ASEAN and One-Belt One Road Strategy: Implications for Regional Economic Integration*

Transcription

1 ASEAN and One-Belt One Road Strategy: Implications for Regional Economic Integration* Dr Tan Khee Giap Co-Director, Asia Competitiveness Institute (ACI) Associate Professor of Public Policy Lee Kuan Yew School of Public Policy National University of Singapore & Chairman, Singapore National Committee for Pacific Economic Cooperation In 2016 ACI was ranked 13 th globally, 2 nd in Asia and 1 st in Singapore amongst 90 think-tanks world-wide under the Best University Affiliated Think-Tank category by Think-Tanks & Civil Societies Program at The University of Pennsylvania, USA *Prepared for presentation at the Forum on Post-2015 ASEAN Economic Integration organized by Chung-Hwa Institution for Economic Research, Taipei, Taiwan, 12 July

2 ACI s Publications on ASEAN-10 3

3 ACI Publication on Competitiveness of Greater China 3

4 Some Research Publications of ACI on Masterplan for Strategic Economic Development of India, Development Policies, Provincial and Regional Competitiveness of India 4

5 ACI s Research on Indonesia 5

6 Presentation Outlines Competitiveness Ranking and Simulation Studies on ASEAN-10, ASEAN Economic Community by 2016: Convergence or Divergence? Why Indonesia, Malaysia, Vietnam and may be the Philippines? East Asia Economic Development Model: Overcoming Three Bottlenecks vis-a-vis the World Bank, Asia Infrastructure Investment Bank and Asian Development Bank The One Belt-One Road (B & R) Initiative and the South China Seas: ASEAN never had so much attention! Facilitating ASEAN Industrialization and Integration: Discerning Strategies with Balanced Perspectives. Asia Economic Connectivity Vision

7 Ranking of GDP Per Capita adjusted for purchasing power parity (PPP) amongst 187 world economies, 2014 Economy Total (in US$) Rank Economy Total (in US$) Rank Qatar 137,162 (1 st ) Saudi Arabia 52,311 (12 th ) Luxembourg 97,639 (2 nd ) Ireland 51,284 (13 th ) Singapore 83,066 (3 rd ) Bahrain 49,020 (14 th ) Brunei Darussalam 79,890 (4 th ) Netherlands 47,960 (15 th ) Kuwait 70,686 (5 th ) Austria 46,640 (16 th ) Norway 67,166 (6 th ) Australia 46,550 (17 th ) United Arab Emirates 66,347 (7 th ) Sweden 46,219 (18 th ) San Marino 60,887 (8 th ) Germany 46,216 (19 th ) Switzerland 58,149 (9 th ) Taiwan 46,036 (20 th ) Hong Kong 55,097 (10 th ) Canada 44,967 (21 st ) United States 54,370 (11 th ) Denmark 44,625 (22 nd ) *Source: International Monetary Fund, World Economic Outlook Database, October 2015

8 Ranking of GDP Per Capita adjusted for purchasing power parity (PPP) amongst 187 world economies, 2014 Economy Total (in US$) Rank Economy Total (in US$) Rank Iceland 44,029 (23 rd ) Thailand 15,579 (77 th ) Oman 43,847 (24 th ) China 13,224 (89 th ) Belgium 43,139 (25 th ) Indonesia 10,651 (103 rd ) Finland 40,661 (26 th ) Philippines 6,974 (119 th ) France 40,538 (27 th ) India 5,808 (125 th ) United Kingdom 39,826 (28 th ) Vietnam 5,656 (126 th ) Japan 37,519 (29 th ) Laos 5,006 (130 th ) Equatorial Guinea 36,785 (30 th ) Myanmar 4,752 (134 th ) Korea 35,379 (31 st ) Pakistan 4,749 (135 th ) New Zealand 35,305 (32 nd ) Bangladesh 3,391 (142 nd ) Malaysia 25,145 (48 th ) Cambodia 3,276 (145 th ) *Source: International Monetary Fund, World Economic Outlook Database, October 2015

9 Percent ASEAN s Real GDP and GDP per Capita Growth Rates, GDP growth rates GDP per capita growth rates Note: The annual growth rates of GDP and GDP per capita are derived on the basis of constant price series. Source: United Nations Conference on Trade and Development (UNCTAD)

10 ASEAN s Diversity in Size, Level of Development and Economic Openness, 2013 Country Land area (thousand square kilometres) Population (million) GDP (constant 2000 US$, billion) Source: World Bank, International Monetary Fund (IMF) and ASEAN Statistics GDP per capita (constant 2000 US$) Trade (% of GDP) Foreign Direct Investment (FDI) Net Inflows (% of GDP) Brunei , Cambodia Indonesia 1, , Laos Malaysia , Myanmar Philippines , Singapore , Thailand , Vietnam

11 Methodology ACI Competitiveness Framework 4 environments & 12 sub-environments 121 indicators 6

12 Overall Competitiveness Score Overall Competitiveness Ranking of ASEAN-10, and Focusing on Malaysia Singapore (1st) Malaysia (2nd) 0.5 Thailand (3rd) Brunei (4th) 0.0 Indonesia (5th) Philippines (6th) -0.5 Vietnam (7th) -1.0 Cambodia (8th) Laos (9th) -1.5 Myanmar (10th) Source: Asia Competitiveness institute 12

13 Overall Competitiveness Score Overall Competitiveness Ranking of ASEAN-10, and Focusing on Indonesia Singapore (1st) Malaysia (2nd) Thailand (3rd) Brunei (4th) Indonesia (5th) Philippines (6th) Vietnam (7th) Cambodia (8th) Laos (9th) -1.5 Myanmar (10th) Source: Asia Competitiveness institute 13

14 Overall Competitiveness Score Overall Competitiveness Ranking of ASEAN-10, and Focusing on Vietnam Singapore (1st) Malaysia (2nd) 0.50 Thailand (3rd) Brunei (4th) 0.00 Indonesia (5th) Philippines (6th) Vietnam (7th) Cambodia (8th) Laos (9th) Myanmar (10th) Source: Asia Competitiveness Institute Note: Value in the parenthesis denotes 2015 competitiveness ranking amongst ASEAN

