Asean 'could be world's 4th-biggest economy
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Asean could become the world's fourth-largest economy by 2050, Myanmar's President Thein Sein said at the opening of the Asean Business and Investment Summit (Abis).
With just one year left before an Asean Economic Community becomes a reality, the regional group already has a combined GDP of US$2.5 trillion, he said yesterday.
He also said that the Regional Comprehensive Economic Partnership (RCEP), a free trade agreement (FTA) scheme, will contribute to greater regional integration within and beyond Asean.
"RCEP links the economies of our region from India in the west to China, Japan and South Korea in the east and down south to New Zealand and Australia," Thein Sein said, referring to the China-led grouping with 16 members so far, with the United States excluded.
The RCEP and the US-led Trans-Pacific Partnership, which have overlapping memberships, face political and social opposition in many economies.
The two-day Abis is being held parallel to the 25th Asean summit.
Thein Sein said: "Since its inception 47 years ago, Asean has weathered the storms of economic downturns, natural disasters... but also achieved success.
"With intra-regional trade increased to US$602 billion in 2013, Asean has a great potential to maintain the momentum and eventually become the fourth-largest economy in the world by 2050."
Singapore’s United Overseas Bank forecasts intra-regional trade in the region to rise to 61 per cent by 2020, from 33 per cent in 2000.
According to Asean Investment Report 2013-2014, the region last year attracted 8 per cent of global flows of foreign direct investment (FDI), though it accounted for just 3 per cent of the global economy.
The report showed that regional integration is also contributing towards this trend in regional value chainss, which are connecting Asean member states through FDI, non-equity modalities, trade in intermediate inputs, finished goods and arm’s-length transactions. The ability of transnational companies to slice, distribute and coordinate different value chain segments and functions, including determining who is to supply what and from where, has been a strong factor facilitating the value chains in Asean.
Asean’s value added inputs in the region’s total exports are high and have been increasing, from 65 per cent in 1995 to 69 per cent in 2011. This development suggests that export-oriented foreign and local companies operating in the region have increased their sourcing of inputs from the region to use in producing or assembling subsequent components or final products in the value chains they are associated with, the report said.
