ASEAN Advantages – Useful information about Asean Countries
ASEAN is a close knit community established between few countries in the Asian region for better mutual co-operation in social and commercial way of life. Today, ASEAN provide great opportunities for business investors and promises to deliver to their expectations.
- 1 ASEAN Overview
- 2 2015 – A Major milestone
- 3 ASEAN the upcoming business hub
- 4 Insights on ASEAN region
- 5 ASEAN 2016 – What’s New
- 6 ASEAN – Next Steps
- 7 ASEAN MEMBERS
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The Association of Southeast Asian Nations, or ASEAN, was established on 8 August 1967 in Bangkok, Thailand, with Indonesia, Malaysia, Philippines, Singapore and Thailand, joining hands initially. Since then ASEAN has made good strides in regional integration and co-operation by unique modes of governance and adding Brunei, Vietnam, Myanmar, Lao and Cambodia as members. The social and economic integration initiatives are into it’s early stages and we all hope that the real regional co-operation would surface after 2015.
As set out in the ASEAN Declaration, the aims and purposes of ASEAN are:
- To accelerate the economic growth, social progress and cultural development in the region through joint endeavors in the spirit of equality and partnership in order to strengthen the foundation for a prosperous and peaceful community of Southeast Asian Nations;
- To promote regional peace and stability through abiding respect for justice and the rule of law in the relationship among countries of the region and adherence to the principles of the United Nations Charter;
- To promote active collaboration and mutual assistance on matters of common interest in the economic, social, cultural, technical, scientific and administrative fields;
- To provide assistance to each other in the form of training and research facilities in the educational, professional, technical and administrative spheres;
- To collaborate more effectively for the greater utilization of their agriculture and industries, the expansion of their trade, including the study of the problems of international commodity trade, the improvement of their transportation and communications facilities and the raising of the living standards of their peoples;
- To promote Southeast Asian studies; and
- To maintain close and beneficial cooperation with existing international and regional organizations with similar aims and purposes, and explore all avenues for even closer cooperation among themselves.
2015 – A Major milestone
Through it’s strategic location in Asia, Thailand offers convenient trade opportunities to China, India and the countries of South Asian Nations (ASEAN). Thailand was one of the founding members of ASEAN and has been instrumental in the formation and development of the ASEAN Free Trade Area (AFTA). AFTA entered into force on 1 January 2010 for the six original ASEAN (ASEAN-6) members (Thailand, Singapore, Malaysia, Indonesia, Philippines, and Brunei) thereby reducing import duties to zero; the so-called CLMV countries (Cambodia, Laos, Myanmar and Vietnam) will follow suit in 2015.
Thailand has long been a proponent of free and fair trade and its attractiveness as a production base for leading international companies is enhanced by a number of free trade agreement. ASEAN’s 10 member states aim to create an ASEAN Economic Community (AEC) by 2015, an integrated market that will have a combined population in excess of 600 million people.
The AEC will feature a free flow of goods, services, investment, capital and labor within ASEAN, while creating a Single Aviation Market with an open-sky arrangement. It is an immediate opportunity for investors and business owners to take advantage, as this would attract direct foreign investors easily with free flowing capitals all across the AEC and since goods and service offerings will be distributed freely in the AEC region, sales would swell tremendously. Labour and skilled manpower which is so vital for any project, can also be shared amidst all countries without any constraints, making project viability and cost control to be better.
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ASEAN the upcoming business hub
ASEAN region which has been solely dependent on export for their growth over the past is now trying to rebalance their economies with the help of local demand as part of an intentionally planned move in their business development in Asia and other regions and growth strategies. Without a doubt, most of the ASEAN economies are showing remarkable growth and the investment projections appear to be strong.
ASEAN at present is a trade focused block and it is anticipated that the trust will continue in the coming decades ahead, with the rich supplies of resources and well-established industrial base which would be further improved by AEC. With the promise of a single production podium and an integrated market, the drive for Intra and inter-ASEAN trade will get a thrust and will hold the key for future.
However, due to the fluctuations in demand globally, there are risks and numerous concern which are continuously growing related region’s growth. It requires ASEAN to foster and bridge the gaps which remain between the members and follow some rigorous policies to bolster growth.
Insights on ASEAN region
With a collective GDP of $2.4 trillion as of 2013, ASEAN is projected to be the fourth largest economy by the year 2050. ASEAN is home to more than 600 million people and with its labor force and consistent productivity improvements can drive the GDP to higher levels. ASEAN labor power is the third largest in the world after China and India.
ASEAN has seen the global downturn of 2008 and remained unaffected and remarkably resilient. Today, ASEAN is much stronger financially with government debt below 50 percent of its GDP, which is much lower as compared to United Kingdom where the debt is 90 percent of its GDP or United where the score stands at a whopping 105 percent. Furthermore, most of the ASEAN’s region has remained steady despite various concerns over the possible end of quantitative easing by US Federal Reserve. In contrast, ASEAN has seen lower volatility than the European Union with respect to economic growth. Even the savings levels have been fairly stable within the region post-2005.
