DOING BUSINESS IN ASEAN - uob.com.sg° ASEAN Political-Security Community (APSC) Blueprint 2015 10...

Doing Business in ASEAN 2016 1

Foreword 5

IntroductIon to ASeAn 8 AimsandPurposes9 FundamentalPrinciples 10 ASEANCommunity2015 10

ASEANPolitical-SecurityCommunity(APSC)Blueprint2015 10 ASEANEconomicCommunityBlueprint2015(AECBlueprint2015) 11 ASEANSocio-CulturalCommunity(ASCC)Blueprint2015 11

ASEANCommunity2025 12 ASEANPolitical-SecurityCommunityBlueprint2025(APSCBlueprint2025) 12 ASEANEconomicCommunityBlueprint2025(AECBlueprint2025) 13 ASEANSocio-CulturalCommunityBlueprint2025(ASCCBlueprint2025) 14

ASEANCharter 14

ASeAn At A GlAnce 15 RegionProfile:ASEAN 16 CountryProfile:BruneiDarussalam 17 CountryProfile:Cambodia 18 CountryProfile:Indonesia 19 CountryProfile:Laos 20 CountryProfile:Malaysia 21 CountryProfile:Myanmar 22 CountryProfile:Philippines 23 CountryProfile:Singapore 24 CountryProfile:Thailand 25 CountryProfile:Vietnam 26

ASeAn todAy: SocIo-PolItIcAl 27 UnderstandingASEANDemographics:IsthereaDividend? 28

ASeAn todAy: Key AcHIeVeMentS under Aec BluePrInt 2015 And recent deVeloPMentS 30 ASEANEconomicCommunityBlueprint2015KeyAchievements 31 MyanmarAnUnprecedentedYear 32 ThailandEconomicOutlook 33 IndonesianEconomicOutlook 33 VietnamEconomicOutlook 34

GrowInG wItH ASeAn: Aec BluePrInt 2025 ForGInG AHeAd toGetHer 35

e-coMMerce In ASeAn 40 BruneiDarussalam 41 Cambodia 43 Indonesia 44 Laos 46 Malaysia 46 Myanmar 50 Philippines 52

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Singapore54 Thailand57 Vietnam60

looKInG Beyond ASeAn 63 ASEANandChina64

TradeRelationsintheModernEra 64 TheChinaConnectionforASEAN 65 EvenCloserASEAN-ChinaEconomicTies:NotAWant,ButANeed 67 ABrightFutureforASEANandChina 69 TheAsianInfrastructureInvestmentBank 69 ASEANandChinasOneBeltOneRoad 69

ASEANandJapan70 RelationsbetweenSoutheastandEastAsia 71

ASEANandSouthKorea71 ASEAN-KoreanMultilevelCooperation 72

ASEANandIndia72 ASEAN-IndiaTradeRelations 73

ASEANandtheTrans-PacificPartnership73 ASEANandtheEuropeanUnion74 ASEAN,AustraliaandNewZealand74

dId you Know: AMAzInG FActS ABout ASeAn 75

GloSSAry And AcronyMS 80

reFerenceS And AcKnowledGeMentS 81

AttrIButIon And credItS 83

rePoSItory oF PolIcIeS And dAtA 84

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Table1:PayingTaxesinASEAN(asat31December2013)84Table2:RestrictionstoForeignInvestment(asat31December2014)85Table3:CorporateFramework(asat31December2014)86Table4:LegalSystemsandDisputeResolutionEnvironment(asat31December2014)93Table5:Competition(asatApril2016)95Table6:ASEAN:Population,TerritoryandEconomy(2014) 100Table7:ASEANandSelectedTradingPartners:Population,Economy(2014) 101Table8:TradewithSelectedDialoguePartnerCountries(inUS$billion) 102Table9:ASEAN:NominalGrossDomesticProductforperiodsindicated 103Table10:ASEAN6:ConsumerPriceIndexforFood,Housing,Transport(2005-2014) 104Table11:ASEAN:InflationRate,end-of-period(inpercent)forperiodsindicated 105Table12:ASEANLendingRates(inpercent)forperiodsindicated 105Table13:ASEAN:ExchangeRates,average-of-period(nationalcurrency/US$)forperiodsindicated 106

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Table14:ASEAN:TotalTradeforperiodsindicated 107Table15:ASEANMemberStates:TradeBalanceforperiodsindicated 108Table16:ASEANMemberStates:TotalTradewithASEAN+3(2014) 109Table17:ASEANMemberStates:TotalTradeswithSelectedTradePartners(2014) 110Table18:ASEANMemberStates:PercentShareofTotalTradewithSelectedTradePartners(2014) 111Table19:ASEAN:Top20ExportCommodities1(2014) 112Table20:ASEAN:Top20ImportCommodities1(2014) 114Table21:FDIInflowsintoASEAN,bySourceCountry(US$million) 115Table22:ASEAN:TrendsinTouristArrivals,byhostcountryforperiodsindicated 116Table23:ASEAN:InternetSubscribers/Users,per1,000personsforperiodsindicated 117Table24:ASEAN:DistributionofPopulation,byagegroup(2013) 117Table25:ASEANMemberStates:PopulationLivingunderPPP$125,inpercentforperiodsindicated 118Table26:ASEANMemberStates:GiniCoefficientinASEANMemberStates,inpercentforperiodsindicated 118Table27:ASEANMemberStates:LifeExpectancyatBirth,inyearsforperiodsindicated 119Table28:ASEANMemberStates:GovernmentHealthExpenditureasPercentageofGDPforperiodsindicated 119Table29:ASEANMemberStates:AdultLiteracyRate15YearsOldandAbove,inpercentforperiodsindicated 120Table30:ASEANMemberStates:UnemploymentRatebyGender,inpercentforperiodsindicated 121

ABout tHe AutHorS 122 SpecialMention 128

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FIGureSFigure1:RisingTradebetweenChinaandASEAN66Figure2:ShareofChinasODI(ex-HK)totheWorld67Figure3:Figure3:ChinasODItoASEANEconomies67Figure4:ChinasPopulationStartsShrinkingin203168Figure5:EmergingASEANEconomiesCanFillTheManufacturingVacuum68

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dISclAIMerThisguideisdesignedtoprovideinformationondoingbusinessinASEANonlyThisinformationisprovidedwiththeintentionthattheauthorsdonotofferanylegalorotherprofessionaladviceInthecaseofaneedforanysuchexpertise,pleaseconsulttheappropriateprofessionalThisisnotanexhaustiveguideonthesubjectandwasnotcreatedtobespecifictoanyindividualsororganisationscircumstanceorneeds

Everyefforthasbeenmadetomakethisguideasaccurateaspossibleanditshouldserveonlyasageneralguideorsupportingmaterial,notastheultimatesourceofsubjectinformation

ThisguidecontainsinformationthatmightbedatedandisintendedonlytobeinformativeforpublicationpurposeatthetimeofprintTheauthorsshallbearnoliabilityorresponsibilitytoanyperson(s)orentityregardinganylossordamageincurred,orallegedtohavebeenincurred,directlyor indirectly,bytherelianceoninformationcontainedinthisguide,andshallnotberesponsibleforanyerrors,inaccuraciesoromissions

coPyrIGHt notIceNopartofthispublicationmaybereproduced,storedinaretrievalsystem,ortransmittedinanyformorbyanymeans,electronic,mechanical,photocopying,recording,orotherwisewithoutwrittenpermissionoftheauthorsoralicencepermittingrestrictedcopyingCopyrightUnitedOverseasBankLimited,RSMChioLimLLPandRajah&TannSingaporeLLP2016Allrightsreserved


Foreword

unIted oVerSeAS BAnK lIMItedSoutheastAsiasgrowthstoryhaspropelledforwardinrecentyears

TherearehugeinvestmentopportunitiesinSoutheastAsiafrommanufacturingtoinfrastructuretoenergyandservicesWhentheeconomicblocof10nationsistakenasawhole,ASEANranksastheseventhlargestglobaleconomywithacollectivegrossdomesticproductofUS$26trillion

ItisthereforenosurprisethatrobustregionalgrowthforecastssuggestthatthecombinedeconomiesofSoutheastAsiawillbeacrucial,long-termdriveroftheglobaleconomy

However,realisingtheregionsfullpotentialislikelytobechallengingThekeychallengeliesintradeliberalisation,integrationofcapitalmarketsandstandardisationof legalandregulatoryframeworkswhichwillmakeitmucheasiertodobusinessacrosstheregion

Inspiteofthis,foreigndirectinvestment(FDI)inflowsintoSoutheastAsiahavesurgedoverthelastfouryears,growing fromUS$478 billion in 2009 toUS$133billion in 2014 This trend is expected to gather evenmoremomentuminthecomingyearsastheregionworkstowardseconomicintegration

UOBunderstandsthatcompaniesneedtoadoptaregionalstrategytotakeadvantageoftheshiftinginvestmentlandscapeTheBankalsohasdedicatedFDIAdvisoryteamsinChina,HongKongSAR,India,Indonesia,Malaysia,Myanmar, Singapore,Thailand andVietnam to address the diverse needs of companies expandingwithin theregion

Inlightofthis,wearepleasedtopartnerRSMandRajah&TannAsiatoproducethesecondeditionofthisguideaspartofourefforttohelpinternationalandregionalcompaniesnavigatetheirinvestmentsintheregion

eric thamManagingDirectorandGroupHeadofCommercialBankingUnitedOverseasBank

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rSMAnyonewhowishestodobusinessinASEANmustfirstembraceitsdiversityanddynamismAsaregionalnetworkof10membernationsgovernedbydifferentpolitical systems, it has a population of more than 600 million people whopractiseamultitudeofreligionsandspeakover70languagesanddialects

