Countdown 2015: Towards Inclusive and Sustainable Growth in the ASEAN Economic Community
Remarks by Angel Gurría, OECD Secretary-General, delivered at Davos World Economic Forum
24 January 2014, Davos, Switzerland
Ladies and Gentlemen,
It is a pleasure to welcome you to our discussion this evening on Countdown 2015: Towards Inclusive and Sustainable Growth in the Association of Southeast Asian Nations (ASEAN) Economic Community. 2015 is not so far off, and regional economic integration is an incredibly ambitious goal. We are here tonight to consider the most effective strategies to support the region’s social and economic development and to ensure it is on a solid pathway to integration and to sustainable and inclusive growth.
This discussion comes at a crucial time. After years of impressive and sustained growth, the region has arrived at a new stage of development; it is at a fork in the road. It is now one of the most dynamic and fastest growing economic regions in the world, but its continued progress is not certain.
Although the OECD and Southeast Asia have a long history of engagement, we have now developed a more solid partnership to support the region’s development; the Southeast Asia Programme. Let me begin by outlining our relationship with Southeast Asia in greater detail.
Southeast Asia: A Strategic Partner for the OECD
The ASEAN Economic Community has achieved impressive economic growth over the past several years. Southeast Asia has been one of the most dynamic and fastest-growing regions in the world, with GDP growth rates projected to average 5.4% per annum between 2014-18.
The region benefits from natural resources and biodiversity, a wide range of productive capabilities, diversified exports, an expanding middle class and a young and dynamic population. Its strong domestic fundamentals have helped to spare Southeast Asia from the slow growth in the global economy, and the uncertainty in the euro area.
Nevertheless, this is no time for complacency. We are not at the end of the road. There are still significant barriers to growth that need to be addressed. The OECD has helped to provide insight on these challenges by producing an annual Economic Outlook for Southeast Asia, China and India (SEAO). Let me now outline some of the big “rocks in the road.”
Obstacles on the Path to Southeast Asia’s Growth
Firstly, emerging Asian countries will need to sustain strong productivity growth to close the gap in relative living standards vis-à-vis the more advanced economies. Structural reforms in key sectors such as investment, education, infrastructure and green growth will foster competitiveness, productivity and job creation. So will policies to promote innovation and entrepreneurship.
Secondly, emerging Asia will need to tackle poverty and concentrate on developing human capital. Income disparities are still widespread, both within countries and among regions. For example, GDP per capita ranges from USD 1 300 in Myanmar to over USD 48 000 in Singapore and Brunei. Development gaps can be reduced through a wide range of reforms, such as tax policy, and infrastructure investment, to promote more equitable outcomes.
Thirdly, the region needs to continue its efforts to achieve its goal of regional economic integration by 2015. The ASEAN economic community constitutes one of the most ambitious programme of economic cooperation in the developing world, with huge potential gains. Creating a “single market and production base” will have positive effects on economic growth and employment. Further cooperation will also help to insulate the region from volatile capital inflows, a viable concern as advanced economies “tap the breaks” on their quantitative easing strategies.
To help contribute to the region’s integration process, and to promote sustainable and inclusive growth, OECD is launching a comprehensive Southeast Asia Regional Programme. We see this as a win-win for the region and for the OECD.
The Southeast Asia Programme: a Mutual Beneficial Partnership
The Southeast Asia Regional Programme will help to enhance and broaden the OECD’s knowledge of the region; foster the exchange of good practices and mutual learning between policy makers in Southeast Asia and OECD countries. It will add weight to our own policy debates and recommendations, as we will gain a better understanding of the region’s unique perspective and experiences. Greater engagement will provide our member and partner countries with a new, more insightful view of Southeast Asia and of the global economy.
It will also help to support the OECD’s efforts to become more inclusive and more global. As the world’s economic landscape becomes more integrated and intertwined, the OECD is committed to expanding and ensuring that the international policy dialogue includes not only the advanced economies, but emerging and developing countries. It is critical, in a global, interconnected world, to have these voices on board.
The Southeast Asia Regional Programme is also meant to foster and boost growth in the region, by bringing participating countries closer to OECD standards and practices, providing access to OECD bodies, and potentially increasing engagement with OECD instruments.
The programme will aim to strengthen policy making in a wide variety of areas – such as taxes; investment; education and skills; small and medium-sized enterprises; regulatory reform, and public-private partnerships. Priorities for work in these policy areas will be further refined during the OECD Southeast Asia Regional Forum, in Bali in March, and I invite all of you to join us there.
Ladies and Gentlemen,
The OECD is looking forward to increasing its engagement with Southeast Asia, after working together so productively for many years. Although many countries in the region already have a history of participation in OECD bodies and committees, today the OECD-Southeast Asia partnership is more important than ever. We all share a vital interest in achieving successful multilateral collaboration aimed at strengthening growth and development prospects, as well as at addressing global challenges such as climate change, food, energy and water security and international financial stability.
We are engaged, encouraged and excited about the great potential and the promise of the Southeast Asia Regional Programme. We are ready to roll up our sleeves and begin tonight by concentrating our discussion around the progamme’s main pillars; trade and investment; connectivity and infrastructure; and sustainable and inclusive growth. We warmly welcome your contributions and ideas to help shape the Asian Economic Community and the new OECD initiative for the Southeast Asian region.