Economic community[edit]

ASEAN has emphasised regional cooperation in the three pillars, which are security,
sociocultural integration, and economic integration.
[61]
The regional grouping has made
the most progress in economic integration by creating an ASEAN Economic Community
(AEC) by 2015.
[62]
The average economic growths of ASEAN's member nations during
19892009 was Singapore with 6.73 percent, Malaysia with 6.15 percent, Indonesia with
5.16 percent, Thailand with 5.02 percent, and the Philippines with 3.79 percent. This
economic growth was greater than the average Asia-Pacific Economic Cooperation
(APEC) economic growth, which was 2.83 percent.
[63]

From CEPT to AEC[edit]
A Common Effective Preferential Tariff (CEPT) scheme to promote the free flow of goods
within ASEAN lead to the ASEAN Free Trade Area (AFTA).
[62]
The AFTA is an
agreement by the member nations of ASEAN concerning local manufacturing in all
ASEAN countries. The AFTA agreement was signed on 28 January 1992 in
Singapore.
[64]
When the AFTA agreement was originally signed, ASEAN had six members,
namely, Brunei, Indonesia, Malaysia, the Philippines, Singapore and Thailand. Vietnam
joined in 1995, Laos and Burma in 1997, and Cambodia in 1999. The latecomers have
not fully met the AFTA's obligations, but they are officially considered part of the AFTA as
they were required to sign the agreement upon entry into ASEAN, and were given longer
time frames in which to meet AFTA's tariff reduction obligations.
[65]

The next step is ASEAN Economic Community (AEC) with main objectives are to create
a:
single market and production base
highly competitive economic region
region of equitable economic development
region fully integrated into the global economy
Since 2007, the ASEAN countries gradually lower their import duties among them and
targeted will be zero for most of the import duties at 2015.
[66]

Since 2011, AEC has agreed to strengthen the position and increase the competitive
edges of small and medium enterprises (SME) in the ASEAN region.
[67]

Comprehensive Investment Area[edit]
The ASEAN Comprehensive Investment Area (ACIA) will encourage the free flow of
investment within ASEAN. The main principles of the ACIA are as follows
[68]

All industries are to be opened up for investment, with exclusions to be phased out
according to schedules
National treatment is granted immediately to ASEAN investors with few exclusions
Elimination of investment impediments
Streamlining of investment process and procedures
Enhancing transparency
Undertaking investment facilitation measures
Full realisation of the ACIA with the removal of temporary exclusion lists in manufacturing
agriculture, fisheries, forestry and mining is scheduled by 2010 for most ASEAN
members and by 2015 for the CLMV (Cambodia, Lao PDR, Burma, and Vietnam)
countries.
[68]

Trade in Services[edit]
An ASEAN Framework Agreement on Trade in Services was adopted at the ASEAN
Summit in Bangkok in December 1995.
[69]
Under AFAS, ASEAN Member States enter
into successive rounds of negotiations to liberalise trade in services with the aim of
submitting increasingly higher levels of commitments. The negotiations result in
commitments that are set forth in schedules of specific commitments annexed to the
Framework Agreement. These schedules are often referred to as packages of services
commitments. At present, ASEAN has concluded seven packages of commitments under
AFAS.
[70]

Single Aviation Market[edit]
The ASEAN Single Aviation Market (ASEAN-SAM), is the region's major aviation policy
geared towards the development of a unified and single aviation market in Southeast
Asia by 2015. The aviation policy was proposed by the ASEAN Air Transport Working
Group, supported by the ASEAN Senior Transport Officials Meeting, and endorsed by the
ASEAN Transport Ministers.
[71]
The ASEAN-SAM is expected to fully liberalise air travel
between member states in the ASEAN region, allowing ASEAN countries and airlines
operating in the region to directly benefit from the growth in air travel around the world,
and also freeing up tourism, trade, investment and services flows between member
states.
[71][72]
Since 1 December 2008, restrictions on the third and fourth freedoms of the
air between capital cities of member states for air passengers services have been
removed,
[73]
while from 1 January 2009, full liberalisation of air freight services in the
region took effect.
[71][72]
On 1 January 2011, full liberalisation on fifth freedom traffic rights
between all capital cities took effect.
[74]

The ASEAN Single Aviation Market policy will supersede existing unilateral, bilateral and
multilateral air services agreements among member states which are inconsistent with its
provisions.
Free-trade agreements with other countries[edit]
ASEAN has concluded free trade agreements with China (expecting bilateral trade of
$500 billion by 2015),
[75]
Korea, Japan, Australia, New Zealand, and India.
[76]
ASEAN-
India bilateral trade crossed the $ 70 billion target in 2012 (target was to reach the level
only by 2015).
[citation needed]
The agreement with People's Republic of China created
theASEANChina Free Trade Area (ACFTA), which went into full effect on 1 January
2010. In addition, ASEAN is currently negotiating a free trade agreement with
the European Union.
[77]
Republic of China (Taiwan) has also expressed interest in an
agreement with ASEAN but needs to overcome diplomatic objections from China.
[78]

