Asean

Redazione published in Asean, Economy and trade

EU and ASEAN: so far yet so close

EU-ASEAN cooperation gradually expands to new areas, among which the fight against coronavirus

The European Union and ASEAN represent the two most advanced regional integration projects in the world. The integrationist spirit that characterizes the two blocs makes them privileged interlocutors on the international stage: it is no coincidence that in the EU-ASEAN Blue Book 2020, published by the European External Action Service, the EU and ASEAN are defined as "natural partners” in the achievement of several common objectives, such as the preservation of the multilateral order, the promotion of sustainable development and the protection of human rights.

However, to date, trade relations between the two blocs are certainly the jewel in the crown of the EU-ASEAN relationship. The EU is the second largest commercial partner of ASEAN behind China and represents 14% of the foreign trade of Southeast Asian countries. In addition, the EU is by far the first source of foreign direct investments in ASEAN countries, for a cumulative amount of over 337 billion euros. Despite a relatively limited economic weight compared to the EU in terms of GDP size (3111 billion dollars against over 18290 billion), ASEAN is the third largest trading partner of the European Union behind the United States and China, and its share of FDI in EU countries has been growing steadily. The EU and ASEAN are committed to increasing their trading volume, which already is at over 273 billion euros in goods and over 85 billion euros in services, by means of the creation of a large free trade area between the two regions. The difficulty of striking a deal of such magnitude so far has prompted the EU to negotiate bilateral agreements with individual ASEAN member countries, including Singapore (already in force since November 2019) and Vietnam (in force since June 2020), but always with a view to a future overarching agreement with the entire Association, which remains the primary objective of the Union.

The outbreak of the coronavirus pandemic has led EU and ASEAN to collaborate on an unprecedented side, the health sector. The common multilateral vocation has driven the two powers to organize a joint ministerial videoconference on March 20th, during which they both affirmed the importance of international cooperation for the effective resolution of the Covid-19 crisis. In compliance with this principle, on April 24th, the EU donated €350 million to the ASEAN countries in order to support them in the fight against Covid-19 and its economic and social consequences.

The EU and ASEAN, by virtue of their common faith in the ideals of supranational cooperation, are approaching one another, both from an economic and commercial perspective and from a political one. The Covid-19 crisis, a genuine stress test for the EU-ASEAN relationship, is showing, once and for all, the indispensability of international collaboration in solving problems that know no borders and that involve everyone.

 

Article edited by Andrea Dugo.

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E-commerce: a driving force for the ASEAN economy

Despite the crisis caused by the virus, the ASEAN economy could recover thanks to the opportunities offered by digital commerce.

The restrictive measures taken to combat Covid-19 have had a major impact on citizens' economic activities and habits, causing a deep global crisis. Despite the encouraging forecasts of the International Monetary Fund, Asia will be one of the most affected regions, with a high risk of increasing poverty.

Faced with the upheavals of the regional and international market, businesses and governments in the ASEAN area are now committed to finding new ways of meeting supply and demand, while still respecting the security and social distance needed to manage the virus. In this regard, it seems like digital commerce could be an interesting tool.

A study by Facebook and Bain & Company predicts that by 2025 consumers in the area will spend about three times more on digital platforms than in 2018, thanks to greater purchasing power and more widespread internet access. The sector is therefore growing rapidly and could reach about $ 150 billion in value in 2025.

The pandemic seems to have speeded up this process, as claimed by Pierre Poignant, CEO of Lazada, one of the largest e-commerce platforms in the ASEAN area, controlled by Alibaba. Because of travel restrictions and social distancing measures needed to contain the pandemic, the relationship between supply and demand has changed, increasing the opportunities for online interaction. The growth of the consumers associated with changes in consumption has seen a strong increase in the purchase of online products of any type.

Businesses also perceived the potential of e-commerce after the restrictions imposed by the pandemic: because they had to close the retail trade channel, they invested huge resources on new digital infrastructures, as shown by the data from the study "Riding the Digital Wave: Southeast Asia's Discovery Generation ”, which was involved about 13,000 respondents and over 30 CEOs and venture capitalists.

