Asean

Carola Frattini published in Asean, Culture and society

The ASEAN response to climate change: artificial intelligence

Some South-East Asian countries are starting to use artificial intelligence services in order to act faster and reduce the impact of floods and inundation

Thailand and Vietnam, like other South-East Asian states, are countries that, due to their geographical location and climate, frequently experience flooding. These floods can be 'deadly' to varying degrees, causing widespread damage to infrastructure, and mainly resulting in loss of life. According to the World Meteorological Organisation, climate- and water-related hazards caused USD 35.6 billion worth of damage in Asia in 2021. The annual WorldRiskIndex identified the Philippines as the country most vulnerable to disasters in 2021, and many other Asian countries were also classified as very high risk. One way these countries are working to mitigate the impact of floods is through the use of artificial intelligence (AI) services for weather warnings. Two companies at the forefront in this area are Weathernews and Spectee.

Weathernews is a Japanese company that specialises in weather forecasting and provides services to customers around the world. This service uses artificial intelligence algorithms to provide highly accurate weather forecasts. The service is designed to help companies and governments make better decisions based on weather forecasts, for example by issuing early weather warnings for flood-prone areas. Weathernews uses several sources to collect data for its weather forecasting services, including public weather services, its own proprietary network of more than 13,000 observation points, and reports from individuals. The company also collects observation data from ships and aircraft. 

The goal of Weathernews president Chihito Kusabiraki is to increase revenues from foreign countries by a further 30 per cent from 40 per cent to 70 per cent of the total. At present, most of Weathernews' international customers are logistics service providers, such as airline operators and shipping companies. In South East Asia, Weathernews plans to launch its artificial intelligence-based forecasting service by March 2023 in Thailand and by June 2023 in Vietnam. With this new service, the company aims to expand its customer base. The company's goal is to increase total revenue in Thailand and Vietnam to ¥3 billion (US$22.6 million) per year. 

Another company that is using artificial intelligence to provide weather warnings to flood-prone areas is Spectee, a Japanese company that specialises in providing news and information about natural disasters, including floods, through the use of artificial intelligence algorithms that can quickly identify images, videos and information about floods, shared on social media. This information is then used to create alerts that can be sent to authorities and emergency responders in affected areas. The company announced that once a partner is found, it will set up a local unit in the Philippines that will keep track of information, photos and videos on social media to map natural disasters in the country. 

The advantage of using artificial intelligence services for weather warnings in flood-prone areas such as Thailand and Vietnam is that they can provide real-time information that can help authorities act quickly. However, using artificial intelligence services for weather warnings also presents potential problems. One of these is that many people may not have access to the technology needed to receive weather warnings. For example, people living in remote areas may not have access to smartphone networks. This could make Spectee's system inefficient. Another concern is that companies and government agencies in emerging Asian economies may find it difficult to afford products designed for customers with greater economic hardship. 

Despite these concerns, it is clear that artificial intelligence services for weather warnings have the potential to be a powerful tool for mitigating the impact of floods. By providing real-time information on weather patterns and flooding, these services can help authorities to act quickly and reduce the impact of flooding on local communities. As these services continue to develop and become more advanced, it is likely that they will play an increasingly important role in disaster response efforts not only in South-East Asia, but worldwide.

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Redazione published in Asean, Global Lens

Asia’s Third Way

How ASEAN Survives—and Thrives—Amid Great-Power Competition

We offer below an excerpt from the latest essay by Kishore Mahbubani, published by Foreign Affairs

