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Integrating the Region through

Master Plan on ASEAN Connectivity

(MPAC)

Lim Chze Cheen

ASEAN Connectivity Division ASEAN Secretariat

GWP Annual Conference 2014 ASEAN – The Emerging Market

24 June 2014

ASEAN as Investors’ Destination, 2013

ASEAN’s Growth Rate

5.1%

Merchandise Trade

US$ 2.42 trillion

Land Area

4.44 million

km2

Population

625 million

FDI

US$ 119.3 billion

GDP

at current prices

US$ 2.4 trillion

Source : ASEANStats, 2013

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ASEAN’s Economic Outlook Robust

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• In 2013, ASEAN’s economic growth is still resilient at 5.1%. GDP per capita is US$ 3,839.

• Growth is projected to be steady at 5.0% in 2014 and pick up to 5.4% in 2015.

Trade increased by 5 times since AFTA…

ASEAN trade increased significantly from USD 430 Billion in 1993 to USD 2.5 Trillion in 2012. Likewise, exports and imports also increased remarkably, both from USD 206.6 and USD223.3 billion to USD 1,254.6 billion and USD 1,221.8 billion respectively for the same period.

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Investment rose 6 times since 2000…

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• FDI inflows to ASEAN

rose from US$ 114 billion

in 2012 to US$ 119 billion

in 2013.

• Intra-ASEAN FDI

continues to grow,

reaching 20% in 2013.

The ASEAN Connectivity Challenge

Around 9% of world population.

Connecting Peoples

Connecting Land

Connecting Oceans

Around 3% of world’s land

mass.

Around three times larger

than available land.

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Journey to Greater Connectivity

1967 Founding of ASEAN

1992 ASEAN Free Trade Area

1997 ASEAN Vision 2020

2003 Bali Concord II

2004 Vientiane Action Programme

2007 ASEAN Economic Community Blueprint

2008 Entry into force of ASEAN Charter

2009 Roadmap for an ASEAN Community (2009-2015)

2010 Master Plan on ASEAN Connectivity

2012 Phnom Penh Agenda

2011 ASEAN Framework on Equitable Economic Development

2013-2015 Post 2015 Vision

1998 Ha Noi Plan of Action

The Master Plan on

ASEAN Connectivity (MPAC)

● ASEAN Strategic Plan on Transport

● ASEAN ICT Master Plan

● ASEAN Plan of Action for Energy Cooperation

etc.

● Transport facilitation agreements

● ASEAN Trade in Goods Agreement

● ASEAN Framework Agreement on Services

● ASEAN Comprehensive Investment Agreement

etc.

● ASEAN Tourism Strategic Plan

● ASEAN Education Work Plan

● Mutual Recognition Agreements

etc.

CROSS-SECTOR COORDINATION

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Where are we now in

connecting the region?

Infrastructure Financing Needs

• USD 17.5 trillion over 10 years Global

• USD 8 trillion over 10 years Asia

• USD 600 billion over 10 years ASEAN

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Projected Infrastructure Needs – ASEAN (USD

billion)

Sector

New Capacity

Maintenance

Total

Power 170.3 46 216.3

Transport 95.6 61.2 156.8

Water and Sanitation 98.8 60.6 159.4

Telecommunications 30.9 32.7 63.6

Total 395.6 200.5 596.1

Source: ADBI (2008)

The Limits of Public Funding

Transport Electricity ICT Water and Sanitation

Total

Cambodia 4.43 0.95 2.97 0.36 8.71

Indonesia 3.88 0.98 0.97 0.35 6.18

Lao PDR 10.62 0.00 2.40 0.60 13.61

Malaysia 1.94 4.42 0.27 0.04 6.68

Myanmar 2.70 0.00 1.46 1.88 6.04

Philippines 2.30 1.87 1.22 0.65 6.04

Thailand 0.58 3.69 0.45 0.19 4.91

Viet Nam 2.07 3.12 2.38 0.54 8.12

Source: Bhattacharyay, ADBI Working Paper, 2010

Infrastructure Investment Needs as % of GDP (est.), 2010-2020

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Physical Connectivity

Source: ASEAN Secretariat computation (data from Private Participation in Infrastructure Database, World Bank)

0

5.000

10.000

15.000

20.000

25.000

Total Investment in Infrastructure Projects with Private Participation, 1992-2012

Cambodia

Indonesia

Lao PDR

Malaysia

Philippines

Thailand

Viet Nam

in US$ millions

Physical Connectivity

101.068

83.934

32.335

20,598 8.6%

Total Investment in Infrastructure Projects with Private Participation, 1990-2012