E-commerce can therefore become an opportunity for the development of ASEAN countries and in particular for SMEs that characterize their economic system and operate in extra-urban areas. In these areas, in fact, the match between supply and demand usually took place on site, with a relatively close circle of consumers from the same territory. Now, thanks to digital channels, companies will instead be able to access geographically distant markets and the same will happen for consumers who will see the multiplication of goods and services otherwise not accessible with the traditional hand by hand exchange.

Many countries in Southeast Asia have realized the importance of online commerce and appear determined to take advantage of its opportunities. Vietnam, after a 20% increase in online trade caused by the lockdown and the restrictions on circulation imposed, aims to reach the podium of ASEAN's digitized economies by 2030 with full 5G coverage of the national territory. Malaysia intends to strengthen the development strategy launched in 2019 under the motto of "One click, a million opportunities", increasing the adoption of new technologies to support and stimulate the national economy, supporting SMEs in the digitization process. Singapore has instead put in place some measures to strengthen e-commerce and stimulate companies to expand their business on the online market, also providing them with training and assistance, as well as the means for the start-up expenses on online portals.

In the economy of the ASEAN countries, therefore, commerce 4.0 is growing and developing, but it will be essential that local governments support this process. The first step will be to spread internet access also in rural areas and then encourage the spread of mobile and cashless payments. Finally, it will be necessary to prepare lean and efficient rules to regulate the sector and put it in a position to produce benefits for all. It appears that e-commerce can be a useful tool to revive ASEAN economies in the context of the current crisis.

 

Articole edited by Gabriel Zurlo.

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ASEAN’s collaborative response to COVID-19

After a delayed initial response, ASEAN accomplished a praised multilateral approach to fighting COVID-19

At the start of the COVID-19 pandemic, the Association of Southeast Asian Nations received international criticism for its lack of cooperation and its slow response; given their geographical proximity and intense economic relations with China, ASEAN countries were extremely vulnerable to the spread of the pandemic and soon confirmed their first cases of the virus. However, in the past few months, ASEAN achieved an effective containment of the outbreak, both by demonstrating regional solidarity and by strengthening international cooperation in the face of the COVID-19 challenge.

 

The intergovernmental organization acted as a bloc, taking collective steps against the pandemic and demonstrating unity and multilateral cooperation. Through several video-conferences held qith the ASEAN Coordination Council, member states were able to share information regarding containment and mitigation measures. In the existing framework of the ASEAN Health sector and the goals stated in the ASEAN Post-2015 Health Development Agenda, the Emergency Operations Centre for public health emergencies provided a platform for daily situational updates, information on prevention and response measures; while the ASEAN BioDiaspora Regional Virtual Centre provided reports of national risk assessments through big data analytics. Moreover, ASEAN member states showed solidarity with regards to laboratory and medical supply needs: Vietnam and Brunei offered support in the form of medical equipment, including test kits, to Laos and Cambodia. On the 9th of April, ASEAN established a Regional Reserve of Medical Supplies and a COVID-19 ASEAN Response Fund, to support the needs of member states and enable rapid response to the sanitary emergency. These regional agreements have ensured a successful response to the COVID-19 outbreak, proven by the low number of cases in most of the 10 ASEAN member states.

 

In addition to such efforts, ASEAN countries managed to contain the pandemic through cooperation with external partners, countries and institutions. On the 10th of March, ASEAN ministers held a video-conference with the European Union, to discuss measures for the immediate public health risks, as well as for the longer-term socio-economic concerns caused by the virus. On the 14th of April, a video summit between the 10 ASEAN members, China, Japan and South Korea was held to enhance cooperation, including the exchange of information, updates on clinical treatments, measures for prevention and control, and sourcing of medical supplies. On the 30th of April, another video conference followed between the Health Ministers of ASEAN and the United States, restating the crucial importance of international cooperation for effectively fighting the COVID-19 pandemic.

 

Article edited by Elena Colonna

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The impact of Covid-19 on democracy in ASEAN

The state of emergency has prompted leaders of certain countries to impose worrying measures

The emergency measures taken by some governments of the ASEAN countries to address the health crisis are causing concern in the international community. Some fear that governments could take advantage of the situation to consolidate their power at the expense of their citizens' freedoms and rights.