The defining geopolitical contest of our time is between China and the United States. And as tensions rise over trade and Taiwan, among other things, concern is understandably mounting in many capitals about a future defined by great-power competition. But one region is already charting a peaceful and prosperous path through this bipolar era. Situated at the geographical center of the U.S.-Chinese struggle for influence, Southeast Asia has not only managed to maintain good relations with Beijing and Washington, walking a diplomatic tightrope to preserve the trust and confidence of both capitals; it has also enabled China and the United States to contribute significantly to its growth and development. This is no small feat. Three decades ago, many analysts believed that Asia was destined for conflict. As the political scientist Aaron Friedberg wrote in 1993, Asia seemed far more likely than Europe to be “the cockpit of great-power conflict.” In the long run, he predicted, “Europe’s past could be Asia’s future.” But although suspicion and rivalry endured—particularly between China and Japan and between China and India—Asia is now in its fifth decade of relative peace, while Europe is once again at war. (Asia’s last major conflict, the Sino-Vietnamese war, ended in 1979.) Southeast Asia has endured a measure of internal strife—in Myanmar especially—but on the whole, the region has remained remarkably peaceful, avoiding interstate conflict despite significant ethnic and religious diversity. Southeast Asia has also prospered. As the living standards of Americans and Europeans have languished over the last two decades, Southeast Asians have achieved dramatic economic and social development gains. From 2010 to 2020, the Association of Southeast Asian Nations (ASEAN), made up of ten countries with a combined GDP of $3 trillion in 2020, contributed more to global economic growth than the European Union, whose members had a combined GDP of $15 trillion. This exceptional period of growth and harmony in Asia is not a historical accident. It is largely due to ASEAN, which despite its many flaws as a political and economic union has helped forge a cooperative regional order built on a culture of pragmatism and accommodation. That order has bridged deep political divides in the region and kept most Southeast Asian countries focused on economic growth and development. ASEAN’s greatest strength, paradoxically, is its relative weakness and heterogeneity, which ensures that no power sees it as threatening.
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Alessio published in Asean, Politics and strategy

More cooperation between the EU and ASEAN

From trade to green policies, the two blocs are set to deepen their cooperation in 2023

Free trade agreements, trade and investment, energy transition and green policies. There are many points on which the European Union and ASEAN are moving in the direction of further strengthening relations. Indonesia, the rotating chair of the Southeast Asian bloc of nations for this year, has already shown a firm intention to work hard to implement or foster new trade agreements with Europe. The first intention is to complete the Indonesia-EU Comprehensive Economic Partnership Agreement (IEU CEPA). Given the comprehensiveness and high level of ambition of the IEU CEPA, which covers 16 negotiating areas, this is a daunting task but one on which Jakarta has high hopes. The 13th round of negotiations, convened Feb. 6-10, was an initial test case for the prospects of completing the agreement by the end of 2023. And the feeling is that everything will be done to get it done. Singapore and Vietnam have already implemented trade agreements with the EU. A successful conclusion of the IEU CEPA would stimulate Thailand, Malaysia and the Philippines to resume negotiations for similar agreements. As The Diplomat points out, bilateral free trade agreements between the EU and ASEAN countries will then serve as building blocks for a future EU-ASEAN agreement, which will kick the relationship between the two blocs into even higher gear. Then there is the chapter on environmental policies. The European Green Deal is considered among the EU's top priorities in the 2023 strategy on ASEAN and Indonesia. Southeast Asian countries are getting serious about energy transition goals, but some obstacles remain to be overcome. Most notably the EU's no-deforestation rules, which have been negatively received by Indonesia and Malaysia, the world's two largest palm oil producers, who have deemed them "discriminatory" against developing countries. However, the EU has reassured that it is determined to resolve the issue diplomatically, indeed congratulating Jakarta on its progress: "Indonesia's achievements to stop deforestation are remarkable. The target date has been set for December 2022 and there are no sanctions for what has happened in the past," said EU Ambassador to Jakarta Vincent Piket recently. All sides seem intent on resolving any doubts to further strengthen cooperation between the two blocs. At all levels.

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Redazione published in Asean, Economy and trade

A “renewable strategy”: the ASEAN challenge for 2023

Between 2025 and 2029, South-East Asia will become a net importer of natural gas and coal, so on its future climate strategy will depend not only an important part of the world's energy production, but also the fate of the Paris Climate Agreement

