• What if they hosted a regional integration and no one came?

    Ben D. Kritz

    Ben D. Kritz

    With the clock winding down toward the 2015 target date for the full integration of the Asean Economic Community (AEC), instead of the final, energetic push we should be seeing now, the prevailing attitude among the members of the Association of Southeast Asian Nations seems to be resignation that the goals will be missed, and missed by quite a wide margin.

    That was the sentiment expressed at the book-launching last month of a broad study of AEC progress published by the Asian Development Bank (ADB) entitled, “The Asean Economic Community: A Work in Progress.”

    The general conclusion of the book itself is that while the effort to create an economic community that promotes the free flow of goods, services, skilled labor, and capital is forward-thinking and noble, political opposition and “inadequate institutional infrastructure” across the region present formidable obstacles to implementing the measures to achieve it.

    Those circumstances being what they are, the AEC should “be regarded as Asean aspirations and commitments pointing in the general direction of creating the region as a single market” that the year 2015 should “be seen as a benchmark of progress in that direction” rather than a hard target.

    Well, that’s just great—after more than a decade of effort toward rationalizing the Asean as a cohesive economic bloc—which it ought to be, and which would be a force to be reckoned with if only the member nations could get their act together—the message now is, “It’s a nice idea but perhaps a little too ambitious, so let’s pat ourselves on the back for making a nice try, and hopefully some of these problematic issues will somehow sort themselves out in the future.”

    To be fair, that might be the most anyone can hope for at this point, and the only real fault in the AEC’s conception was that it was too optimistic about how soon it could be achieved. For one thing, the huge disparity in institutional and economic strength between the leaders and laggards in the Asean makes it difficult to find common, mutually-beneficial ground in areas like skilled labor migration, management of trade barriers, intellectual property protections, and enforcement of product standards.

    The framers of the AEC recognized the need, from the very beginning of the endeavor back in 2003, that countries like Cambodia and Myanmar were going to need to be granted certain advantages to allow them to “catch up” with the rest of the region, but the extent to which other countries are willing to offer those advantages before they are regarded as unacceptable costs to everyone else is rather small.

    Thus, AEC measures and commitments are peppered with escape clauses like “subject to negotiated pre-agreed flexibilities” and “consistent with member countries’ national agenda and readiness of economy,” which more often than not has meant implementation has stalled on nationalistic grounds.

    By the same token, knowing that countries did have a legitimate concern for their own well-being, the attempt, at least, was made to construct the AEC in such a way that many of its objectives could be achieved simply by the Asean members’ putting their own houses in order—hence the attention paid to “institutional infrastructure”.

    This is an area in which the Philippines has notably fallen short. Back in 2010, the Department of Trade and Industry (DTI), in cooperation with other concerned agencies such as the National Economic and Development Authority (NEDA), launched an unremarkable initiative (unremarkable in the sense that it is an exercise that is repeated with each new administration) to develop “industry road maps” for 32 business sectors in the country.

    As of November 2013—more than halfway through the term of President B.S. Aquino 3rd and only two years from the target date on which the various “road maps” would have been fully implemented—just 21 of the 32 “road maps” had been completed, although according to the DTI, “five or six” more were expected before the end of the year. Four months later and that number is still stuck on 21, at least according to the DTI representative managing the Asean integration workshop for retail trade, manufacturing and creative industries in Cebu last week.

    “Planning and not following through,” or more often, “planning to plan” are considered art forms in this government, though. Just last week, the Department of Tourism unveiled another “master plan” (if I’m not mistaken, at least the third such opus produced by the DOT since Aquino took office) to “level up” the country’s tourism industry, leading one of my friends with interests in the tourism and environmental management sectors to sarcastically observe, “They ought to just rename it to the Department of Tourism Master Planning.”

    Also last week, economic guru Ben Diokno posted an article online (“Is the Philippine Mining Industry Doomed?,” posted April 2 on www.manilaspeak.com) condemning the government’s lack of attention to the development of a mining policy, something that was promised and should have been pursued with vigor after Aquino unilaterally halted mining development in the country with the issuance of Executive Order 79 back in June 2012.

    Other than a Department of Finance proposal to tax at a rate 50 percent the gross income of mining companies that have financial-technical assistance agreements with the government—which Diokno seems to consider an ill-advised trial balloon that may very well drive out what little mining industry that remains in the Philippines—there have been virtually no concrete proposals offered, to say nothing of actual measures implemented.

    Little wonder, then, that the Philippines is contributing mightily to the general malaise that has affected efforts to implement the AEC, which has got to be infuriating to the few industries—the semiconductor and electronics industry, the sugar industry, and the dairy industry are a few that come to mind—who have thought on a broader scale than their own government is capable of doing and prepared themselves for 2015, only to be stymied by a lack of policy support. The fact that businesses in the Philippines apparently can commiserate with their opposite numbers in other Asean countries with respect to the shortfall in AEC preparations really doesn’t do much to ease the sting.



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