As Asean Moves Toward Integration, How Will Cambodia Fare?

[geovalin]

Essarayoss Mean, VOA Khmer

18 November 2015

WASHINGTON DC—

[Editor’s note: Pek Koon Heng-Blackburn is an assistant professor of international studies and director of the Asean Studies Center at American University, in Washington. She recently sat with VOA Khmer to discuss new initiatives in Asean, as its members seek to become more economically integrated. Under that integration, experts fear that Cambodia will not be competitive with its Southeast Asian neighbors, as a free flow of goods and services between the 10 Asean members ensues. In her interview, Heng-Blackburn explained the ideas behind the economic community and the challenges Cambodia faces as it joins in.]

What is the Asean Economic Community?

The Asean Economic Community that will be realized this year under Malaysia’s chairmanship of Asean is actually one of the three communities of Asean. Asean is based on three communities: the political security community; the economic community; and social cultural community. The Asean Economic Community is really the most important one for Asean. It will create a single market and production base, it will create a competitive economic region, it will create a more equitable economic development within Asean, and it will integrate Asean into the greater global economy.

Now, when we are talking about this creation of a single market, we are talking about 633 million consumers, based on the 10 Asean countries. And these countries have a total GDP of $2.3 trillion and one of the highest regional growth rates in the last several years since the financial crisis.

In 2014, it registered 5.6 percent growth rate, which is a reason why there’s a lot of interest, international interests, American interests, and Chinese interests, as well, in the attainment of this single market and single production base. Also Asean wants to create a competitive economic region by having a competition policy, by doing IPR (Intellectual Property Rights), by doing consumer protection, so that we can be more competitive, and we will pull in more investors because of a better IPR rules.

Pek Koon Heng-Blackburn is an assistant professor of international studies and director of the Asean Studies Center at American University, in Washington. (Courtesy photo of Pek Koon Heng-Blackburn)

And then thirdly, it will try to narrow the income divide within Asean to equitable economic development, and it sets up an Asean infrastructure fund with a hope for a paid-up capital of $13 billion to promote infrastructure in the less developed countries like Laos, Cambodia and Myanmar. And then finally it will integrate Asean into the global economy to the Regional Comprehensive Economic Partnership. It is an Asean free trade agreement with dialogue partners, so there will be 16 members, including India and China. That is a very, very ambitious objective and this will be realized at the end of this year.

There are two types of countries: the six former Asean, which are more developed, and the four new Asean nations, which are less developed. How would the single market element benefit those countries and what’s the cost to those countries?

You have to look at both single market and production base because it’s about consumers buying the products and also about production being based in the countries. Hopefully more investment will come to the less-developed Asean countries, which is why this is a benefit, if it’s able to pull in more investment. The benefit is that the Asean Economic Community will create what we call a similar market in that it’s a free trade area. A free trade area is where you can locate production in any country in Asean. Once you get production, let’s say in Laos, you have access not just to that tiny population of Laos, but you also have access to 633 million consumers. Once you invest in any of the 10 countries you have access to all 10.

Full story: http://www.voacambodia.com/content/as-asean-moves-toward-integration-how-will-cambodia-fare/3063489.html

[ezzra]

As Wichita falls, so falls Wichita falls... same answer to the question above...

[ggt]

Cambodia will do just fine...they have plenty of cheap labor...and the folks in power will be glad to take bribes under the table to speed the industrialization and manufacturing process along...this is Asia you know...

[Expat1]

I concur Cambodia will trundle along well enough. If you want to worry about someone worry about Thailand. How is Thailand going to fare? Unless they start taking serious positive steps, like increased English ability, increased higher level skills training, easier immigration for foreign engineers, scientists, etc., more incentives for businesses, easier Customs procedures, etc (the list is very long) then they are gonna fall farther behind the other major ASEAN players and catching up will not be easy.