Thursday, November 6, 2014

ASEAN "builds strong" Dispute Settlement Mechanisms

ASEAN is strongly committed to establishing dispute settlement mechanisms in all fields of cooperation, said Deputy Secretary-General of ASEAN for Community and Corporate Affairs, Mr AKP Mochtan, in his opening remarks at a workshop to familiarize stakeholders with ASEAN Dispute Settlement Mechanisms (DSM) held in Siem Reap, Cambodia last week. “DSM is a key component in the realisation of a rules-based community, where the rule of law is strengthened and disputes are resolved through peaceful means with legal certainty and predictability,” Mr Mochtan told the participants.

According to Mr Mochtan, the successful conclusion of the Protocol to the ASEAN Charter on Dispute Settlement Mechanism in 2010 has shown ASEAN’s strong commitment to realise the ASEAN Charter’s objective of creating dispute settlement mechanisms in all fields of ASEAN cooperation. “This Protocol to the ASEAN Charter, together with the existing Treaty of Amity and Cooperation in Southeast Asia and the Protocol on Enhanced Dispute Settlement Mechanism (EDSM), is a significant achievement in establishing reliable and trustworthy dispute settlement mechanisms,” he added.

In his remarks, Dr SOK Siphana, Advisor to the Royal Government of Cambodia and Chairman of Board of Directors of the Cambodian Development Research Institute stated that “I believe that workshop would provide an excellent opportunity for all participants to obtain new knowledge and best lessons-learned with regard to the ASEAN disputes settlement mechanisms to better prepare themselves for the arrival of the ASEAN Community in 2015, which is only one year ahead and beyond.”

The Workshop, which was attended by Cambodian participants from various line Ministries, practicing lawyers, think-tanks, private and financial institutions and civil society organisations, as well as ASEAN Secretariat staff members, provided a forum for participants to exchange views and ideas with speakers and experts on ensuring the effectiveness of these mechanisms within both national and regional contexts. There was also a panel discussion that focused on challenges and next steps on the ASEAN Protocol on EDSM. 

The Workshop was hosted by the Ministry of Foreign Affairs of Cambodia in collaboration with the ASEAN Secretariat and with the support of the “Capacity Building for the ASEAN Secretariat” project, a partnership between the ASEAN Secretariat and Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH, which is funded by the German Federal Foreign Office.

Friday, February 21, 2014

ASEAN Integration Monitoring Report (English Edition)

Since the adoption of the ASEAN Economic Community (AEC) Blueprint in 2007 and towards its realisation post-2015, the Association of Southeast Asian Nations (ASEAN) has undertaken various efforts to monitor its implementation.

Building upon the AEC Scorecard, the inaugural ASEAN Integration Monitoring Report assesses the progress in four AEC-related dimensions: merchandise trade, trade facilitation, services trade and investment. It focuses on policy and market integration outcomes achieved in ASEAN Member States, as part of the first pillar of the AEC formation process.

Released by the ASEAN Integration Monitoring Office of the ASEAN Secretariat, together with the World Bank - East Asia Pacific Region, this report is the first component of the ASEAN Community Monitoring and Evaluation Program (AECMEP).

The ASEAN Integration Monitoring Report shows that ASEAN’s broader economic agenda has brought significant gains to the member states. As a trade-creating block, together with the improvement of trade facilitation, ASEAN integration has led to an increase in intra-ASEAN trade, parallel with an increase in ASEAN’s trade with the rest of the world. ASEAN also had modest contributions to the development of the services sector and the enhancement of foreign direct investment (FDI), both for extra- and intra- regional inflows.

AEC efforts have also helped in narrowing the development gap and accelerating development in Cambodia, Lao PDR, Myanmar and Viet Nam, whose share of GDP in ASEAN grew from 3.5% in 1990 to nearly 10% in 2011. This is further reflected in the implementation rate of 79.7 % of the AEC Scorecard as of August 2013.