15 2015 Overall Competitiveness Ranking OVERALL Rank Economy Score Economy Score Economy Score Economy Score Economy Score 2000 Singapore Malaysia Thailand Brunei Philippines Singapore Malaysia Thailand Brunei Philippines Singapore Malaysia Thailand Brunei Philippines Singapore Malaysia Thailand Brunei Indonesia Singapore Malaysia Thailand Brunei Indonesia Singapore Malaysia Thailand Brunei Indonesia Singapore Malaysia Thailand Brunei Indonesia Singapore Malaysia Thailand Brunei Indonesia Singapore Malaysia Thailand Brunei Indonesia Singapore Malaysia Thailand Brunei Indonesia Singapore Malaysia Thailand Brunei Indonesia Singapore Malaysia Thailand Brunei Indonesia Singapore Malaysia Thailand Brunei Indonesia Singapore Malaysia Thailand Brunei Indonesia OVERALL Rank Economy Score Economy Score Economy Score Economy Score Economy Score 2000 Indonesia Vietnam Cambodia Laos Myanmar Indonesia Vietnam Cambodia Laos Myanmar Indonesia Vietnam Cambodia Laos Myanmar Vietnam Philippines Cambodia Laos Myanmar Philippines Vietnam Cambodia Laos Myanmar Philippines Vietnam Cambodia Laos Myanmar Philippines Vietnam Cambodia Laos Myanmar Philippines Vietnam Cambodia Laos Myanmar Philippines Vietnam Cambodia Laos Myanmar Vietnam Philippines Laos Cambodia Myanmar Vietnam Philippines Cambodia Laos Myanmar Philippines Vietnam Cambodia Laos Myanmar Philippines Vietnam Cambodia Laos Myanmar Philippines Vietnam Cambodia Laos Myanmar

16 2015 Macroeconomic Stability Ranking MACROECONOMIC STABILITY RANKING Rank Economy Score Economy Score Economy Score Economy Score Economy Score 2000 Singapore Malaysia Thailand Indonesia Brunei Singapore Malaysia Thailand Indonesia Brunei Singapore Malaysia Thailand Indonesia Brunei Singapore Malaysia Thailand Indonesia Brunei Singapore Malaysia Thailand Indonesia Brunei Singapore Malaysia Thailand Indonesia Brunei Singapore Malaysia Thailand Indonesia Brunei Singapore Malaysia Thailand Indonesia Philippines Singapore Malaysia Thailand Indonesia Brunei Singapore Thailand Indonesia Malaysia Brunei Singapore Malaysia Indonesia Thailand Brunei Singapore Malaysia Indonesia Thailand Brunei Singapore Malaysia Thailand Indonesia Brunei Singapore Thailand Malaysia Indonesia Brunei MACROECONOMIC STABILITY RANKING Rank Economy Score Economy Score Economy Score Economy Score Economy Score 2000 Philippines Vietnam Cambodia Myanmar Laos Vietnam Philippines Cambodia Laos Myanmar Philippines Vietnam Cambodia Laos Myanmar Vietnam Philippines Cambodia Laos Myanmar Philippines Vietnam Cambodia Laos Myanmar Philippines Vietnam Cambodia Laos Myanmar Philippines Vietnam Cambodia Laos Myanmar Brunei Vietnam Cambodia Laos Myanmar Philippines Vietnam Cambodia Laos Myanmar Vietnam Philippines Laos Cambodia Myanmar Vietnam Philippines Cambodia Laos Myanmar Philippines Vietnam Cambodia Laos Myanmar Philippines Vietnam Cambodia Laos Myanmar Vietnam Philippines Cambodia Laos Myanmar

17 2015 Government and Institutional Setting Ranking GOVERNMENT AND INSTITUTIONAL SETTING Rank Economy Score Economy Score Economy Score Economy Score Economy Score 2000 Singapore Malaysia Thailand Brunei Philippines Singapore Malaysia Thailand Brunei Philippines Singapore Malaysia Thailand Brunei Philippines Singapore Malaysia Thailand Brunei Vietnam Singapore Malaysia Thailand Brunei Philippines Singapore Malaysia Thailand Brunei Philippines Singapore Malaysia Thailand Brunei Philippines Singapore Malaysia Thailand Brunei Philippines Singapore Malaysia Thailand Brunei Vietnam Singapore Malaysia Thailand Brunei Indonesia Singapore Malaysia Brunei Thailand Indonesia Singapore Malaysia Brunei Thailand Indonesia Singapore Malaysia Brunei Thailand Philippines Singapore Malaysia Brunei Thailand Philippines GOVERNMENT AND INSTITUTIONAL SETTING Rank Economy Score Economy Score Economy Score Economy Score Economy Score 2000 Vietnam Indonesia Cambodia Myanmar Laos Vietnam Indonesia Cambodia Laos Myanmar Vietnam Indonesia Cambodia Laos Myanmar Philippines Indonesia Cambodia Myanmar Laos Vietnam Indonesia Laos Cambodia Myanmar Vietnam Indonesia Cambodia Laos Myanmar Indonesia Vietnam Laos Cambodia Myanmar Indonesia Vietnam Cambodia Laos Myanmar Philippines Indonesia Laos Cambodia Myanmar Vietnam Philippines Laos Cambodia Myanmar Vietnam Philippines Laos Cambodia Myanmar Philippines Vietnam Cambodia Laos Myanmar Vietnam Indonesia Cambodia Laos Myanmar Indonesia Vietnam Cambodia Laos Myanmar

