KUALA LUMPUR: CIMB Asean Research Institute (CARI) expects Vietnam, which will be the Asean Chair for 2020, to galvanise Asean towards challenging anti-international trade and the rules-based world economy.
CARI chairman Tan Sri Dr. Munir Majid said Vietnam should ensure Asean speaks with one voice with a well-prepared stance, at Apec and also at the G-20, both of which will be held in November).
“Asean must be the region that leads the call for world economic peace, ” Munir said in the keynote presentation at “CARI Briefings: Asean 2020 Outlook and Vietnam’s Asean Chairmanship 2020” on Tuesday.
As the chair, Vietnam would focus on enhancing Asean solidarity, economic integration and identity while being more responsive by promoting Asean pro-activeness, under the Asean 2020 theme, “Cohesive and Responsive”.
The key agenda for Vietnam this year includes boosting intra-Asean trade and investment through regional dialogues and discussions; the development of the circular economy through a best practices sharing platform; and the development of a digital integration Index to monitor and improve the key areas under the Asean digital integration framework.
Munir said CARI expected Vietnam’s chairmanship of Asean to demonstrate a more robust leadership that would go beyond its theme of “cohesive and responsive” to being action-oriented and proactive.
He cited that the percentage for intra-Asean trade fell to 23.0% in 2018 even though the value of intra-Asean trade in goods increased from US$591bil in 2017 to US$647.5bil in 2018.
“Trade is the lifeblood of the US$3 trillion Asean economy, constituting 90% of its GDP. Improving intra-Asean trade (and investment) is essential at a time particularly of headwinds against international trade. Asean must be the region that leads the call for world economic peace, ” he said.
He highlighted that another area of concern hindering Asean trade was non-tariff barriers.
“Vietnam should focus on reducing the non-tariff barriers which make a nonsense of the Asean Economic Community (AEC). They have been rising instead of falling since the AEC was pronounced in Kuala Lumpur in 2015. Intra-Asean trade has stubbornly stuck at less than 25%. Even intra-RCEP trade is higher at 32%, ” Munir pointed out.
Munir cited that Asean performed well in 2018, having risen to the fifth-largest economy in the world with a nominal GDP totalling US$3.0 trillion and capturing its highest ever total FDI inflows of US$154.7bil.
However, after achieving a growth rate of 5.2% in 2018, forecasts predict a year-on-year slowdown in 2019 before the growth rate is expected to pick up in 2020, he said.
Dr Le Quy Quynh, Ambassador of Vietnam to Malaysia, said at the briefing that Asean must stand together and speak out for a rules-based international order to meet the challenges of an increasingly unstable international security and trade environment.
“In this time of global uncertainty, which was recently heightened by the ongoing US-Iran standoff, unity and solidarity among Asean member states remain crucial as is Asean centrality in the international arena, ” he said.
Dr Quynh explained that for Asean to be a more responsive force on the global stage, Vietnam intends to improve institutional capacity through institutional reforms and improvements in the rules of procedures and processes within Asean-led mechanisms.
The adoption of Asean Outlook on the Indo-Pacific (AOIP) in 2019 under Thailand’s chairmanship demonstrates Asean's unity in its desire to maintain a central role in regional integration efforts.
Designed as a guide to cooperation in the region, particularly the Asia-Pacific and Indian Ocean regions, the AOIP could also serve as a guide on how Asean can address other future issues threatening peace and prosperity in the region.