WhataretheriskstoASEAN?Canwecontinueforgingaheadamiduncertaintyoverglobaldemand?Thedevelopmentgapswithinandbetweenthecountries,such as disparities in income, law, tax systems, financial systems, capital andexchangecontrols,willcontinuetobethekeychallengesasASEANforgesaheadtowardsASEANCommunityVision2025adoptedatthe27thASEANSummitinKualaLumpurinNovember2015

ASEANneedstofosterdeeper integrationasamatterofpriority IamgladthattheAEC2025Blueprint,whichis a componentofASEANCommunityVision2025,hasdevelopeda comprehensiveblueprint tomakeASEANadynamic, cohesiveand inclusivecommunity that is responsive toglobal trendsandconnected to theglobaleconomy Specifically, the AEC 2025 Blueprint recognises the importance for ASEAN to (a) remain open andcohesiveforfreetradeandinvestmentflows,(b)enhanceparticipationandintegrationinglobalvaluechains,(c)deployinformationandcommunicationstechnologytonarrowthedevelopmentgapand(d)strengthentheroleofmicro,smallandmediumenterprisessothattheyremainresilient,innovativeandproductive

TogetherwithournetworkfirmsinASEAN,wearewell-positionedtohelpourclientsridethewaveofopportunitiesundertheAEC2025BlueprintWiththat,wearepleasedtobringtoyouthesecondeditionoftheguidebookonDoingBusinessinASEANincollaborationwithourpartnersUOBandRajah&Tann

chio Kian HuatChiefExecutiveOfficerRSMChioLimLLPMay2016

Foreword


rAjAH & tAnn ASIAWith close to9%of theworldspopulation, agrowingmiddle class, a youngworkforce, and a low-based upward trending gross domestic product ofUS$26trillion,tradeandinvestmentprospectsforASEANremainpromisinglyrobustatatimewhenmanyoftheworldslargesteconomicenginesarefacingheadwindsRegional integrationwithinanEmergingAsiahasalsopickedupspeedAnumberofframeworksforgreaterintegration,includingtheASEAN+3(ASEAN, Japan, China and Korea) and ASEAN+6 (ASEAN+3, India, AustraliaandNewZealand) initiatives, act as significantbuildingblocks as theASEANEconomicCommunityestablishedattheendof2015startstobecomeareality

However,challengesinkeypolicyareasremainandrequiredetailedaddressingtradeingoodsandservices,investmentandcapitalmarketliberalisation,competitionandconsumerprotection,intellectualproperty,infrastructure,tourism,thedevelopmentoftheprivatesectorSMEeconomyinafastchangingcross-borderenvironmentandimprovedregulatorycoordinationTheneedforrelevantandpracticallegaladvicecouldnotbemoretimely

Rajah&TannAsiawasestablishedinAugust2014withthevisiontoprovideanASEANhometeamoflawyersWith600lawyersworkingacross11officesin9countriesacrossAsiaandrootedintheknow-howanddiverseculturesoftheregion,ourclientshavecometotrusttheunparalleledexperienceandon-the-groundinsightsthatwebringtotransactionsintheregionandbeyond

WetrustthatthispublicationwillserveasausefulresourceandtoolforthoseseekingtolearnmoreaboutASEANanditsmemberstates,aswellasabouttheregionalinitiatives,bothimplementedandplanned

lee eng Beng ScChairmanRajah&TannAsia

Foreword

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IntroductIon to ASeAn


AIMS And PurPoSeS

A gainst a backdrop of the ColdWar and thetumultuous transition to independence inmanySoutheastAsianstates,ASEANsobjectiveatitsestablishmentwastoaccelerate theeconomicgrowth, social progress and cultural developmentintheregionthroughjointendeavoursinthespiritofequalityandpartnershipinordertostrengthenthe foundation for a prosperous and peacefulcommunityofSouth-EastAsianNations

AssetoutintheASEANDeclaration,theotheraimsandpurposesofASEANare:

Topromoteregionalpeaceandstabilitythroughabidingrespectforjusticeandtheruleoflawintherelationshipsamongcountriesoftheregionand adherence to theprinciples of theUnitedNations(UN)Charter;

To promote active collaboration and mutualassistanceonmattersofcommoninterestintheeconomic, social, cultural, technical, scientificandadministrativefields;

To provide assistance to each other in theform of training and research facilities inthe educational, professional, technical andadministrativespheres;

To collaboratemore effectively for the greaterutilisation of agriculture and other industries,the expansion of trade (including the studyof problems of international commoditytrade), the improvementof transportationandcommunicationsfacilities,andraisingthelivingstandardsoftheirpeoples;

TopromoteSoutheastAsianstudies;and

To maintain close and beneficial cooperationwith existing international and regionalorganisations with similar aims and purposes,and explore all avenues for even closercooperationamongthemselves

heAssociationofSoutheastAsianNations,orASEAN,wasestablishedon8August1967in

Bangkok,Thailand,with thesigningof theASEANDeclaration(BangkokDeclaration)bytheFoundingFathersofASEAN,namelyIndonesia,Malaysia,thePhilippines,SingaporeandThailandSubsequently,Brunei Darussalam joined on 7 January 1984,Vietnamon28July1995,LaosandMyanmaron23July 1997, andCambodiaon30April 1999Thesecomprisethe10memberstatesofASEANtoday

Such a commitment was of great importance forbuilding trust in a region divided by stark ethnicdifferences and a scant history of inter-statecooperationduringtheperiodofcolonisation

The1967BangkokDeclarationwasan initiativetoensurepeaceandstabilityintheregion,throughacommitmenttoworktogetheranddealpeacefullywithmutualdifferences Memberstateshopedtoforge an independentbloc in SoutheastAsia thatwouldnotbedominatedorexploitedbyexternalpowers

Today, the notions of sovereignty, equality,territorial integrity and non-interference amongmember states remain central tenets of ASEANunityandcooperation

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(APSC), ASEAN Economic Community (AEC) andASEANSocio-CulturalCommunity(ASCC)

Eachpillarhasitsownblueprint,andtogetherwiththe Initiative for ASEAN Integration (IAI) StrategicFrameworkandIAIWorkPlanPhaseII(2009-2015),forms the Roadmap for an ASEAN Community2009-2015

ASeAn Political-Security community (APSc) Blueprint 2015

T he ASEAN Political-Security Community hasits origins in over four decades of closecooperationandsolidarity

At the 13th ASEAN Summit in Singapore, ASEANheads of states / governments signed the ASEANCharter, which marked ASEAN member statescommitment towards intensifying communitybuilding through enhanced regional cooperationandintegration In linewiththis,theytaskedtheirministersandofficials todraft theAPSCBlueprint,which would be adopted at the 14th ASEANSummit

TheAPSC2015Blueprint is guidedby theASEANCharterandtheprinciplesandpurposescontainedtherein The APSC Blueprint builds on the ASEANSecurity Community Plan of Action, theVientianeAction Programme (VAP), as well as relevantdecisionsbyvariousASEANsectoralbodies

The ASEAN Security Community Plan of Action isaprincipleddocument that sets out the activitiesneeded to realise the objectives of the ASEANPolitical-SecurityCommunity,whiletheVAPsetsoutthemeasuresnecessary for 2004-2010These twodocumentsare important references incontinuedpoliticalandsecuritycooperation

The APSC 2015 Blueprint provides a roadmapandtimetable toestablish theAPSCby2015ThisBlueprintwouldalsohavetheflexibilitytocontinueprogrammesandactivitiesbeyond2015inordertoretainitssignificanceandhaveanenduringquality

FundAMentAl PrIncIPleS

I n their relationswith one another, the ASEANmember states have adopted the followingfundamentalprinciples,ascontained intheTreatyofAmityandCooperation inSoutheastAsia (TAC)of1976:

Mutual respect for the independence,sovereignty, equality, territorial integrity, andnationalidentityofallnations;

The right of every State to lead its nationalexistence free from external interference,subversionorcoercion;

Non-interference in the internal affairs of oneanother;

Settlement of differences or disputes bypeacefulmeans;

Renunciationofthethreatoruseofforce;and

Effectivecooperationamongmemberstates

ASeAn coMMunIty 2015

T heASEANCommunity 2015 is based on thevision of One Vision, One Identity, OneCommunityTheASEANleadersagreedonasharedvision of ASEAN as a concert of Southeast Asiannationsthatisoutwardlooking,andlivinginpeace,stability and prosperity as development partnerswithinacommunityofcaringsocieties

At the9thASEANSummit in2003,ASEAN leadersresolved that an ASEAN Community shall beestablished At the 12th ASEAN Summit in 2007,the leaders subsequently affirmed their strongcommitment to accelerate the establishmentof an ASEAN Community by 2015 and signedthe Cebu Declaration on the Acceleration of theEstablishmentofanASEANCommunityby2015

TheASEANCommunity2015comprisesthreepillars,namely, the ASEAN Political-Security Community



ASeAn Socio-cultural community (AScc) Blueprint 2015

T he ASCC Blueprint 2015 contributes to therealisation of an ASEAN Community that ispeople-centred and socially responsible with aview to achieving enduring solidarity and unityamong the nations and peoples of ASEAN byforging a common identity and building a caringand sharing society which is inclusive andharmoniouswhere thewell-being, livelihood, andwelfareofthepeoplesareenhanced

