November 13, 2017
thoughts on


November 13, 2017
Organized by:
ASEAN Leaders’ Interface with ASEAN Business Advisory Council Philippine / Warwick ASEAN Conference University of Warwick 
Featured on:
International Convention Centre, Manila
featured on
International Convention Centre, Manila
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I am always keen to share my perspectives of ASEAN, the regional integration project that has had a large presence in my career over the last 15 years.



Gong Xi Fa Chai and thank you to the organisers for inviting me to deliver this keynote speech, which I have entitled ASEAN@Crossroads. I am delighted to be able to have my first visit to UK’s 2nd best university (after Bristol).

I am always keen to share my perspectives of ASEAN, the regional integration project that has had a large presence in my career over the last 15 years. In particular – 

  1. CIMB’s corporate mission since 2005 has been to build an ASEAN universal bank. By the end of 2018, with the opening of CIMB Philippines, we will be present in all 10 ASEAN countries.
  2. CIMB fully embraced the AEC dream and positioned ourselves to benefit as a bank, from the uplift in flows of trade, capital and people across ASEAN. We were loud about it too; our tagline “ASEAN For You” has been hard to miss across the region.
  3. I have been very active in many pro-AEC bodies, including being the prime mover behind the setting up of ABC and CARI, and, more recently, becoming the first chairman of the WEF’s ASEAN RSG.

ASEAN, formed in 1967, turned 50 last year. I remember when I hit that same age milestone a year earlier, someone pointed out a saying - “at 50, we stop making excuses about who we are are who we are not, because, at this point, it is what it is”.

It is indeed high time we acknowledge that, while as a political organisation ASEAN has been a huge success, ASEAN economic integration has fallen well short of original aspirations and even current official rhetoric. The so-called “ASEAN Way”, key to its political achievements, turned out to be the key inhibitor to its economic integration agenda.

The crossroad question is whether ASEAN continues as is or will there be a recalibration of the “ASEAN Way” to accelerate economic integration in the future? The future, of course, isn’t ordinary at this juncture. We are on the cusp of the Fourth Industrial Revolution, with highly disruptive technologies transforming everything - politics, economics, businesses and society at large. Leaders and policymakers at all levels have to respond or the consequences can be grave; Kodak, HMV, Blockbuster are notable early victims. 


ASEAN has played a central role in achieving 50 years of relative peace & stability in the region. In Kishore Mahbubani and JeffeRy Sng’s latest book – The ASEAN Miracle: A Catalyst for Peace - they make the case for ASEAN winning a Nobel peace prize (EU received one in 2012) by comparing a Southeast Asia fraught with border tensions and skirmishes of the late 60s and 70s with the peaceful and stable ASEAN that enabled some of world’s greatest national economic success stories, and highlighting the role that ASEAN has played as a moderating force in the global arena.

These days, we tend to take for granted peace and stability in the region. But it wasn’t long ago, during my childhood, that we genuinely worried first about the formation by force of Sukarno’s Malindo nation and then a Vietnamese invasion of Thailand and beyond. The camaraderie developed amongst ASEAN government leaders, in the unique, informal and very social “ASEAN Way” smoothened countless instances of bilateral tensions and progressed many good socio-political regional initiatives. The ASEAN Summit has also become an important platform for regular dialogue between world powers.

Although ASEAN has a deep commitment to non-intervention in domestic affairs, member countries have made considerable political progress while in the regional grouping. It hasn’t been perfect, of course, but Indonesia has become the poster child of democratic transition for emerging nations, democracy has taken deep roots in the Philippines since the end of the Marcos regime and Myanmar’s recent political transition has been remarkable. Incidentally, 2018 is a big year for politics in ASEAN - there will be major elections in Cambodia, Malaysia and Indonesia, and, possibly, Thailand. Let us hope that the outcomes of these elections further strengthen legitimacy of governments, which would certainly help progress ASEAN.

The ASEAN peace dividend has enabled regional GDP to double over 10 years to US$2.6 trillion; if ASEAN were a country, we would be the world’s 6th largest economy today. Going forwards, with a highly literate and tech-savvy population with a mean age of only 29, major infrastructure investments underway and its huge consumer market, ASEAN is confident about sustaining superior growth rates and became the top-5 world economy in the next few years.


Having been a successful political community, ASEAN correctly recognised that the regional organisation can facilitate even stronger economic performance by increasing flows of trade, investments and labour within the region. In 2007, 

ASEAN set the goal of an AEC, which would be a “single market and production base with free flow of goods, services and investments and freer flow of capital and skilled labour” by 2015. An official study showed that that regional economic growth could be a mouthwatering 7.1% higher by 2025 if economic integration goes as planned. Different countries benefit differently, highest being Cambodia at almost 20% and lowest Indonesia at 2%, but all countries do better. 

At the end of 2015, a year later than planned, ASEAN declared itself an economic community, but what we got is very far from the promised “single market and production base”. Although over 95% of tariff lines have been brought down to zero, non-trade barriers remain very high; In fact, it has increased from 1,634 items in 2000 to 5,975 items in 2015. Intra-ASEAN trade remains at 24% of total trade, about where it was 10 years ago. By comparison, EU enjoys over 60%. Many integration initiatives exist, But remain short of targets. For instance, mutual recognition agreements have been reached for eight professional qualifications, but this covers only 1.5% of ASEAN’s total workforce and, even then, some have not been officially recognised by the local professional bodies despite been endorsed at the inter-governmental level.