18 2015 Financial, Businesses and Manpower Conditions Ranking FINANCIAL, BUSINESSES AND MANPOWER CONDITIONS Rank Economy Score Economy Score Economy Score Economy Score Economy Score 2000 Singapore Malaysia Thailand Brunei Indonesia Singapore Malaysia Thailand Brunei Philippines Singapore Malaysia Thailand Brunei Vietnam Singapore Malaysia Thailand Brunei Vietnam Singapore Malaysia Thailand Brunei Vietnam Singapore Malaysia Thailand Brunei Vietnam Singapore Malaysia Thailand Brunei Vietnam Singapore Malaysia Thailand Brunei Indonesia Singapore Malaysia Thailand Brunei Indonesia Singapore Malaysia Thailand Brunei Vietnam Singapore Malaysia Thailand Brunei Indonesia Singapore Malaysia Thailand Indonesia Brunei Singapore Malaysia Thailand Brunei Indonesia Singapore Malaysia Thailand Brunei Indonesia FINANCIAL, BUSINESSES AND MANPOWER CONDITIONS Rank Economy Score Economy Score Economy Score Economy Score Economy Score 2000 Vietnam Philippines Laos Cambodia Myanmar Indonesia Vietnam Laos Cambodia Myanmar Philippines Indonesia Cambodia Laos Myanmar Indonesia Philippines Cambodia Laos Myanmar Indonesia Philippines Cambodia Laos Myanmar Philippines Indonesia Laos Cambodia Myanmar Philippines Indonesia Cambodia Laos Myanmar Vietnam Philippines Cambodia Laos Myanmar Vietnam Philippines Cambodia Laos Myanmar Indonesia Philippines Laos Cambodia Myanmar Vietnam Philippines Laos Cambodia Myanmar Vietnam Philippines Cambodia Laos Myanmar Philippines Vietnam Cambodia Laos Myanmar Philippines Vietnam Cambodia Laos Myanmar

19 2015 Quality of Life and Infrastructure Development Ranking QUALITY OF LIFE AND INFRASTRUCTURE DEVELOPMENT Rank Economy Score Economy Score Economy Score Economy Score Economy Score 2000 Singapore Brunei Malaysia Thailand Philippines Singapore Malaysia Brunei Thailand Philippines Singapore Malaysia Brunei Thailand Philippines Singapore Malaysia Brunei Thailand Philippines Singapore Malaysia Brunei Thailand Philippines Singapore Malaysia Brunei Thailand Philippines Singapore Malaysia Brunei Thailand Philippines Singapore Malaysia Brunei Thailand Indonesia Singapore Brunei Malaysia Thailand Indonesia Singapore Brunei Malaysia Thailand Vietnam Singapore Malaysia Brunei Thailand Indonesia Singapore Malaysia Brunei Thailand Indonesia Singapore Malaysia Brunei Thailand Indonesia Singapore Malaysia Brunei Thailand Indonesia QUALITY OF LIFE AND INFRASTRUCTURE DEVELOPMENT Rank Economy Score Economy Score Economy Score Economy Score Economy Score 2000 Indonesia Vietnam Cambodia Laos Myanmar Indonesia Vietnam Cambodia Laos Myanmar Indonesia Vietnam Cambodia Laos Myanmar Indonesia Vietnam Cambodia Laos Myanmar Indonesia Vietnam Cambodia Laos Myanmar Indonesia Vietnam Laos Cambodia Myanmar Indonesia Vietnam Laos Cambodia Myanmar Philippines Vietnam Laos Cambodia Myanmar Philippines Vietnam Laos Cambodia Myanmar Indonesia Philippines Laos Cambodia Myanmar Vietnam Philippines Laos Cambodia Myanmar Vietnam Philippines Laos Cambodia Myanmar Philippines Vietnam Cambodia Laos Myanmar Philippines Vietnam Laos Cambodia Myanmar

20 What-if Competitiveness Simulation Analysis on Overall Competitiveness, 2015 Economy Rank Score Before After Before After Brunei Cambodia Indonesia Laos Malaysia Myanmar Philippines Singapore Thailand Vietnam Source: Asia Competitiveness Institute 20

21 The Panoramic View of Flying Geese Model on Economic Development, Cooperation and Specialization: Overcoming the Three Bottlenecks 经济发展 合作与专业化的雁行模式全景 西方发达经济体 ( 美国 ) 德国 日本 东亚新兴的工业化经济体 ( 香港 新加坡 韩国 台湾 ) 东盟四国和中国沿海 ( 中国沿海 印度尼西亚 马来西亚 菲律宾和泰国 ) 中国西部 中部和东北, 东盟转型经济体 ( 柬埔寨 老挝 缅甸和越南 中国西部 中部和东北 ) 21

22 Relative Shares of Global Gross Domestic Product^ for Major Economies: 主要经济体所占全球国内生产总值 ^ 相对份额 : 年 (^Using PPP with the world as 100; *Estimated by Asia Competitiveness Institute at Lee Kuan Yew School of Public Policy, National University of Singapore; Source: Maddison 2007) (^ 使用国际购买力平价为 100;* 由新加坡国立大学李光耀公共政策学院亚洲竞争力研究所估算 ; 资料源 : 麦迪森 2007) * China 中国 India 印度 Japan 日本 A Total A 总和 Europe 欧洲 USA 美国 Russia B Total B 总和 A + B Total A + B 总和

23 VAR Model of Estimation on the Global Engines of Growth 23

24 Why the One-Belt One-Road Strategy is a reality and ignoring it risked to be marginalized? Relative Importance of US, EU versus China & China versus Japan as an Engine of growth for ASEAN-5 (Indonesia, Malaysia, Philippines, Singapore and Thailand), 美国 欧盟和日本比较中国作为东盟 5 国 ( 印尼 马来西亚 菲律宾 新加坡和泰国 ) 的经济增长引擎的相对重要性 Relative Importance of US vs. China as an Engine of Growth for ASEAN-5 美国对比中国 Period Ratio 时期比值 Relative Importance of Japan vs. China as an Engine of Growth for ASEAN-5 日本对比中国 Period Ratio 时期比值 Relative Importance of EU vs. China as an Engine of Growth for ASEAN-5 欧盟对比中国 Period Ratio 时期比值 * * *0.51 Note: *Forecasted by ACI Source: Tan et al (2012,Table 6) Note: * Forecasted by ACI Source: Tan et al (2012,Table 7) Note: *Forecasted by ACI Source: Tan et al (2012,Table 8) China s importance as a major engine of growth for ASEAN countries has been rapidly increasing over past three decades 中国作为东盟国家经济增长的主要引擎的重要性在过去 30 年有显著提升 24 Source: Tan Kong Yam, Tilak Abeysinghe and Tan Khee Giap (2014). Shifting Drivers of Growth: Policy Implications for ASEAN-5., Asian economic papers, MIT Press (USA)

