Cohesiveness will be vital for Asean’s post-pandemic economic recovery

Thursday, June 4, 2020 - 11:49
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We live in extraordinary times. We have seen a health emergency become a global economic emergency, creating unprecedented stress on families, companies and communities. We should count ourselves lucky, however, to live in a region that holds so much promise, energy, and fortitude. As I write this piece, the ASEAN Economic Ministers will be meeting to discuss strategies for the post-pandemic economic recovery for the region. There may never have been a more important meeting of this body. 

Despite the ongoing pandemic emergency, ASEAN is, I believe, well placed to emerge stronger, and better equipped to seize the opportunities of the future if the 10 member states work together to take clear and decisive steps. 

The EU-ASEAN Business Council, the European business body for Southeast Asia that I chair, and the ASEAN Business Advisory Council recently issued a Joint Statement calling for such an approach. Those bodies, plus a host of organisations representing businesses from the US, UK, Australia, New Zealand, Canada, India, Russia, East Asia, as well as young entrepreneurs and specific sectors, issued the following Joint Statement: “The time for ASEAN to prove its collective strength to mitigate the worst impacts of the on-going pandemic and ensure the long-term prosperity and wellness of its people through fast action is now. Decisiveness and resolve towards swift and effective planning and execution of measures for a post-pandemic economic recovery are of utmost priority.”

The Joint Statement called for a High-Level Special Commission tasked by the ASEAN Leaders to recommend a recovery plan. That plan that would improve the response to the current and future pandemics and ensure that ASEAN comes out stronger, more integrated
and better able to respond to global challenges and opportunities. That Commission would seek input from various stakeholders, including a Special Business Advisory Board.

There are several reasons why ASEAN and foreign businesses called for a Special Commission. Post-pandemic economic recovery will not be easy and the “new normal” will require novel approaches. COVID-19 is going to alter how we live, work and play and, therefore, transform our economies and the nature of competition.

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We will see increased digitisation and automation of everything. We will see significant shifts in supply chains as businesses look to diversify the sources of essential components away from single locations. We will see an urgent and more profound need to reskill workers and adapt current educational practices for the new paradigms. Environmental sustainability, inclusion and shared prosperity will be paramount. With the right enabling environment, ASEAN should be well-placed to succeed, given its young and adaptable population, high
urbanisation rates, high levels of internet penetration and its geographical location.

The big stimulus packages that governments in the region have introduced will soften COVID19’s economic blow, but they will not by themselves position the ASEAN member states to compete in the “new normal”. Some needed actions are basic, such as defining and easing the movement of essential goods and services, or setting clear and effective rules to reopen travel and tourism across the region. Other actions require bolder steps.

To equip ASEAN’s talented work force and unleash the power of 650 million consumers, ASEAN needs to accelerate progress on the promised “single market and production base”.

That means finally taking action to eliminate non-tariff barriers to trade in the region, starting with price control restrictions, import quotas, and ownership and control restrictions. It means quickly harmonising standards across the broadest possible range of sectors. It means simplifying and automating customs procedures. It means establishing regional rules on the flow of data to enable the growth of the digital economy.

Taking actions like those will position ASEAN for a faster and more sustainable recovery. They will make the region a preferred location for new investment as companies everywhere are looking to diversify away from over reliance on a single source of supply to make supply chains more resilient. With those supply chains will come advanced manufacturing, research and development and higher paying jobs which in turn will fuel the growth of consumer markets.

Another way to accelerate the post-COVID-19 recovery and put to good use global liquidity at record low interest rates, is investment in sustainable infrastructure. It will create jobs in the short term and provide a foundation for sustained growth that will benefit ASEAN and its citizens for generations to come. Designing and building quality infrastructure, and financing and insuring it, are areas of expertise where European industry can help. This includes both traditional physical infrastructure – roads, railways, airports, power systems – and digital infrastructure, including smart cities and digital health.

All told, a robust recovery plan will establish a foundation for growth that unlocks innovation, enhances the well-being of the 650 million people living in ASEAN, eradicates poverty, and ensures inclusive, wide-spread economic and social development. At the same time,
cooperation between the public and private sector can help prepare the work force for an increasingly digitised and innovative future, including more vocational training, increased mobility of the workforce, and regional internship and training programmes.

Different regions in the world will compete fiercely to position themselves as the ideal places for investment, innovation and relocation of supply chains. ASEAN will need to be at the top of its game. A lot of hard work is needed. The Governments of ASEAN cannot, and need not, do this alone. The private sector has a role to play and stands ready. The power of ASEAN, 10 countries and all stakeholders working together, will be a force for good for its citizens and the world.

 

The writer is the chairman of the EU-ASEAN Business Council.

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