By Chiara Suprani

If many analysts predicted that South-East Asia would become the next world power plant, then the energy strategy that the ASEAN block will decide to adopt for its future development is going to be crucial. Ranking fourth in the world for energy consumption, the group of ten countries of South-East Asia still meets 83% of its energy needs with fossil fuels. According to a report published by the 7th ASEAN Energy Outlook, between 2025 and 2029 South-East Asia will turn into a net importer of natural gas and coal, therefore from its future energy strategy will depend not only a considerable part of the world’s energy production, but also the fate of the Paris Climate Agreement. The majority of ASEAN countries have joined the Agreement that calls for net-zero emissions by 2050, with the exception of the Philippines. Indonesia, instead, has opted for setting the deadline by 2060. In order to support the energy transition of Joko Widodo’s country, the 2022 Summit of G20 launched the Just Energy Transition Partnership (JTEP), which is an US$20 billion program to decarbonize Indonesia's energy system. The agreement between Indonesia and its international partners calls for the decarbonization of 34 percent of Indonesian energy production by 2030. The formula of the JTEP is a mix of concessional loans, market loans, grants, guarantees, and private investment by public and private entities-this underpins the JETP. A formula that has been received positively because it is elaborated on the needs of each country. However, investors in the fossil fuel world are very combative. In fact, at COP27 in November 2022 the number of oil and gas representatives increased compared to the ones at the COP26: from 503 to 636, thus outnumbering each country's delegation.

Capitalizing on renewable energy requires that national strategies should be laid on a ground that is fertile for change: readjusting citizens' habits and seizing each country's energy potential are key to creating a favorable investment climate. The signs are gradual but visible. There are numerous cases of citizen lawsuits and complaints against governments or private entities for lack of respect of human rights or insufficient commitment toward, for example, fostering clean air or halving emissions. Among the cases of tapping the energy potential of each country, there is the one of Indonesia, whose geothermal capacity is second only to the United States, and where the Muara Laboh geothermal plant in West Sumatra was built. Or also, on Jurong Island, located southeast of Singapore, the largest energy plant in South-East Asia has been built. It aims to cover 3 percent of the annual energy needs of 300,000 homes. As the region becomes increasingly reliant on renewable energy, the ASEAN Centre of Energy does not shy away from recommendations. New energy projects in ASEAN countries will put additional stress on the national power grid, which is still subject to numerous blackouts. Countries that fail to formulate a flexible, diversified and resilient strategy could be subjected to a "boom and bust" development, or expansion and contraction, like the one that hit Vietnam in 2019. Unearthing the catalyst for ASEAN's energy transition is therefore a key goal for 2023.

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Alessio published in Asean, Culture and society

2023 as seen by ASEAN citizens

Economy, employment, and environment are top concerns of Southeast Asian peoples, who endorse "ASEAN WAY" in diplomacy

Unemployment, inflation, lack of raw materials, climate change, increasingly intense weather events, widening socio-economic gap and income disparity. These are the main concerns of citizens in the ten ASEAN member countries. The figure emerges from the long-awaited annual report The State of South-east Asia by ISEAS - Yusof Ishak Institute in Singapore. The results of the annual survey, which is useful to understand what Southeast Asian citizens expect from the year that has just begun, indicate that 59.5 % of the 1,308 respondents in the 10 ASEAN countries ranked unemployment and economic recession as a more pressing concern than climate change, which ranked second with 57.1 %. Rising socio-economic gaps and growing income inequality ranked third, while only after that were the growing geopolitical tensions mentioned by all international media in reference to opposing maneuvers in the Asia-Pacific. Indeed, 73% of the respondents expressed fear that ASEAN is becoming an arena of geopolitical competition, another sign that the classic "third way" of neutrality and pacifism adopted by the bloc is convincing the region's citizens. China continues to be considered the most influential economic power in the region, followed by the United States. China was also ranked as the most influential and strategic power in Southeast Asia. Again, the United States follows in second place. A testament to the fact that the bloc's citizens approve of their government's attempt to keep the doors open to everyone but not turn against anyone. When all is said and done, Southeast Asian respondents continued to prefer the option of strengthening ASEAN's trust and unity to fend off pressure from the U.S. and China amid tensions between the two powers. The traditional option under which ASEAN sides with neither China nor the United States saw more support this year than in 2022, while a third option growing in popularity involves ASEAN seeking to deepen relations with "third parties" such as Japan or India to increase its strategic space.