In early March, the United Nations High Commissioner for Human Rights urged all countries involved in the health emergency to guarantee the centrality of human rights and international norms. In this regard, the President of the ASEAN Parliamentarians for Human Rights also reminded the governments of the area that restrictions for public health reasons must be strictly necessary, of limited duration, and based on scientific and non-discriminatory evidence.

However, the approach taken by some governments of the ASEAN countries risks disappointing these expectations. The Asian Forum for Human Rights and Development reports that the Philippines, Thailand, Cambodia and Myanmar are implementing policies that risk violating international standards. In Thailand and Myanmar, the situation regarding freedom of expression is worrying, especially online. In the Philippines, broad powers have been conferred to law enforcement officers, whose action is often left to the discretion of agents.

In particular, the situation in Cambodia is attracting significant attention. On 31 March, the Cambodian government passed a law conferring full powers on the executive to manage the emergency, including unlimited surveillance of telecommunications, control of the media and social networks, and the possibility of prohibiting or restricting the dissemination of information other than from government sources. A reporter has already been arrested for quoting a speech by Prime Minister Hun Sen in the newspaper, and dozens of people have been charged and arrested for spreading "fake news" online. Several groups of activists and institutions of the international community have strongly condemned the measures imposed by Prime Minister Hun Sen, considered excessive and worrying. It is indeed feared that the emergency provisions implemented by the Cambodian authorities may stay in place and be enforced long after the end of the emergency.

The situation in Cambodia and other South-East Asian countries such as the Philippines, Thailand and Myanmar, is now under observation by international bodies. It will be crucial to understand how governments will behave with the gradual recovery from the health and economic crisis, when the state of emergency will end. The hope of the international community, represented in this case by the words of the UN High Commissioner for Human Rights and by the President of the ASEAN Parliamentarians for Human Rights, is that the recovery will coincide with the restoration of normalcy, with respect for the rights and freedoms of all citizens.

 

Article edited by Gabriel Zurlo Sconosciuto.

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La rilevanza del Mar Cinese Meridionale

Con l’abbondanza di risorse naturali e la sua posizione strategica questo mare è diventato il teatro di un teso scontro regionale

Il Mar Cinese Meridionale è al centro di un lungo e complesso scontro geopolitico che coinvolge diversi Paesi del Sud-Est asiatico, la Cina e altre potenze globali tra cui gli Stati Uniti. L’area è infatti incredibilmente ricca di risorse naturali con riserve di circa 11 miliardi di barili di petrolio, oltre 50 trilioni m³ di gas naturale e il 10% delle riserve ittiche mondiali. L’elemento più importante, tuttavia, è che il 30% del commercio marittimo mondiale transita nel Mar Cinese Meridionale, conferendo una cruciale rilevanza geopolitica alla regione. Si tratta dunque di uno specchio d’acqua di fondamentale importanza strategica, e diversi Paesi nella regione avanzano rivendicazioni territoriali, spesso contrastanti.

Nel cuore geografico e simbolico del Mar Cinese Meridionale ci sono diversi arcipelaghi di isole remote e disabitate, rivendicate da Cina, Vietnam, Filippine, Malesia, Taiwan e Brunei. Per molti di questi Paesi, l’accesso alle risorse di quest’area potrebbe rivelarsi fondamentale nel lungo periodo. Chi riuscisse a fare valere le proprie rivendicazioni territoriali su queste isole potrebbe includerle nella propria zona economica esclusiva, ottenendo diritti esclusivi su tutto il territorio e dunque il sottosuolo circostante.

La maggior parte di questi Paesi basa le proprie rivendicazioni sulla Convenzione delle Nazioni Unite sul diritto del mare, ma la Cina sembra avere una posizione diversa, in contrasto con la comunità internazionale. Pechino avanza una rivendicazione storica sul Mar Cinese Meridionale che risale ad alcune esplorazioni navali del XV secolo. Il governo cinese individua i propri confini nell’area compresa all’interno della linea tratteggiata, la famosa “nine-dash line”, tracciata alla fine della Seconda Guerra Mondiale e comprendente circa il 90% del conteso specchio d’acqua.