25 US$ Trillions US$ Trillions 万亿美元 万亿美元 US$ Trillions US$ Trillions 万亿美元 万亿美元 $25 $20 $15 $10 $5 Projected Nominal GDP Growth Paths, ^ 名义国内生产总值增长路径推计, ^ Scenario 1: Conservative growth path* 方案 1: 保守增长轨迹 * $ $35 $30 $25 $20 $15 $10 $5 Scenario 3: Optimistic growth path* 方案 3: 乐观增长轨迹 * $ * Average growth for period Source: World bank., ^ Projected by ACI at LKYSPP, NUS * 年间平均增长数据源 : 世界银行., ^ 新加坡国立大学李光耀公共政策学院亚洲竞争力研究所推计 China (5.5%) Germany (2%) India (4.5%) Japan (0%) USA (1%) China (7.5%) Germany (4%) India (6.5%) Japan (2.5%) USA (3%) 中国 德国 印度 日本 美国 中国 德国 印度 日本 美国 $30 $25 $20 $15 $10 $5 Scenario 2: Moderate growth path* 方案 2: 平稳增长轨迹 * $ Scenario 4: Dynamic growth path for China and India with steady state growth for Germany, Japan and USA** $30 $25 $20 $15 $10 $5 方案 4: 中国和印度的动态增长轨迹与德国 日本与美国的平稳增长轨迹 ** $ ** For China , 7% p.a.; , 6% p.a. For India , 5.5% p.a.; , 6% p.a. ** 对于中国 年, 每年 7%.; , 每年 6%. 对于印度 年, 每年 5.5%.; , 每年 6%. China (6.5%) Germany (3%) India (5.5%) Japan (1.5%) USA (2%) 6 China (7%;6%) Germany (2.5%) India (5.5%;6%) Japan (1.5%) USA (2%) 中国 德国 印度 日本 美国 中国 德国 印度 日本 美国

26 Motivation: Why Should We Care About Competitiveness of the Greater China Region? Figure 1. GDP of East Asia, Japan, mainland China and United States and from Source: World Bank 26

27 Annual Increase in China GDP = US$1,156 billion (Average of ) Country GDP (US$ billion, 2012) Number of Years for China to Increase by this GDP Size India 1, (19 months) Indonesia (9.2 months) Singapore (2.8 months) UK 2, (25 months) Russia 2, (21 months) Source: World Bank

28 The Four Engines of Growth Malaysia Period China India Japan EU US (2.04) (1.03) (1.69) Note: Figures in brackets for refer to: (i) under China: relative importance of China vs. Japan as an engine of growth; (ii) under US (EU): relative importance of US (EU) vs. China as an engine of growth. 28

29 The Four Engines of Growth Thailand Period China India Japan EU US (1.74) (1.06) (1.57) Note: Figures in brackets for refer to: (i) under China: relative importance of China vs. Japan as an engine of growth; (ii) under US (EU): relative importance of US (EU) vs. China as an engine of growth. 29

30 The Four Engines of Growth Indonesia Period China India Japan EU US (1.37) (1.03) (1.47) Note: Figures in brackets for refer to: (i) under China: relative importance of China vs. Japan as an engine of growth; (ii) under US (EU): relative importance of US (EU) vs. China as an engine of growth. 30

31 The Four Engines of Growth Singapore Period China India Japan EU US (2.52) (0.94) (1.34) Note: Figures in brackets for refer to: (i) under China: relative importance of China vs. Japan as an engine of growth; (ii) under US (EU): relative importance of US (EU) vs. China as an engine of growth. 31

32 The Four Engines of Growth Philippines Period China India Japan EU US (1.75) (1.05) (1.59) Note: Figures in brackets for refer to: (i) under China: relative importance of China vs. Japan as an engine of growth; (ii) under US (EU): relative importance of US (EU) vs. China as an engine of growth. 32

33 Relative Importance of US vs China as an Engine of Growth ( ) Country Ratio India 1.94 Malaysia 1.69 Philippines 1.59 Thailand 1.57 Japan 1.53 Indonesia 1.47 Singapore 1.34 Australia 1.15 Korea 1.09 Taiwan 0.99 Hong Kong 0.70

34 Relative Importance of EU vs China as an Engine of Growth ( ) Country Ratio India 1.61 Malaysia 1.03 Philippines 1.05 Thailand 1.06 Japan 0.91 Indonesia 1.03 Singapore 0.94 Australia 0.92 Korea 0.76 Taiwan 0.63

35 Relative Importance of China vs Japan as an Engine of Growth ( ) Country Ratio Hong Kong 6.33 Taiwan 3.73 Korea 3.20 India 2.98 Singapore 2.52 Malaysia 2.04 Philippines 1.75 Thailand 1.75 Australia 1.52 Indonesia 1.37

36 Relative Importance of (US plus Japan) vs China as Engine of Growth ( ) Country Ratio India 2.28 Malaysia 2.18 Philippines 2.14 Thailand 2.16 Indonesia 2.20 Singapore 1.74 Australia 1.81 Korea 1.40 Taiwan 1.26 Hong Kong 0.86

37 Trend Decoupling in Real GDP Growth, Actual and Trends Advanced economies, actual Advanced economies, trend Source: Computed from IMF, WEO and WEO Update Emerging and developing economies, actual Emerging and developing economies, trend

38 Engines of Growth among ASEAN-5 ( ) Indo Mal Phil Spore Thai Indo (0.17) Mal (0.49) (0.20) Phil Spore 0.26 (0.16) 0.30 (0.43) Thai Note: figures in brackets refer to the period (0.24) (0.22) (0.39) 1.27

39 No Decoupling in GDP Growth Cycles, Deviations from Trends Advanced economies Emerging and developing economies

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41 Table 4: Bi-variate Correlation between Foreign Direct Investment (FDI) and National Output (GDP) for ASEAN Member States Brunei Cambodia Indonesia Laos Malaysia Myanmar Philippines Singapore Thailand Vietnam Source: Asia Competitiveness Institute based on data from the United Nations Conference on Trade and Development (UNCTAD)

