HIGH LEVEL DIALOGUE ON ASEAN ITALY ECONOMIC RELATIONS · 2018-04-19 · hindering ASEAN economic...

HIGH LEVEL DIALOGUE ON ASEAN ITALYECONOMIC RELATIONS

Second Edition

April 11 and 12, 2018 - Singapore

ASEAN AREA GEO-ECONOMIC GROWTH:CHALLENGES AND BROADENING OPPORTUNITIES

ASEAN area geo-economic growth: challenges and broadening opportunities

2

ASEAN countries are expected to experience robust growth …

Today Forecast

GDP US$ 2.5 trillion US$ 4.1 trillion (2022)

Population 630 million 726 million(2030)

Middle income class

67 million (11% of population)

123 million (17% of population – 2025)

Sources: Elaboration of The European House Ambrosetti on IMF, UN, and Standard Chartered Bank data


3

… albeit with differences among countries

Source: The European House – Ambrosetti elaboration on ASEAN stat, 2018

0500

1.0001.5002.0002.5003.0003.5004.0004.500

2016 2017 2018 2019 2020 2021 2022

Indonesia Philippines Thailand Malaysia Singapore

Vietnam Myanmar Cambodia Lao P.D.R. Brunei Darussalam

GDP in ASEAN countries (US$ billions – forecast from 2017)


4

ASEAN’s journey towards regional integration started more than 50 years ago…

1967

Establishment of ASEAN Free Trade Area (AFTA)

1987

Birth of ASEAN

1992

Signing of the ASEAN Investment Guarantee Agreement (IGA)

1997 Signing of the Framework Agreement on ASEAN Investment Area (AIA)

2000 Cebu Declaration and AEC Blueprint 2015

Signing of the ASEAN Trade in Goods Agreement (ATIGA)

1998 The launch of initiative for ASEAN Integration (AI)

The entry into force of ASEAN Comprehensive Investment Agreement (ACIA)

Adoption of the ASEAN Financial Integration Framework (AFIF)

2007

2009

2011

2015 ASEAN Economic Community 2025


5

… and marked its culmination in the ASEAN Economic Community 2025 (launched in 2015), consisting in five interrelated and mutually reinforcing characteristics …

STRA

TEGI

COB

JECT

IVES

1. HighlyIntegrated and

Cohesive Economy

2. Competitive, Innovative, and Dynamic ASEAN

3. Enhanced Connectivity and

Sectoral Cooperation

Eliminating tariffs and facilitate trade in goods and services Attracting more investments from abroad Ensuring an inclusive and stable financial sector Facilitating the movement of skilled labor and business visitors

Providing an effective competition policy Fostering the creation and protection of knowledge Deepening ASEAN participation in Global Value Chains Strengthening related regulatory frameworks

Guaranteeing greater connectivity, efficiency, integration, safety and sustainability of transport Prioritizing the bridging of the digital gap and ensuring ICT adoption Intensifying cooperation on e-Commerce Achieving energy security, accessibility, affordability and sustainability for all Ensuring food security, food safety and better nutrition and increasing resilience to climate change Promoting the development of a strong healthcare industry


6

… and marked its culmination in the ASEAN Economic Community 2025 (launched in 2015), consisting in five interrelated and mutually reinforcing characteristics

4. A Resilient,Inclusive, People-

Oriented, and People-Centred

ASEAN

5. A GlobalASEAN

Strengthening the Role of Micro, Small, and Medium Enterprises (MSMEs) Increasing the involvement of the private sector Fostering Public-Private Partnerships (PPP) Narrowing the development gap Enhancing engagement with stakeholders on economic issues

Integrating the region into the global economy through FTAs and comprehensive economic partnership agreements (CEPs) ST

RATE

GIC

OBJE

CTIV

ES


7

ASEAN economy is growing but some risks loom ahead

Source: The European House – Ambrosetti (2018) from ADB, IMF, and ASEAN stat

Monetary policy normalization in advanced economies can lead to capital

outflows, higher cost of borrowing and reduced liquidity

hindering ASEAN economic growth

High and rapid increases in private-sector debt can pose risks to financial and

economic stability

Protectionism reforms prompted at an international

level may have significant impacts on trade opportunities

and economic growth

Countries have not met the targets set in the ASEAN

Framework Agreement on Services (AFAS) aimed at

enhancing cooperation andliberalizing trade in services


8

ASEAN region should prepare for population aging

Overall ASEAN region has more than half of population under the age of 30 but …

… some countries have a relevant ageing population issue due to: □ Fertility rates that have fallen by 50 per cent in 40

years □ Life expectancy that has grown steadily from 65 years

in 1990 to 72.5 years in 2016 ASEAN countries should assure adequate support for elderly

population through: □ Family support policies□ New pension schemes□ Rethinking of national healthcare systems