Negli ultimi anni, la Cina ha portato avanti una politica di potenza volta a imporre le proprie rivendicazioni territoriali con la costruzione di isole artificiali, basi militari e distretti amministrativi, scatenando le proteste delle nazioni coinvolte. Le mosse di Pechino non hanno solo indispettito i Paesi della regione, ma anche la comunità internazionale, con gli Stati Uniti in testa. Gli USA hanno grossi interessi geopolitici nella regione, e sono dunque interessati a contenere le ambizioni di Pechino e a rafforzare il proprio ruolo di potenza militare e geopolitica nell’area del Pacifico.

Meccanismi di risoluzione delle dispute internazionali hanno più volte contestato l’approccio cinese nella regione, cercando di proteggere i diritti territoriali legittimi di Paesi più piccoli, come le Filippine o il Vietnam. Ma la Cina sembra trascurare le risoluzioni delle Corti internazionali e pare determinata a non retrocedere, paventando anche l’uso della forza per affermare le proprie rivendicazioni.

Finora le dispute nel Mar Cinese Meridionale non hanno preso una piega violenta, ma si sono limitate alla sfera politica e diplomatica. Dal 2017, la Cina e i Paesi ASEAN hanno deciso di provare a risolvere la contesa sul piano diplomatico, attraverso la redazione di un Codice di Condotta per il Mar Cinese Meridionale, ovvero un sistema regolatore per risolvere le dispute nella regione. Tuttavia, l’accordo è ancora lontano dalla sua conclusione, e le difficoltà che stanno emergendo non sono poche.

I Paesi coinvolti tendono sempre più a difendere le proprie rivendicazioni militarizzando la regione e provocandosi a vicenda, con gravi rischi per tutta l’area. È una situazione complessa che continuerà ad attirare l’attenzione della comunità internazionale, evidenziando segnali importanti sull’atteggiamento geopolitico della Cina nei prossimi anni e il suo rapporto con i Paesi del Sud-Est asiatico.

 

Article edited by Tullio Ambrosone.

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Redazione published in Asean, Economy and trade, Philippines

L’outsourcing nelle Filippine

Come le Filippine sono diventate un hub del BPO

Il Business Process Outsourcing (BPO) è uno dei settori in più rapida crescita nelle Filippine, al punto da rappresentare uno dei tre pilastri dell’economia del paese, insieme alle rimesse inviate dai lavoratori filippini all’estero ed al turismo.

La crescita del BPO nelle Filippine ha mostrato infatti un tasso di espansione medio annuo del 20% nel corso dello scorso decennio. Secondo i dati dell’Oxford Business Group, il settore rappresentava solo lo 0,075% del PIL nel 2000, dato cresciuto progressivamente fino a raggiungere il 12% nel 2019.

Secondo gli ultimi dati del governo filippino l’industria del BPO impiega 1,35 milioni di lavoratori, la maggior parte dei quali (87,6%) nei call center, mentre quasi il 12% lavora in aziende di computer e servizi informatici. Nell’ultimo anno, è emerso un forte trend di crescita anche del segmento del Data Analytics.

La Roadmap 2016-2022 della IT and Business Process Association of the Philippines (IBPAP) si pone tuttavia obiettivi di crescita ancora maggiori per il settore, puntando a toccare – entro un paio di anni – 1,8 milioni di persone occupate, 40 miliardi di dollari di fatturato complessivo e una quota del 15% nel mercato globale del BPO.

Il settore BPO è fortemente internazionalizzato nelle Filippine: il 55% delle aziende opera a livello globale (il 65% delle quali esporta verso gli Stati Uniti), il 27% a livello regionale e solo il 18% all’interno del Paese. Sono tre le ragioni principali per cui le Filippine sono riuscite a diventare un hub internazionale del BPO.

In primo luogo, il governo filippino si è attivato fin dai primi anni 2000 per incentivare gli investitori ad esternalizzare nel Paese. Ha infatti messo in atto diverse politiche liberali, inclusi benefici fiscali e misure di semplificazione nelle procedure in materia di occupazione.

Il secondo aspetto riguarda il bilinguismo. Oltre al filippino, gli studenti imparano fin da subito l’American English. La padronanza della lingua inglese e l’affinità con la cultura occidentale conferiscono alle Filippine un vantaggio concorrenziale rispetto ai suoi diretti competitors nel BPO, come l’India.

Infine, il salario medio dei lavoratori filippini nel settore è meno della metà di quello delle loro controparti nei paesi occidentali. Gli Stati Uniti ed altre imprese anglofone sfruttano questo fattore per abbassare i loro costi fissi.