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45 2016 ACI Competitiveness Ranking: Geographical Distribution Overall Competitiveness Macroeconomic Stability Government and Institutional Setting Top 10 Economies Middle 14 Economies Bottom 10 Economies Financial, Businesses and Manpower Conditions Quality of Life and Infrastructure Development 45

46 2016 Annual ACI Update on Competitiveness Ranking of Indian Sub-national Economies Empirical Findings: Overall Competitiveness Top 10 States and Federal Territories TOP 10 States and Federal Territories MIDDLE 15 States and Federal Territories BOTTOM 10 States and Federal Territories State Rank Rank State Maharashtra Uttar Pradesh Delhi # Andhra Pradesh Tamil Nadu West Bengal Gujarat Kerala Karnataka Haryana State Bottom 10 States and Federal Territories Rank Rank State Mizoram Assam Andaman & Nicobar Islands # Bihar Nagaland Uttarakhand Meghalaya Chhattisgarh Tripura Jharkhand # denotes Federal Territories 46

47 Findings: Provincial Ranking Overall Competitiveness 2016 Preliminary Results* Overall Competitiveness: Top 10 Ranking and Score Overall Competitiveness: Geographical Spread 2016 Rank 2015 Rank 2014 Rank Province Score DKI Jakarta East Java Central Java West Java East Kalimantan South Sulawesi Bali South Kalimantan North Sulawesi DI Yogyakarta *The data is from 2013 secondary data from official sources and 2015 primary data based on ACI s perception survey Source: Asia Competitiveness Institute 47

48 Background Indonesia s Economic Potential Composition of ASEAN GDP (2014, current USD) Year Indonesia GDP Growth World GDP Growth Thailand Cambodia 0.67% Vietnam 7.51% 11.48% Malaysia 13.19% 15.08% % % % % 4.1% 2.8% 2.2% 2.4% Myanmar 2.60% 12.42% Singapore % 2.5% Lao PDR 0.48% Indonesia 35.86% 0.70% Brunei Darussalam 2015* 4.7% 2.8% Source: World Bank, World Development Indicators for and World Bank, Global Economic Prospects for 2015 forecast Source: World Bank, World Development Indicators Indonesia is the biggest economy in ASEAN and is expected to play a leading role in enhancing connectivity and trade across regions. As Indonesia grows further, Singapore as well as other neighbouring Southeast Asian countries will also benefit. This ACI s study contributes as part of Aid for Trade. 48

49 Background Indonesia s quest for higher growth Sei Mangkei Kalimantan Utara Morotai Kalimantan Barat Special Economic Zones in Indonesia Existing Proposed Tanjung Api-Api MBTK Palu Sulawesi Selatan Bitung Maluku Sorong Tanjung Lesung Mandalika NTT Merauke Source: Indonesia s Investment Coordinating Board (BKPM) Indonesia has embarked on various economic reforms to spur higher economic growth. Emphasis was put on infrastructural development, business climate improvement, and shift towards investment-based growth. Indonesia s archipelagic geography provides vast opportunities as well as challenges. Challenges arise in spreading economic prosperity across the islands and fully engaging them in the nation-wide economic production and distribution process. 49

50 Facilitating ASEAN Industrialization: Discerning Strategies with Balanced Perspectives The East Asia Economic Development (EAED) model essentially is about overcoming the three bottlenecks, namely the financing, infrastructure and production bottlenecks. Relocations of multinational corporations from Mainland China, Taiwan, Korea, Japan, Europe and the USA to ASEAN are ongoing opportunities which must be seized! Asia Infrastructure Investment Bank (AIIB): Financing of ASEAN infrastructures to enhance ASEAN investment competitiveness with healthy competition and even cooperation amongst the World Bank, and Asian Development Bank (ADB) and AIIB! China is not just in a neo-colonial position of taking natural resources from ASEAN and stifling their industrialization process. As investment opportunities in China s industrialization is near saturation, China s surplus capitals are finding outlets to achieve higher returns, China is poised to be a important locomotive for future ASEAN development and growth. As China s economy slows from high to moderate growth, excess capacity and surplus capital of China is very much what ASEAN needs, and we can pick and choose what is good for ASEAN in planning its development process which is paramount! South China Seas dispute should be viewed as an opportunity for greater economic integration for Asian and ASEAN if it is contained and not internationalized. 50

51 Asia Economic Connectivity Vision: 2030 A Proposed Master Plan 亚洲经济互联互通 : 愿景 2030 总规划的提议 3 Source: Google Maps 资料源 : 谷歌地图

52 > > Asia Economic Connectivity Vision (AECV) 2030: with Asian Aspirations < < > > 亚洲经济连通性愿景 (AECV)2030: 与亚洲志向 < < 13 The AECV 2030 will work towards harmonious multilateral relations, facilitate crossborder trade and investment, enhance governance of institutions, promote sustainable development along with poverty reduction and social inclusivity in Asian region. AECV 2030 将在亚洲范围内致力于促进和谐的多方关系 促进跨境贸易与投资 加强机构管理 推动可持续发展, 并同时减少贫困和提高社会包容性 In realisation of Asian aspirations by providing affordable education, improved healthcare and better housing for all, living in peaceful co-existence, good neighboring spirit with mutual respect, trust and dignity. 实现亚洲志向, 那就是为相关国家的人们提供可负担的教育 给予每个人更好的医疗保健和个人住房, 使人们都能够具有和平共处的 良好的邻里精神, 同时相互尊重 信任 有尊严 Vision 2030 with Asian Aspirations 愿景 2030 与亚洲志向 Mission & Commitments 使命与承诺 Proposed Routes 提议路径 Five Broad Proposals 五大提议 Target Performance Indicators 年目标绩效指标

