Asean nations need to increase inter-regional trade if they want to sustain growth amid declining demand for Southeast Asian exports from the west and Japan, a World Bank economist said in Jakarta on Tuesday.

Exports to the west and Japan have historically driven Asean growth, to the point that inter-regional trade was often neglected, World Bank economist Shubham Chaudhuri said at the Globe Asia Business Summit. But that has to change if the region expects to continue its recent history of economic growth.

“Exports have been a critical driver of growth for Asean, compared to what you see in other regions,” Chaudhuri said, but “as Asean economies grow, they are actually exporting less within the region.”

Economic integration across Asean nations relies on addressing problems at home first, Chaudhuri said, including disparities in education, welfare, the legal systems and infrastructure — an issue vital to Indonesia’s future.

The region should learn from the successes and struggles of the European Union as it moves toward a regional economy, he added.

“The lesson from the European Union that I would draw for Asean, is the tremendous push from the domestic sector, including the private business, for market integration,” Chaudhuri said.

Julian Wilson, the EU Ambassador to Indonesia, said that Asean would be better off to “learn more from the mistakes rather than the beneficial ones.”

Asean nations need to take baby steps toward economic integration, Wilson said, explaining that efforts to standardize some sectors  — like the cosmetic industry — have had some success. This small and slow approach should be the model for all regional integration efforts, Wilson said.

“Start small, take time,” he said.

But the region faces hurdles unique to Asean nations, he said. Southeast Asia is not Europe, even neighboring countries are less homogenous than many European nations and each member state will have to sacrifice at home if they want to move forward, Wilson said.

The conference, which concluded today, was organized by Globe Asia, a magazine owned by Lippo Group — which also owns the Jakarta Globe. –Bhimanto Suwastoyo, http://www.thejakartaglobe.com/business/inter-regional-trade-vital-to-future-asean-growth-world-bank-economist/520786