Nonostante la crisi legata al COVID-19 abbia avuto un impatto negativo e rallentato la crescita del BPO nelle Filippine, le multinazionali straniere non hanno abbandonato il paese. Se la crisi continuerà a favorire la domanda di servizi telematici è infatti probabile che il settore riprenda presto la propria traiettoria positiva di crescita.

Articolo a cura di Amiel Masarap e Maria Viola.

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Gli equilibri commerciali in Asia ai tempi del Covid-19

Nel primo trimestre del 2020 l’ASEAN è risultato il primo partner commerciale della Cina

Negli ultimi anni il panorama commerciale globale ha subito profonde trasformazioni che hanno contribuito a produrre nuove e significative dinamiche economiche nel continente asiatico.

Fino a qualche anno fa, prima della guerra commerciale tra USA e Cina e prima dello scoppio della pandemia, Unione Europea e Stati Uniti erano rispettivamente il primo e il secondo partner commerciale della Repubblica Popolare Cinese. Oggi invece, nel bel mezzo di una crisi sanitaria ed economica globale, l’ASEAN ha scavalcato UE e USA ed è risultato il maggior partner commerciale della Cina nel primo trimestre del 2020. Secondo l’Amministrazione generale cinese delle dogane, nei primi tre mesi di quest’anno, il commercio bilaterale totale tra ASEAN e Cina è aumentato del 6,1% su base annua a 140,62 miliardi di dollari, nonostante l’emergenza sanitaria.

Diversi elementi sono intervenuti a produrre questo scenario, con cambiamenti profondi per tutto il sistema commerciale e per gli equilibri di potere globali.

Sul versante europeo, ha sicuramente influito la Brexit. La Gran Bretagna rappresentava infatti circa il 10% degli scambi commerciali tra UE e Cina. Con la sua uscita dall’Unione dunque, i Paesi europei hanno perso una quota significativa del rapporto commerciale con la Cina, che ha influito pesantemente sui dati aggregati relativi al commercio UE-Cina.

Dall’altra parte dell’Oceano Atlantico, invece, la guerra commerciale avviata dall’amministrazione di Donald Trump ha contribuito in maniera decisiva al deterioramento dei rapporti commerciali tra USA e Cina, scatenando diversi effetti collaterali. Non sono cambiati solo i rapporti tra Washington e Pechino, le tensioni commerciali hanno finito per spingere molte aziende a trasferire capacità produttive dalla Cina ai Paesi del Sud-Est asiatico, rinforzando catene di valore e sistemi produttivi regionali. Lo scontro con gli USA ha anche indotto le autorità cinesi a rafforzare i legami economici e diplomatici con i partner del continente asiatico, mettendo i Paesi ASEAN in una posizione di primo piano, date le dimensioni del blocco commerciale.

Inoltre, la gravità dello shock economico causato dalla pandemia di COVID-19 ha contribuito ad acuire tali trasformazioni, mettendo in crisi il sistema economico e commerciale globale. Secondo le stime del Fondo Monetario Internazionale, i Paesi più colpiti a livello economico sono quelli occidentali, in Europa e Nord America, mettendo Paesi come quelli del Sud-Est asiatico nelle condizioni di guadagnare terreno a livello commerciale. Inoltre, rafforzando le dinamiche scaturite dalla guerra commerciale, le misure restrittive attuate dai governi per limitare i contagi stanno inducendo molte aziende a rivedere le catene di produzione e fornitura, favorendo soluzioni regionali a scapito di meccanismi globali.

Sembra dunque che le trasformazioni degli ultimi anni stiano spingendo il continente asiatico verso maggiori forme di cooperazione economica e commerciale. Cina e ASEAN sono oggi più vicine dal punto di vista economico e diplomatico di quanto non lo fossero qualche anno fa. Lo scenario resta complesso e indefinito, sarà fondamentale seguire l’evolversi della situazione nei prossimi mesi per capire la portata dei cambiamenti in corso e analizzarne l’impatto a livello globale.