ASEAN six majors[edit]
ASEAN six majors refer to the six largest economies in the area with economies many
times larger than the remaining four ASEAN countries.
Country GDP (nominal) GDP (PPP)
Indonesia 867,468,000,000 1,284,789,000,000
Thailand 400,916,000,000 674,344,000,000
Malaysia 312,413,000,000 525,039,000,000
Singapore 287,374,000,000 339,019,000,000
Philippines 278,260,000,000 471,254,000,000
Vietnam 170,020,000,000 358,889,000,000
Development gap[edit]
When Vietnam, Laos, Myanmar, and Cambodia joined ASEAN in the late 1990s,
concerns were raised about a certain developmental divide regarding a gap in average
per capita GDP between older and the newer members. In response, the Initiative for
ASEAN Integration (IAI) was formed by ASEAN as a regional integration policy with the
principal goal of bridging this developmental divide, which, in addition to disparities in per
capita GDP, is manifested by disparities in dimensions of human development such
as life expectancy and literacy rates. Other than the IAI, other programmes for the
development of the Mekong Basin - where all four newer ASEAN members are located -
that tend to focus on infrastructure development have been effectively enacted. In
general, ASEAN does not have the financial resources to extend substantial grants or
loans to the new members. Therefore, it usually leaves the financing of these
infrastructure projects to international financial institutions and to developed countries.
Nevertheless, it has mobilised funding from these institutions and countries and from the
ASEAN-6 (Indonesia, Malaysia, Philippines, Brunei Darussalam, Singapore, and
Thailand) themselves for areas where the development gap needs to be filled through the
IAI programme. Other programmes intended for the development of the ASEAN-4 take
advantage of the geographical proximity of the CLMV countries and tend to focus on
infrastructure development in areas like transport, tourism, and power transmission.
[79]

From CMI to AMRO[edit]
Due to Asian financial crisis of 1997 to 1998 and long and difficult negotiations
with International Monetary Fund, ASEAN+3 agreed to set up a mainly bilateral currency
swap scheme known as the 2000 Chiang Mai Initiative (CMI) to anticipate another
financial crisis or currency turmoil in the future. In 2006 they agreed to make CMI with
multilateralisation and called as CMIM. On 3 May 2009, they agreed to make a currency
pool consist of contribution $38.4 billion each by China and Japan, $19.2 billion by South
Korea and totally $24 billion by all of ASEAN members, so the total currency pool was
$120 billion.
[80]
A key component has also newly been added, with the establishment of a
surveillance unit.
[81]

The ASEAN+3 Macroeconomic and Research Office (AMRO) started its operation in
Singapore in May 2011.
[82]
It performs a key regional surveillance function as part of the
$120 billion of Chiang Mai Initiative Multilateralisation (CMIM) currency swap facility that
was established by Finance Minister and Central Bank Governors of ASEAN countries
plus China, Japan and South Korea in December 2009.
[83]

According to some analysts, the amount of $120 billion is relatively small (cover only
about 20 percent of needs), so coordination or help from International Monetary Fund is
still needed.
[84]
On 3 May 2012 ASEAN+3 finance ministers agreed to double emergency
reserve fund to $240 billion.
[85]

Foreign Direct Investment[edit]
In 2009, realised Foreign Direct Investment (FDI) was $37.9 billion and increase by two-
fold in 2010 to $75.8 billion. 22 percent of FDI came from the European Union, followed
by ASEAN countries themselves by 16 percent and then followed by Japan and US.
Intra-ASEAN travel[edit]
With the institutionalisation of visa-free travel between ASEAN member states, intra-
ASEAN travel has boomed, a sign that endeavours to form an ASEAN Community shall
bear fruit in years to come. In 2010, 47 percent or 34 million out of 73 million tourists in
ASEAN member-states were from other ASEAN countries.
[86]

Intra-ASEAN trade[edit]
Until end of 2010, Intra-Asean trade were still low which mainly of them were mostly
exporting to countries outside the region, except Laos and Myanmar were ASEAN-
oriented in foreign trade with 80 percent and 50 percent respectively of their exports went
to other ASEAN countries.
[87]

ASEAN Capital Market Forum[edit]
ASEAN Capital Market Forum (ACMF) consist of:
ASEAN Linkage, until end of 2013 only has 3 stock exchange members: Bursa
Malaysia, Singapore Exchange and Stock Exchange of Thailand, but cover 70
percent of transaction values of 7 ASEAN Stock Exchanges,
[88]
with objective to
integrate ASEAN Stock Exchanges to compete with International Stock Exchanges
Mutual Recognigtion of Disclosure Standards, with objective to harmonise and equal
of ASEAN Standards
Mutual Recognition of Collective of Investment Scheme (CIS), with objective to
harmonise all regulations in ASEAN which related with CIS, some countries are still
categorised as Financial Action Task Force (FATF) Non-Cooperative Country which
are not maximum to do with money laundering and terrorism