Vietnam to steer Asean towards economic peace

The country as the ‘one voice’ Asean should have a well-prepared stance on global issues at international forums

by SHAZNI ONG/ pic credit: CIMB Group

VIETNAM, currently in the driver’s seat as the Asean chair for 2020, must demonstrate a more robust leadership in steering the caucus to challenge anti-international trade and the rules-based world economy at various international platforms.

CIMB Asean Research Institute (CARI) chairman Tan Sri Dr Mohd Munir Abdul Majid said Vietnam as the “one voice” Asean should also have a well-prepared stance on global issues at international forums such as the upcoming Asia-Pacific Economic Cooperation and Group of 20 summits.

“Trade is the lifeblood of the US$3 trillion (RM12.21 trillion) Asean economy, constituting 90% of its GDP. Improving intra-Asean trade and investment is essential at a time particularly of headwinds against international trade.

“Asean must be the region that leads the call for world economic peace,” Mohd Munir said at CARI’s Asean 2020 Outlook and Vietnam’s Asean Chairmanship 2020 briefings in Kuala Lumpur (KL) yesterday.

As it is, Mohd Munir said the percentage for intra-Asean trade dropped to 23% in 2018, even though the value of intra-Asean trade in goods increased from US$591 billion in 2017 to US$647.5 billion in 2018.

He added that another area of concern that is hindering Asean trade is non-tariff barriers.

“Vietnam should focus on reducing the non-tariff barriers which make a nonsense of the Asean Economic Community (AEC). They have been rising instead of falling since AEC was pronounced in KL in 2015.

“Intra-Asean trade has stubbornly stuck at less than 25%. Even intra-RCEP (regional comprehensive economic partnership) trade is higher at 32%,” Mohd Munir said.

He added that Asean performed well in 2018, having risen to the fifth-largest economy in the world with a nominal GDP totalling US$3 trillion and capturing its highest ever total foreign direct investment (FDI) inflows of US$154.7 billion.

“However, after achieving a growth rate of 5.2% in 2018, forecasts predicted a year-on-year slowdown in 2019 before the growth rate is expected to pick up in 2020,” Mohd Munir added.

Ambassador of Vietnam to Malaysia Dr Le Quy Quynh, who was present at the briefing, echoed Mohd Munir’s views.

He said Vietnam intends to improve institutional capacity through institutional reforms and improvements in the rules of procedures and processes within Asean-led mechanisms.

“In this time of global uncertainty, which was recently highlighted by the ongoing US-Iran standoff, unity and solidarity among Asean member states remain crucial, as is Asean centrality in the international arena,” he said.

He said the adoption of Asean Outlook on the Indo-Pacific (AOIP) in 2019 under Thailand’s chairmanship demonstrated Asean’s unity in its desire to maintain a central role in regional integration efforts.

“Designed as a guide to cooperation in the region, particularly the Asia-Pacific and Indian Ocean regions, the AIOP could also serve as a guide on how Asean can address other future issues threatening peace and prosperity in the region,” Le added.

As such, Vietnam as the Asean chair for 2020 will focus on enhancing Asean solidarity, economic integration and identity, while being more responsive by promoting Asean pro-activeness under the Asean 2020 theme, “Cohesive and Responsive”.

Among others, the key agenda for Vietnam this year includes boosting intra-Asean trade and investment through regional dialogues and discussions; the development of the circular economy through a best practices sharing platform; and the development of a Digital Integration Index to monitor and improve the key areas under the Asean Digital Integration Framework.