31,7%

23,4%

17,8%

14,4%

13,6%

13,2%

13,1%

9,2%

8,7%

8,4%

Singapore

Thailand

Vietnam

Indonesia

Brunei

Malaysia

Myanmar

Cambodia

Philippines

Laos

Population older than 65 in ASEAN countries (%), 2035

Source: The European House – Ambrosetti elaboration, 2018


9

ASEAN Countries have important opportunities to boost up their growth

1. Digital economy

3. Infrastructures

2. Renewable energy


10

0,1 0,0 0,9 0,0 0,3 3,7 2,09,0

21,436,0

21,9 25,1 25,4 25,6

46,5 47,555,5

75,0 78,8 81,0

Lao

PDR

Mya

nmar

Indo

nesia

Cam

bodi

a

Viet

nam

Thai

land

Philip

pine

s

Brun

ei

Mal

aysia

Sing

apor

e

2000 2016

1. Digitalization is extremely relevant for industrial productivity and trade

The digital market will be worth US$200 billion by 2025 in ASEAN (up from US$31 billion in 2015)

Digitalization has the potential to spur innovation, enhance productivity and improve well-being fostering:□ Development of Artificial Intelligence

technologies □ E-commerce market expansion□ Start-ups flourishing

Needs to be addressed:□ Guaranteeing infrastructure and access for all□ Ensuring market openness□ Reducing skill gaps

Internet users (% of population), 2000 vs 2016

Source: The European House – Ambrosetti elaboration on World Bank data, 2018


11

2. There will be a strong rise in energy demand in ASEAN countries

Energy demand in ASEAN is expected to increase 2.4 times by 2040

Industry and transport sectors are expected to expand the most

ASEAN has set the ambitious target of securing 23% of its primary energy from modern, sustainable renewable sources by 2025

In order to achieve the 23% target ASEAN will need to:□ Double renewable energy (RE) investments

up to US$17 billion annually□ Enhance its regulatory framework to enable

bankable Renewable Energy (RE) projects □ Promote RE technologies, which are expected to

make ASEAN’s investments competitive

2015 2020 2025 2030 2035 2040

Industry Transportation ResidentialNon-energy use Commercial Agriculture

426526

654779

912

1,047

ASEAN energy demand (MTOE), 2015-2040

Source: The European House – Ambrosetti elaboration on ASEAN Centre for Energy, 2018


12

3. ASEAN countries still have room for investing more on infrastructure

There is a huge demand of infrastructures due to:

□ Population change (urbanization, demographic change, increase in mobility)

□ Geopolitical and environmental issues (trade competitiveness and climate change)

□ Disruptive technology Major opportunities will also open up thanks to

the ASEAN Master Plan for Connectivity(AMPC)

It is estimated that the region will need to invest more than $1 trillion in infrastructures by 2020 in order to fill the demand gap

0% 20% 40% 60% 80% 100%

Water & Sanit.

Roads

Electricity

Ports

Airports

Installed capacity by 2020 (% of total Demand)

Capacity Deficit by 2020 (% of total Demand)

ASEAN area infrastructure gap by 2020 (% of total demand)

Source: The European House – Ambrosetti elaboration on ADB data, 2017


13

The Belt and Road Initiative provides more opportunities in the field of infrastructures and connectivity

Forecasted investmentswithin 2050

€1.5 trillion (stock)

Countries involved68% World GDP (2016) up to 80% World GDP (2050)

Major changes in geo-political and geo-economic situation

=major opportunities to enter into new and untapped areas

all along Eurasia

Relatore

Note di presentazione

Uso duale


14

Italy-ASEAN Economic Relations still have room for growth

TradeItaly can be the “European Ambassador” for economic and trade relations with the ASEAN Region

Partnerships in:• High tech sectors• Reneweable energy• Business eco-system with phisiological relationship between large enterprises

and SME

Education systems and research centers Double degrees and exchange programs for students, academic and qualified staff


15

Italy-ASEAN Economic Relations still have room for growth

There is a need of more Europe in ASEAN today!

HIGH LEVEL DIALOGUE ON ASEAN ITALY ECONOMIC RELATIONS · 2018-04-19 · hindering ASEAN economic...

Documents

Transcript of HIGH LEVEL DIALOGUE ON ASEAN ITALY ECONOMIC RELATIONS · 2018-04-19 · hindering ASEAN economic...