On Aug 8, Asean commemorated its 49th year of existence. Since the signing of the Bangkok Declaration in 1967, Asean has definitely come a long way. With the continuous change in the global and regional landscape, Asean, as a regional grouping, will inevitably face enormous challenges ahead.

Essentially, Asean needs to put its house in order first, especially in terms of redefining its identity, character and strategic values. Indeed, Asean made a bold move in this regard last year. At the conclusion of the 27th Asean Summit and Related Summits in Kuala Lumpur, the 10 Asean member states, under the chairmanship of Malaysia, achieved another major milestone in the grouping’s almost 50 years of journey when the Kuala Lumpur Declaration on the establishment of the Asean Community (AC) and the Kuala Lumpur Declaration on Asean 2025 were signed.

AC, inaugurated last Dec 31, comprises three community pillars: political and security, economic and sociocultural, where the Asean Community Vision 2025 serves as its blueprint. But it is apparent that since its realisation, the economic community pillar appears to have greater strides compared with the other two pillars.

Although historically the establishment of Asean was primarily political in objective, especially on issues of political security in Southeast Asia, greater attention on economic advancements was rigorously pursued in the early 1970s, which subsequently led to the formation of the Asean Free Trade Area (AFTA) in 1992. AFTA, among others, is an attempt to further liberalise trade activities among its member states. And last year, Asean charted a new chapter in the economic sphere when the Asean Economic Community (AEC) was realised, eight years after the first blueprint of AEC was signed in 2007.

AEC is built upon four main characteristics: a single market and production base, a highly competitive economic region, a region of equitable economic development and a region fully integrated into the global economy. Looking into these characteristics, one wonders if these are really a tall order to be achieved. Will these be a reality?

For a start, the potential of Asean is huge. We are talking about a population of 622 million, the third largest in the world, with 65 per cent of the population under 35 years old. Total gross domestic product is US$2.6 trillion (RM10.4 trillion), 7th largest economy in the world and 3rd largest in Asia.

The potentials are there, and with the proper blueprint and road map in place, the main factor now would be its implementation. And in this regard, the chosen theme for this year’s Asean chairman, Laos, is really hitting the nail on the head, which is “Turning Vision into Reality for a Dynamic Asean Community”.

To achieve the AEC vision, there are three issues which need immediate attention.

The first is to prioritise and focus on key strategic sectors. One key sector which is extremely crucial is banking and finance. During the recent CIMB-UUM Public Lecture on the Trans-Pacific Partnership Agreement and its impact on the Malaysian banking industry, CIMB-UUM chair professor, Prof Emeritus Dr Salim Rashid, put forth an interesting idea of the creation of activist banks.

Simply put, activist banks are banks which do not just lend money, but also actively look for profitable opportunities in the market for any takers to take up the challenge and along the way, foster the spirit of entrepreneurship.

Perhaps this idea of activist banking, which involves coordinated investment action, can also be applied in Asean. Having activist banks will not just promote sustainable development in Asean, but will also inculcate a culture of entrepreneurship, crucial when it comes to making Asean more people-oriented and people-centered.

The second is for Asean to leverage the might of China and India, the two Asian giants, now seen as the new centre of gravity in the global economy. China’s one-belt-one-road initiative and the Asian Infrastructure Investment Bank (AIIB) should not be seen as an antithesis to the Asean community agenda, but as a strategic platform to further realise Asean’s aims to be more globally integrated. The AIIB model, perhaps, can be developed and established among Asean member countries to tackle development inequalities.

Finally, lessons learnt from the recent momentous event of the United Kingdom leaving the European Union, or  Brexi-t. One immediate message which can be drawn is the danger of many facets of development inequalities. It is obvious that  Brexi-t is about the great divide between the rich and poor, educated and the less educated, and urban versus rural populace.

It is central, therefore, for Asean to put more effort to put people first on top of their agenda. Civil society movements must be given space to flourish, and there must be greater engagement in the community-building process. The process must be from the bottom up. This must be the order of the day for Asean.

Asean has had its ups and downs. Its rise and fall in the course of its almost half a century journey has proven to the world that it is a group which has both resilience and dynamism to stand the test of time. Moving forward should be no different. By Dr Irwan Shah Zainal Abidin, 16 August 2016

Dr Irwan Shah Zainal Abidin is director of the Asian Research Institute of Banking and Finance (ARIBF), Universiti Utara Malaysia

Source: http://www.nst.com.my/news/2016/08/165818/unlocking-aseans-economic-potential