Travel agents make bookings for tourists at Keness Travel Co Ltd in Phnom Penh last week. Photograph: Pha Lina/Phnom Penh Post

Monday, 27 August 2012
Justine Drennan
The Phnom Penh Post

The vision regional leaders have for an ASEAN Economic Community by 2015 may become clearer after this week’s Economic Ministers meeting in Siem Reap, but not everyone has a rose-coloured view of what such integration might mean for Cambodia.

“My peers are really concerned that other countries have many more skills and higher study levels,” National Institute of Business student Chan Kakada, 22, said yesterday, ahead of Prime Minister Hun Sen officially opening the meeting today.

Students who have not mastered the English language also fear employment opportunities will fade in the face of stiffer competition for English skills, Kakada, who hopes to one day open her own travel agency, said.

Another chance for ASEAN to get it right

Tue, August 28 2012
Pushpanathan Sundram, Singapore | Opinion
The Jakarta Post

The 44th ASEAN economic ministers meetings currently held in Siem Reap, Cambodia is the first high-level meeting after the debacle at the ASEAN foreign ministers meeting in Phnom Penh one month ago where the ministers failed to issue the customary Joint Communiqué over the South China Sea issue, a first since the meeting started 45 years ago.

The economic ministers meetings will provide the much-needed platform for ASEAN to show that they are on sight towards the ASEAN Economic Community (AEC) by the year 2015.

This is especially so since the target for establishing the AEC is less than two and half years away. ASEAN has to redouble its efforts to keep pace with the binding commitments made in the AEC blueprint.

It is now at the mid-point of the implementation of its AEC blueprint and has to take stock, realign and adopt a bolder approach to meet all the outstanding, current and future commitments.

More importantly, it will have to avoid any protectionist stance due to the continuing uncertainty in the global economy. ASEAN will also have to show its collective leadership in managing the competing interests of its partners in East Asia over the form and pace of East Asia-wide trade arrangement.

Rich-poor gap hinders Asean integration

Tuesday August 28, 2012
AFP

PHNOM PENH: South-East Asian nations must redouble efforts to bridge development gaps which threaten the region’s efforts to create an EU-style single market, Cambodia’s prime minister said.

Building an Asean economic community by 2015 is the “top priority”, Hun Sen said as he opened the annual meeting of Asean economic ministers in the Cambodian tourist hub of Siem Reap.

Emulating the European Union’s example, Asean wants to establish a single market and manufacturing base of about 600 million people – a goal that has been spurred by intensifying competition from China and India.

Should Cambodia build more pagodas or should she build more research centers?

កម្ពុជា​ត្រូវ​សង់​វត្ត​បន្ថែម ឬ​មជ្ឈ​មណ្ឌល​ស្រាវ​ជ្រាវ​-មន្ទីរ​ពិសោធន៍?

Tuesday, 31 July 2012
ប៉ែន មីរ៉ាន់ដា
The Phnom Penh Post

វត្ត​អារាម ជា​ទី​សក្ការ​របស់​ប្រជា​ពលរដ្ឋ​ខ្មែរ​ប្រមាណ ៩០ % ដែល​កាន់​សាស​នា​ព្រះ​ពុទ្ធ ដែល​ជា​សាសនា​របស់​រដ្ឋ។ យើង​កត់​សម្គាល់​ឃើញ​ថា ចំនួន​ព្រះ​សង្ឃ និង​វត្ត​អារាម កំពុង​តែ​កើន​ឡើង ហើយ​ការ​សាង​សង់ ត្រូវ​បាន​យក​ចិត្ត​ទុក​ដាក់ ដោយ​រាជ​រដ្ឋា​ភិបាល និង​សប្បុរស​ជន​នានា។

តែ​បើ​ក្រឡេក​មើល​ចំនួន និង​ទំនើប​កម្ម​មជ្ឈ​មណ្ឌល​ស្រាវ​ជ្រាវ និង​មន្ទីរ​ពិសោធន៍​វិញ មិន​មាន​ការ​កើន​ឡើង​គួរ​ឲ្យ​កត់​សម្គាល់​សោះឡើយ។