Energy

Telecom

Transport

Water and Sewerage

in US$ millions

Source: ASEAN Secretariat computation (data from Private Participation in Infrastructure Database, World Bank)

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Sources of Infrastructure Financing

Source: Barrow, ADB, 2010

The ADB’s Estimates for Asia, 2010-2020

Physical Connectivity

ASEAN Highway Network (AHN)

• Upgrade ‘Below Class III’ sections • Complete missing links . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• ‘Below Class III’ sections remain: AH12, AH 15 (Lao PDR), AH1, AH2 (Myanmar)

• Missing links remain: AH112, AH123 (Myanmar)

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Physical Connectivity

Singapore-Kunming Rail Link (SKRL)

• Construct missing links . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• Ongoing: Aranyaprathet-Klongluk (Thailand), Poipet-Sisophon (Cambodia)

• Feasibility study completed, seeking funding: Phnom Penh-Loc Ninh (Cambodia), Loc Ninh-Ho Chi Minh City (Viet Nam)

• Seeking technical assistance for feasibility study: Mu Gia-Tan Ap-Vung Ang (Viet Nam), Vientiane-Thakek-Mu Gia (Lao PDR)

Physical Connectivity

Maritime Transport

• Conduct feasibility study on the establishment of an ASEAN Roll-on/Roll-off (RO-RO) Network and Short-Sea Shipping

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• Study completed and efforts to operationalise the RO-RO prioritised routes ongoing

“Maritime transport accounts for over 80% of the world trade volume and 70% of its value” (UN, 2012)

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Physical Connectivity

Maritime Transport

• Enhance the performance and capacity of the 47 designated ports

• Develop an ASEAN

Single Shipping Market

Source: ASEAN Maritime Transport Development Study, ALMEC Corp. 2002.

Physical Connectivity

ASEAN Broadband Corridor

• Achieve universal access; improve affordability; and increase broadband penetration.

• AMS to implement respective plans to deliver the ASEAN Broadband Corridor

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Physical Connectivity

ASEAN Power Grid

• Implement the Melaka-Pekan Baru Interconnection

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• MOU signed by Indonesia and Malaysia in September 2012, expected COD in 2019

• Implement the West Kalimantan-

Sarawak Interconnection . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• Ongoing, expected COD in 2015

Infrastructure in the Mekong Sub-Region

Source: Modified from Comprehensive Asia Development Plan Phase II, ERIA, 2011

Kyaukphyu

Bangkok Dawei

Yangon

Mumbai

Chennai

Kaladan Multimodal Transit Transport project

Pakbara

Trilateral

Highway

Mekong India Economic Corridor

Mandalay

Moreh

Ho Chi Minh City

Hyderabad

Bangalore

Goa East-West Economic Corridor

Da Nang City

Mawlamyine

Kunming

Hai Phong

Nanning

Kohima

Infrastructure in the Mekong Sub-Region

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West Borneo

Economic Corridor

East Borneo

Economic Corridor

Greater Sulu

Sulawesi Corridor

Priority Infrastructure Projects

in BIMP-EAGA

Source: Economic Planning Unit, Malaysia

Priority Connectivity

Projects in IMT-GT Southern Thailand

Ports Development

Program -Phuket Port

-Greenfield Development of

Naklua Port

ICQS Bukit Kayu Hitam

Hat Yai-Sadao Toll Road

Sumatra Ports

Development Project -Ulee Lheue Port

-Malahayati Port

-Belawan Port

-Kuala Enok Port

Sumatra Toll Roads

Project -Palembang and

Indralaja Toll Road

-Highway from Bandar

Lampung to Bakahuni

Melaka-Dumai Economic

Corridor Multimodal

Transport Project -Dumai Port

-Pekanbaru-Dumai Road

2 port programs

4 road projects

1 multimodal transport project

1 power project (2 countries) 1 trade facilitation

Melaka-Pekanbaru Power

Interconnection

Development of

Aceh Highway

Facilities

-Bandah Aceh-

K.Simpang

Source: Modified from Centre for IMT-GT Sub-Regional Cooperation

Southerly

Section of

Eastern Highway

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What are we doing and need to do more

to connect the region?

• Mobilise resources to finance connectivity projects

• Strengthen coordination mechanism to deliver the MPAC and ensure synergies with various work plans at different levels

• Translate regional initiatives into national actions

• Enhance outreach and advocacy activities

Connectivity towards Community for Opportunities

Thank you