Despite these achievements, there remain several areas where implementation has been limited. Although ASEAN’s gains came from enhancing trade facilitation, services and investments, efforts are still needed in these critical areas as well as in the transport sector. Domestic regulatory reforms, enhanced capacities, strong internal coordination and sufficient budgets are imperatives in order to address the implementation challenges.

The ASEAN Integration Monitoring Report further suggests priorities for future actions for the effective implementation of the AEC 2015 goals.

Download the report here

Saturday, January 11, 2014

Five free reports on ASEAN Economic Community, SMEs, investment, commercial opportunities, workskills

ASEAN Strategic is pleased to present five recent and detailed reports providing useful insights into the ASEAN Economic Community for private sector businesses and investors. Their publishers have kindly made digital versions available free-of-charge for a period of time:

Survey on ASEAN Competitiveness 2013 (December 2013) published by the ASEAN Business Advisory Council reports that the majority of businesses surveyed perceive ASEAN economic integration “more of an opportunity rather than a threat”.  However, ASEAN-BAC strongly urges ASEAN to strengthen the process of information dissemination and consultation with businesses, particularly SMEs, on AEC initiatives. Download the report here.

ASEAN Business Outlook Survey 2014 (August 2013) published by the US Chamber of Commerce reports on the views and expectations of US companies in all ASEAN countries. As the South East Asian single market, AEC 2015, approaches, 79% of respondents reported that their company’s level of trade and investment in ASEAN has increased over the past two years, and an overwhelming 91% expect it to increase over the next five years. Download the report here.

Investing in ASEAN 2013/2014 (October 2013) published by Allurentis 
reports on ASEAN’s economic performance and its progress towards regional integration. It features sectoral articles on business,  finance, legal, energy, industry, manufacturing, infrastructure, aviation, IT, telecommunications, mining, agriculture, healthcare, education, real estate, sport and tourism, and profiles on each of the 10 member countries of ASEAN. Download the report here.

ASEAN Workforce Skills – Employer Survey 2013 (August 2013)  published by the Australian Trade Commission reports on ASEAN employers’ skill needs, current training arrangements and extent of engagement with local and international providers.  It outlines the sectors of focus in Indonesia, Malaysia, Philippines, Singapore, Thailand, and Vietnam, and some of the high level findings of the overall survey project.
Download the report here.

SME Guidebook Towards the AEC 2015 (November 2013) published by the ASEAN Secretariat
to enhance greater awareness of small and medium enterprises to a wide range of financial facilities, financial and non-financial institutions available to them in all ten ASEAN member states as well as the market opportunities in ASEAN and beyond. It also details trade promotion centres and self-certification issuing authorities.

Download the report here..

Monday, December 23, 2013

Countdown to 2015: Creating ASEAN Champions through regional planning, M&A strategy and branding

With the ASEAN Economic Community to be formally constituted on 31 December 2015, business advisory firms JWT and A.T. Kearney recently collaborated in an in-depth study of the new bloc (representing 10 countries with a combined 600 million people and a regional GDP of $2.3 trillion) and its impact.

Through conversations with 50 corporate leaders, the majority from domestic companies across South East Asia, their study indicates the AEC is high on their radar screens: 64% say their organizations plan to enter new markets in the region once the AEC kicks in.

Most CEOs in the study cite “the need for scale to deal with more intense competition” as the main reason for increased M&A activities in their industry. Additionally, 60% will expand their current portfolio of brands and products, and 24% will create new brands or product lines altogether after 2015 in order to reach more consumers.

In a December roadshow through major South East Asian cities, the firms outlined their report’s conclusion that ASEAN companies “need to create a regional game plan, map out an M&A strategy, and start investing more in branding over the next two years if they want to emerge as regional champions.”

According to Chua Soon Ghee, A.T. Kearney’s Southeast Asia Managing Partner, “South East Asian companies that map out a regional strategy now and start investing in building solid brands are poised to emerge as winners in the AEC. Those that don’t have a regional game plan risk becoming their competitor’s lunch.”

Daniel Siswandi, Strategy Head, JWT Indonesia, believes ASEAN consumers aware of the integrated market are excited about the prospect; but regional institutions, businesses and marketers are undervaluing the role of branding.