ឈរ​លើ​គោល​ការណ៍​អា​ស៊ាន​ដែល​នឹង​បង្កើត​សមា​គមសេដ្ឋ​កិច្ច​អាស៊ាន (ASEAN Economic Community, AEC) ត្រឹម​ឆ្នាំ ២០១៥ និង​គោល​ការណ៍​សកល​ភា​វូប​នីយ​កម្ម កម្ពុជា​នឹង​ប្រឈម​ការ​ប្រកួត​ប្រជែង​ផលិត​ផល​ទាំង​បរិមាណ​និង​គុណភាព​នៅ​លើ ទីផ្សារ​តំបន់ និង​ពិភព​លោក។ តើ​កម្ពុជា ត្រូវ​ត្រៀម​លក្ខណៈ​បែប​ណា​ខ្លះ ដើម្បី​កែប្រែ​ការ​ប្រឈម​ឲ្យ​ទៅ​ជា​ឱកាស ពាណិជ្ជ​កម្ម និង​សេដ្ឋកិច្ច? តើ​រដ្ឋាភិ​បាល ឬ​សប្បុរស​ជន ពាណិជ្ជ​ករ គួរ​ប្រើ​ថវិកា​ខ្លះ ដើម្បី​ការ​សាង​សង់​មជ្ឈ​មណ្ឌល​ស្រាវ​ជ្រាវ និងមន្ទីរ​ពិសោធន៍​វិទ្យា​សាស្ត្រ​ដែរ​ឬ​ទេ?

ជា​ដំបូង តួនា​ទី​វត្ត​អារាម​ពិត​ជា​សំខាន់​ណាស់ សម្រាប់​ពលរដ្ឋ​ខ្មែរ​ដូច​ជា ការ​ផ្តល់​ពុទ្ធ​ដីកា និង​ដំបូន្មាន របស់​ព្រះ​សង្ឃ ដល់​ពុទ្ធ​សាស​និក និង​ជា​កន្លែង​ផ្ដល់​ចំណេះ​ដឹង។ វត្ត​អារាម​ក៏​ជា​ទី​ស្នាក់​អា​ស្រ័យ របស់​និស្សិត​បុរស ដែល​មក​ពី​ទី​ជន​បទ​ដើម្បី​បន្ត​ការ​សិក្សា​ថ្នាក់​ឧត្តម​នៅ​ទី​ក្រុង។ អត្ថបទ​មួយ​របស់ Arnaldo Pellini (2004) ក៏​បាន​បង្ហាញ​ឧទាហរណ៍ របស់​សមាគម​វត្ត​អារាម​ក្នុង​ស្រុក​ស្ទោង ខេត្ត​កំពង់​ធំ ដែល​ដើរ​តួនាទី​ជា​សមាគម ថវិកា និង​ស្រូវ​សម្រាប់​ប្រជា​ពលរដ្ឋ។ បើ​តាម​ស្ថិតិ​របស់​ក្រសួង​ធម្ម​ការ និង​សាស​នា ដែល​ដក​ស្រង់​ដោយសារ​ព័ត៌​មាន Xinhua គិត​មក​ត្រឹម​ខែ​មេសា​ឆ្នាំ​២០១០ មាន​វត្ត​អា​រាម​ចំនួន ៤៣៩២ និង​ព្រះ​សង្ឃ​ច្រើន​ជាង ៥ ម៉ឺន​អង្គ ក្នុង​ប្រទេស​កម្ពុជា។ បើ​យើង​គិត​ពី​សមាមាត្រ​ភាគ​រយ​ព្រះ​សង្ឃ និងប្រជា​ជន​សរុប ១៣,៣៩៥,៦៨២ (NIS, 2008) គឺ​ស្មើ ០.៤ %។

