6 - Future directions: moving beyond AEC 2015

Summary

ASEAN economic cooperation and integration have come a long way. From a set of token cooperative initiatives during its first few decades to the AEC, ASEAN now can boast the most advanced expression of regional economic cooperation and integration of any major region in the developing world.

The progressively outward-oriented nature of the trade and investment regimes of ASEAN member economies is consistent with the direction of the AEC and related initiatives, which stress the need for ‘open regionalism’ more than most other regional economic groupings. No doubt this reflects the fact that the lion's share of ASEAN's trade and investment interaction is extra-regional. But it is also an expression of ASEAN's development strategy, one that would well be imitated by the many other regional economic groupings sprouting up throughout the world.

Outward orientation has served ASEAN well. It has been one of the fastest growing regions in the world for the past quarter century, with a major downturn only during the AFC of 1997–8. While there is considerable variance in performance across ASEAN countries, per capita income on average has been rising robustly, poverty rates have been falling and social indicators have been improving. Although the USA-originated financial crisis of 2008–9 and the Eurozone Sovereign Debt Crisis have affected ASEAN growth over the past five years owing to their exposure to global markets, liberal trade and investment regimes have allowed them to bounce back quickly, helped in part by buoyant commodity demand by China and India for the natural resources of several ASEAN economies.