Consumer demand hub:
The region has 67 million households which are part of the consuming class, which is expected to double by 2025, making ASEAN one of the biggest consumer market for the businesses globally. The cities in the region are booming and more than 22 percent of the total population resided in the cities. The urbanization is on the rise and urban population accounts for more than 54 percent of the total GDP. It is expected that further 54 million habitants will join the cities by 2025 and will ultimately boost the GDP.
Online consumer presence:
With internet penetration of 25 percent and mobile penetration of massive 110 percent, consumers are moving online at an increasing pace. For instance, it has the second largest Facebook user community after the United States. It also has some highly advanced consumers in regions like Singapore, which has the fourth highest mobile penetration in the world and nearly 75 percent of its total population remains online.
Globally well positioned:
Trailing by North America, the European Union, and China, ASEAN is the fourth largest exporter in the world, accounting for nearly 7 percent of all the global exports taken together. Most of it member nations have sophisticated manufacturing setup and have been performing reasonably well. For instance, Malaysia and Singapore are leading the electronics export, Thailand is gearing the automotive parts and vehicles and Vietnam specializing in apparel and textiles. Apart from these member nations, you have Indonesia which is now a leading producer and exporter of palm oil, the Philippines which is thriving with its business startup consulting and outsourcing industry along with Myanmar with its vast reserves of gas, oil, and precious minerals. ASEAN has now replaced China’s dominance in the global market as a premier exporter.
With better integration and implementation of various cross-border trade policies, ASEAN is expected to have a smoother and healthy flow of goods and services across its borders. It has also expanded its trade with various free-trade agreements with countries like China, Australia, India, New Zealand, Japan, and South Korea.
Home to global businesses:
ASEAN is home to most of the biggest companies in the world. ASEAN has more than 227 global companies having revenue of more than $1 billion. Singapore is ranked fifth in the world in terms of having the most number of corporate headquarters.
Foreign Direct Investment (FDI):
FDI has been booming in the region and has attracted nearly $128 billion in 2013 as compared to China’s $117 billion. Not just foreign corporates, ASEAN is now a Launchpad for many of the new companies. With its distinct cultures, languages and histories, its ten member nations share focus on economic development and mutual prosperity. ASEAN’s household purchasing power is on the rise which is assisting the region in approaching a higher level of consumer growth.
ASEAN is home to world’s most diversified population. Indonesia has the world largest Muslim population with nearly 90 percent of its people belongs to the Islamic faith. The Philippines has more than 80 percent Roman Catholic whereas Thailand comprises of 95 percent of Buddhist. Having such a diverse yet unified economy provides uniqueness to this region.
ASEAN as a region occupies about only 3 percent of global land mass but has more than 20 percent of all the known species living deep in its jungles, mountains, lakes, rivers and seas.
ASEAN 2016 – What’s New
With the official formation of the AEC (ASEAN Economic Community) by the end of 2015, there is a rising anticipation that the 10 strong trading alliances of South-East Asian countries will before long surprise to express its mettle as an economic power in the world. With the change of stride in China’s economy and headline-seizing growth story of India, many economic and political critics will see the expansion of ASEAN, with the world pivoting towards Asia.
For those doing business in the Asia region, the numbers are impressive which demonstrate the region’s growth. Its economy is forecasted to raise at 5 percent annually till 2020, which is exceeding the global growth of 3.5 percent per year. Its metropolitan population is rising by around 2.2 percent annually, whereas the population of the middle-class is set to surge to 194 million by 2020.
Transformation in Retail
In developed ASEAN markets, retail through online sales has already been up 5 to 15 percent of the total; with retail per capita has increased dramatically. South-East Asia is achieving higher online shopping penetration than in other developed marketplaces such as the UK and US. As per the research conducted by Bain & Company, 50 to 90 percent of customers in South-East Asia who are residing outside cities are avoiding their PCs and are using mobile phones online shopping.
Infrastructure and Traffic Management
Mass rapid transportation development projects are under construction in Kuala Lumpur, Singapore, Manila, Jakarta and Bangkok which will raise rail length by 50 percent by 2020. With respect to real estate, it will generate newer centers, new opportunities for investment and the prospects to build mixed-use innovative developments which will enable people’s capability to work, live and play much easily.
Newer skills and technologies with new uses for present technologies make it possible in transforming the movement within cities. Autonomous driving, intelligent traffic management and car-sharing are projected to streamline overcrowding and boost mobility. Traffic jams in cities such as Manila and Jakarta are renowned which is due to insufficient investment in projects related to mass rail transit. Though, platforms like Grab, Uber and Waze are permitting mobile-phone data in order to improve efforts by the government in traffic management.
Innovation at work
Serviced office and co-working space presently accounts for 1 to 5 percent of total Asia office in developed ASEAN cities and is mounting rapidly due to the flexible working, freelancing and sharing economy. It is estimated that in South-East Asia co-working spaces would make up 10 to 15 percent of total by 2030.