ម្យ៉ាង​វិញ​ទៀត ថវិកា ដែល​ត្រូវ​សាង​សង់​វិហារ និង​កុដិ ក្នុង​វត្ត នីមួយៗ​យ៉ាង​ហោច​ក៏​ត្រូវ​ចំណាយ​ពី ២០ ទៅ ៣០ ម៉ឺន​ដុល្លារ​អាមេរិក​ដែរ ហើយ​បើ​យើង​មាន​មហិច្ឆ​តា​ដើម្បី​ធ្វើ​ទំនើប​កម្ម​វត្ត​ទាំង​អស់​ដែល​មាន ស្រាប់ យ៉ាង​ហោច​ណាស់​ក៏​ត្រូវ​ការ​ថវិកា​ជិត​មួយ​កោដិ​ដុល្លារ​អាមេរិក​ដែរ។ ការ​សាង​សង់​ទៀត​សោត ពពាក់​ពពូន​គ្នា​នៅ​តែ​តំបន់​ជិតៗ ហើយ​តំបន់​ឆ្ងាយៗ ជា​ពិសេស​តំបន់​ព្រំដែន​ដែលត្រូវ​ការ​ប្រជា​ពលរដ្ឋ​រស់​នៅ​ឲ្យ​បាន​ច្រើន​ នោះ បែជាមិន​សូវ​ មាន​ទៅវិញ។

New Thai-Cambodian land transport route officially opened to accommodate AEC

Friday, 15 June 2012
By NNT
Pattaya Mail

SA KAEO, 15 June 2012 – A new official route connecting Thailand and neighboring Cambodia has been opened ahead of the realization of the ASEAN Economic Community (AEC) in 3 years’ time.

On Thursday, the Thai Ministry of Transport joined Cambodia’s Ministry of Public Works and Transport in the official opening of the Thai-Cambodian Friendship Bridge, which connects the country’s Sa Kaeo Province with PoiPet town across the border.

The opening ceremony was co-chaired by Thai Transport Minister Charupong Ruangsuwan and Cambodian Minister of Public Works and Transport Tram Iv Tek, who were joined by Asian Development Bank’s executives from both countries and locals as well as state servants, military personnel and the police from the 2 neighbors, amidst an army of Thai, Cambodian and foreign members of the press.

13 East Asian countries agree to double size of currency swap arrangement

PHNOM PENH (Kyodo) -- Deputies of finance ministries and central banks of 13 East Asian countries agreed Wednesday to double the size of a regional currency swap arrangement to $240 billion to cope with a potential financial crisis that could hit the region, official sources said.

Meeting in Cambodia's capital, the deputies agreed that each country's contribution to the arrangement, set up under the Chiang Mai Initiative Multilateralization scheme, will be doubled, the sources said.

They said the ratio will remain the same, with 80 percent coming from Japan, China and South Korea, and the other 20 percent from the 10 members of the Association of Southeast Asian Nations: Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam.

ASEAN finance, central bank deputies meeting kicks off in Cambodia

March 27, 2012

PHNOM PENH (Xinhua) - The ASEAN finance and central bank deputies meeting kicked off here on Tuesday in order to update financial cooperation toward an ASEAN Economic Community by 2015, according to a press release of Cambodia's Ministry of Economy and Finance.

The meeting would focus discussion on financial cooperation in the ASEAN framework in order to continue expediting financial integration toward the establishment of ASEAN Economic Community in 2015, it said.

It would review the progress of the Roadmap for Monetary and Financial Integration of ASEAN including Capital Market Development, Financial Services Liberalization, Capital Account Liberalization, and ASEAN Capital Market Forum.

ASEAN has come of age as a market and producer

Monday, Sept. 20, 2010
SENTAKU MAGAZINE
Posted by The Japan Times

The Association of Southeast Asian Nations (ASEAN) is regaining its economic clout to the extent that it is now time for Japanese corporations to think about the group's 10 members not only as huge markets for their products but also as production bases.

A number of factors have contributed to the recent rise of ASEAN in the regional and global economic arenas: its geopolitical advantage of being adjacent to two economic behemoths (China to the north and India to the west), benefits accruing from a series of free trade agreements it has concluded with a number of trading partners since the 1990s, a combined population of 600 million whose personal consumption is on the rise, and a slowdown of the Chinese economy, which has suffered from the rising value of the renminbi currency and steep increases in labor costs.

The Asian Development Bank surprised economists and market observers alike when it predicted in July that ASEAN as a whole would achieve a robust economic growth of 6.7 percent this year, up 1.6 percentage points from the previous forecast in April. This is a remarkable figure by today's global standards, and not far behind the 9.6 percent and 8.2 percent expected of China and India, respectively.

