ASEAN leaders reach consensus on economic recovery in the post-pandemic era
Under the theme “Cohesive and Responsive ASEAN,” the 36th ASEAN Summit was held via video conferencing on June 26, presided over by Vietnam, which currently holds the rotating chair of ASEAN. The meeting was attended by leaders of the 10 ASEAN member states and the Secretary General of ASEAN. The leaders of ASEAN countries reached consensus on economic recovery in the post-pandemic era, pledging to work together to reduce the impact of the COVID-19 pandemic on the regional economy, maintain stability of the industrial chain and supply chain, and strengthen cooperation with China and other partner countries.
Although the ASEAN leaders were unable to meet in person in Vietnam as planned to perform the usual ASEAN-style handshake, the virtual summit facilitated broad consensus on important issues.
Achieving Dual Goals
Vietnamese Prime Minister Nguyen Xuan Phuc spoke highly of the anti-epidemic achievements of ASEAN countries and opined that ASEAN countries should work together on social development and post-pandemic economic recovery while strengthening cooperation with partner countries to overcome the pandemic. Consensus reached at the Special ASEAN Plus Three Summit on COVID-19 in April was reaffirmed. Participating ASEAN leaders unanimously agreed to continue to strengthen cooperation with dialogue partners in the fight against the epidemic and strive to achieve the dual goals of fighting the pandemic and restoring the economy.
At the summit, ASEAN announced the establishment of the COVID-19 ASEAN Response Fund alongside commitment to promote ASEAN’s recovery and develop a comprehensive recovery framework to help restart and recover the regional economy. Philippine President Rodrigo Duterte called for a joint fight against the coronavirus pandemic and urged ASEAN member states to share anti-virus technology, cooperate in production, rationally distribute vaccine resources, and strive for effective supply of high-quality vaccines based on the ASEAN Leaders’ Declaration on ASEAN Vaccine Security and Self-Reliance.
The ASEAN Leaders’ Vision Statement on a Cohesive and Responsive ASEAN was adopted at the summit. ASEAN leaders emphasized strengthening solidarity, cooperation, economic integration, and awareness, and enhancing ASEAN’s ability to adapt actively. They reaffirmed maintenance of an open, transparent, and law-based regional structure, in which ASEAN plays a central role and continues to promote ASEAN connectivity. The leaders pledged to implement ASEAN Community Vision 2025 to build an ASEAN Community that is united, people-centered, based on law, and connected to foreign partners.
Laos Deputy Foreign Minister Thongphan Savanphet said that the biggest advances in the realization of the Master Plan on ASEAN Connectivity 2025 will be reflected in the three pillars of ASEAN, namely the Political-Security Community, the Economic Community and the Socio-Cultural Community. ASEAN leaders emphasized that disputes should be settled through peaceful means under international law and that the use or threat of force should be avoided.
The pandemic has caused a tremendous impact on the economy and society of ASEAN countries. ASEAN is an export-oriented economy. Due to the pandemic, some countries are faced with difficulties such as insufficient supply of raw materials. Maintaining the stability of the regional industrial and supply chain was a hot topic at the summit. Secretary General of ASEAN Dato Lim Jock Hoi lamented that the ASEAN economy is entering another recession since the Asian financial crisis. Leaders of Thailand, Brunei, Malaysia, and Indonesia proposed relaxing travel restrictions among ASEAN member states to revitalize regional tourism and promote economic recovery. Singaporean Prime Minister Lee Hsien Loong noted that all countries globally are now investing huge sums of money in protecting employment and the economy but stressed that none of them can keep trade flowing or the international supply chains running independently. He suggested countries in the region therefore must work together to maintain the rules-based international trading system and supply chain stability.
In the process of economic recovery, the digital economy is playing a big role. Myanmar State Counsellor Aung San Suu Kyi commented on how the COVID-19 pandemic has also accelerated the development of digital technologies and the digital economy, suggesting ASEAN seize the opportunities presented by the Fourth Industrial Revolution (Industry 4.0) to achieve greater development in the region. Thailand’s Prime Minister Prayut Chan-o-cha said, “The digital economy is the key to increasing the scientific and technological makeup of ASEAN member states’ GDP, so more should be invested in ASEAN’s digital infrastructure.” The Chairman’s Statement of the Summit stressed that ASEAN countries have recognized the indispensable role of digital technologies in economic recovery and resolved to redouble efforts to prepare for the “Industry 4.0” to build a robust, integrated, and inclusive digital economy.