53 > > Mission & Commitments < < > > 使命与承诺 < < Constructively engage one another on the basis of Chinese initiative, ASEAN-centric leadership with closer economic cooperation amongst emerging South Asian and African countries 建设性地参与到这一以中国发起 东盟担任中心领导做为基础的合作中来, 与新兴的南亚与非洲国家进行更紧密的经济合作 14 Extend Asia s Economic Connectivity Vision (AECV) to capitalize on differences in economic comparative advantages, greater market accessibility to the large Chinese domestic economy through aid-for-trade approach as well as to strengthen export competitiveness for weaker economies across continents 扩大亚洲经济互联互通 (AECV) 以充分利用经济体间比较优势的差异, 通过 " 援助促贸易 " 的方式更广泛地进入广阔的中国国内市场, 并加强各大洲较弱经济体的出口竞争力 Facilitate resource flows to support Asian growth, while promoting infrastructure investment, human capital capacity building, improve economic resiliency and technology transfers to economies in need across continents. 促进资源流动以支持亚洲经济增长, 同时为各大洲有需求的经济体提升基础设施投资 人力资源能力建设, 提高经济韧性和技术转让. Overcome financing, infrastructure and production bottlenecks via Public-Private-Partnership (PPP) through a consultative approach amongst economies concerned with ownership 通过在与所有权相关的国家间展开协商的方式, 以公私合作伙伴关系 (PPP) 突破资金 基础设施和生产瓶颈 Vision 2030 with Asian Aspirations 愿景 2030 与亚洲志向 Mission & Commitments 使命与承诺 Proposed Routes 提议路径 Five Broad Proposals 五大提议 Target Performance Indicators 年目标绩效指标

54 > > Connectivity by Air, Sea, Rail and Road < < > > 航空 航运 铁路与公路的连通 < < Tentatively we shall propose various modes of transportation across continents as part of the grand connectivity nexus in support of regional growth and development. 我们试探性地提出大洲间的各种交通方式, 作为支持区域经济增长和发展的宏伟连接纽带的一部分 Routes of the various proposed modes of transportation would take into account the potential economic activities, financial viability and logistics involved across continents in consultation with the private and public sectors of those economies involved. 提议的各种交通方式的路径将咨询相关经济体的私营及公管机构, 并会把各大洲间的潜在经济活动 财政可行性与涉及到的物流等因素纳入考虑范围 If implemented, the proposed routes through various modes of transportation should greatly enhance competitiveness and economic integration of the region, leading to more efficient movement of goods, linkages of services and people to people connection. 如果付诸实践, 提议的各种交通方式的路径将会大大提高区域竞争力和经济一体化, 并带来更高效的商品流动 业务关联与人际联系 15 Vision 2030 with Asian Aspirations 愿景 2030 与亚洲志向 Mission & Commitments 使命与承诺 Proposed Routes 提议路径 Five Broad Proposals 五大提议 Target Performance Indicators 年目标绩效指标

55 > > Five Broad Proposals in Consultation with Stake Holders to Ensure Wide Ownerships < < > > 向利益相关者咨询的五大提议, 确保广泛的所有权 < < Five broad proposals are to be based upon market-oriented potential economic activities, financial feasibility, sustainable and inclusive growth under the ASEAN-centric leadership. 五大建议将是在东盟作为中心领导下, 基于以市场为导向的潜在经济活动 财务可行性 可持续性和包容性增长的 Private and public participation would be an important guiding and operational principle, with detailed interests identified and clarified with the parties throughout the process. 政府与私人的共同参与能在整个过程中细化并明确各方利益, 它将是一个具有指导性和可行性的重要原则 An active consultation process with and ownership by stake holders are paramount to the success of the AECV 与拥有所有权的利益相关方进行积极的咨询对于 AECV2030 的成功是至关重要的 A road show will therefore be undertaken by ACI team members shortly to visit and engage private and public stake holders to identify common business interests, encourage public policies formulations and stimulate catalytic changes. 因此,ACI 团队成员将在近期内进行一次路演, 去访问和连系私人与公共部门的利益相关方以明确共同的商业利益 鼓励公共政策制定并催化改革 23 Vision 2030 with Asian Aspirations 愿景 2030 与亚洲志向 Mission & Commitments 使命与承诺 Proposed Routes 提议路径 Five Broad Proposals 五大提议 Target Performance Indicators 年目标绩效指标

56 Proposal One 第一项提议 : Labor-Intensive Manufacturing Migration from Greater China to ASEAN 劳动密集型制造业从中国到东盟的转移 1. Promote ASEAN as a leading manufacturing base to be driven by Indonesia, Malaysia and Thailand by integrating further with Pan-Beibu Gulf Economic Cooperation so as to become the second factory of the world 通过进一步整合泛北部湾经济合作, 提升东盟使其成为一个由印度尼西亚 马来西亚和泰国推动的 领先的工业生产基地, 从而成为世界的第二大工厂 Increase the region's attractiveness to foreign investors and facilitate production relocations by multi-national corporations (MNCs) from Mainland China, Taiwan, Korea, European Union, Japan and USA due to increased ASEAN connectivity and stability. 基于东盟增强的连通性和稳定性, 通过来自中国大陆 台湾 韩国 欧洲 日本和美国的跨国公司 (MNCs) 增加区域对外国投资者的吸引力并促进生产关系 3. Establish a streamlined production and supply value chain across Asian continents for designated manufacturing clusters, to maximize synergistic benefits. 为指定的制造业集群建立贯通亚洲大陆的 流程化的生产和供应价值链, 以实现协同效益的最大化 4. Encourage technology transfers, generate productivity spillovers and create employment in Asia as exemplified by the flying geese model 鼓励技术转移, 在亚洲内激发生产率溢出效应并创造就业机会, 像雁行模式所表示的那样 Vision 2030 with Asian Aspirations 愿景 2030 与亚洲志向 Mission & Commitments 使命与承诺 Proposed Routes 提议路径 Five Broad Proposals 五大提议 Target Performance Indicators 年目标绩效指标