The economic growth rate for Singapore this year is estimated at 12.5 percent, Malaysia 6.8 percent, and Indonesia 6.0 percent. Even Thailand, whose economy suffered after a violent confrontation between supporters and opponents of ex-Prime Minister Thaksin Shinawatra earlier this year, is likely to see 5.5 percent growth.

The history of ASEAN economies has had its ups and downs. During the 1980s, many Japanese, European and American corporations started investing in ASEAN-member production facilities — a major shift from the trend of concentrating investments in South Korea, Taiwan, Hong Kong and Singapore, collectively known as newly industrialized economies. New plants were set up in Malaysia, the Philippines and Thailand, one after another, ushering in an age of full-fledged ASEAN economic growth for the first time since its inception in 1967.

Following the Plaza Accord of September 1985, which pushed up the value of the yen currency, Japan's export-oriented firms started shifting their production bases to ASEAN- member nations, thus relieving those countries, except Indonesia, of trade deficits as oil prices plummeted.

The remarkable prosperity of ASEAN came to a sudden halt with the currency crisis that hit the region in the summer of 1997. One of the factors behind the crisis was that much of the huge investments in new factories had come in the form of foreign currencies from outside sources such as financial institutions in Japan, Europe and the U.S. That's because the area did not have a fully developed financial market for raising funds domestically.

Although a huge increase in imports of materials and components for these new plants led to trade deficits in ASEAN countries, the value of their currencies remained high. It was the massive sale of the Thai baht by foreign funds that began the collapse of ASEAN's economy.

ASEAN-member nations learned valuable lessons from the 1997 crisis. Subsequently they made it their top priority to export more than they imported to accumulate foreign exchange reserves. China at present ranks first in foreign currency reserves with $2.450 trillion; while Japan is second with $1.060 trillion, Singapore eighth, Thailand 12th and Malaysia 13th, each with more than $100 billion. These reserves have not only stabilized the regional economy but also encouraged foreign funds to invest more in the region.

The current ASEAN economic boom is reflected in booming sales of vehicles and other expensive consumer products. Although the car market in the area remained somewhat sluggish in 2009, total sales came to 1.9 million vehicles, not far behind India's 2.26 million vehicles. During the first half of this year, motor vehicle sales in the six principal ASEAN nations shot up by 41 percent over the same period for the previous year (1.18 million). Some have even predicted that the number for the whole year will reach a record 2.5 million vehicles.

Motorcycle sales in Indonesia during the first half of this year rose 31 percent over the same period of 2009 to 7.6 million units, prompting Honda to raise production capacity there from 3.3 million units to 4 million units a year. Yamaha went from 3 million units to 3.6 million units. Sales of flat-screen televisions, air conditioners and refrigerators throughout ASEAN were also up nearly 50 percent in the January-June period from the same period of 2009.

Even though China's per capita gross domestic product has risen to $3,700, topped only by Singapore, Malaysia and Thailand among ASEAN countries, ASEAN countries still offer lower production costs than China, especially with regard to labor. ASEAN offers a large labor force, as Indonesia has a population of 237 million and the Philippines, 88 million. Particularly low wages are available in Laos and Cambodia, broadening choices for enterprises outside the region that are contemplating off-shore production.

China is trying to lure factories to inland areas where wages are still low, but these areas have a transportation disadvantage. India has a young labor force, but it will probably take 10 to 15 years before India's electric power supply, roads and port facilities compare with those of ASEAN countries.

Above all else, the ASEAN region is ideally situated geographically to export manufactured goods not only to the neighboring big markets of China and India but also to North America, Europe, the Middle East and Africa.

At present, ASEAN is working with the Asian Development Bank to build a highway crossing the Indochinese Peninsula from the Vietnamese city of Da Nang on the South China Sea coast to Myanmar's port city of Mawlamyaing facing the Indian Ocean. When completed, this highway will dramatically improve the efficiency of transporting goods manufactured within ASEAN to Europe and the Middle East, since they will no longer have to go through the Strait of Malacca, long a bottleneck for Chinese exporters.