Article edited by Tullio Ambrosone

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Emergenza COVID-19: le opportunità per l’ASEAN

Smart working ASEAN

Nonostante la gravità della crisi, si aprono scenari interessanti

Anche nei Paesi del Sud-Est asiatico l’epidemia di coronavirus sta avendo un impatto significativo: diverse aree sono in isolamento, i grandi eventi sono stati annullati o rinviati, le strutture mediche sono in difficoltà e il sistema economico ne sta risentendo. Tuttavia, la grave emergenza sanitaria ed economica che i Paesi ASEAN stanno affrontando sta aprendo nuovi scenari, che potrebbero recare alcuni benefici nel lungo termine.

Le aziende stanno iniziando a diversificare le loro catene produttive, spostando investimenti e capitali dalla Cina verso i Paesi del Sud-Est asiatico. Anche prima della pandemia, tensioni politiche come la guerra commerciale tra Washington e Pechino, stavano spingendo le grandi compagnie a dirottare le catene di produzione dalla Cina a Paesi terzi, ma l’emergenza sanitaria ha finito per accelerare questo trend. Nel tentativo di diversificare la produzione infatti, grandi aziende come Google e Microsoft trasferiranno le attività di fabbricazione di nuovi telefoni, computer e altri dispositivi dalla Cina a Vietnam e Thailandia. Altri giganti come Sony e Nokia investiranno in Indonesia, mentre Samsung sta puntando sul Vietnam. Questi esempi non solo dimostrano l’intenzione delle grandi aziende di evitare la dipendenza dalla Cina e scommettere sulle economie del Sud-Est asiatico, ma rivelano anche una grande opportunità per la regione di sviluppare maggiori competenze nel settore della produzione tecnologica.

La crisi sanitaria, che obbliga i Paesi a imporre misure di distanziamento sociale, sta anche trasformando il mondo del lavoro. Sta cambiando infatti anche la mentalità imprenditoriale, che si sta adattando al contesto di crisi e sta sfruttando la tecnologia per affrontare le limitazioni ai movimenti e il distanziamento sociale. Aziende come CoXplore o AngkorHub, specializzate in co-working e piattaforme di smart-working, stanno crescendo in maniera significativa negli ultimi mesi, evidenziando un trend che potrebbe sopravvivere alla crisi. Specialmente nel Sud-Est asiatico, regione densamente popolata, queste start-up hanno il potenziale per trasformare l’approccio al lavoro e numerose aziende sono pronte a investire in questa direzione, anche dopo l’emergenza.

L’isolamento di migliaia di persone, inoltre, sta offrendo grandi occasioni al crescente settore del ride-hailing nel Sud-Est asiatico. Aziende come Grab e Gojek stanno intensificando le proprie attività nei Paesi ASEAN, con l’obiettivo di fornire servizi di consegna a domicilio a più persone possibile durante l’emergenza. Altri settori, come quello della vendita di prodotti alimentari online, stanno crescendo nella regione, aprendo nuovi scenari non solo per le aziende, ma anche per i lavoratori.

Ancora una volta dunque un momento di crisi sta offrendo opportunità e dando vita a nuove tendenze economiche e sociali. Nonostante il contesto di grande tensione, la crisi del sistema sta avviando trasformazioni che porteranno benefici nel lungo termine. Sarà interessante continuare a seguire l’evoluzione della situazione per identificare nuovi trend e capire che volto avrà la regione del Sud-Est asiatico dopo questa epocale crisi sanitaria ed economica.

Article edited by Tullio Ambrosone

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Has BRI been infected?

The impact of Covid-19 on ASEAN countries, through interrupted supplies and quarantined workers.

The Covid-19, after the spread in China and the consequent severe restrictive measures, has also spread in ASEAN countries. That resulted in the shutdown of several productive establishments (as it happened in Cambodia for more than two-hundreds factories, which had their productivity interrupted because of the lack of Chinese raw materials). Furthermore, it caused the halt of important infrastructural projects, including those related to the Belt and Road Initiative, (BRI; the Chinese strategic project aimed to connect the Country and its economic partners through new strategical roads, railways and maritime thoroughfares)

ASEAN authorities are beginning to assess the damages due to the Coronavirus. Delays on BRI related projects, in particular, could hamper economic recovery in the next months.