57 Proposal Two 第二项提议 : Infrastructure Investment and Development 基础设施的投资与发展 Enhance export-oriented growth, promote inclusive development and ensure sustainable capital inflows across continents through appropriate sequential reforms 加强以出口为导向的经济增长, 促进包容性发展并通过适当的 按部就班的改革确保跨大洲的 持续的资本流入 2. Bridge the development gap between and within more and less developed economies through strengthened connectivity and integration along sea, road, rail, air and information communications technology linkages, with investments in public utilities, power stations, dams, oil and gas transport corridors 通过增强航空 航运 铁路 公路和信息与通信技术的连通与整合, 通过对于电站 大坝 油气运输通道等公共设施的投资, 缩小较发达经济体和欠发达经济体之间和它们内部的差距 3. Improve trade efficiency, energize economic vitality and enhance Asia competitiveness by unblocking financing, infrastructure and production bottlenecks 通过突破融资 基础设施和生产方面的瓶颈提高贸易效率 激发经济活力并提升亚洲竞争力 Vision 2030 with Asian Aspirations 愿景 2030 与亚洲志向 Mission & Commitments 使命与承诺 Proposed Routes 提议路径 Five Broad Proposals 五大提议 Target Performance Indicators 年目标绩效指标

58 Proposal Three 第三项提议 : Asia as a Food Basket with Enhanced Agricultural Productivity 亚洲成为拥有更高农业生产力的食品供应源 According to the 2014 Report by United Nations Food Organisation, current world population stands at 7 billion and will reach 9 billion by 2050 and food needs to increase by 70% to meet the proposed population growth. 根据联合国粮食组织 2014 年的报告, 目前世界人口为 70 亿, 并将在 2050 年达到 90 亿 食品供应须提高 70% 以满足这一人口增长的需求 2. Given the rapidly aging Asian population with rapid urbanisation and reluctant younger farmers, promote regional cooperation in agriculture, plantation crops, fishery, food processing and other downstream industries will be paramount 由于亚洲人口正在迅速老龄化 城市化进程在不断加速 年轻人也变得越来越不愿意从事农业生产, 促进农业 种植作物 渔业 食品加工业等下游产业的区域合作将变得至关重要 3. Emphasize each nation's comparative advantage to maximize total regional agricultural produces and food outputs 重视每个国家的比较优势以实现区域农业总产量和食品产出的最大化 4. Invest in agricultural infrastructure and facilities to increase economies of scale on land and labor productivity 投资农业基础设施和设备以扩大经济体的生产规模, 提高土地和劳动人口的生产率 5. Harmonize irrigation schemes, implement new technologies and practices to increase crop yield 协调统一灌溉方案, 通过使用新技术和方法以提高作物产量 Vision 2030 with Asian Aspirations 愿景 2030 与亚洲志向 Mission & Commitments 使命与承诺 Proposed Routes 提议路径 Five Broad Proposals 五大提议 Target Performance Indicators 年目标绩效指标

59 Proposal Four 第四项提议 : Sustainable Green and Liveable Ecosystem with Inclusive Development 可持续的 绿色的 宜居的生态系统与包容性发展 1. Establish a green environment through re-forestation 通过重新造林营建一个绿色的环境 2. Engage in regional cooperation to resolve the problem of over-fishing 融入区域合作以解决过度捕捞的问题 3. Support marine sanctuary and ocean resource conservation 支持海洋保护区和海洋资源保护 4. Reduce water pollution through proper waste disposal practices and water resource management 通过适当的废物处理方式和水资源管理, 减少水体污染 5. Promote livability of cities and environmentally sustainable urbanisation 提升城市宜居性以及环境可持续的城市化进程 38 Vision 2030 with Asian Aspirations 愿景 2030 与亚洲志向 Mission & Commitments 使命与承诺 Proposed Routes 提议路径 Five Broad Proposals 五大提议 Target Performance Indicators 年目标绩效指标

60 Proposal Five 第五项提议 : ASEAN as a Regional Trade, Business and Services Hub 东盟作为一个区域贸易 商业及服务业的枢纽 Fac ilit at ing ASEAN as a regional a vi ation, logi stics and global tr ading hubs, synergizing internationalisation of small and medium enterprises by cooperating with multinational corporations 推动东盟成为一个区域航空 物流与全球贸易的枢纽, 通过与跨国公司合作促进中小型企业的国际化 2. ASEAN to play a pivotal role in global telecommunications and financial services clusters with greater internationalisation of Yuan or RMB 东盟在全球电信和金融服务集群中扮演一个举足轻重的角色, 同时更好地推进人民币的国际化 3. Serving as a vibrant regional tourism hub with ASEAN focused destinations 作为一个针对东盟的, 充满活力的区域旅游集散中心 4. Making ASEAN the prime destination for regional headquarters for business corporations with a competitive and pro-business tax regime 使东盟拥有竞争力强和亲商的税制, 使其成为工商企业地区总部的主要目标地点 Vision 2030 with Asian Aspirations 愿景 2030 与亚洲志向 Mission & Commitments 使命与承诺 Proposed Routes 提议路径 Five Broad Proposals 五大提议 Target Performance Indicators 年目标绩效指标

61 > > Target Performance Indicators by 2030 < < > > 2030 年目标绩效指标 < < Macroeconomic Indicators 宏观经济指标 Infrastructure Development Indicators 基础设施发展指标 Human Capital Indicators 人力资本指标 1. Gross Domestic Product 国内生产总值 2. Export of Goods and Services 出口商品与服务 3. Government Revenue (incl. grants) 政府收入 4. Foreign Direct Investment Inflows 外商直接投资流入 5. Length of Railways 铁路长度 6. Length of Roads 公路长度 7. Electronic Power Consumption 电力消耗量 8. Employed Population 就业人口 9. Adult Literacy Rate 成人识字率 10.Life Expectancy at Birth 出生预期寿命 11.% of Population Below Poverty Line 贫困线以下人口比率 49 Vision 2030 with Asian Aspirations 愿景 2030 与亚洲志向 Mission & Commitments 使命与承诺 Proposed Routes 提议路径 Five Broad Proposals 五大提议 Target Performance Indicators 年目标绩效指标

