2010 Nov 28
November 28, 2010

Asean connectivity for competitiveness

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IT IS said that Asean [Association of Southeast Asian Nations] is composed of 10 precious and exquisite pearls that sparkle and stand on a class of their own. However, these pearls remain loose, and everyone agrees that the Asean region will be a more immense source of light and strength for the rest of the world if these loose pearls are stranded by a common thread to form a necklace.

This must be the underlying ambition of the Asean leaders during their summit last year in Bangkok, when they asked that a group composed of eminent persons be formed to prepare a master plan for Connectivity, which must be ready for approval during their meeting in end-October 2010.

The leaders would like a strategic plan that is doable and achievable over the medium term through projects that will result in a well-connected region by 2015—the timeline for relaunching the Asean Community.

This is the first strategic initiative that the Asean leaders have taken since the AFTA (Asean Free Trade Area) was formed in 1992. Our President then, Mrs. Corazon C. Aquino, was a prime mover and one of the signatories of that historical agreement. Our succeeding President, Mr. Fidel V. Ramos, helped lay down the initial building blocks that moved the region towards achieving the goal of one market, one people.

One dynamic market

The response so far of the 10 member states to AFTA has been awesome as they saw the benefits of having one big, dynamic market of 550 million, making it possible for our firms and farms to function at higher economies of scale, bringing them to world-class performance. It opened their trade and investment windows to the rest of the world even wider. Intra-Asean trade jumped to double-digit growth as member states realized the benefits of partnering with their neighbors. The Philippines, for one, had been an early global player, with its attention focused elsewhere on America, Japan, Germany, UK and China. AFTA made the Philippines realize that opportunities for greater growth are not far from home.

Economists now boldly forecast that Southeast Asia is becoming a key driver of global growth. The succession of financial and economic crises which emanated from the more advanced world capitals, rocking the rest of the world, did not dampen the enthusiasm of investors for the Asean region. This resiliency of the 10 member states is indicative of the positive outcome from the close engagements among our leaders, which resonate down to the people.

Pursuing initiatives

Since the Asean Charter entered into force, our leaders have been conscious in pursuing initiatives to build the Asean community along three pillars: economic, political security, and socio-cultural.

It has not been an easy task due to the wide diversity in the state of development between member states, and by the differences in political systems which are in place in certain member states. The problem was in the “How” to build up the connectivity harmoniously.

However, there is no doubt about the leaders’ unity of purpose in upgrading the standard of living of their people. The richer members are willing to lend a hand in reducing the poverty level in other member states. Hence, the most important pillar is turning out to be the economic pillar since political stability can only be realized with economic well-being.

With the rich resources of the region that are of interest to the world in general, and with good management and inspired leadership, there is no reason why the economic well-being of each member state cannot be improved in the medium term. The Asean people deserve no less. They have the talents, the work ethic, and the goodwill that will carry them through the hurdles on their way to progress.

Buzzword

Regional architecture has become a buzzword in the context not only of economic stability but also of political security. We recognize that the region must have institutions and establishments that must be able to withstand the tremors and the tsunamis of political and economic disasters which take place every so often. The Asean leaders know that this must be a shared goal not only intra-region but also between regions as well.

But what use are the quake-proof buildings and the flood-proof harbors without the humming sound of economic activities involving the Asean peoples? Their talents, their creativity, their thirst for hard work, their drive for excellence must be put to good use. This is what the Masterplan for Asean Connectivity is aiming to achieve; a regional architecture and facilities for global competitiveness to reduce the poverty level in the region.

The author is privileged to have represented the Philippines as its eminent person in crafting the aforementioned Masterplan. Together with nine other eminent persons from the rest of the Asean member states, and with the help of the Asean Secretariat and other resource partners, the task force put together in a span of 11 months an ambitious set of projects for the leaders’ approval.