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Redazione published in Asean, Politics and strategy

Italy and Vietnam, 50 years of friendship

Editorial by Lorenzo Riccardi, Managing Partner RsA Asia

Hanoi is Rome's main trading partner in ASEAN. And it is on the list of priority countries for investment promotion

Italy and Vietnam are getting closer and closer. In 2022, trade between the two countries reached an all-time high of $6.2 billion, up 11% from 2021. A trend that has been on the rise for a while and has led to doubling figures within a decade. And that is set to continue, as Italy has included Vietnam in its list of 20 priority countries for trade and investment promotion through 2030. Among other things, next March 23 marks the 50th anniversary of bilateral relations, and to celebrate the recurrence a calendar of initiatives is planned to promote cultural and economic ties. For example, on the occasion of the Lunar New Year, the Consulate of Vietnam in Turin on January 30 organized a round table discussion on investment opportunities in Vietnam and Southeast Asian countries. Along with the writer, Sandra Scagliotti, Honorary Consul of the Socialist Republic of Vietnam in Italy, and Mario Donadio of Leading Law participated. Vietnam is Italy's main trading partner in Southeast Asia, but the whole region offers great opportunities. The political and economic union of the ten members of the Association of Southeast Asian Nations counts on a huge market, with 667 million people and a territory of 4.5 million square kilometers; it is the third largest economy in the Asia-Pacific and the fifth largest in the world. The ASEAN Economic Community (AEC) has a combined GDP of $3.6 trillion, according to estimates for 2022. The International Monetary Fund released its World Economic Outlook on January 31, 2023. The report forecasts global growth for 2023 at 2.9% before rising further to a GDP rate of 3.1% in 2024, which is an upward revision of 0.2 percentage points from the October 2022 estimates. The recent reopening of China's borders is expected to pave the way for a faster-than-expected global recovery. For the five largest ASEAN economies (Indonesia, Malaysia, the Philippines, Thailand and Vietnam), growth is projected at 4.3% in 2023. Cooperation with Europe and Italy is set to increase further.

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Sabrina Moles published in Asean, Global Lens

Climate diplomacy: where is the green light for change?

Political tensions and economic competition are slowing down the race towards the green transition. The war in Ukraine is changing Russian fossil fuel routes, but supply agreements are particularly advantageous for partner countries such as China

2022 was a black year for climate diplomacy. Although the 2021 Conference of the Parties (COP26) seemed to have rekindled decision-makers' focus on the climate crisis, the natural disasters that followed, the war in Ukraine, and a further slowdown in the markets have contributed to a completely different trend this year. COP27 saw presidents from some of the major global economies rushing past on their way to the G20 summit in Bali, while delegations from the most fragile countries only got the promise of funds for loss and damage, i.e. economic compensation for suffering the worst effects of climate change. Although not reaching the agreed quota of USD 100 billion, this decision was hailed by many as a first milestone towards climate justice. However, as new models by climate researchers demonstrate, the damage resulting from the climate crisis is far greater than has been calculated so far. Today, many of the world's most endangered cities are in Asia, including several major regional capitals such as Bangkok, Ho Chi Minh City, and Manila.

The meeting between US President Joe Biden and his Chinese counterpart Xi Jinping on the side-lines of the G20 summit has revived the rollercoaster of climate diplomacy, creating a sense of cautious optimism following commitments from the world's two biggest polluters. However, Washington and Beijing's actions are not yet consistent with their narrative of each country’s 'leading' role in the green transition. Looking east, China's promise to offer alternative models of sustainable development is still far from supporting the most urgently needed reforms. Neither the more heterogeneous ASEAN bloc nor the advanced East Asian economies seem ready for a rapid energy transition and achieving carbon neutrality. The first target is 2030, when Japan promises to have cut emissions by 46 per cent compared to 2013 figures, China aims to peak its emissions, and South Korea is bound by the Global Methane Pledge to reduce methane emissions by 30 per cent compared to 2020. China is missing from the latter mechanism, and has also released itself from the loss and damage fund.