With regard to work, demand for office will change because of larger outsourcing coming from the developed markets, rise in co-working spaces and more elastic work practices. Even though the growth of worldwide office demand reduced subsequently after the financial crisis, the region has resisted the trend. It is expected that office demand will grow by 6 percent per year till 2020 due to growing economy which in turn will spur outsourcing from the developed markets and will raise the middle class. We wrote an excellent and useful work permit in Thailand information post that we recommend you to visit if you are interested to know more about work in Thailand.
ASEAN – Next Steps
ASEAN is determined to board on a long-term and bold and strategy to improve its logistics connectivity in order to operate in a seamless and an efficient manner towards its journey to economic integration. On the execution of the ASEAN Economic Community, the total region will reap benefit out of this single production and the single market. Though, the profits are not predicted to be equal amongst its member countries nor within the provinces inside the member countries. It is surely a win-win position but subject to the perception taken, the AEC’s appeal to each ASEAN countries might be not the same.
If the businesses choose to select the expected GDP growth as a crucial factor then Myanmar’s as the key target for upcoming expansion would not be astonishing but carefulness would still be required. The higher levels of expected growth are partial because Myanmar begins with a lower GDP level as compared to other member countries, and hence facilitation environment and infrastructure have a great influence on the country’s development.
Master Plan on ASEAN Connectivity (MPAC)
The MPAC is intended to allow the AEC and enhance ASEAN’s inner integration with the help of improved infrastructure development, efficient and effective international institutional measures as well as connectivity for the citizens. The plan is founded on the key principles listed below:
- Aid in accelerating existing ASEAN enterprises and accompaniment the building process by ASEAN Community;
- Adopt win-win measures in reflecting the welfares of all Member States of ASEAN;
- Ensuring synchronization of continuous sectoral plans and policies within the contexts of ASEAN and also its sub-regions;
- Striving for a balance between national and regional interests;
- Strengthening the connectivity between archipelagic and mainland Southeast Asia;
- Outward-looking and serving to endorse vigorous competitive dynamic forces amongst outside partners and also helping in preserving the significance of ASEAN; and
- Viable in practice with strong financial mobilization models, with the participation of the private sector.
The final result would be that distribution and production grids in ASEAN will be extended and deepen with respect to logistics assimilation, broadened with more products and commodities being traded competitively, and finally, become much more ingrained in supply chains globally. Alike significant, improved ASEAN logistics integration would taper growth gaps within the ASEAN expanse as the human prospects of the region is unlocked over this bigger connectivity in lagging, which are often remote countries. It will also help in increasing greater investment opportunities, growth and trade lagging regions within nations in ASEAN.
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Head of State : His Majesty Sultan Haji Hassanal Bolkiah Mu’izzaddin Waddaulah
Capital : Bandar Seri Begawan
Language(s) : Malay, English
Currency : B$ (Brunei Dollar)
Ministry of Foreign Affairs & Trade of Brunei Darussalam Website: www.mfa.gov.bn
Head of State : His Majesty King Norodom Sihamoni
Head of Government : Prime Minister Hun Sen
Capital : Phnom Penh
Language : Khmer
Currency : Riel
Ministry of Foreign Affairs & International Cooperation of Cambodia Website: www.mfaic.gov.kh
Head of State : President Susilo Bambang Yudhoyono
Capital : Jakarta
Language : Indonesian
Currency : Rupiah
Ministry of Foreign Affairs of Indonesia Website: www.kemlu.go.id
Head of State : President Choummaly Sayasone
Head of Government : Prime Minister Thongsing Thammavong
Capital : Vientiane
Language : Lao
Currency : Kip
Ministry of Foreign Affairs of Lao PDR Website: www.mofa.gov.la
Head of Government : The Honourable Dato’ Sri Mohd Najib bin Tun Abdul Razak
Capital : Kuala Lumpur
Language(s) : Malay, English, Chinese, Tamil
Currency : Ringgit
Ministry of Foreign Affairs of Malaysia Website: www.kln.gov.my
ASEAN-Malaysia National Secretariat Website: www.kln.gov.my/myasean
Head of State : President Thein Sein
Capital : Nay Pyi Taw
Language : Myanmar
Currency : Kyat
Ministry of Foreign Affairs of Myanmar Website: www.mofa.gov.mm
Head of State : President Benigno S. Aquino III
Capital : Manila
Language(s) : Filipino, English, Spanish
Currency : Peso
Department of Foreign Affairs of the Philippines Website: www.dfa.gov.ph
Head of State : President Tony Tan Keng Yam
Head of Government : Prime Minister Lee Hsien Loong
Capital : Singapore
Language(s) : English, Malay, Mandarin, Tamil
Currency : S$ (Singapore Dollar)
Ministry of Foreign Affairs of Singapore Website: www.mfa.gov.sg
Head of State : His Majesty King Bhumibol Adulyadej
Head of Government : Prime Minister Yingluck Shinawatra
Capital : Bangkok
Language : Thai
Currency : Baht
Ministry of Foreign Affairs of Thailand Website: www.mfa.go.th
Head of State : President Truong Tan Sang
Head of Government : Prime Minister Nguyen Tan Dung
Capital : Ha Noi
Language : Vietnamese
Currency : Dong
Ministry of Foreign Affairs of Viet Nam Website: www.mofa.gov.vn