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A-Level, IB
AQA, Edexcel, OCR, IB, Eduqas, WJEC

Last updated 22 Mar 2021

ASEAN is a trade bloc of 10 nations with an aggregate economic size of $2.3 trillion. The aim is to establish a fully-fledged economic community (AEC) by the end of 2015

The ASEAN trading bloc's diversity – ranging from advanced economies like Singapore to developing countries like Myanmar is an interesting and important feature – who will be the winners and losers from deeper economic integration in the region?

Current members;

Association of Southeast Asian Nations (Brunei Darussalam, Cambodia, Indonesia, Lao P.D.R., Malaysia, Myanmar, Philippines, Singapore, Thailand, Vietnam)

Economic Background to ASEAN

  • ASEAN is a middle-income region but with big differences in per capita incomes
  • Countries such as Singapore and Brunei enjoy a very high GDP per capita at around $49,000 and $39,000, respectively, on par with the top tier of developed-market economies.
  • In contrast, Myanmar and Cambodia have a GDP per capita (PPP adjusted) of just below $900.
  • The ASEAN region has a population of over 600 million, roughly half that of China's or India's and around 9% of the world's total
  • ASEAN's combined GDP of USD 2.3 trillion in 2012 is around 30% the size of China's, roughly the same size as that of the UK and 25% larger than India's. ASEAN GDP =3% of the world's total
  • 25% of ASEAN trade is intra-regional trade – the aim is to increase this as economic ties deepen and also for a rise in intra-regional FDI flows
  • China has emerged as the No. 1 trading partner for ASEAN
  • 5 “ASEAN+1" free-trade agreements have been signed, with China, Japan, Korea, India and Australia/New Zealand respectively

The basics of a single market / economic community

As part of the ASEAN integration plans, barriers to trade in goods and services will be brought down or kept to a minimum.

Flows of investment, capital and skilled labour will be facilitated and co-operation in sectors designated as priority integration sectors will be promoted.

  • Free flow of goods and services
  • Freer flow of capital and the Free flow of skilled labour
  • Priority integration sectors
  • Food, agriculture and forestry

This will be added to by establishing regional standards for competition policy, Consumer protection, Intellectual property rights, taxation and e-commerce

The ASEAN Infrastructure Fund was established with the Asian Development Bank to fund physical infrastructure projects in ASEAN. An example is the building of a new high speed railway between Malaysia and Singapore.

Asian economic growth rates (Source: ADB Report 2015)

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