South-East crossroads of interests 

Another interpretation of China's decisive role sees Beijing as the leader of a 'positive competition' with Washington, where the two countries seek to gain status (and budget) from their dominance in multilateral forums and in the market for energy transition technologies. But recent US manoeuvres targeting the semiconductor sector and manufactured goods produced in Xinjiang (which mainly include solar panels) risk turning competition into rivalry. What is certain is that China's promises combined with economic interest are having an impact on the countries most dependent on Chinese funding in the fossil fuels sector. One example is Vietnam, which must now consider whether to build new coal-fired power plants in the absence of Chinese capita due to Beijing's promised ban on foreign investment in the sector. Nevertheless, Southeast Asia's energy demand continues to rise, having grown more than 80 per cent in less than twenty years, and the easiest and most immediately available options are the most polluting energy sources, which continue to occupy more than 80 per cent of the region’s energy mix. Financial incentives also accompany the more practical availability of cheap natural resources, as in the case of Indonesia, which is the world's third largest coal exporter. Furthermore, the war in Ukraine is changing Russian fossil fuel routes, with supply agreements which are particularly advantageous for partner countries such as China.

Southeast Asia is at the crossroads of the interests of new investors avoiding China and older relationships rooted in the economic fabric of different countries. Japan, the main investor in Thailand in 2022, has long been eyeing the opportunity to build electric cars and components necessary for the energy transition. There is also a strong interest in new sustainable agricultural supply chains, as well as in businesses that can transform the tourism sector according to parameters more consistent with the UN agenda for sustainable development. In this case, the challenge is much broader than merely addressing the energy dossier, because it requires deep reflection on the environmental and social impacts of sectors that have driven the economies of several countries in the region over recent decades.

The challenges of sustainability between India and Central Asia

Far from the spotlight of climate diplomacy, but extremely important for its economic and demographic weight, India has to reckon with the challenges of uncontrolled modernisation. The unbridled growth of its cities is not matched by reasoned urban planning (think, for example, of private vehicle traffic), while water resources and soil health have plummeted since the 1950s. The evidence on the ground is not yet matched by an awareness of playing a proactive role at the climate negotiation table. Even for New Delhi, competition with China is a priority. Furthermore, while on the one hand the Indian government forms new working groups for the enforcement of multilateral agreement directives, on the other hand it moves to repress environmental organizations and activists.

Finally, Central Asia focuses on climate change adaptation measures rather than demanding more responsibility from the big polluters. While in some places like Kazakhstan the race for economic leadership in the region seems to overshadow environmental promises, in other countries such as Kyrgyzstan there is a strong concern about extreme climate phenomena and food security. The competition over water resources, which has recently emerged with clashes along the Kyrgyz-Tajik border, also opens dangerous scenarios of climate change as an accelerator of conflict in the region. The main promise, as stated by the leaders involved in the UN environment agency's project on climate security in Central Asia, is to work together with international organizations to build a socially and economically sustainable adaptation strategy. Here too, however, the role of a prominent player like China could influence the design and electrification choices of newly urbanized areas. Looking at the resources in the area (water sources along the border with Xinjiang, natural gas wells), another side of the coin becomes visible: predatory scenarios that are not new in Asia, such as the case of the Chinese dams along the Mekong Delta.

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Valerio Bordonaro published in Asean, Global Lens

World moves closer to ASEAN

China, Japan, the United States, Europe, and Italy: relations with Southeast Asia are increasingly being seen as globally strategic

If there is a clear trend in the global commercial and geopolitical landscape, it is the willingness of the major powers and all the more developed or emerging countries to deepen their relations with ASEAN. Southeast Asia is increasingly seen as an indispensable center of economic and diplomatic cooperation. Just look at what has happened recently and what may happen in the near future. In 2022, the first year of the Regional Comprehensive Economic Partnership (RCEP) coming into effect, China recorded a 15 percent year-on-year increase in trade with ASEAN, which firmly holds the position as China's top trading partner. In 2023, it is foreseeable that the pace may even increase, in step with Beijing's accelerating growth. President Joe Biden's participation last November at the ASEAN summit in Cambodia, on the other hand, confirmed that the United States has also stretched the pace in a region that is also crucial for strategic reasons. The investment plan announced by the White House is finally moving in the direction of U.S. involvement not only on the defensive and military side, but also on the infrastructural and environmental side, given the focus on energy transition involving all ASEAN countries. Moving very decisively are certainly not only the superpowers. Japan, for example, has long been an established presence in Southeast Asia. Ever since 1977 and the launch of the "Fukuda Doctrine," named after the then prime minister who during a famous trip to the Southeast expressed Tokyo's commitment not to become a military power and to build a relationship of mutual trust with ASEAN and its member countries. Since then, Japan has become one of the bloc's major trading partners and investors and a major source of infrastructure funding. Now the country is seriously considering elevating its relationship with ASEAN to a comprehensive strategic partnership, putting it on par with China and the United States. South Korea recently launched its first Indo-Pacific strategy, which reserves deepening relations with ASEAN as one of its pillars. The region is also set to become the largest destination for foreign direct investment from Taiwan. The European Union, for its part, has realized that its interests increasingly coincide with those of ASEAN, and the possibility of a free trade agreement between the two blocs no longer seems so remote. A development that would also benefit Italy, whose businesses are looking with increasing interest toward the Southeast.