Areas of cooperation in this community includeculture,artsandinformation,disastermanagement,education, environment, health, labour, ruraldevelopment and poverty eradication, socialwelfare and development, youth and civil servicecooperation

Embedded in theASEANVision 2020,DeclarationofASEANConcord I (1976),DeclarationofASEANConcord II (2003) and the Hanoi Plan of Action(HPA)isASEANsgoalofacommunityofcohesive,equitable and harmonious societies, boundtogetherinsolidarityfordeeperunderstandingandcooperationItskeyfeaturesare:

Equitable access to opportunities will beuniversal, rising above the barriers of religion,race, language, gender and social and culturalbackground;

Humanpotentialsarenurturedtothefullestsothatallindividualscanparticipatemeaningfullyin a competitiveworld in amanner that givesparamount importance to their welfare anddignity;

Norms of social and distributive justice areupheld by addressing issues of poverty andequity, and special care is given to vulnerablegroups children, youth, women, the elderly,andpersonswithdisabilitieswhocouldbethesubjectofabuse,neglectanddiscrimination;

ASeAn economic community Blueprint 2015 (Aec Blueprint 2015)

T heAECBlueprint2015envisagesthefollowingkeycharacteristics: asinglemarketandproductionbase;

ahighlycompetitiveeconomicregion;

a region of equitable economic development;and

aregionfullyintegratedintotheglobaleconomy

TheAECBlueprint2015areasofcooperationincludehuman resources development and capacitybuilding,recognitionofprofessionalqualifications,closerconsultationonmacroeconomicandfinancialpolicies, trade financing measures, enhancedinfrastructure and communications connectivity,development of electronic transactions throughe-ASEAN,integratingindustriesacrosstheregiontopromoteregionalsourcing,andenhancingprivatesectorinvolvementfordevelopingtheAEC

Enabling economic development throughoutASEAN is also an important objective of the AECBlueprint 2015 The enlarged membership ofASEANcamewithanewsetofchallengesThelastfourmembersto joinCambodia,Laos,MyanmarandVietnam had significant development gapswiththesixfoundingmembers

Narrowingthisdevelopmentgapthusbecameanadditional priority of ASEAN Projects under theInitiative for ASEAN Integration are designed toenablenewASEANmemberstoacceleratethepaceofeconomicgrowth,andenablethemtoparticipateonasimilarlevelwiththefirstsixmembers

In short, the AEC Blueprint 2015 will transformASEANintoaregionwithfreemovementofgoods,services, investment, and skilled labour, aswell asfreerflowofcapital

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(c) aCommunityempoweredwithcapabilities,toseizeopportunitiesandaddresschallenges inthecomingdecade;and

(d) underline the complementarity of theUnited Nations 2030 Agenda for SustainableDevelopmentwithASEANcommunitybuildingefforts to uplift the standards of living of ourpeople

The ASEAN Community 2025 charts out theBlueprints for (a) Asean Political-SecurityCommunity2025,(b)ASEANEconomicCommunity2025 and (c) ASEAN Socio-Cultural Community2025 The details of each of these key pillars areprovidedbelow

ASeAn Political-Security community Blueprint 2025 (APSc Blueprint 2025)

T heAPSCBlueprint2025envisionASEANtobea united, inclusive and resilient communityASEANpeopleshall liveinasafe,harmoniousandsecure environment, embrace the values oftoleranceandmoderationaswellasupholdASEANfundamentalprinciples, shared values andnormsIt envision ASEAN to remain cohesive, responsiveand relevant in addressing challenges to regionalpeaceandsecurityaswellasplayacentralrole inshaping the evolving regional architecture, whiledeepening our engagementwith external partiesand contributing collectively to global peace,securityandstabilityItsetsoutthefollowingninekeyprinciples:-

1 Arules-basedcommunitythatfullyadherestoASEAN fundamental principles, shared valuesandnormsaswellasprinciplesofinternationallawgoverningthepeacefulconductofrelationsamongstates;

2 An inclusive and responsive community thatensures our peoples enjoy human rights andfundamental freedoms as well as thrive ina just, democratic, harmonious and gendersensitiveenvironment inaccordancewith theprinciplesofdemocracy,goodgovernanceandtheruleoflaw;

The environment and natural resources areprotectedandmanagedtosustaindevelopmentandasalegacyforfuturegenerations;

Civilsociety isengaged inproviding inputs forpolicychoices;

Peoplearehealthyinmindandbodyandlivinginharmonyinsafeenvironments;and

ASEAN citizens interact in a communityconscious of its historical ties, aware of itscultural heritage and bound by a commonregionalidentity

ASeAn coMMunIty 2025

I n November 2015, the Head of States/Government representing the ten ASEANcountriesmeetinKualaLumpurforthe27thASEANSummit to celebrate the substantiveimplementation of the AEC 2015 Blueprint bystandardising economic regulations includingthose on trade, capital market regulatoryframeworks and platforms, labour mobility andprotectionof the intellectualproperty rights TheleadersalsoacknowledgetheestablishmentoftheASEANCommunity is still awork in progress andthecollective leadershiptostrengthentheASEANidentity iscriticalandnecessaryAstrongpoliticalwill tostrengthenASEANunity isneededandtheKuala LumpurDeclaration onASEAN2025by theASEAN leadersmade plain the leaders continuedcommitmenttowardsdeeperregional integrationTheAseanCommunityVision2025envision:

(a) apeaceful,stableandresilientCommunitywithenhanced capacity to respond effectively tochallenges,andASEANasanoutward-lookingregion with a global community of nations,whilemaintainingASEANcentrality;

(b) a vibrant, sustainable and highly integratedeconomies, enhanced ASEAN Connectivity aswell as strengthenedefforts innarrowing thedevelopmentgap;




ASeAn economic community Blueprint 2025 (Aec Blueprint 2025)

T he AEC Blueprint 2025 envision a highlyintegrated and cohesive; competitive,innovative and dynamic, with enhancedconnectivityandsectoralcooperation;andamoreresilient, inclusive, and people-oriented, people-centred community, integrated with the globaleconomyItsetsoutthefollowingvisions:-

1 A highly integrated and cohesive regionaleconomy that supports sustained higheconomic growth by increasing trade,investment, and job creation; improvingregional capacity to respond to globalchallenges and mega trends; advancing asingle market agenda through enhancedcommitments in trade ingoods, and throughan effective resolution of non-tariff barriers;deeper integration in trade in services; anda more seamless movement of investment,skilledlabour,businesspersons,andcapital;

2 A competitive, innovative and dynamiccommunity which fosters robust productivitygrowth including through the creation andpracticalapplicationofknowledge,supportivepolicies towards innovation, science-based approach to green technology anddevelopment,andbyembracingtheevolvingdigital technology; promotion of goodgovernance, transparency and responsiveregulations;effectivedisputeresolution;andaviewtowardsenhancedparticipationinglobalvaluechains;

3 Enhanced connectivity and sectoralcooperation with improvements in regionalframeworks, including strategic sectoralpoliciesvitaltotheeffectiveoperationalisationoftheeconomiccommunity;

4 A resilient, inclusive, people-oriented andpeople-centred community that engendersequitable development and inclusive growth;acommunitywithenhancedmicro,smallandmedium enterprise development policiesand cooperation to narrow the developmentgaps;andacommunitywitheffectivebusinessand stakeholder engagement, subregional

3 A community that embraces tolerance andmoderation, fully respects the differentreligions, cultures and languages of ourpeoples,upholdscommonvalues inthespiritof unity in diversity as well as addresses thethreatofviolentextremisminallitsformsandmanifestations;

4 A community that adopts a comprehensiveapproach to security which enhances ourcapacitytoaddresseffectivelyand inatimelymanner existing and emerging challenges,including non-traditional security issues,particularly transnational crimes andtransboundarychallenges;

5 Aregionthatresolvesdifferencesanddisputesby peaceful means, including refrainingfrom the threat or use of force and adoptingpeacefuldisputesettlementmechanismswhilestrengthening confidence-building measures,promotingpreventivediplomacyactivitiesandconflictresolutioninitiatives;

6 Aregionthatremainsfreeofnuclearweaponsand other weapons of mass destruction,as well as contributes to global efforts ondisarmament, non-proliferation and peacefulusesofnuclearenergy;

7 Acommunitythatenhancesmaritimesecurityand maritime cooperation for peace andstability in the region and beyond, throughASEANandASEAN-ledmechanismsandadoptsinternationally-acceptedmaritimeconventionsandprinciples;

8 A community that strengthens our unity,cohesiveness andASEAN centrality aswell asremains the primary driving force in shapingtheevolvingregionalarchitecturethat isbuiltuponASEAN-ledmechanisms;and

9 A community, in the interest of developingfriendlyandmutuallybeneficialrelations,thatdeepens cooperation with Dialogue Partners,strengthens engagement with other externalparties, reaches out to potential partners, aswellasrespondscollectivelyandconstructivelytoglobaldevelopmentsandissuesofcommonconcern

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ASeAn cHArter

T heASEANCharterservesasafirmfoundationin achieving the ASEAN Community byproviding a legal status and an institutionalframeworkforASEANItalsocodifiesASEANnorms,rulesandvalues,setscleartargets forASEAN,andpromotesaccountabilityandcompliance