In Indonesia, the Coordinating Minister of Maritime and Investment Affairs announced the delay of the 6 billion high speed railway that will link Jakarta to Bandung: 50% of the materials and 20% of the workers are from China. The construction of the 510 MW hydropower plant in Batang Toru was interrupted too.

Delays are also occurring in Cambodia, where BRI rendered Sihanoukville special economic zone, in the province of Preah Sihanouk, with the purpose of creating an ideal investment platform for companies in the ASEAN area. The project is suffering from a gradual lack of supplies from China, and it is seeing the offices of Chinese leaders remain empty. That will result in a further prolongation of the construction time and it will exponentially increase the costs. However, The Cambodian leader Hun Sen stays positive, hoping that the fabrication will resume after the first quarter of the year.

In Malaysia, up until one month ago, Malaysia Rail Link assured that the East Coast Rail Link – which is worth 10.4 billions and which will link Kuala Lumpur and Putrajaya to east coast states such as Pahang, Terengganu and Kelantan - wouldn’t have been subject of any delay. Due to the current decisions taken by Malaysian government, which put the state in a total lockdown, at least for the next 14 days it is not excluded that slowdowns or temporary interruptions will occur for the project, which is currently completed at 15% .

Instead, the virus is not slowing the China-Laos Railway down, due to be ready for 2021, that will transform Laos from a landlocked country into a terrestrial hub. The central administration had already decided not to interrupt for the Spring Festival: officials and workers have stayed on the construction site, sheltered from the Covid outbreak. Moreover, Chinese and Laotian engineers are starting to lay the foundations of the electricity line, the first BOT (build- operate-transfer) electricity grid in Laos, which will supply the railway.

BRI has a targeted completion date of 2049, but even this date seems to waver as the virus’s impact on economy will be felt for many years to come.

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Articole edited by Gabriel Zurlo Sconosciuto

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ASEAN is betting on free trade

Negotiations for the RCEP are coming to an end and the agreement should see the light at the end of 2020

After lengthy negotiations, this year several countries on the Asian continent are preparing to conclude one of the world's largest trade agreements ever. The agreement, called Regional Comprehensive Economic Partnership or RCEP, involves ten countries of the ASEAN bloc and five of its main trading partners, namely China, Japan, South Korea, Australia and New Zealand. Together these countries make up almost a third of the world's population and global GDP, more than trading blocs such as the European Union, USMCA or Mercosur.

The initial project also included India that then preferred to withdraw from the agreement for fear of damaging domestic production and benefiting China. In fact, several analysts and observers argue that Beijing could use the RCEP as an opportunity to counter American influence in the region and revamp its role as guarantor of free trade at the global level. Donald Trump's aggressive commercial policy has also contributed to strengthening this dynamic, leading several countries to give even more importance to the RCEP negotiations.

Although less ambitious than agreements such as USMCA, RCEP will boost trade in the Asian region by lowering tariffs, standardizing customs rules and procedures, and extending market access especially to member countries that do not have major trade agreements in place. The most significant innovation is the development of common rules of origin for the whole trade bloc

Once the agreement is signed, member countries will be able to obtain a single certificate of origin that will allow companies to easily move products within the bloc, without having to worry about the specific criteria of the rules of origin of each country. This will reduce costs for companies by encouraging them to export more towards RCEP member countries and develop regional value chains

La riduzione delle tariffe e altri benefici non saranno applicati in base alla sede centrale di un’azienda, ma in base alla sede di produzione, consentendo così anche ad aziende americane o europee, che già producono in un Paese RCEP, di esportare in altri stati del blocco alle stesse condizioni.

The reduction in tariffs and other benefits will not be applied according to the company's headquarters, but according to its manufacturing location, thus also allowing non-Asian companies, which already produce in RCEP countries, to export to other states of the bloc under the same conditions. However, it should also be stressed that the agreement will encourage the development of supply chains inside the Asian region, which in turn will leave Western companies at a disadvantage, unless they are located there. It should also be noted that compared to other trade agreements, RCEP only contains some limited measures on services, investments and common standards and does not include specific references to the protection of workers and the environment.

The RCEP should enter into force at the end of 2020, a few months later than initially planned. As the world navigates the aftermath of a major trade war, the case for free trade is under siege. RCEP can offer an optimistic answer to the challenges world trade is facing, in the name of multilateralism and free trade.