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Sabrina Moles published in Asean, Economy and trade

Tourism rebounds in ASEAN countries

According to WTTC, Southeast Asia will be the first to return to pre-pandemic levels of tourism. But contradictions and opportunities of mass tourism pose new questions

December 2022: Christina Aguilera posts a reel on her Instagram account that collects more than 25 thousand likes. The US pop star is spending her birthday in Vietnam, in the background of the landscape of Ha Long Bay, a UNESCO heritage site. The singer takes a helicopter ride, then celebrates with a toast on a yacht. All around, still few tourists, especially for a place that came to record more than 7 million visitors in 2017. By 2020, after the first pandemic wave, arrivals to Ha Long had plummeted to 1.5 million. Only a year earlier, environmentalists called for more attention to the natural area, where the construction of the new airport could trigger an environmental catastrophe due to the future tourist boom.

Ha Long's popularity and the decline in tourism due to the pandemic do not provide sufficient evidence to reason about greater landscape protection. Recovery, however, is near: according to data from the World Travel and Tourism Council (WTTC), the Asia-Pacific region will be the first to return to 2019 figures, with projections of 8 percent year-on-year growth over the long term. In addition, over the next decade, workers in the sector could increase to the point where they occupy 64.8 percent of the global total.

Ready for recovery

That 2023 could be the year of recovery is also told by actors in the territory. In January, Tourism Council of Thailand (TCT) President Chamnan Srisawat said that forecasts are for at least 20 million tourists to Thailand in the new year, almost doubling from 2022 numbers (11.8 million). The Vietnam National Tourism Administration (VNAT) also forecasts 8 million international arrivals, for estimated earnings of about $27.5 billion. In Cambodia, preparations are being made for the return of crowds to the well-known Angkor Wat complex. "The government has devoted a lot of effort to a recovery plan for the tourism industry," Top Sopheak, spokesman for the Ministry of Tourism, told the Chinese news agency Xinhua. "We believe that foreign tourists will increase in the coming years, especially in Angkor, as many airlines have resumed flights."

ASEAN has also been studying measures to address travel recovery in the post-pandemic era. As early as January 2022, a meeting of tourism ministers highlighted the need to take coordinated measures to boost the recovery of the tourism sector and achieve a number of goals already set out in the ASEAN Tourism Strategic Plan (ATSP) 2016-2025: not only a better quality of tourism offerings, but also a greater focus on the social and environmental sustainability of the sector. Examples given in the meeting's press release include the urgent need to support small and medium-sized enterprises, increase the skills of tourism operators, and protect the environment and historical heritage.

A fragile compromise

The basis for a recovery of Southeast Asian economies also (though not only) through the tourism industry is a given. The easing of restrictions due to the pandemic has already led to a growth in foreign entries, from which come tourists with ample spending power compared to domestic travellers. A possible recovery of the more developed economies also promises significant revenue for the most tourism-dependent country such as Thailand, but also an opportunity to invest in the sector as is happening in Vietnam.