“Companies have to make the switch from manufacturing products to selling brands. The region’s consumers are moving fast into the middle class and are much more sophisticated, in terms of what they buy and what they expect,” said Bob Hekkelman, JWT’s Southeast Asia CEO.  “It’s time to get out of the commodity game, move up the value curve and form a long term relationship with consumer through brands.”

"Everyone in the region is buying into ASEAN but we’re not aware of any effort to clarify the ASEAN brand," added Lulut Asmoro, CEO, JWT Indonesia.

In Jakarta, panelists provided additional background and perspective to the historic formation of the ASEAN Economic Community.

V. Raman Narayanan, Group Head ASEAN Affairs, AirAsia, described the AEC as returning the region “to what we were before Portuguese arrived in 1500s." However businesses need to adopt an ASEAN mindset – similar to AirAsia’s positioning as a regional airline in 2001 – to take advantage of their location within Asia's “South East sweet-spot” of “geography, demography and economy.” He also opined that if business didn't proactively back the AEC, governments may turn it into "swiss cheese."

John Riady, Executive Director, Lippo Group, emphasised four critical issues that still needed to be addresses for the successful introduction of the AEC:  (1) political stability, (2) regulatory coherence, (3) competitiveness and (4) equal treatment.

For businesses expanding across borders, Albert Tan, Chief Strategy Officer, PT Telkom Indonesia added the importance of a "human capital transformation strategy" including value chains, pre-planning and retention.

In their report, JWT and A.T. Kearney provide 10 ways for South East Asian companies “to capture an immediate impact” before the launch of the AEC:

  1. Recognize the larger market. The region's economies are growing, and the population is becoming more affluent thanks to rising income, greater employment, and more credit. Collectively, ASEAN countries have more than $2 trillion GDP, making it the fifth largest market in the world. Consumers, although diverse, are connected by culture and values and take pride in local products. Create a clear brand proposition and deliver on quality, and there will be plenty of scope to build a strong following across the region's consumers.
  2. Appreciate and embrace change. The push toward the AEC will only hasten progress toward a more open and unhindered market, which will increase integration in the region. The focus so far has largely been on home markets, where many have enjoyed minimal competition, years of profits, and rapid growth—and are cash rich. Now the push to expand beyond national boundaries is inciting strong regional players. (Outward FDI from the region increased more than fivefold from $84.5 billion in 2000 to $495.7 billion in 2011.)
  3. Understand that regional champions will rule. The writing is on the wall. More than half of the M&A deals in 2011 were cross-border transactions. With a level playing field, it will soon be an eat-or-be-eaten world. In our ASEAN study, most leaders cited the "need for scale to deal with intensified competition" as the main reason to engage in M&A. Build solid brands with regional reach to be in the best position to grab a dominant share of this newly enlarged market.
  4. Prepare a regional game plan. The old world of simply appointing a distribution line will not be enough to become a regional player. Operating in new countries will require making complex choices on marketing and branding, products, supply chain, and manufacturing.
  5. Increase scale through M&A. Integration will happen. Companies will move fast to acquire competitors to gain access to new markets, technologies, brands, and resources or as a defensive maneuver. To build scale through M&A, adopt a methodical approach.
  6. Build marketing muscle. Now is the time to create a regional brand, as consumption is about to surge and local consumers are feeling positive about the region's outlook and about ASEAN. Being first or selling cheaply doesn't mean you'll remain a market leader. Become more savvy and sophisticated in your marketing and branding.
  7. Move up the value chain. ASEAN consumers are spending more on higher value items. Products cannot command a higher premium unless they have a clear brand idea.
  8. Take a page from the winner's book. Global companies and big regional players spend half of their communications budget—if not more—on brand campaigns. Start investing more in brand communication, and stop focusing solely on tactical ads.
  9. Don't get lost in translation. As we head toward the AEC, approach product innovation and brand development from a wider perspective, beyond your own territory.
  10. Next stop, the world. Forward-thinking players that capture the region will have a strong foothold to go global.

Download the report here