The ASEAN Charter entered into force on 15December 2008 A gathering of ASEAN foreignministers was held at the ASEAN Secretariat inJakartatomarkthishistoricoccasion

With the entry into force of the ASEAN Charter,ASEAN effectively operates under a new legalframework and has established a number of neworganstoboostitscommunity-buildingprocess

Ineffect, theASEANCharterhasbecomea legallybindingagreementamongthe10ASEANmemberstates

development cooperation and projects, andgreater economic opportunities that supportpovertyeradication;and

5 AglobalASEANthatfostersamoresystematicand coherent approach towards its externaleconomic relations; a central and foremostfacilitator and driver of regional economicintegration in East Asia; and a united ASEANwith an enhanced role and voice in globaleconomic fora in addressing internationaleconomicissues

WeaddresstheAECBlueprint2025ingreaterdetailonpage36

ASeAn Socio-cultural community Blueprint 2025 (AScc Blueprint 2025)

T he ASCC Blueprint 2025 shall be one thatengages and benefits the people of ASEAN,andis inclusive,sustainable,resilientanddynamicanditsetsouttorealisethefollowingvision:-

1 A committed, participative and socially-responsible community through anaccountable and inclusive mechanism forthe benefit of ASEAN people, upheld by theprinciplesofgoodgovernance;

2 An inclusive community that promotes highqualityoflife,equitableaccesstoopportunitiesfor all and promotes and protects humanrights of women children, youth, the elderly,personswithdisabilities,migrantworkersandvulnerableandmarginalisedgroups;

3 Asustainablecommunitythatpromotessocialdevelopment and environmental protectionthrough effective mechanisms to meet thecurrentandfutureneedsofASEANpeople;

4 Aresilientcommunitywithenhancedcapacityandcapability toadaptand respondtosocialandeconomicvulnerabilities,disasters,climatechange as well as emerging threats andchallenges;and

5 A dynamic and harmonious community thatis aware and proud of its identity, culture,andheritagewith the strengthenedability toinnovate and proactively contribute to theglobalcommunity



ASeAn At A GlAnce

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MottoOneVision,OneIdentity,OneCommunity

ASeAn day8thAugust

total trade in 2014 US$253trillion

Intra-ASeAn trade in 2014US$60820billion

top 5 trade Partners in 2014ChinaUS$36650billionJapanUS$22900billionEUUS$20940billionUSAUS$2124billionSouthKoreaUS$13140billion

reGIon ProFIle: ASeAn

IntroductionASEANwasformedon8August1967inBangkok,Thailand,throughthesigningof theASEANDeclaration(BangkokDeclaration)by Indonesia,Malaysia, the Philippines, Singapore andThailand Brunei Darussalamsubsequentlyjoinedon7January1984,Vietnamon28July1995,LaosandMyanmaron23July1997,andCambodiaon30April1999

Map

Population62225million(2014estimate)

Population between 20 and 54 years of age508%(2013estimate)

total land Area444millionsquarekilometres

GdP (current Price) in 2014US$257trillion

GdP per capital (current Price) in 2014 US$4,136

GdP per capital (PPP) in 2014US$10,700

ASeAn At A GlAnce


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capitalBandarSeriBegawan

ethnic Groups (2011 estimate)Malay657%,Chinese103%,OtherIndigenous34%,Others206%

languagesMalay(official),English,Chinese

religions (2011 estimate)Muslim(official)788%,Christian87%,Buddhist78%,Others(includesindigenousbeliefs)47%

life expectancy 77years

literacy954%

country ProFIle: BruneI dAruSSAlAM

IntroductionTheSultanateofBruneisinfluencepeakedbetweenthe15thand17thcenturies when its control extended over coastal areas of northwestBorneo and the southern Philippines Bruneis ruling family providedmuchneededstabilityoverthe18thand19thcenturiesasgeopoliticalstrife fromEuropean colonial expansion andglobalpiracy threatenedthe Sultanate In 1888, Brunei became a British protectorate andindependence was achieved in 1984 Today Brunei benefits fromextensivepetroleumandnaturalgasfields,andhasoneofthehighestpercapitaGDPsinAsia


urbanisation77%(2014estimate)

economyBruneihasasmallwell-to-doeconomythatdependsonrevenuefromnaturalresourceextraction,andencompassesamixtureofforeignanddomesticentrepreneurship,governmentregulation,welfaremeasures,andvillagetraditionCrudeoilandnaturalgasproductionaccountfor60% of GDP andmore than 90% of exports Bruneis GDP per capitais among the highest in Asia, with substantial income from overseasinvestment supplementing its income fromdomesticproductionThegovernmentprovidesBruneiancitizenswith freemedicalservicesandeducation throughtheuniversity levelThegovernmentofBruneihasbeenemphasizingthroughpoliciesandresourceinvestmentsitsstrongdesiretodiversifytheeconomyintonewsectors

central Bank and currencyBruneiCurrencyandMonetaryBoard,BruneiDollar(BND)

GdP per capital (current Price)US$41424(2014estimate)

GdP per capita (PPP)US$82,850(2014estimate)

unemployment rate38%(2014estimate)

Inflation rate-02%(2014estimate)

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capitalPhnomPenh

ethnic GroupsKhmer 90%, Vietnamese 5%,Chinese1%,Others4%

languages (2008 estimate)Khmer(official)963%,Others37%

religions (2008 estimate)Buddhist (official) 969%, Muslim19%,Christian04%,Others08%

life expectancy64years

literacy 740%

country ProFIle: cAMBodIA

IntroductionMostCambodiansconsiderthemselvesasKhmers,descendantsoftheAngkorEmpirethatextendedovermuchofSoutheastAsiaandreachedits zenith between the 10th and 13th centuries Today, Cambodia isrecoveringfromdecadesofcivilunrestduringtheKhmerRougeregimeand subsequent foreign occupationThis recovery has been aided byCambodiasentryintoASEANin1999,foreignaid,aswellasaboomintourism



economySince 2004, Cambodias growth has been driven by industries ingarments,construction,agricultureandtourismItsGDPclimbedmorethan7%ayearbetween2010and2013TheCambodiangovernmenthasbeenworkingwithbilateralandmultilateraldonorssuchastheAsianDevelopment Bank (ADB), theWorld Bank (WB) and the InternationalMonetaryFund(IMF), toaddressthecountrysmostpressingneedsAsubstantialpartofthegovernmentbudgetcomesfromdonorassistance,andaneconomicchallengeforCambodiaoverthenextdecadewillbefashioning an economic environment inwhich the private sector cancreateenoughjobstohandleCambodiasdemographicimbalance

central Bank and currencyNationalBankofCambodia,CambodianRiel(KHR)

GdP per capital (current Price)US$1,105(2014estimate)



Inflation rate39%(2014estimate)

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capitalJakarta

ethnic GroupsJavanese401%,Sundanese155%,Malay37%,Batak36%,Madurese3%,Betawi29%,Minangkabau27%,Buginese27%,Bantenese2%,Banjarese17%,Balinese17%,Acehnese14%,Dayak14%,Sasak13%,Chinese12%,Others15%

languagesBahasaIndonesia,English,Dutch,over700localdialects

religions (2010 estimate)Muslim872%,Christian7%,RomanCatholic29%,Hindu17%,Other09%(includesBuddhistandConfucianist),Unspecified04%


literacy930%

country ProFIle: IndoneSIA

IntroductionFollowing centuries of colonial rule followed by military strongmendictatorships, Indonesia has emerged strongly as a modern Muslimnation in the 21st century despite some teething problems Today,Indonesia under President JokoWidodo is amongst theworldsmostpopulous democracies, theworlds largest archipelagic state, and theworlds largestMuslim-majoritynationThecountryisanembodimentofunity indiversityandthereremainsastrongnationalconsensusondeliveringeconomicgrowthaccompaniedbyfreeelections



economyIndonesia has had strong growth since 2010 During the 2008 globalfinancial crisis, Indonesia outperformed its regional neighbours andjoinedChinaand Indiaas theonlyG20members thatpostedgrowthFiscallyconservativepolicieshaveresultedinadebt-to-GDPratiooflessthan25%andhistoricallylowratesofinflationIndonesiaisacceleratingpolicies aimed at dealing with poverty, unemployment, inadequateinfrastructure,corruption,acomplexregulatoryenvironment,unequalresource distribution among regions, labour unrest and the thornysubjectoffuelsubsidies

central Bank and currency BankIndonesia,IndonesianRupiah(IDR)






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capitalVientiane

ethnic Groups (2005 estimate)Lao 55%, Khmou 11%, Hmong8%,Others (over100minorethnicgroups)26%

languagesLao (official), French, English,variousethniclanguages

religions (2005 estimate)Buddhist 67%, Christian 15%,OthersandUnspecified315%


literacy730%

country ProFIle: lAoS

IntroductionModern-dayLaoshasitsrootsintheancientLaokingdomofLanXang,establishedinthe14thcenturyunderKingFaNgumFor300years,LanXangsinfluenceextendedtopresent-dayCambodiaandThailand,aswellasoverallofwhatisnowLaosAftercenturiesofgradualdecline,LaoscameunderthedominationofSiam(Thailand)fromlate18thcenturytolate19thcentury,whenitbecamepartofFrenchIndochinaTheFranco-SiameseTreaty of 1907defined Laos currentborderwithThailand In1975,thecommunistPathetLaotookcontrolofthegovernment,endinga six-century-old monarchy and instituting a strict socialist regimethatwas closely alignedwith thatofVietnam From1988, Laos sawaliberalisationofitsforeigninvestmentlawsandagradual,limitedreturntoprivateenterpriseLaosbecameamemberofASEANin1997andtheWorldTradeOrganisation(WTO)in2013



economyThegovernmentofLaos,oneofthefewremainingone-partycommuniststates,begandecentralisingcontrolandencouragingprivateenterprisein1986Theresultswerestrikinggrowthaveraged6%ayearfrom1988to2008exceptduringtheshort-liveddropcausedbytheAsianfinancialcrisisthatbeganin1997

central Bank and currency BankoftheLaoPDR,LaoKip(LAK)