Article edited by Tullio Ambrosone

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Redazione published in Economy and trade, Itasean

Working breakfast with Ivan Scalfarotto, Undersecretary to the Ministry of Foreign Affairs

Ivan Scalfarotto Associazione Italia-ASEAN

Undersecretary Scalfarotto described the strategy to support the internationalization of Italian enterprises.

On February 17th, the Italy-ASEAN Association had the pleasure to host a meeting in Milan with Mr. Ivan Scalfarotto, Undersecretary to the Ministry of Foreign Affairs and International Cooperation. Undersecretary Scalfarotto discussed alongside Secretary General Alessia Mosca and the Members of the Association about the position of Italy in the current state of international trade.

Undersecretary Scalfarotto confirmed the commitment of the Italian Government to strengthen the economic and diplomatic ties with ASEAN and described the strategy to support the internationalization of Italian enterprises

He highlighted the importance of international trade for the Italian economy. As a matter of fact, exports were fundamental for economic growth during the latest financial crisis: between 2010 and 2017, Italian export grew of +6,4%, while the GDP shrank of -0,8%. Italy would have suffered even more of the economic crisis, if its enterprises were not able to rely on foreign markets.

Furthermore, the “Made in Italy” brand is based on the production of high-quality goods from imported products, such as agri-food and textile products. For example, Italy is well-known for coffee and chocolate, but it does not produce coffee beans and cocoa. Italy does not even produce enough wheat to support its pasta industry

Given the skills of the Italian enterprises, one might be tempted to think that companies can compete on global markets on their own. However, Undersecretary Scalfarotto stressed that, globally, the value of G2G (Government to Government) agreements far exceed those of B2B (Business to Business). He explained that the government can and should play a role as a pro-active actor in facilitating economic exchange. Indeed, it is hard for single companies to install a stable and trusty dialogue with foreign partners without receiving the support of the Government (especially in Asian countries).

To this matter, Undersecretary Scalfarotto then proceed by reporting cases where the Italian Government - through its agencies - was crucial for the internationalization of Italian enterprises. As an example, he cited the role of Cassa Depositi e Prestiti Group in filling the void left by financial institutions in providing funding credit to Italian companies. He also stated that the Italian Government is currently addressing in a unified manner critical issues to international trade, such as external tariffs and duties.

Undersecretary Scalfarotto emphasized that trade can play a key role as a foreign policy instrument, as the Trump administration have showed. Therefore, Government should intervene in crucial sectors where irregularities can emerge (as it is the case with 5G technologies), in order to establish a level playing field. level playing field.

In conclusion, Undersecretary Scalfarotto highlighted the strategic role of the Association of South-east Asian Nations. From the economic point of view, it represents in total the 5th largest economy in the world. From a geopolitical point of view, instead, the region is a great stabilizer to the tensions between bigger regional powers. Therefore, Italy and the European Union should play a more active role in South-East Asia, filling the void left by the US in Asia-Pacific. In fact, strengthening the economic relations with Asian countries can be a tool to promote political stability and growth in the region, a strategy already adopted by the European Union in Latin America.

 

 

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Redazione published in Itasean

Lecture by Vivian Balakrishnan, Singapore's Minister for Foreign Affairs

On his first official visit to Italy, the Singapore's Minister of Foreign Affairs met with the Italy-ASEAN Association

On December 19th 2019, Singapore's Foreign Minister Vivian Balakrishnan held a conference on the evolution of globalization at the office of the Italy-ASEAN Association in Rome.

During his speech, Mr Balakrishnan stressed the long-lasting and stable relationship between Italy and Singapore. In particular, Italy was one of the first countries in the world to recognize Singapore's independence in 1965.

Today, more than 600 Italian companies are active in Singapore and, at the same time also Singaporean investments in Italy are considerable. The recent trade agreement between the European Union and Singapore, which came into force in November 2019, has the potential to further intensify economic exchanges.

Today, more than 600 Italian companies are active in Singapore and, at the same time also Singaporean investments in Italy are considerable. The recent trade agreement between the European Union and Singapore, which came into force in November 2019, has the potential to further intensify economic exchanges.

The Straits Times, an influential Singaporean newspaper, reported a more detailed account of Mr Balakrishnan's visit to Italy. The article is available at the following link.

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