Effective connections

The Philippines threw its full support behind the drafting of this master plan by sharing its experiences in connecting its 7,100 islands that may be relevant to the task force. The value of having private sector in creating the master plan was emphasized, together with the PPP (Public-Private Partnership) approach as an option in the implementation of the projects. Much information have been provided by the regional sectoral work groupings of senior officials involving functions such as trade facilitation, tourism, transportation, communications, labor, youth, education, information technology, border security, etc.

The eminent persons had to determine innovative ways to meet the challenge of effective connections between each country through three elements: physical infrastructure, effective institutions, and people-people linkages via culture and education.

These three types of connectivity must meet the over-arching aim of becoming a globally competitive region, which is the desired outcome of the entire exercise. And rightfully so, since we do not wish the huge investments in funds and technologies to be captured by politicians who have other shallow, parochial interests.

However, instead of merely picking up the sectoral wish lists that may have little impact on the stated objectives of the master plan, the members of the task force with their wide experience and vision from public and privates sectors’ backgrounds were allowed to evaluate the available lists and to pursue new possibilities that may be of greater correlation to the desired big picture outcomes.
SWOT analysis

In the case of physical connectivity in transportation, the Philippines looks forward to the development of a nautical highway to ensure that we are connected to our neighbors in EAGA (East Asean Growth Area) and eventually to the peninsular states as well. It is hoped that the innovative RO-RO (Roll On, Roll Off) system of transport that has worked so well here will help restart the stalled trade links in this backwater of the Asean region.

In the field of energy, and after conducting a SWOT (strengths, weaknesses, opportunities, threats) analysis of the subregion, the Masterplan’s Trans Asean Gas Pipeline will include the Mindanao-Brunei branch which ensures energy supply and security to EAGA. The Mindanao-Brunei gas pipeline could hasten the availability of low-cost power in southern Philippines, bolstering the economic viability in both sides of the Mindanao Sea.

Both studies are for feasibility studies with final results to be ready by 2015.

A better route

The financial and technical resources that will be needed to pursue the physical connectivity projects will be enormous. It is predicted that a combination of internal and external financing sources will have to be considered with commercial and internationally development institutions. Forging PPP may be the better route to finance certain types of projects and should be part of the schemes for studies. It is envisioned that the Asean Finance Masters will take ownership of this part of the Masterplan since they are in the best position to develop the most advantageous option-combination for the projects involved.

Some people may ask, “What is special about this Masterplan from others in the past? Does Asean really need another plan? Aren’t its bureaucrats churning so many plans that remain hidden in the cupboards of regional offices? How does this plan going to be implement that it will make it different from the past?”

If you note a tinge of skepticism in the tone of some of these questions, you are probably right. There have been many criticisms about the poor follow-through in the execution of past projects. They say that Asean was long on promise but short on execution. We have to insist that the new Asean is more than just a ‘talking club.” The eminent persons group concentrated on addressing the last question given above. Hence the need for accountable persons for every project was underlined with clear timelines and growth defined by measurable outputs. Each country will have to be “on the ball” which will be shepherded by a country senior coordinator reporting directly to the President.

Delivering results

It is very much like the S.M.A.R.T. approach adopted in business schools which has guided the progression of the National Competitiveness Council action programs on governance and competitiveness. This acronym represents the characteristics of an effective objective, i.e., Specific, Measurable, Attainable, Result-oriented and Time-bound. The bias is on delivering results with measurements, monitoring and evaluation every step of the way.

In the Asean Secretariat, it was agreed that a very senior top honcho will be appointed dedicated to focus on the Masterplan for Connectivity – to give support to the Asean Connectivity Coordinating Committee composed of our permanent representatives.
The leader would be apprised of the top-drawer projects every quarter or so – to ensure launching in 2015. Everyone in Asean should be excited in these coming new connectivities to transform our community with a small “c” to one with a capital “C.” –Cesar B. Bautista, Philippine Daily Inquirer

(The article reflects the personal opinion of the author and does not reflect the official stand of the Management Association of the Philippines. The author is the present private-sector Co-Chairman of the National Competitiveness Council and former Secretary of the Department of Trade and Industry. Send feedback to map@globelines.com.ph. For previous articles, please visit .)