It is high time that Japanese manufacturers take a fresh look at the geopolitical advantages of the ASEAN region, where people in the middle-income brackets as well as their spending are ballooning. The region offers opportunities comparable to those of China and India.

This is an abridged translation of an article from the September issue of Sentaku, a monthly magazine covering Japanese political, social and economic scenes.

ASEAN Market to Boom

June 15, 2010
LiveTradingNews.com

ASEAN Markets will see a strong rally today after a turn in Wall St sentiment, additional good news in the region has also raised long term expectations of ASEANS Stock Exchanges.

ASEAN Nations prepare for the establishment of an economic community by 2015, member-countries of the Association of Southeast Asian Nations (Asean) are planning to enter into an East Asia Free Trade Area (Eafta) to engage regional giants such as Japan, South Korea and China.

This will see an explosion in ASEAN business and stock markets. As Ebeling Heffernan has been saying for some time, everyone should be gaining some ASEAN exposure.

S. Pushpanathan, deputy secretary-general for the planned Asean Economic Community, said integrating the regional bloc into the regional and global economy continues to be a top priority.

“Besides the effective implementation of the intra-Asean free trade-agreement and FTAs with dialogue partners such as China, Japan, Korea, and recently Australia and New Zealand, Asean should also engage bigger trading blocs.

“And as mandated by the Asean leaders, member states are currently looking into the recommendations for an Eafta and Comprehensive Economic Partnership in East Asia,” said Pashpanathan in a statement during the trade ministers’ meeting of Asean and Asia-Pacific Economic Confederation (Apec) member-countries recently in Jakarta.

He said both regional blocs share similar goals while priorities are being pursued differently. “The Asean regional economic integration should go beyond trade liberalization and facilitation, structural reforms, connectivity, food and energy security but also into pressing issues facing the member countries such as disaster management and counterterrorism cooperation.”

Pushpanathan said the realization of the Asean economic community by 2015 “will be a big boost” to the Apec Bogor Goals that seek to liberalize trade and investments by 2020.

Asean groups the Philippines, Indonesia, Thailand, Vietnam, Laos, Cambodia, Singapore, Brunei, Burma/Myanmar and Malaysia. Apec groups 21 developed and developing economies around the Pacific Rim.

The Stock Exchange of Thailand (SET) has selected eligible securities as the constituents of the SET50 and SET100 indices for H2/2010 (July 1- December 31,2010). The review was based on trading data of eligible securities during June 1, 2009 to May 31, 2010, SET Group Head, Markets Division, Ms. Kesara Manchusree said.Their inclusion should see increased demand for the securities and each is worth buying.

There are five additions in the SET50: Bangkok Life Assurance PCL (BLA), Home Product Center PCL (HMPRO), Indorama Ventures PCL (IVL), Tisco Financial Group PCL (TISCO), TPI Polene PCL (TPIPL).

There are also 9 additions in the SET100: Bangkok Life Assurance PCL (BLA), Central plaza hotel PCL (CENTEL), GFPT PCL (GFPT), Kang yong electric (KYE), Samart Telcoms PCL (SAMTEL), Somboon Advance Technology PCL (SAT), Sri trang agro-industry PCL (STA), Tipco asphalt PCL (TASCO), Vanachai group PCL (VNG)

The SET50 Index is calculated from the top 50 eligible securities and the SET100 from the top 100,with 5 securities in the replacement lists of each index.

For details on the selection criteria and method of Index calculation, please go to www.set.or.th/set50

In Bangkok, profit-taking erased gains in banks, with Bangkok Bank BBL.BK, the biggest, and number four
Kasikornbank KBAN.BK both falling more than 1 percent. The Thai market continued to be supported by local buying,as political tension eased after the end last month of protests in the capital, cushioning further foreign selling on Monday and last week.

In Manila, port operator International Container Terminal Services Inc (ICT.PS) jumped 5.5 percent and Manila Water (MWC.PS), the utility arm of conglomerate Ayala Corp (AC.PS), gained 3.3 percent.

Bucking the trend, Vietnam’s index .VNI inched down 0.06 percent, ending a five-day rise.