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capitalKualaLumpur

ethnic Groups (2010 estimate)Malay501%,Chinese226%,Indigenous118%,Indian67%,Others07%,Non-citizens82%

languagesBahasaMalaysia(official),English,Chinese(Cantonese,Mandarin,Hokkien,Hakka,Hainan,Foochow),Tamil,Telugu,Malayalam,Panjabi,Thai

religions (2010 estimate)Muslim(official)613%,Buddhist198%,Christian92%,Hindu63%,Others35%


literacy931%

country ProFIle: MAlAySIA

IntroductionDuringthelate18thand19thcenturies,GreatBritainestablishedcoloniesandprotectoratesinMalaysiascurrentarea;thesewereoccupiedbytheJapanesefrom1942to1945In1948,theBritish-ruledterritoriesontheMalay Peninsula, except Singapore, formed the Federation ofMalaya,whichgainedindependencein1957Duringthe22-yeartermofPrimeMinister Mahathir bin Mohamad (1981-2003), Malaysia successfullydiversifieditseconomy,fromdependenceonexportsofrawmaterialstothedevelopmentofmanufacturing,servicesandtourismPrimeMinisterMohamed Najib bin Abdul Razak has continued these pro-businesspoliciesandintroducedsomecivilreforms



economyMalaysiahassincethe1970s,transformeditselffromaproducerofrawmaterialsintoanemergingmulti-sectoreconomyAsanexporterofoilandgas,MalaysiahasprofitedfromhigherworldenergypricesItscentralbank,BankNegaraMalaysia(BNM),maintainshealthyforeignexchangereserves,andawell-developedregulatoryregimehaslimitedMalaysiasexposuretoriskierfinancialinstrumentsandtheglobalfinancialcrisis

central Bank and currencyBNM,MalaysianRinggit(MYR)






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capitalNaypyidaw

ethnic Groups Burman 68%, Shan 9%, Karen 7%,Rakhine4%,Chinese3%,Indian2%,Mon2%,Others5%

languagesBurmese(official)

religionsBuddhist89%,Christian4%,Muslim4%,Others3%


literacy930%

country ProFIle: MyAnMAr

IntroductionVarious ethnic Burmese and ethnic minority city-states or kingdomsoccupiedthepresentbordersthroughthe19thcenturyOveraperiodof 62 years (1824-1886), Britain colonisedMyanmar and administeredthe country as part of its Indian Empire until Myanmar attainedindependencein1948Afteraperiodof juntarule,thecountrybeganaseriesofpoliticalandeconomicreformsinthelastdecadeMyanmaris beginning to reap the economic dividends of its policies with theincrease inFDIand tradeflows InApril2016, theNationalLeague forDemocracy led by Aung San Suu Kyi, whowon theNovember 2015election,formedthenewgovernment,endingdecadesofmilitaryrulePopulation5149million(2014estimate)

urbanisation 340%(2014estimate)

economySinceMyanmarstransitiontoaciviliangovernmentin2011,ithasbegunan economic overhaul targeted at attracting foreign investment andintegrationintotheglobaleconomyReformsincludethemodernisationandopeningupofthefinancialsector,anincreaseinbudgetallocationsforsocialservices,andanaccelerationofagriculturalandlandreforms

central Bank and currencyCentralBankofMyanmar,BurmeseKyat(MMK)





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capitalManila

ethnic Groups (2000 estimate)Tagalog281%,Cebuano131%,Ilocano9%,Bisaya/Binisaya76%,HiligaynonIlonggo75%,Bikol6%,Waray34%,Others253%

languagesTagalog(official)andEnglish(official)

religionsCatholic829%,Muslim5%,Others121%


literacy 954%

country ProFIle: PHIlIPPIneS

IntroductionThePhilippineislandsbecameaSpanishcolonyduringthe16thcentury;theywerecededtotheUSin1898followingtheSpanish-AmericanWarAfterWorldWarII,theRepublicofthePhilippinesgainedindependencein 1946 A 20-year rule by Ferdinand Marcos ended in 1986 whenCorazonAquinowaselectedpresidentThepreviouspresident,BenignoAquinoIII,waselectedtoasix-yearterminMay2010On9May2016,the Philippines elected a new President, RodrigoDuterte, to succeedBenignoAquinoIIIThenewPresidentvowstocleanupcorruptionandcrimesinthePhilippines



economyThePhilippineeconomyhasweatheredglobaleconomicandfinancialdownturnswellduetolowerdependenceonexports,relativelyresilientdomestic consumption, large remittances from overseas Philippineworkers,andarapidlyexpandingbusinessprocessoutsourcingindustryEfforts to improve tax administration and expenditure managementhave helped to ease the Philippines tight fiscal situation and reducehighdebtlevelsUnderthenewadministrationofRodrigoDuterte,earlyindicationssuggestthattheadministrationwillcontinuetoencourageinvestmentsandsupportpro-businesspolicies

central Bank and currencyBangkoSentralngPilipinas,PhilippinePeso(PHP)






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capitalSingapore(citystate)

ethnic Groups (2013 estimate)Chinese742%,Malay133%,Indian92%,Others33%

languages (2010 estimate)Mandarin (official) 363%, English(official) 298%, Malay (official)119%,Tamil(official)44%,Hokkien81%, Cantonese 41%, Teochew32%,Others34%

religions (2010 estimate)Buddhist 339%, Muslim 143%,Taoist 113%,Catholic 71%,Hindu52%, Christian 11%, Others 07%,None164%


literacy 959%

country ProFIle: SInGAPore

IntroductionSingaporewasfoundedasaBritishtradingcolonyin1819ItjoinedtheMalaysianFederationin1963butseparatedtwoyearslaterandgainedindependenceSingaporewentontobecameoneoftheworldsmostprosperouscountrieswithstronginternationaltradinglinks(itsport isoneoftheworldsbusiestintermsoftonnagehandled)andhasaGDPpercapitacomparablewiththoseofleadingWesternEuropeannations



economySingaporehasahighlydevelopedandsuccessfulfree-marketeconomyIthasaremarkablyopenandcorruption-freeenvironment,stableprices,andahighGDPpercapitaTheeconomydependsheavilyonexports,particularly inconsumerelectronics, informationtechnologyproducts,pharmaceuticals,andonagrowingfinancialservicessectorInthelongterm,thegovernmenthopestoestablishanewgrowthpaththatfocuseson raising productivity Singapore has attractedmajor investments inpharmaceuticalsandmedicaltechnologyproduction,andhaskeptupwith efforts to establish the country as Southeast Asias financial andhigh-techhub

central Bank and currencyMonetaryAuthorityofSingapore,SingaporeDollar(SGD)





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capitalBangkok

ethnic Groups (2010 estimate)Thai959%,Burmese2%,Others13%,Unspecified09%

languages (2010 estimate)Thai(official)907%,Burmese13%,Others8%

religions (2010 estimate)Buddhist936%,Muslim49%,Others15%


literacy935%

country ProFIle: tHAIlAnd

IntroductionAunifiedThaikingdomwasestablishedinthemid-14thcenturyKnownas Siamuntil 1939,Thailand is the only Southeast Asian country thathasneverbeen controlledbya Europeanpower In1932, abloodlessrevolution occurred leading to the development of a constitutionalmonarchyAnallyofJapanduringWorldWarII,ThailandbecameaUStreatyallyin1954aftersendingitstroopstoKoreaThailandlaterfoughtalongsidetheUSintheVietnamwar



economyWith a well-developed infrastructure, a free-enterprise economy,generallypro-investmentpolicies,andstrongexportindustries,Thailandhas achieved steady growth due largely to industrial and agriculturalexportsmostlyelectronics,agriculturalcommodities,automobilesandparts,andprocessedfoodsUnemployment,atlessthan1%ofthelabourforce,isoneofthelowestintheworld,whichputsupwardpressureonwagesinsomeindustries

central Bank and currencyBankofThailand,ThaiBaht(THB)






