Attraction of the AEC
The forum “ASEAN at 50: ASEAN economic community and the opportunities for Vietnamese businesses” .
At the forum, Dr. Rebecca Fatinma, the Senior Expert of ASEAN and East Asia Economic Research Institute (ERIA) said, as a region with young population, ASEAN being the third largest market in Asia and the sixth largest economy in the world (2016 data) has vast potential market for investment. Especially in the context when the world economy is facing many challenges, the economic growth of the region makes other countries "jealous."
More importantly, Ms. Fatinma emphasized that ASEAN's mode of development is step by step and based on the principle of consensus: “As a region comprising 10 economies with different socio-political institutions and growing pace, it is important that we grow together, develop more and more to narrow the development gap.", Dr. Fatinma suggested.
Moreover, ASEAN should work toward the goal of a single market for the benefit of all. "This is very important if the region wants to develop together and benefit all involved," said Dr. Fatinma.
Urging for “hard" and "soft" connectivity
However, Dr. Fatinma noted that even though ASEAN is currently a bright spot but should we continue in the old-fashioned way? The senior ERIA expert put the emphasis on the connectivity in both institutions, infrastructure, and people in a common economic community.
There remains bureaucracy in exports among countries, and we need to improve the one door mechanism, " said Mrs. Fatinma. In addition, the development of e-commerce and digital economy requires a lot of investment in technology and transport infrastructure to ensure smooth flow of commodities in the region.
Considering connectivity and sharing the key to a common economic community, Mr. Vo Tri Thanh, deputy director of the Central Institute for Economic Management (CIEM), noted that there is still a lack of infrastructure connectivity. According to plans, by 2025, ASEAN should have completed 115 infrastructure projects but until now, only 31% of those has been completed. The lack of infrastructure connection drives logistics cost to a very high level, said Mr. Vo Tri Thanh.
Professor Hidetoshi Nishimura, President of ERIA, also said that in order to develop a common market and production base, apart from the "hard" connection in terms of infrastructure, there should be a "soft" connection between people and policy institutions.
Dr. Ponciano Intal Jr., ERIA's senior economist expert, said that the increase in non-tariff barriers is a constraint in the "soft" connection. Non-tariff barriers affect trade and the flow of goods among member countries. "Many countries need to change their approach, licensing and management processes to turn ASEAN into the world center," Dr. Ponciano Intal Jr. emphasized.
Vietnam's position in the AEC
Assessing the benefits that the ASEAN Economic Community (AEC) brings to its members, Professor Hidetoshi Nishimura, President of ERIA, said that among ASEAN Members, Vietnam is considered a rising star with strong investment from foreign companies such as Canon and Samsung. In addition, Vietnam is taking advantage of its global production chain and indeed has achieved certain successes.
Deputy Minister of Foreign Affairs, Mr.Nguyen Quoc Dung emphasized Vietnam had left its imprint for the last two years, following the establishment and development of AEC because, in fact, Vietnam has joined the process of ASEAN economic integration from the early days when the ASEAN Free Trade Area (AFTA) was just in its infancy. During the 22 years participating in ASEAN, Vietnam economy has gradually been integrated in ASEAN economy with two-way trade turnover increasing to 41.36 billion USD in 2016. ASEAN is the third largest market and also the third biggest trading partner in supplying sources of goods for Vietnamese enterprises.
Meanwhile, Dr. Fatinma said that in Vietnam is receiving huge investment flows compared with other ASEAN countries. With the presence of Vietnamese big enterprises in ASEAN countries such as Vinamilk, BIDV Bank, Vietnam Oil and Gas Group PVN, they will be the springboard for small and medium enterprises in Vietnam to join the value chain and benefit from the expansion of these corporations in ASEAN.