East Asian economies need to deepen their integration through a common, comprehensive strategy as expectations grow that they will lead global growth in coming years, said the visiting top official of the Association of Southeast Asian Nations.
And Japan has a key role to play to ensure “better connectivity” among the diverse economies of East Asia — both in terms of infrastructure investment and improving the region’s institutional framework, ASEAN Secretary General Surin Pitsuwan said.
Surin was speaking at a seminar in Tokyo on Thursday organized by the Japan Business Federation (Nippon Keidanren) and the Keizai Koho Center.
While East Asian economies have been growing and integrating rapidly for decades through cross-border production networks, “the evolution of the global community has come to a point where individual strategies, individual approaches and individual initiatives are no longer adequate as far as economic cooperation and integration are concerned,” said the former Thai foreign minister.
Under the auspices of the East Asia Summit last year, a study has been launched to create the Comprehensive Asian Development Plan, which aims to “make sure that the 16 economies (that take part in the East Asia Summit) — with a 3.2 billion total population, and combined gross domestic product and trade volume (that accounts for) more than half the world total — will be better integrated,” Surin said.
The Jakarta-based Economic Research Institute for ASEAN and East Asia is now finalizing a draft blueprint for financial and economic integration of East Asia, especially in the area of infrastructure development and connectivity, he said.
Even though East Asia has recovered from the 2008-2009 global crisis faster than the rest of the world and is forecast to achieve higher growth this year, the region still lacks a “strategy common to all” its economies to ensure sustained growth, Surin said. Such efforts will lead to “creating a road map” for building an East Asian community, he added.
A community, he said, “will not emerge without connectivity.” And Japan is urged to play a key role in improving connectivity among the region’s economies through investment in transport, telecommunications and financial infrastructure, as well as through institutional efforts to facilitate regional trade, he added.
The research institute is looking into more than 600 such infrastructure projects in the region, which are estimated to cost $240 billion, Surin said. Governments alone cannot make all the investments, and Japanese businesses are urged to invest and “prepare the ground for us to make sure that we can make the 3 billion East Asian consumers into a strong market,” he noted.
Surin stressed that Asia’s robust growth “means employment for Japan, income for Japanese companies and GDP growth for Japan.” Every dollar of GDP increase for ASEAN, for example, “represents 6 cents worth of Japanese exports” to the bloc, he said.
And the rapidly growing ranks of middle-class consumers in Southeast Asia offer a big market for Japanese businesses and “potential for Japanese investments and services,” he added.