62 百万美元 2000 年不变价格 百万美元 2000 年不变价格 ASEAN-10 Target Performance Indicators,2030 Macroeconomic Factors 东盟十国 2030 年目标绩效指标宏观经济指标 百万美元 2000 年不变价格 百万美元 2000 年不变价格 东盟十国 GDP: 推计至 2030 年 东盟十国出口商品与服务 : 推计至 2030 年 GDP projection figures are based on a growth rate of 5% By 2030, GDP is estimated at 2.82 trillion USD Recommendations as per ACI s AECV plan can enable the region to capitalise on its strengths GDP 的推计数字基于 5% 的增长率 到 2030 年, 国内生产总值估算为 2.82 万亿美元 基于 ACI 的 AECV 计划, 可以使该地区能够利用自己的优势 By 2030, export of G&S by ASEAN-10 is estimated to reach 2.42 trillion USD A model for export-oriented growth is proposed in the AECV 2030 with a focus upon agricultural products, through enhanced synergistic efficiencies 至 2030 年, 东盟出口商品与服务经估算将达到 2.42 万亿美元 在 AECV 2030 中提出了一个以出口为导向的经济增长模式, 它以农业产品为重点并使用提升协同效益的方式 东盟十国境外直接投资流入 : 推计至 2030 年 东盟十国政府收入 : 推计至 2030 年 FDI was calculated based upon GDP projections for ASEAN-10 By 2030, FDI is estimated at billion USD, with investments in connectivity and competitive production capabilities This is a quantitative estimate of what the region needs to attract to achieve the ACI proposed Vision with aforementioned clusters 境外直接投资的计算基于东盟十国 GDP 的推计 至 2030 年, 对互联互通与有竞争力的生产能力进行投资, 境外直接投资经估算将达到 亿美元 这是一个对于地区所需要吸引的目标以达到 ACI 提出的愿景的, 针对上述集群的量化的估算 Government Revenue as projected from recorded data and forecasted growth rates will reach billion USD GDP, FDI and Government Revenue indicators are interconnected figures, and benefit from a positive feedback loop through increased competitiveness and efficiencies 政府收入根据记录的数据和预测的增长率将达到 亿美元 GDP, 境外直接投资与政府收入指标是相互关联的数据, 并通过竞争力和效益的增长, 从积极的反馈循环中获益 62

63 百万千瓦时 ASEAN-10 Target Performance Indicators,2030 Infrastructure Development 东盟十国 2030 年目标绩效指标基础设施发展 公里 公里 东盟十国铁路长度 : 推计至 2030 年 东盟十国电力消耗量 : 推计至 2030 年 Length of Railways was calculated based on requirements of an expanding ASEAN-10 economy By 2030, Length of Railways could approach 28,522 kilometres Physical connectivity improvement needs to be supplemented by shared standards for compatible transport infrastructure and information communication technology (ICT) 铁路长度是基于东盟十国经济不断增长这一需求而计算的 至 2030 年, 铁路长度将达到 28,522 公里 实体上的互联互通需要有兼容的交通基础设施和信息通信技术 (ICT) 共同标准的支持 Power Consumption, in line with energy needs and potential GDP growth of 5%, is estimated at 1.82 trillion kilowatt hour This is a significant opportunity for energy producers and exporters, who will stand to benefit from the regions increased economic connectivity 电力消耗量, 根据能源需求和 5% 的 GDP 增长潜力, 经推计将达到 1.82 万亿千瓦时 这对于能源生产商和出口商是一个巨大的机会, 他们将从该地区与日俱增的经济的互联互通中获益 东盟十国公路长度 : 推计至 2030 年 By 2030, Length of Roads for movement of goods and people may well reach 2.61 million kilometres This level of road expansion requires infrastructure bottlenecks to be overcome with bi-lateral and multi-lateral cooperation, via a PPP model 至 2030 年, 可以用于人员与货物流动的公路长度将可能达到 261 万公里 这一程度的道路扩建需要通过基于公私合作伙伴关系模式的双边及多边合作, 突破基础设施瓶颈方可达到 63

64 年 ASEAN-10 Target Performance Indicators,2030 Human Capital Upgrading 东盟十国 2030 年目标绩效指标人力资本提升 百分比 千人 百分比 东盟十国成人识字率 : 推计至 2030 年 东盟十国贫困线以下人口比率 : 推计至 2030 年 By this measure, literacy Rate in ASEAN would rise to 99.67% in 2030 Literacy empowers the region to move up the industrial ladder with a pool of skilled labour, sharing the gains of closer economic integration 通过一措施, 至 2030 年, 东盟识字率将上升到 99.67% 读写能力通过积累技术劳动力使地区工业能力提升, 从更紧密的经济一体化中获益 Target set was based on World Bank s estimate for global poverty By 2030, decreasing at an average of 0.55% a year, poverty levels should drop to 3% As ASEAN-10 develops over the next decade or so, the wealth gains will erode poverty on absolute terms, with distribution depending upon effective policy and action 目标的设定基于世界银行估算的全球贫困水平 至 2030 年, 通过每年 0.55% 的递减, 贫困水平应降至 3% 基于于东盟十国在未来十年左右的时间发展, 财富收益将从绝对数量来看削减贫困, 但财富的分配取决于有效的政策和行动 东盟十国出生预期寿命 : 推计至 2030 年 东盟十国就业人口 : 推计至 2030 年 By 2030, Life Expectancy at Birth is targeted at 72 years Technological improvements in healthcare, healthcare delivery and information dissemination are taken as moving in tandem 至 2030 年, 出生预期寿命的目标是达到 72 岁 医疗技术的进步 医疗服务和信息的传播都被视为是同步提升的 Total Population Employed by 2030, with an average of 6.77 million people joining the workforce each year, will reach million. These projections reflect the magnitude of growth and development by the region up to 2030 with ACI s proposed vision, with regional collaboration allowing for technological transfers, greater mobility and well-paced urbanisation to facilitate accelerated growth for all 至 2030 年, 随着平均每年 677 万人进入职场, 总就业人口将达到 亿 这些推计都反映了通过 ACI 提出的愿景, 通过区域合作 允许技术转移 更大的流动性和通过更好的城市化进程以促进全面增长, 而达到的地区经济增长与发展的程度 64

65 Thank you for your attention! 65