What remains is the dilemma of the sustainability of the sector, especially in those areas where border closures have brought with them serious damage to the local socioeconomic fabric. As the International Labor Organization (ILO) pointed out in its 2021 report, the pandemic has caused an unprecedented collapse of job opportunities, especially affecting those sectors related to international tourism and global value chains. Adding to the dependencies that can be created in the labour market are other side effects of mass tourism: inflation, inflated real estate prices, and environmental degradation. The impact of mass tourism in Southeast Asia is primarily on ecosystems. It only took a few weeks of lockdown to return natural habitats to their true inhabitants. This has happened, for example, in Thailand, where a group of dugongs has returned to populate the waters around Libong Island. To date, there are still few Southeast Asian destinations that impose restrictions to safeguard the natural heritage of the excessive amount of tourists lured by the region's breathtaking views. Such as in Boracay, a small Philippine island where a total ban on entrances was imposed in 2018 to allow the waters to be cleaned of the accumulation of polluting sewage spilled from accommodations. Some restrictions have recently been adopted on the use of beach sand but, on the other hand, the green light for fireworks to celebrate New Year's Eve signals a more lax policy to keep the popularity of the tourist destination high.

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Alessio published in Asean, Economy and trade

ASEAN, development is the watchword

While the war in Ukraine is continuing, integration, cooperation and growth remain at the center of Southeast Asian countries' plans

2023 started the same way 2022 closed: with the West worried about the war in Ukraine and inflation on the one hand and Asia trying to strengthen its growth on the other. And it is precisely ASEAN that is increasingly emerging as a platform for investment but also for dialogue. A trend clearly anticipated by two accelerating processes: the flow of foreign projects into Southeast Asian countries and the moves of their governments in opening up to international trade and mobility. In addition to the stimulation of domestic demand, which already returned to vibrant growth in 2022, the region's executives have realized that removing regulatory, normative, and fiscal barriers allows them to reinvigorate engagement on the two key concepts of openness and integration. Pillars of improved multilateral trade and policy dialogue. Free trade has been a key driver of Asia's development in recent decades, but now some global powers are adopting semi-protectionist postures, forcing several companies to reconsider their supply chains. Despite this, Asia continues to be the most dynamic region in the world, buoyed by the development orientation of most of its governments. From the Regional Comprehensive Economic Partnership to other free trade agreements, examples supporting this perspective are numerous even in the last few pandemic years. The results can be seen. In 2022, Vietnam grew more than 8 percent, a record high since 1997 driven by a 13.5% increase in foreign direct investment. Not only by those moving part of their production lines from mainland China but also and especially as part of new projects that the region is increasingly able to attract. Including those related to hi-tech manufacturing. Of course, global uncertainties have led the Asian Development Bank to reduce its 2023 economic growth forecast for developing Asia, which includes 46 economies, from 4.9% to 4.6%. Excluding China, the growth rate was reduced from 5.3% to 5%. An expansion of about 5% would still be the fastest of any region in the world. Moreover, the Southeast Asian region is set to become the world's largest single market by 2030. 

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Lorenzo published in Asean, Economy and trade

ASEAN epicenter of growth in 2023

The year that has just begun features many uncertainties, from the war in Ukraine to inflation, but also one certainty: the pivotal role of Southeast Asia

"ASEAN Matters: Epicentrum of Growth." That is, "ASEAN matters: epicenter of growth." This is the apt slogan chosen by Indonesia for its 2023 rotating presidency of the Southeast Asian bloc of countries. After successfully hosting the G20 summit in Bali, the Indonesian government confidently embarks on its next goal: to coordinate the diverse positions and interests of ASEAN member countries, maintain the unity of the bloc, and further elevate Southeast Asia's stature as a global growth center. It is a mission made less complicated by the trend in the area already in the past few years. In spite of all the difficulties created first by the Covid-19 pandemic and then by the war in Ukraine with its many side effects starting with inflation, the region has held up brilliantly. Perhaps one of the most interesting stories to tell is that of Vietnam, which grew above 8 percent in 2022, the highest figure in 25 years. But it is not just about data and percentage points of gross domestic product. Also counting in a positive way is the openness predisposition always maintained by the bloc, albeit with due differences and discontinuities among member states. In 2023, Indonesia will try to make all these elements "count" even more on the international level, while on the regional level it intends to maintain its focus on expanding economic cooperation at the bloc level. Jakarta will also try to build consensus on food and energy security by strengthening supply chains. There is no shortage of complicated challenges on the domestic front as well, chief among them the crisis in Myanmar, an issue on which the Indonesian presidency will try to make significant progress. Never losing sight of the fact that free trade has been a key driver of Asia's development in recent decades, and Southeast Asia has long been showing that it wants to avoid at all costs not only so-called economic decoupling but also a new cold war in which major powers push everyone else to choose sides. The motto of the Indonesian chairmanship reiterates that ASEAN's choice is one of economic growth and trade integration.

