; increasing Member States’ openness to both intra-regional and extra-regional investment under fair investment rules and strengthening institutional capacity where necessary to improve coordination of policies, programmes, and projects between the regional and subregional levels. (c) People-to-People Connectivity This entails deeper intra-ASEAN cultural interaction, greater intra-ASEAN people mobility through progressive relaxation of visa requirements...