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capitalHanoi

ethnic Groups (1999 estimate)Kinh (Viet) 857%, Tay 19%, Thai18%, Muong 15%, Khmer 15%,Mong12%,Nung11%,Others53%

languagesVietnamese (official), English,French,Chinese,andKhmer

religions (1999 estimate)Buddhist93%,Catholic67%,None808%,Others32%


literacy934%

country ProFIle: VIetnAM

IntroductionVietnamdeclaredindependencefromFranceafterWorldWarIIin1954andwasdividedintothecommunistNorthandanti-communistSouthundertheGenevaAccordsUSeconomicandmilitaryaidtoSouthVietnamgrewthroughthe1960sinanattempttobolsterthegovernment,butUSarmedforceswerewithdrawnfollowingaceasefireagreementin1973Two years later, NorthVietnamese forces overran the South, unifyingthecountryundercommunistruleSince1986,Vietnameseauthoritieshave committed to increase economic liberalisation and introducedstructural reformsnecessary tomodernise the economy andproducemorecompetitive,export-drivenindustries



economyVietnam is a densely populated developing country that has beentransitioning from the rigidities of a centrallyplannedeconomy since1986 In recent years, Vietnamese authorities have reaffirmed theircommitment to economic modernisation In January 2007, Vietnamjoined the WTO and became an official negotiating partner in theTrans-PacificPartnershiptradeagreementin2010Povertyhasdeclinedsignificantly,andVietnamisworkingtocreatejobstomeetagrowinglabourforcethatisexpandingbymorethanamillionpeopleeveryyear

central Bank and currencyStateBankofVietnam,VietnameseDong





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AstudybyADBandILOASEANCommunity2015:Managing integration for better jobs and sharedprosperity in 2014 (herein known as ADB-ILO2014 Report) shows that ASEAN as a whole willexperience lower birth rates and a rising share oftheworking-age population, with 68million newentrantstothelabourforceuntil2025,suggestinga potential demographic dividend However, thesituation will vary by country In Indonesia andVietnam, for example, if appropriate social andeconomic policies are in place, lower birth ratesanddecreasingdependency ratios could facilitateaccelerated growth and increase in per capitaincome Conversely, in rapidly ageing societiessuch asThailand, thiswindowof opportunitywillslowlynarrow

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Men WomenMen ages 15-64 Women ages 15-64

Source UN: World Population Prospects: The 2012 Revision

Database.

A nyonewhowishestodobusiness inASEANwoulddowelltofirstunderstandjustwhatadiverseregionASEANisanetworkof10membernations,numberingmorethan600million,ruledbya plethora of different governmental styles,practising a multitude of religions and speakingover70languagesanddialects

In addition to such entrenched differences, thepopulationofASEANof633millionpeoplein2015isarelativelyyoungone508%ofthepopulationarebetween20and54yearsofage

Despite the diversity of political styles and therelativeyouthof itspeoples,ASEANhasremainedremarkablyresilientandcomparativelystableinthepoliticalarena,weatheringtheglobalcrisesof1997,2001and2008,andfindingitselflargelyontrackforcontinuedeconomicsuccessin2015andbeyond

Before embarking on any business ventures inASEAN, it would therefore make good sense tounderstandthesocio-politicalforcesthatshapethisregion: itspeoples,governments,culturesandthenatureofsocietiesformedtherein

underStAndInG ASeAn deMoGrAPHIcS: IS tHere A dIVIdend?

S Since 1980, ASEANs population has almostdoubled from 355 million in 1980 to 633millionin2015andisexpectedtoreach694millionby 2025 The ASEAN Statistical Yearbook 2014recordedthat508%ofitspopulationarebetweenthe ages 20-54 and 361% are below age 20ASEANs relatively young demographic continuestoattract investors to investheavily in the region,whilegovernmentsfollowthroughoninfrastructureimprovementstosupport increasingurbanisationBetween1950and2011,theproportionofpeoplelivinginurbanareasrosefrom10%to447%andby2050, it is expected to reach583%WithASEANsurbansharesettogrow,consumerspendingpoweris likelytogrowandthesebringopportunities forthedemandforconsumergoods

ASeAn todAy: SocIo-PolItIcAl


towards capitalising on the nations growingdemographic dividend and falling dependencyratioAttractingrecordFDI inthepasteightyears,VietnamappearssettoreapsignificantGDPgrowthfrom itsdemographic transitionas it continues toliberalise trade and investmore in education andhealthcare Similarly,Malaysias fertilityrateof2%will present it with a demographic dividend andreal GDP growth if the country is able to followthrough with infrastructure improvements andmore transparent tradepolicies needed to attractFDI In the Philippines, its 31 fertility rate thesecondhighest inASEANafterLoasPDR,will facethe largest challenge and opportunity relating toitsdemographicdividendThePhilippineshastheopportunitytoexpanditsGDPbyabout7%ayearifitcansuccessfullyreformitstradepoliciesandsocialservices to attract a 30% increase in investmentConversely,iftheappropriatepolicyenvironmentisnotinplace,health,educationalandsocialwelfaresystems will undergo a significant strain, andunemploymentandinstabilitymayresult

Latin Americas notoriously wasted demographicdividend of the 1970s and 1980s during whichweakgovernanceanda lackofopenness to tradestalledgrowthshouldbekeptinmindasASEANlooks to the future, and ASEAN governmentscontinuetocontemplatehowtobestattractforeigninvestmentsandgrowtheireconomies

The ADB ILO 2014 Report also found that ASEANis experiencing significantdemographic changeatbothendsoftheagespectrumwithdecliningproportions of young people aged 15 to 24 andincreasing proportions of elderly people aged 65andaboveasshowninthediagramonthepreviouspageHowever, theprofilediffers fromcountry tocountry In Indonesia, Laos and the Philippinesin 2025, youthwill account formore than17%ofthe population, while in Singapore and Thailand,theirsharewillbelessthan115% Between2010and 2025, the Philippines will see its workingage population expand by 35% InMyanmar andVietnam, over the same period, the working-agepopulation will increase by only 14% and 124%respectively, while in Thailand, it will contract by11% During this period, the proportion of theelderlyinThailandspopulationwillhaverisenfrom89%to161%,andinSingapore,from9%to173%These varied ageing trends will affect the laboursupplyandsocialprotectionexpenditure,aswellaslabourmigration

While some ASEAN countries, such as Indonesia,have already begun to experience and capitaliseon their demographic dividends, others, such asVietnam and the Philippines, are just beginningto experience their own demographic transitionsIndonesia exemplifies an ASEAN country that hascapitalisedon its demographic transition throughrigorousinstitutionaldevelopmentandashifttoanexport-oriented manufacturing sector Reformingits economy in the 1970s (pre-empting itspopulation dividend), Indonesia has experiencedGDPgrowthfrom6%to8%almosteveryyearoverthe past two decades since enacting its marketreforms Despite this success, Indonesia can domoretobuildonitsinvestmentsineducationandhealthcare: two possible avenues for creating amore highly skilled, healthy workforce to attractFDI

AlongwithIndonesia,threeotherASEANcountries Vietnam, Malaysia and the Philippines areexpected to experience double-digit labour forcegrowth through 2020 and beyond In Vietnam,market liberalisation and government reformsinitiated in 2011 will be among the first steps

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ASeAn todAy: Key AcHIeVeMentS under Aec BluePrInt 2015 And

recent deVeloPMentS

ASEAN TODAY: KEY ACHIEVEMENTS UNDER AEC BLUEPRINT 2015 AND RECENT DEVELOPMENTSASEAN TODAY: KEY ACHIEVEMENTS UNDER AEC BLUEPRINT 2015 AND RECENT DEVELOPMENTSASEAN TODAY: KEY ACHIEVEMENTS UNDER AEC BLUEPRINT 2015 AND RECENT DEVELOPMENTS


Collectively, the intra-ASEAN market was thelargestforASEANtradeat241%in2014Likewise,the region has becomeone of theworlds fastestgrowing investment destinations, accounting for11%oftotalglobalforeigndirectinvestment(FDI)inflowsin2014comparedwithjust5%in2007At179%,ASEANsintra-regionalFDIinflowsissecondlargestbypartner,laggingbehindonlytheEU-28

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high-priority measures, by Aec Pillar,2008-2015 number of Measures

(as at 31 october 2015)

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Single Market and Production Base

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Integration into the Global Economy

ASeAn econoMIc coMMunIty BluePrInt 2015 Key AcHIeVeMentS

A SEANhasmadeextraordinaryprogresssinceit was founded in 1967 It has beentransformed into an increasingly well regulated,dynamic and creative platform acrosswhatmanyregardastheworldsfastest-developingeconomicregion The year 2015 is a key milestone in theASEAN integration agenda following thesubstantive implementation of the ASEANEconomic Community Blueprint 2015 (AECBlueprint2015)thatwasadoptedin2007ASEANscombinedGDPnearlydoubledfromUS$133trillionin2007tooverUS$25trillionin2014,whileaverageGDPpercapitagrewbyalmost80%fromUS$2,343in2007toUS$4,135in2014Overthesameperiod,ASEAN has also become more influential, withwideningmarketsregionallyandgloballyBy2014,itwasAsias3rdlargest,theworlds7thlargest,andamong the most advanced integrated marketsWith a combined population of over 622million,ASEANhasavastconsumerbase,behindonlyChinaandIndiagloballyOver50%ofASEANspopulationisundertheageof30,makingupalargeportionofboththecurrentandfutureworkforce

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wagedbytheMyanmararmedforces isnolongerpurelyaboutstoppingatakeoverofthegovernmentbycommunistsandotherforcesInsteadthearmyseekscontrolofthesameresourcesItisastateofcivilwarfuelledbytheresourcecurse

Another economic dimension of the peaceprocess is the irreconcilable views on economicdevelopment projects in the ethnic states Ethnicminoritypopulationsarejustifiablyconcernedthatinvestments in infrastructure, special economiczonesandother suchprojects in theirhomelandswill become beachheads for expanding thedominationoftheBamarethnicmajority

StatecapacitymayturnouttobetheAchillesheelof the incoming NLD-led government It is easyforforeignerstoflyintoMyanmar,haveapleasantconversationinEnglishwithagovernmentministerand leavebelieving thatwhatwas agreedwill bedone However, this didnt work in the previousgovernment for the past five years The newgovernmentledbySuuKyiwillhavetoimplementaslewofintegratedpro-business,infrastructureandmanpowerdevelopmentpoliciesthatcanconvincethe long-term investors of the new governmentsresolve to build an investor-friendly and pro-businessenvironmentinMyanmar

InMyanmar, the answers to the following severalpressing questions will determine the success oftheNLD in implementing its economicgoalsWillSuuKyisgovernmentbeabletofindandempowera strong team of technocrats to manage theeconomy?WillMyanmarsnewlyelectedmembersofparliamentactinthenationalinterestinsteadoftheir own and those of theirwealthy supporters?And will the foreign community give Myanmarsministers and director generals the time andencouragementtoaddressthesetoughissues?