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Annalisa Manzo published in Asean, Politics and strategy

Timor Leste towards ASEAN’s membership

After more than ten years from its candidacy, Dili is preparing to become the eleventh member state of the South-East Asian bloc.

Signed at the end of the 40th ASEAN Summit held in Phnom Penh, the agreement in principle granted Timor-Leste observer status and participation in all ASEAN meetings, including the summit plenaries. The country would be the first new ASEAN member in more than two decades since Cambodia's admission in 1999.

The expected decision comes after years of debate, which includes initial reluctance from Singapore. President Ramos-Horta presented East Timor's candidacy for ASEAN membership in 2011, one year before completing his first five-year term. At the time, the request brought out quite a bit of resistance even at home, due to the country's lack of human and economic resources to adapt to ASEAN programs, and above all the financial obligations that members are required to pay to manage the regional organization. The decision is therefore a great achievement for Ramos-Horta, who won the Nobel Peace Prize in 1996, together with the then bishop of Dili Carlos Ximenes Belo, for their peaceful campaigns in favor of the independence of East Timor from Indonesia. Inclusion in the regional bloc would in fact seem to be the beginning of a mea culpa from Indonesia towards its former colony.

The history of the two nations is marred by the loss of thousands of lives and the horrific acts of violence that marked the 24-year Indonesian occupation of what was then East Timor. Many more were killed in the aftermath of the United Nations-approved referendum on August 30, 1999, when the East Timorese voted for independence from Indonesia.

In December 1975, with the full approval of US President Gerald Ford and Australian Prime Minister Gough Whitlam, then-President Suharto invaded East Timor, after it was abandoned by Communist-controlled Portugal. For more than two decades, Indonesia acted as the colonial master of East Timor, which was named the twenty-seventh province of the Republic. However, the United Nations has never recognized Indonesia's sovereignty over East Timor, thanks in part to Ramos-Horta's global campaign. In the wave of change that led to the fall of the Suharto regime, his successor BJ Habibie decided to let the people of East Timor choose the future of their country, through a referendum that sanctioned independence from Indonesia, with almost 80% of the votes. Unable to accept such a defeat, the Indonesian army and its militias began an unparalleled destruction, forcing hundreds of thousands of people to flee. Peace was restored only after the United Nations sent multinational troops and the Indonesian military agreed to cooperate. Timor Leste was chosen as the official name of the new Republic, which declared its full independence on May 30, 2002. 

Timor Leste, which shares the islands of Nusa Tenggara with Indonesia, is now among the world's poorest nations, the main reason why Singapore had opposed its entry into the bloc. All these years, it was President Joko Widodo who pushed fellow regional leaders to accept Timor-Leste as part of the group. From the outset Singapore questioned East Timor's capability to join the trade bloc, fearing that such an impoverished state would just become an unnecessary burden on ASEAN.

However, ASEAN has admitted new members despite low human and economic resources. Timor Leste remains a low-income country, but its welfare is better than Myanmar today. It enjoys huge reserves of oil and gas, and in 2021 per capita income was $1,400. 

Helping new member states is standard procedure for ASEAN. Its history shows this first with Laos and Myanmar in 1997 and then Cambodia in 1999. New members of the bloc were also given special treatment to catch up with economically stronger members such as Indonesia, Vietnam, Thailand.  

While waiting to receive the same treatment, the conditions are before everyone's eyes. Joining ASEAN would finally give Timor Leste a level playing field within the group and access to a huge market, which would help the country grow faster and be part of decision-making processes. Indonesia will not be able to repay its debt, but it is ready to write a new future.

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