ASEAN countries reiterated commitment to accelerating the process of regional economic integration and trade liberalization. On the sidelines of the 36th ASEAN Summit, a Regional Comprehensive Economic Partnership (RCEP) ministerial meeting was held via video conference. The participants agreed to strive to sign the RCEP agreement by the end of this year, which “demonstrates the firm commitment of ASEAN and its partners to upholding an open, inclusive and rules-based multi-lateral trading system,” as the Chairman’s Statement noted.
RCEP negotiations were started by 10 ASEAN countries in 2012. Other participating countries include China, Australia, South Korea, Japan, India and New Zealand. The 16 RCEP countries account for 47 percent of the global population. The 3rd RCEP Summit, held on November 4, 2019, announced that 15 member countries excluding India had concluded all text negotiations and all substantive market access negotiations and would work together to ensure signing of the agreement in 2020.
According to Minister of Industry and Trade of Vietnam Tran Tuan Anh, ASEAN is currently working with dialogue partners to expedite review of the complete legal text for participants to sign at the East Asia Summit in November this year.
Singapore Minister of Trade and Industry Chan Chun Sing said that although the RCEP countries are at different stages of development, they can draw on each other’s strengths and intensify economic cooperation. Santisouk Phounesavath, member of the Lao RCEP negotiating delegation, stressed that getting the agreement done by the end of this year is direly needed to aid economic recovery from the COVID-19 pandemic.
Vietnam Television reported that ASEAN and dialogue partners have become very determined to sign the RCEP. Once implemented, the agreement will inject new vitality into regional and global trade.
In recent years, pragmatic cooperation between China and ASEAN has been expanding. Both sides have supported each other and cooperated in not only fighting the COVID-19 pandemic but also in advancing the RCEP negotiations. At the summit, ASEAN leaders emphasized that against the backdrop of the global economic downturn, they should strengthen cooperation with dialogue partners such as China as part of efforts to maintain ASEAN economic growth and promote regional economic recovery.
During the COVID-19 pandemic, China has joined hands with the countries in the region to coordinate China’s domestic sourcing of goods and strived to maintain the stability of industrial and supply chains in the region. For example, China coordinated multiple shipping companies to arrange shipment of raw materials for textiles to Cambodia.
“Stabilizing the supply chain means stabilizing the production of enterprises and preserving the jobs of industrial workers,” said Tang Zhimin, director of China ASEAN Studies Center, Panyapiwat Institute of Management, in an interview with People’s Daily. “The world’s second largest economy recovered rapidly, which is a big deal for maintaining the stability of industrial and supply chains in the region and the world.”
China and ASEAN have continued to strengthen cooperation in the digital economy. The opening ceremony of China-ASEAN Year of Digital Economy Cooperation was held on June 12. The campaign aims strengthen cooperation in the digital world, facilitate sharing of experience in digital epidemic prevention and control, expand digital infrastructure construction, accelerate digital transformation, improve communication mechanisms, and distribute the dividends of digital economic development. Dato Lim Jock Hoi opined that China has a high level of expertise in developing digital infrastructure and implementing digital economic regulatory framework and has been an important partner of ASEAN in promoting digital economic development in the region.
Joint construction of the “Belt and Road” has provided fuel for ASEAN’s economic and social development. Many large-scale projects contracted by Chinese enterprises have worked hard to overcome the pandemic while pressing forward to ensure infrastructure construction advances. On June 21, the second longest tunnel of the China-Laos railway was completed. Accelerated advancement of China-Laos railway construction is key for Laos to transform from a landlocked to a land-linked country and promote regional connectivity. Vinh Tan Power Company, established by Chinese companies in Binh Thuan Province of Vietnam, generated 898 million kilowatt hours in May, an increase of 23.35 percent year-on-year, which has contributed to local economic development and improved the living standards of area residents.
“All countries in East Asia are now facing the urgent task of restoring the economy. Increasing cooperation between ASEAN and China to build the Belt and Road will tremendously soften the impact of the pandemic on the regional economy and stimulate regional economic growth while at the same time injecting confidence and momentum into the world economy,” Tang Zhimin said.