Indonesia’s main share index, Asia’s second best performing market this year, ended the day up 0.12 percent,
after rising earlier to its highest level since May 17. The market attracted net foreign buying of $58 million over the past two sessions, adding to the $309 million net foreign inflows in the past three weeks.

Among outperformers in Jakarta, Astra International (ASII), the country’s biggest automotive distributor and the largest listed firm by market value, rose for a third session, adding 3.95 percent. Bank Mandiri (BMRI.JK), the biggest lender, rose 1.8 percent to 5,550 rupiah after broker Nomura upgraded its rating on the bank to ‘buy’, with target price of 6,800 rupiah.

In Singapore, the index ended just flat, with commodity firm Noble Group (NOBG.SI) up 2.2 percent and telecom firm Singapore Telecom (STEL.SI) down 0.33 percent.

Hotel operator Overseas Union Enterprise (OVES.SI) fell 22 percent after a key shareholder at the company plans to raise up to $300 million by selling shares, convertible bonds.

In Kuala Lumpur, gaming firm Genting (GENT.KL) rose 1.6 percent and Genting Malaysia (GENM.KL) was up 0.36 percent.

Single Asean market a step closer

February 9 2010
By Kevin Brown in Singapore
Financial Times (UK)

An ambitious initiative to allow cross-border trading between several south-east Asian stock exchanges took a significant step towards completion yesterday with a firm commitment to technology for the project.

Four leading exchanges said they had signed a letter of intent at a meeting in Manila with NYSE Technologies, the technology arm of NYSE Euronext, the transatlantic exchange that owns the New York Stock Exchange.

The four - Bursa Malaysia, the Philippine Stock Exchange, the Singapore Exchange and the Stock Exchange of Thailand - are in the vanguard of moves towards a common board that could eventually include stocks from most of the 10 countries in the Association of Southeast Asian Nations.

Vietnam's Hochiminh Stock Exchange and the Indonesia Stock Exchange in Jakarta are also backing the project , which could eventually lead to a single south-east Asian market for stocks with a combined capitalisation of more than $1,000bn.

Francisco Edralin Lim, chief executive of the Philippine Stock Exchange, said the deal with NYSE was a significant move towards the establishment of integrated Asean capital markets.

"We are confident that they will deliver cutting-edge solutions that meet all our requirements. We are also excited about the possibilities of leveraging their extensive order routing networks to bring order flow into the Asean markets," said Mr Lim.

The Thai stock exchange, which has been leading the integration project, said the trading link would allow investors to trade multiple Asean markets from their domicile countries while also allowing fresh access to order flows from outside Asean, which also includes Cambodia, Laos, Brunei and Burma.

The exchanges have been working with experts from the Asian Development Bank on technical issues such as the incompatibility of some existing trading systems, setting up central clearing and settlement arrangements and handling transactions in several currencies.

Yusli Mohamed Yusoff, chief executive of the Malaysian stock exchange, told the Financial Times in September that currency settlement for cross trades would follow "home settlement rules".

For example, the Malaysian ringgit would be used if trades were settled in Malaysia.

ADB officials say the Asean exchanges are individually too small to attract global attention, but could be globally competitive if they were to achieve greater scale and liquidity, potentially leading to the establishment of a new Asean asset class.

The cross-border trading initiative follows an agreement by Asean capital markets regulators on a "road map" for full integration of the region's capital markets by 2015.

Mekong summit this weekend

November 2, 2009
By Petchanet Pratruangkrai
The Nation

Tokyo - The first-ever summit of Mekong River countries and Japan will facilitate creation of the Asean Economic Community (AEC), Japanese Ambassador to Asean Yoshinori Katori said on Friday.

Tokyo will host the Mekong Summit this Friday and Saturday, with leaders of the five Asean nations touching the Mekong River - Burma, Cambodia, Laos, Thailand and Vietnam - and Japan participating.

"This will be a great opportunity for countries in the Mekong Basin and Japan to gather to discuss greater cooperation in promoting the Mekong region," said Katori.

The summit will focus on narrowing the development gap among countries served by the Mekong and promoting greater Asean integration.

Keiichi Ono, director of the First Southeast Asia Division in the Japanese Foreign Ministry's Southeast and Southwest Asian Affairs Department, said the summit would have a four-part agenda.