TheunityoftheMyanmarpeopleincludingitskeyinstitutional stakeholders (including the militaryand the wealthy families) is key to laying a solidfoundation for economic progress NLD hasfocused on national reconciliation as its priorityandiscertainlymakingstepsintherightdirectionto bring economic prosperity and harmony forMyanmar

A review undertaken by the ASEAN SecretariatshowedASEANhassubstantivelyimplementedthehigh-priority measures under the AEC Blueprint2015; notably, it achieved 100% implementationfor the Equitable Economic Development andIntegration into the Global Economy goals Ithas made significant progress in removing tariffbarriersandachieveda925%implementationrateunder the AEC Blueprint 2015 Single Market andProductionBasegoalItscoredanimplementationrate of 905% under the AEC Blueprint 2015CompetitiveEconomicRegiongoal

MyAnMAr An unPrecedented yeAr

A ungSanSuuKyiandhergovernmenthavetaken office since April 2016This scores asthe first democratically elected government aftermanyyearsofmilitary rule TheMyanmarpeoplehavehighhopesforthisgovernmentwhowillhavetomanageanddeliveronsomeoftheexpectationsduringitsfive-yeartermofgovernance

The National League for Democracys (NLD) pre-electioneconomicgoalsweresketchyEconomistsclose to the NLD have said the agriculture sectorwill be a major priority Sound macroeconomicpolicies,especiallyfiscaldiscipline,willbeanotherThismeansavoidingunsustainablebudgetdeficitsandinflation

There are key challenges looming over theeconomicpolicy landscapethattheNLDneedstohandle immediately: the peace process and statecapacity Without meeting these challenges withsomedegreeofsuccess,SuuKyisgovernmentwillhave an arduous task of reforming the economyand fulfilling the expectations and goals of theMyanmarpeople

The peace process is primarily a political issue,but it also has key economic ramifications In theborderlands of Myanmar inhabited by ethnicminorities,theextractionofnaturalresourcesfundsthearmedgroupsstillengagedinanalmost60-yearfighttopreservetheirethnic identitiesThisbattle

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Aside from rising infrastructure spending, the2016 budget stipulates a vast increase in publicexpenditure on health, making this a particularfocus of state spending and another intriguingsectorforinvestmentForthefirsttimein2016,thegovernmentplanstobreakthroughthemandatedhealth-spendingthresholdof5%ofGDP,comparedtojust37%intherevised2015budget

The Jokowi administration has made progressin its economic reform by focusing on boostinginfrastructure spending and bravely identifyingwhat needs to be done in the labour market toimprove labour productivity and mobility It iscrucial that thegovernmentuses thismomentumand a cooperative military-industrial complexto follow up on subsequent promised measuresand continue boosting investor confidence in itseconomicreforms

SinceSeptember2015,theIndonesianGovernmenthas announced multiple Economic DeregulationPackages(EDP)withtheaimofstreamlininglawsandregulations,improvingbusinessinfrastructure,facilitating international trade and attractinggreaterforeigninvestments

In order to stimulate foreign direct investments,the 10th EDP aims to increase maximum foreignshareholdinginvarioussectorsaswellasopeningupofsectorspreviouslyclosedtoforeigninvestors(eg healthcare support services, movie and filmdistributionandonlinemarketplaceorganizer)Thissignals a shift in Indonesias economic policy andmay offer numerous new business opportunitiesforinvestorsaroundtheregion

Whiletheproposedchangesappearbothextensiveand comprehensive, they have been met withcautious and guarded optimism While expertsgenerally agree that the reforms can provide theIndonesianeconomywiththeneededstimulus,thetruetestisintheimplementationofthechangesAsthemanychangesaffectamultitudeofministries,the decentralized government is faced with thechallengeofworkingtogethertopassthereformsatboththeregionalandnationallevelinacoherentmanner

tHAIlAnd econoMIc outlooK

T hailand is currently ruled by the NationalCouncil forPeaceandOrder(NCPO)whichiseffectively a military regime that will remain inpowerfortheforeseeablefuture

WhilemanyWesternobserversarecriticalofthis,themilitaryjuntagovernmentappearstoenjoyastrongpopulistappealatthegrassrootsandcontinuestomaintain popular support as it prioritises stabilityandpragmaticeconomicdevelopment

As long as the military remains united it shouldcontinuetomaintainafirmgriponpoweruntiltheConstitutional Reform that will pave way for theelectionofaciviliangovernmentiscompleted

In themeantime, it does appear it is business asusual in Thailand as its focus is on stability andeconomicdevelopment

IndoneSIAn econoMIc outlooK

I ndonesia stands at an economic cross-roadtodayasitbalancesthemanagementofastate-sponsored infrastructure boom against a labormarketbesetby inertiaandthepressingneed forbroad-based structural reforms To that end theIndonesian Army (Tentara Nasional Indonesia orTNI)hasbecomean increasingly importantplayerin helping the government realise its economicgoals by allowing the latter to leverage on thebreadthanddepthoftheTNIsorganisationalreachto implement government policies anddevelopmentplans

Amid an unfavourable investment climate,weakened consumer sentiment and low pricesfor key export commodities, such as coal,metal minerals, rubber and crude palm oil, thegovernment has become more dependent ongovernmentspendingtodriveeconomicgrowth

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While it is still too early to predict the effectsof the reforms, businesses in the ASEAN regionare presented with new possibilities as theNegative Investment List is revised With a slewof accompanying changes to lower the barrier ofentrytoforeignworkersandinvestments,enteringthe Indonesian market may be easier and moreattractivethanithasbeenforthepastdecade

VIetnAM econoMIc outlooK

I t has been a good 2015 for Vietnam ThecountrysQ4GDProseby70%-thehighestin5yearswhichiswellabovetheofficialgovernmenttargetof62%andthehighestinASEAN

This growth has largely come from a strong anddiversified exports base (aided by a measuredcurrency depreciation policy), a growingattractivenessasaninvestmentdestinationforFDI,creditrobustnessandacannygovernmentthathasproved itself highly versatile and pragmatic in itsparticipation inthevarioustradeagreementsthathaveputASEANinthespotlightoverthepastfewyears

WhilethemarketconsensusshowsthattheVietnamgrowthstorystillhaslegs,thecurrentadministrationappears to be wisely managing expectations bysignallingthroughfiscalandmonetarypoliciesthatitwouldbecomfortableiftheeconomymaintainsitscurrenttrajectoryin2016

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Inthenextdecade,ASEANwillalsoprovideanewemphasis on the development and promotion ofmicro, small and medium enterprises (MSMEs) initseconomicintegrationeffortsAtthesametime,ASEAN will likewise embrace the evolving digitaltechnology as leverage to enhance trade andinvestments,provideane-basedbusinessplatform,promotegoodgovernance,andfacilitatetheuseofgreentechnology

TheAEC2025isenvisionedto:

i CreateadeeplyintegratedandhighlycohesiveASEANeconomythatwouldsupportsustainedhigh economic growth and resilience evenin the face of global economic shocks andvolatilities;

ii Engender more equitable and inclusiveeconomic growth in ASEAN that narrows thedevelopment gap, eliminates, if not reduces,poverty significantly, sustains high growthrates of per capita income, and maintains arisingmiddleclass;

iii Foster robust productivity growth throughinnovation, technology and human resourcedevelopment, and intensified regionalresearch and development that is designedfor commercial application to increaseASEANs competitive edge in moving theregionup theglobal valuechains (GVCs) intohigher technology and knowledge-intensivemanufacturingandservicesindustries;

iv Promote the principles of good governance,transparency, and responsive regulatoryregimes throughactiveengagementwith theprivatesector,community-basedorganisations,andotherstakeholdersofASEAN;

v Widen ASEAN people-to-people, institutional,andinfrastructureconnectivitythroughASEANand sub-regional cooperation projects thatfacilitatemovementofcapitalaswellasskilledlabourandtalents;

vi Create a more dynamic and resilient ASEAN,capable of responding and adjusting toemerging challenges through robust nationaland regional mechanisms that address foodand energy security issues, natural disasters,economic shocks, and other emerging trade-relatedissuesaswellasglobalmegatrends;

he implementation of the ASEAN EconomicCommunity (AEC) Blueprint 2015 has

been substantively achieved in, among others,eliminatingtariffsandfacilitatingtrade,advancingtheservicestradeliberalisationagenda,liberalisingand facilitating investment, streamlining andharmonisingcapitalmarketregulatoryframeworksand platforms, facilitating skilled labour mobility,promotingthedevelopmentofregionalframeworksin competition policy, consumer protection andintellectualpropertyrights,promotingconnectivity,narrowingthedevelopmentgap,andstrengtheningASEANsrelationshipwithitsexternalparties

