Enhancing ASEAN's Connectivity

Preface

PREFACE This book is a result of the ASEAN Roundtable 2011 on “Enhancing ASEAN’s Connectivity” organized by the ASEAN Studies Centre (ASC) at the Institute of Southeast Asian Studies (ISEAS), along with the Konrad Adenauer Stiftung (KAS) on 5 May 2011 at Shangri-La Hotel, Singapore. The primary objective is to examine the current state of infrastructure development across ASEAN and to discuss how greater connectivity can contribute to the process of ASEAN economic integration. The ASC hopes that the roundtable would produce a set of policy recommendations that would help ASEAN to address the national- and regional-level challenges to build a robust infrastructure and to suggest approaches to resource mobilization for this purpose. The roundtable focused on four areas: transportation for the movement of goods and people, telecommunications for business and people, information and communication technology (ICT) for businesses, education and other developments in the region, and energy infrastructure for better use and distribution of resources. Road, rail, water and aviation corridors assume importance for the movement of goods and people. The development of transnational transport projects, such as the ASEAN Highway Network and the Singapore–Kunming Rail Link, is also key to realizing a seamless ASEAN. In the dynamic global telecommunications environment, ASEAN needs to promote telecommunications as a fundamental infrastructure in accomplishing its vision of an AEC. Given the importance of the Internet in business and other economic and social development, it is crucial to promote the utilization of ICT. The absence of such linkages will threaten to accentuate the already existing gaps between xvi Preface different countries both within ASEAN and around the world. Finally, integrated power grids and gas pipelines for ASEAN countries aim to improve energy efficiency and develop indigenous energy resources. It is expected to bring huge economic efficiency, creating opportunities to expand the power market, stimulate investment, and contribute to member countries’ energy security. At the end of the one-day roundtable discussion, it was concluded that: 1. For ASEAN, to build an economic community, even though the tariff cutting component is on track on paper, there exist many non-tariff barriers which would lower the potential benefits under the economic integration. One such barrier is the lack of physical and personal connectivity across the ASEAN region. Hence, it is a crucial time for ASEAN to enhance regional connectivity. 2. Greater connectivity results in better cooperation not only among the member countries, but also between the ASEAN region and the rest of the world. It would also help in the multifaceted growth of the region and would significantly narrow the development gap within ASEAN. 3. 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. 4. The MPAC can potentially transform the ASEAN region, providing the conditions for a single market and production base. It is an expensive initiative, and funding remains a major challenge. The private sector should be actively involved as a number of infrastructure projects identified in the MPAC are still waiting for substantial investment. Hence, what is needed is to develop economically viable and bankable projects. Preface xvii This book is divided into three parts. The first part contains three chapters which present an overview of ASEAN’s state of physical connectivity and challenges in building better infrastructure. The second part hosts a collection of chapters that discuss specific issues pertaining to each kind of physical connectivity — a) transportation infrastructure; b) telecom connectivity; c) ICT, and d) energy infrastructure. The third part covers the issues in implementing the MPAC and gives concrete policy recommendations. The book has several distinguished writers from academia, private sector and government bodies: Dato’ Michael Yeoh (Asian Strategy and Leadership Institute), Nguyen The Phuong (Ministry of Planning and Investment, Vietnam), Fukunari Kimura (ERIA), Bambang Susantono (Transportation Department, Republic of Indonesia), Andre Levisse (McKinsey & Company), Lee Yu Kit (IBM), Emmanuel C. Lallana (Ideacorp), Nguyen Manh Hung (ASEAN Centre for Energy), Tilak K. Doshi (Energy Studies Institute) and Somsak Pipoppinyo (ASEAN Secretariat). The ASC would like to thank all of them for making...