First, leaders will discuss how development in the Mekong region should proceed.

Second will be how to respond to the negative effects of development, such as environmental pollution, and transnational problems like infectious diseases.

Third will be expanding cooperation and exchanges between Japan and the Mekong-region countries in a wide range of fields and levels.

Fourth will be a focus on regional and international issues. Any country will be allowed to raise a topic for discussion and have bilateral meetings with others.

"Along with the East Asia Summit, the Mekong Summit will serve as a stage for leaders of the Mekong nations and Japan to share ideas and show their vision for the future development of the Mekong Basin," said Ono.

He said the outcome of the meeting would help countries along the Mekong enhance their attempts at economic development and safeguard their interests once the AEC took effect in 2015.

The Mekong River plays a vital role in Asean. It is rich in natural resources, contains almost half of Asean's population and affords distinct geographical advantages.

A Mekong Partnership was formed in 2007, and there exist many development schemes supported by China under the framework of the Greater Mekong Subregion, along with Asean connectivity schemes.

The Japanese government is donating US$20 million (Bt669 million) to allow 10,000 youths from Mekong countries to visit the country over the next five years and has declared 2009 to be the Mekong-Japan Exchange Year.

Southeast Asia's Wounded Tigers [-Remittances from Cambodian migrant workers have become an important revenue source and driver of domestic demand]

January 20, 2009
By Abe De Ramos
Far Eastern Economic Review (Hong Kong)

As the extent of the U.S.-led financial crisis unfolds globally, developing Southeast Asian countries are finding themselves in the position of suffering the collateral damage. While not directly hit by the liquidity crunch like their larger and wealthier neighbors, they’re also not immune to the slowdown, being part of the chain that supplies goods to consumers in the West who are now crimping on their spending. Indeed, the crisis highlights how developing economies in the Association of Southeast Asian Nations (Asean) are being reduced to a fringe role in the global economic landscape, and how they’re facing the hard truth that they won’t be able to regain the “tiger economy” status they once held without building a stronger domestic base.

On the surface, it seems as though the region will ride out the crisis relatively well. After all, the first economies to go into recession are those whose financial and industrial sectors are directly linked to the fortunes of the West. The liquidity crunch in Wall Street has weakened the financial hubs of Hong Kong and Singapore, while falling consumer confidence is hurting many Japanese companies reliant on exports to the United States and Europe. Projected declines in GDP growth rates for developing Asean nations this year also seem to be less severe than in China, the factory of the world, as well as Taiwan, Korea and India, which generate substantial revenues from exports of goods, services and technological expertise.

But the region is far from well and good. Being in the middle of the supply chain East Asia has created in the last 20 years—in which a computer is designed in Japan or Taiwan, its components made in Malaysia, Thailand or Indonesia, then assembled in China—developing Asean nations are seeing a mild slowdown now only because of the lag effect. The question is how quickly and how well it can recover when the full impact of the global slump finally hits home.

In the near term, countries like the Philippines and Vietnam have little leeway to boost domestic economic activity in order to offset falling external demand. With the crisis proving deeper than expected, Asian governments may need to provide stimulus packages and pursue easier monetary policies. However, most are already overstretched, with negative fiscal balances unsupported by a narrow tax base, and made worse by fiscal leakage through corruption. Those with the borrowing capacity such as Thailand and Malaysia can raise funds, but for much higher costs given the lack of liquidity and greater perception of risk.

What differentiates developing Asean nations from the rest of the region is a weak domestic economy. Private consumption expenditure as a component of GDP has barely budged since at least 1990. This would not necessarily be a negative factor if it were overshadowed by growth in state expenditure and capital formation through investments, as has happened in China and India. However, these indicators have also lagged across Southeast Asia, with the exception of Vietnam, a newcomer to liberalization.

It’s true that in the larger economies of Malaysia, Thailand and the Philippines, exports have grown and made significant contributions to their GDP growth over the period. It’s also true that in the Philippines, Cambodia, Indonesia and Vietnam, remittances from migrant workers have become an important revenue source and driver of domestic demand. But these trends only emphasize the troubling reality that developing Asean nations are struggling to create their own wealth within their respective boundaries.

