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1 CLMV and the AEC 2015 : The Rising of Continental Southeast Asia and Its Implications to Taiwan Hugh Pei-Hsiu Chen President Taiwan Association of Southeast Asian Studies TASEAS
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3 to explore the economic dynamics of the ASEAN s least developed countries (LDCs) - Cambodia, Lao PDR and Myanmar and the latecomer Vietnam, known as CLMV, in achieving AEC 2105 and the GMS, especially focuses on CLMV plus Thailand and highlights the rising Continental Southeast Asian economy and its implications to Taiwan.
4 The Significance of CLMV in achieving AEC 2015 Although each country in CLMV faces different development constraints, CLMV as a whole has a huge potential for future development, which will depend on individual country efforts and support from development partners within and outside the region. The ASEAN is strongly committed to regional integration with special emphasis on narrowing the development gap among its members. The aim of narrowing the development gap is consistent with the ASEAN s commitment to build an economic community.
5 The Growing Importance of CLMV plus T in ASEAN CLMV countries have emerged as a new major export destination for Thailand. Thai exports to CLMV has been served as a better source of diversification than exports to the other ASEAN economies or China. Compared with other ASEAN economies, Thailand is in a better position in terms of exporting to CLMV. Thai exporters have enjoyed a marked rise in the market share of CLMV imports. Thai government s plans to improve transport linkage to these economies should also enhance Thailand s trade with these economies further.
6 CLMV as the New Markets for Thailand CLMV as a new major export destination for Thailand is not merely a reflection of weak demand in EU and the US, it also reflects strong import demand from CLMV themselves. Thai exports to CLMV are less cyclical, also targeting end users rather than re-exports. Two potentially important initiatives to promote trade integration that should boost Thailand s exports to CLMV further: (1) carrying out further tariff reductions under AEC. & (2) constructing better infrastructure connecting CLMV.
7 Challenges Ahead of CLMV in Achieving AEC 2015 In general, to Thailand, the CLMV, as well as the ASEAN, there are certain liberalization milestones for the objective of the free flow of goods and services. Individually, CLMV countries face political and economical challenges domestically and internationally in the age of globalization. Of all the illustrated challenges concerned, narrowing the development gaps among CLMV and other ASEAN member economies stands out as the top priority mission.
8 Cambodia Cambodia is considered one of the fastest-growing economies in the region, with double-digit growth rates and macro-economic stability for the past five years. However, many development challenges persist, including a high poverty rate, a big income gap, a low production base and poor human resources. The main sectors that contribute to economic growth are the garment industry, tourism, construction and agriculture. Human resource development and promotion of trade and investment are very crucial for future development.
9 Lao PDR Lao PDR has been facing numerous challenges as the country being one of the LDCs in the world. Challenges faced to narrowing development gap with other ASEAN members. Focuses: (1) infrastructure development, (2) strengthening the private sector by promoting SMEs and developing markets, (3) developing the tourism industry, (4) promoting processing industries for export and domestic consumption, (5) human resource development with a focus on vocational schools and training for skilled labour.
10 Myanmar Myanmar has a vast potential for future economic development due to a big local market, abundant natural resources and a young labor force, all of which have not yet been fully tapped. Accelerating economic reforms, especially financial reforms, and re-aligning exchange rates, promoting SMEs, Special Economic Zones and taking advantage of its geographical location between China, India and ASEAN will promote Myanmar s economic development.
11 Vietnam The process of economic reform initiated since 1986, with an important view to pro-actively engaging in international economic integration, has brought about important socioeconomic achievements, and laid more concrete foundations for future economic development in the country. Focuses: (1) to accelerate SOE reform, (2) to establish better prerequisites for development of the financial market, (3) to deepen the tax reforms, (4) to promote country s comparative advantages.
12 and Thailand Trade between Thailand and its neighbors has also increased over the last decade. Thailand should help CLMV with capacity building, especially to improve human capital and productivity and encourage participation from private sector; to synchronize domestic rural development plan with international cooperative development programs; to build economic networking in the region to achieve the goal of narrowing development gap. Logistics networking can be a starting point of further networking so that the region will be developed into a single hub.
13 Thailand as Coordinator to ASEAN-China Affairs Beijing has been called on Bangkok, the current coordinator between China and ASEAN, to play a positive role in deepening trust and cooperation between China and ASEAN. ASEAN has a coordination mechanism with major countries outside the organization and Thailand replaced Vietnam as the coordinator between China and ASEAN in It will perform the role until Thailand has no disputes with China, it is neutral as a coordinator between China and ASEAN, and China s large market plays a vital role in the economic development of ASEAN.
14 The Emerging Continental Southeast Asia and Taiwan Taiwan brooks no delay of casting off the marginalized alienation and pursuing a constructive participant role inside. Taiwan should recognize that besides Singapore there is still options to entrust a coordinator country to manage her relations with ASEAN and other economies in the region, referring the way China adopted. Taiwan has to do her utmost to deepen and broaden the relations with CLMV, especially Vietnam, and format an overall continental Southeast Asian policy.
15 continued In addition, it s time for Taiwan to return continental Southeast Asia. Pioneering the establishment of representative institute in Myanmar and the re-opening of Taipei Representative Office in Cambodia are stepping stones for Taiwan to engage in the regional development.
16 Appendix Economic Research Institute of ASEAN and East Asia ERIA ERIA 10+6 Academic Networking Brunei Cambodia Indonesia Laos Malaysia Myanmar Philippine Singapore Thailand Vietnam Australia China India Japan Korea New Zealand Brunei Darussalam Institute of Policy & Strategic Studies (BDIPSS) Cambodian Institute for Cooperation and Peace (CICP) Centre for Strategic and International Studies (CSIS) National Economic Research Institute (NERI) Malaysian Institute of Economic Research ( MIER) Yangon Institute of Economics (YIE) Philippine Institute for Development Studies (PIDS) Singapore Institute of International Affairs (SIIA) Thailand Development Research Institute (TDRI) Central Institute for Economic Management (CIEM) Australian National University (ANU) Chinese Academy of Social Sciences (CASS) Research and Information System for Developing Countries (RIS) Institute of Developing Economies (IDE/JETRO) Korea Institute for International Economic Policy (KIEP) New Zealand Institute of Economic Research (NZIER)
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