ASEAN recognises that regional economicintegration is a dynamic, ongoing process aseconomies as well as domestic and externalenvironments are constantly evolving In thiscontext, ASEAN has initiated two studies for theAEC Blueprint 2025 The AEC Blueprint 2025has been developed, taking into account therecommendations of the two studies, namely, bytheEconomicResearchInstituteforASEANandEastAsia(ERIA),theSRajaratnamSchoolofInternationalStudies (RSIS) and the Institute of SoutheastAsianStudies (ISEAS),aswellas inputs fromotherstakeholdersThemeasures taken have to lead increatinganetworked,competitive,innovative,andhighlyintegratedandcompetitiveASEAN

Theoverall visionarticulated in theAECBlueprint2015 remains relevant The AEC Blueprint 2025will build on the AEC Blueprint 2015 consistingof five interrelated and mutually reinforcingcharacteristics,namely:(i)AHighlyIntegratedandCohesive Economy; (ii) A Competitive, Innovative,and Dynamic ASEAN; (iii) Enhanced ConnectivityandSectoralCooperation;(iv)AResilient,Inclusive,People-oriented, and People-centred ASEAN; and(v)AGlobalASEAN

The immediate priority is to complete theimplementationofmeasuresunfinishedundertheAEC Blueprint 2015 by end-2016 The continuingcommitments of Cambodia, Lao PeoplesDemocratic Republic, Myanmar and Vietnam(CLMV)under theAECBlueprint 2015up to 2018arealsoincorporatedundertheAECBlueprint2025


T


vii Incorporate a sustainable growth agenda that promotes a science-based use of, and support for, greentechnologyandenergy;

viii Promotetheuseof theASEANProtocolonEnhancedDisputeSettlementMechanism(EDSM)anddevelopotherapproachestospeedupeconomicdisputeresolution;

ix ReinforceASEANcentralityintheemergingregionaleconomicarchitecturebymaintainingASEANsroleasthecentreandfacilitatorofeconomicintegrationintheEastAsianregion;and

x WorktowardsacommonpositionandenhanceASEANsroleandvoiceinglobaleconomicfora

ThekeycharacteristicsandelementsoftheAEC2025and2015BlueprintsaresummarisedinthetablebelowThe2025BlueprintdemonstratesthecontinuedcommitmentoftheASEANcountriestoworktogethertowardsanAEC2025thatishighlyintegratedandcohesive,competitive,innovativeanddynamic,withenhancedconnectivityandsectoralcooperationandamoreresilient,inclusiveandpeople-oriented,people-centredcommunity,integratedwiththeglobaleconomy

characteristics and elements of Aec 2025 and 2015 Blueprints

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ASEANspotentialasa regionwillbeeven furtherheightened by a stable, strong and effectivelyfunctioningfinancialmarketGiventhecriticalrolethat financial integration plays towards achievingAECgoals,ASEANshouldintensifydialoguesamongMemberStates,andcarryoutcapacitybuildingandtechnicalassistancesoas to implementnecessarymeasures to harmonise the regions regulatoryframework

Goodgovernance, transparency,anda responsiveregulatory regime will all be enhanced throughbetter engagement and consultation with theprivate sector and other ASEAN stakeholdersEffortstominimiseregulatorycostswillbesteppedup, while ensuring that legitimate regulatoryobjectivescontinuetobemet

Inthecomingdecade,thebenefitsoftheeconomiccommunity should be enjoyed more broadly,not only by large corporations but also by othereconomic players, including micro-, smallandmedium-sized enterprises, start-ups, employees,entrepreneursandprofessionalsEfforts tonarrowthe development gap will be strengthened, toensure thatAEC2025delivers realbenefitsof jobcreationandstability,welfareimprovement,bettersustainabilityandfuturedevelopment

Theregionalmarketwillnotonlyserveasasteppingstone for participation in the global market butalso as a true source of comparative advantageto achieve global competitiveness AEC 2025 willseetheregionascendtheglobalvaluechainsintomore sustainable production activities, highertechnology-intensivemanufacturingindustriesandknowledge-intensiveservices

Continuingfromtheworkontariffelimination,AEC2025willhaveastrongerfocusontradefacilitationby effectively following through on existingregional commitments, as well as more robustinstitutionsandmechanismsFullimplementationofkeyinitiatives,suchastheASEANSingleWindow,ASEAN-wide Self-Certification and the ASEANTrade Repository, would be at the top of theprioritylistInadditiontothese,afullyoperationaland sustained mechanism for addressing non-tariff barriers and the barrier effects of non-tariffmeasureswillcontributetoamoretransparentandenabling business environment that will furtherhelp businesses, large and small, to cultivate theopportunitiespresentedbyAEC2025

To be a competitive participant in global valuechains,ASEANwillembraceandfosterthepotentialofitsservicessector,ridingonthefactthatserviceshaveplayedan increasingly significant role in theregionsgrowthand investmentNo longersimplyancillary to goods value chains, a competitiveservices sector is now imperative for effectiveparticipation in global value chains This requiresa more holistic approach to services integrationbeyondliberalisationcommitments

AsASEANbecomesmorefamiliarwithitscollectiveidentityastheworldstopinvestmentdestination,theregionneedstorespondtoincreasinginterestby firms to expand their regional presence andadoptanASEANstrategyContinuedimprovementintheregionsinvestmentpolicyenvironmentandregimes, complemented by a competitivemarketand effective trade facilitation, will contributecruciallytothiseffort

The table came from Sanchita Basu Das, who is a Fellow and Lead Researcher (Economic Afairs) at the ASEAN Studies Centre and Coordinator of the Singapore APEC Study Centre, both at the ISEAS-Yusof Ishak Institute



AEC Blueprint 2025 will provide ASEAN witha new master plan for economic integrationfor the coming 10 years Charting the regionstrajectoryoverthenextdecade,institutionswillbestrengthened,commitmentsfollowedthroughwithimplementation, and monitoring and evaluationenhanced Unique, dynamic and brimming withpotential, ASEAN will assume its aspiring role asa key driver for regional as well as internationalgrowth

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e-coMMerce In ASeAn


to enhance and develop the countrys economySuchplansincludethe:

Wawasan Brunei 2035 or BruneiVision 2035 which outlines Bruneis long-term economicvision(forexample,toachieveannualrealGDPgrowthratesof5-6%);and

Outline of Strategies and Policies forDevelopment consisting of eight mainstrategiesandsupportedby50PolicyDirectionsfocusing on education, economics, security,institutional development, local businessdevelopment, infrastructure development,socialsecurityandtheenvironment

FintechBruneis financial system is made of twocomponents,theIslamicandconventionalfinancialsectors,which function concurrentlyTo realise itsaspirationsofestablishingitselfasaglobalfinancialhubinboththesesectors,thegovernmentofBruneihastakenstepstoimplementpoliciesandinitiativesthatareintendedtocreatearegulatoryregimeandan ecosystem encouraging the development of askilledlabourforcetoprovidefinancialservicesthatmeetinternationalandIslamicfinancialstandards

Theoversightof such initiatives is largelyheldbytheAutoritiMonetariBruneiDarussalam(AMBD),which is the central bank of Brunei and thegoverningauthorityregulatingthefinancialsectorOnesuchinitiativeimplementedbytheAMBDistheNationalPaymentandSettlementSystemsProject,which was undertaken to modernise Bruneisnationalpaymentandsettlementsystemtoalignitwithglobalstandardsandenhancestabilityinthefinancialsector

relevant legislative Framework e-commerce

e-commerceBrunei does not have overarching legislationgoverning E-Commerce activities Instead, arange of laws potentially apply to E-Commerceoperations, depending on the specific industry

e-coMMerce In ASeAn

T oday, internetandmobilepenetration rateshave risen tounprecedentedheightsacrossmanycountries,andSoutheastAsiaisnoexceptionThis rise in internet and smartphone usage hashelped propel growth in the E-Commerce andFinTechindustries,whosefuturepromisestobeanexcitingone

Giventheever-increasingnumberofinternetusersandagrowingmiddleclassinmanyoftheASEANcountries, the E-Commercemarkets in theASEANregionofferattractivebusinessopportunitiesThisgrowth of electronic and online transactions hasalsoledtotheriseofFinTech,whichusescomputerprograms and other technology to support andenablebankingandfinancialservices

AwiderangeoflawsandregulationscouldapplytotheE-CommerceandFinTechindustries,dependingonthenatureoftheFinTechproductsandservicesintended to be offered Businesses, particularlyfinancial institutions, should consult the relevantauthorities or legal counsels to ensure that theycomplywith all such regulations and laws beforecommencingtheiroperationsinthemarket

BruneI dAruSSAlAM

overview

e-commerceAlthough Brunei has high levels of internetpenetration,itsE-Commerceindustrycurrentlyhasnotyetrealiseditsfullpotential

This situation looks set to change as Brunei hasadopted a focused economic strategy targetingspecificsectors,whichhavebeenidentifiedasvalue-addedactivities,haveahighpotential forexportsandthatarelikelytocreatejobsinthecountry,ascandidates for investments The information andcommunicationtechnology(ICT)sectorhasbeenidentifiedassuchasector

To this end, the government of Brunei hasestablishedaclearsetofnational long-termplans

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Money-Changing and Remittance BusinessesAct,Chapter174

MoneylendersAct,Chapter62

PawnbrokersOrder,2002

SecuritiesMarketOrder,2013

TakafulOrder,2008

Government Incentives for the e-commerce and Fintech Industry

The go

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