Academic journal article Journal of Southeast Asian Economies

Approach to Development Gaps in ASEAN: A Vietnamese Perspective

Academic journal article Journal of Southeast Asian Economies

Approach to Development Gaps in ASEAN: A Vietnamese Perspective

Article excerpt

I. Introduction

ASEAN, the regional association, is facing a paradox as it is turning itself into an ASEAN Community. The deeper its members integrate, the development gaps among them appear to widen. Development gaps always exist, but not all the gaps are impediments to integration among nations. The challenge for ASEAN's integration is that the increasingly globalized world and current community-building process of ASEAN could turn the region into "the included" and "the non-included", unless ASEAN can find appropriate approaches to bridge crucial development gaps among its members.

To overcome the challenge of a divided ASEAN Community, we should take a broader approach to the issue of development gap. Development contains a number of dimensions, from economics, politics, society, education, community health to environment, which are tools for achieving the ultimate objective of human development. Therefore development gaps are multi-dimensional and inter-disciplinary.

We introduce a "4-I" approach to bridge the development gaps in ASEAN, namely: (1) income gap; (2) infrastructure gap; (3) integration gap; and (4) institution gap.

Great disparity of income among ASEAN member countries does exist, with per capita GDP ranging from as low as US$166 in Myanmar to as high as US$25,207 in Singapore. Differences in stages of development create gaps in economic structure, which can generate potential domestic conflicts among different interest groups and industries during the process of deeper and wider ASEAN integration.

Looking into such infrastructure as transportation, information and communication technology (ICT), and utilities, there are large gaps among ASEAN member countries. The first group with best-developed infrastructure includes Singapore and Malaysia, the second group with fairly developed ones includes Thailand, the Philippines, and Indonesia, and the last with poorly developed infrastructure is the CLMV countries. Evidently, poor infrastructure such as transportation and ICT systems are barriers to factor mobility and technological transfer into the new ASEAN members.

The ASEAN-6, which have implemented an export-oriented development strategy, were engaged in international and regional integration for long, whereas the CLMV are transition economies, which only undertook open-door policies in the late 1980s and have started to integrate themselves with the international economic system recently. The openness of ASEAN member economies varies, both in terms of foreign trade and FDI stock to GDP, with trade openness for Singapore, Malaysia, Brunei, and Thailand at over 100 per cent, and FDI openness of Singapore, Brunei and Vietnam are the highest (see Table 5). Competing among ASEAN governments for more foreign investment would, however, leave some "less attractive" ASEAN members behind.

Heterogeneity in institutional systems is a key determinant to be taken into account while dealing with the gaps in ASEAN. Different versions of market economy with various levels of economic freedom among ASEAN member economies could generate an asymmetry in regional macroeconomic policy when the regional economy is moving towards a "single market" to build a future Economic Community of ASEAN. Such an institutional gap might cause unexpected economic "shocks" against the 'incompatible" member economies, turning integration into a "mission impossible".

What are the policy options then? We recommend that the 4-I gaps should be taken as an analytical framework in dealing with the development gap issues in the process of ASEAN community building. To this end, future policy actions should be as follows:

1. Consider the objective of "bridging the development gaps in ASEAN" as the core mission to any community-building strategy in the region.

2. Make the 4-I gaps embedded in any blueprint for action towards a future ASEAN (Economic) Community. …

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