In the long term, no country in the region is yet competitive enough to generate robust, sustainable growth without the spoils from their industrial neighbors and the West. This is a factor of their failure to innovate and create globally competitive domestic industries. While China has foreign investments and exports to thank for its growth, it used its newfound wealth to invest in knowledge and manufacturing technology, creating not just a virtuous cycle of job creation and more investments, but also national champions—companies that are taking on global giants. In India, it’s not the state but an enterprising private sector—encouraged by favorable demographics and an economy that’s opening up—that’s giving birth to the same virtuous cycle and homegrown multinationals. How many innovators and global companies from Southeast Asia can you name?

The problem is it may already be too late for developing Asean countries to attract the kind of foreign investments that will help them benefit from technology transfer. Multinationals that have the technology are putting it to use in China, investing only in the region to diversify geographic risk. Private investments, meanwhile, are constrained by capital limitations and a general lack of entrepreneurial spirit: companies are not borrowing, and banks are not lending. As a percentage of GDP, domestic credit from the banking sector in developing Asean nations, apart from Vietnam and Cambodia, is lower than 1995 levels. Domestic capital markets, an alternative funding source, are shallow: stock markets are small, bond markets even more so.

This situation isn’t likely to change soon. The Asian crisis of 1997 has forced both banks and investors to be conservative in lending and borrowing, and governments’ inclination to build up their foreign reserves has no doubt misallocated capital away from job-creating and industry-building initiatives. In other words, as developing Asean nations rebuilt themselves from their own crisis, they lost sight of the long term, in the process losing competitiveness to aggressive neighbors. This current crisis, as it washes on their shores, should challenge the region to reassess its vision for the future, perhaps towards a domestic economy able to dictate its own fate.

Abe de Ramos, an Associate Fellow of the Asia Society, is a Hong Kong-based financial editor and a former policy analyst at the CFA Institute’s Center for Financial Market Integrity.

Skilled Labor Shortages Could Hurt Asean Economies - ILO

Tuesday, October 21, 2008

SINGAPORE (AFP)--Southeast Asia's economies will suffer if a growing shortage of managers and skilled professionals isn't addressed, the International Labour Organisation warned Tuesday.

The shortages were no longer limited to multinational companies but were affecting an increasing number of local firms wanting to expand globally, the ILO said in the report entitled Labour and Social Trends in Asean in 2008.

"If these skills shortages are not addressed, they will constrain enterprise competitiveness and Asean's future development," it said, citing a lack of managers and skilled staff in the information technology and finance sectors.

The Association of Southeast Asian Nations' membership ranges from wealthier states such as Brunei, Malaysia, Singapore and Thailand, to poor countries such as Cambodia, Laos and Myanmar.

The other Asean members are the Philippines, Indonesia and Vietnam.

The regional bloc, with a combined population of 550 million people, aims to create a single market and manufacturing base by 2015 in order to have more clout in international markets.

The ILO said the growing skills shortages raised questions about the quality and relevance of tertiary education in Asean, adding that the problem wasn't a lack of applicants, but their poor qualifications.

"Many countries have been suffering from a shortage of managers and technical and professional staff, indicating a mismatch between supply of workers with appropriate education and skills and the demand for those types of workers," it said.

"Skills shortages could undermine enterprise competitiveness in a variety of ways. They can lead to capacity under-utilization and productivity losses, increased labor turnover, higher wage increases and higher recruitment and training costs," it added.

"If the problems are widespread, whole industries and entire economies may suffer."

According to the organization, a well-trained Asean workforce will also be better equipped to adjust to changing global trends.

"In the context of the current volatility in global markets and inflationary pressure in most of the Asean member countries, it is even more imperative now that education and training policies support workforce development and enrich productivity growth," it said.

Skilled labor shortages are a long-term problem that is likely to persist beyond the current economic meltdown, the ILO added.

"Even if economic growth in Asean, and in the Asian region as a whole, decelerates in the wake of a slowing global economy, the problems of skills shortages at the high end are likely to remain."

Asean's labor force stood at around 285 million in 2007, with 40 million more expected to be added by 2015, ILO said.