Economic integration is always up against domestic resistance. For ASEAN, it becomes even more difficult because of the so-called “ASEAN Way”. Although lacking in any official definition, in the “ASEAN Way”, national sovereignty is paramount, decisions are made by consensus and unanimously. If one country disagrees, it can stop the deal or it can opt out. The “ASEAN Way” also loathes supranational authority so the ASEAN secretariat lacks resources and has no enforcement powers. Integration projects tend to be driven top down from inter- governmental committees, with limited participation of the private sector.

A good example of the frustrating ASEAN economic integration process can be seen in the financial sector. There is the ASEAN Banking Integration Framework, which took many years to negotiate, but its focus is primarily on how operating licenses should be agreed bilaterally between countries. This misses the point. There are already many banks operating across multiple countries and the real value enhancement is to improve multinational banking operations to make ASEAN banks more competitive vis-à-vis global banks and benefit the ASEAN consumer. What the banking framework should have focused on, instead, is how banks move personnel, information or operations across borders to exploit cross- border economies of scale.

In the capital markets, the flagship initiative was the ASEAN Trading Link between stock exchanges. Yet only 3 countries - Malaysia, Thailand and Singapore - agreed to participate and the initiative didn’t gain any traction because it simply wasn’t what the market needed, seeing as investors can already trade across borders via brokerage houses.

In my view, the greatest achievement of the AEC project has been how it spurred the private sector to regionalise. In the past few years, there has been a rapid proliferation of ASEAN multinational companies, such as CIMB, AirAsia, Ayala, Petron, Thai Beverage, Salim, UOB and so on. And it isn’t just the big companies - Grab is an ASEAN multinational unicorn. At various ASEAN meetings these days, it is a case of the “tail wagging the dog’ as businesses urge governments to move faster and go further with integration. 


Together with the AEC, ASEAN announced the new AEC Blueprint 2025, which essentially moved many of the original 2007 targets to 2025 and also dialled down AEC’s aspiration to being “highly integrated and cohesive: competitive, innovative and dynamic: with enhanced connectivity and sectoral cooperation: and a more resilient, inclusive and people-oriented, people centred community, integrated with the world economy”. The 50-year-old has become more realistic about his aspirations - no more single production base, not completely free movement of anything, but still aspires to move forwards.

At present, there is no political will amongst ASEAN governments to go beyond current institutional arrangements or indeed change the “ASEAN Way” of doing things. Domestic resistance to integration, opening up of markets, is instinctive. I have met so many people - powerful ones - who support the AEC, except where it adversely impacts their business. For some, the AEC is a means for them to enter new markets not for others to enter their market. Again, back to banking, if ASEAN strengthens regional ASEAN banks by facilitating cross-border movement of data, people and operations, it will be to the disadvantage of pure domestic banks. But is that against national interest or just vested interest? And, while defending their vested interest against ASEAN competitors, they just make it easier for global players to win against local and regional players. What integration needs is leadership and enforcement powers so that ASEAN can move forwards where integration is only adverse to vested interest.

However, how can we get leadership when the ASEAN secretariat has to operate on a budget of u$20m per annum (the EU at Euro155bn)? And it has little power. I will always remember the late Khun Surin telling me that being an ASEAN Secretary-General is more secretary than general because almost every decision is made by a committee of 10 ambassadors to ASEAN.

The crossroad question before us is whether to accept the slow pace of ASEAN economic integration or try to advocate change. I and many of my ASEANite conspirators had become quite jaded, to be honest; tired of going from conferences to dialogues to meetings, saying the same things. But early last year, when it dawned on us that the Fourth Industrial Revolution is here, and we realised we need ASEAN economic integration more than ever. 


The Fourth Industrial Revolution did seem to creep up suddenly; revolutionary technologies that bring abrupt and radical change to almost everything around us, from how we create, consume and move to how we communicate and govern. By definition, this scale of deep, transformative change has only happened 3 other times in history. Jack Ma noted recently that “we will see much more pain than happiness in the next 30 years”. Winners and losers will depend on responses to the threats and opportunities that come with the 4IR, and regional organisations have a huge role to help steer and shape what happens as the nature of cross-border relations and economic interactions will be revolutionised.

The 4IR will exponentially increase productivity, bring greater connectivity and inclusion, enable companies, individuals and nations to leapfrog like never before, empower small businesses, improve congestion, environmental management and healthcare and much more. But it will also bring job losses and business disruptions, greater inequality, more concentration of corporate power and new sources of risks. The 4IR will also undermine the traditional “factory of Asia” as AI and robotics decrease competitiveness of low-cost labour and 3D printing relocates factories closer to markets.

The ASEAN organisation must help ASEAN businesses navigate the 4IR. Even today, ASEAN e-commerce companies are under firing because of cumbersome customs and logistics. Data is the foundation of the 4IR so ASEAN must think about how it encourages data to flow safely and with minimal friction across borders. The character of trade is shifting from physical to virtual goods; how will these be governed? What about services? A doctor in Manila treating a patient in Yangon - great idea, but can medical information flow easily? How are payments made and taxes collected? Who licenses the doctors? What about regional flow of venture capital to encourage innovation and entrepreneurship, and education strategies to optimise regional talent pools and minimise unemployment?

In financial services, our banks look in awe at Alibaba and Tencent, and how they have managed to exploit economies of scale of China. How do we bring to bear ASEAN economies of scale for our businesses? If we don’t, global platforms will soon dominate ASEAN financial services.

ASEAN economic integration is imperative because of the advent of the 4IR. We have to no choice, but to recalibrate the “ASEAN Way” in a manner which preserves its great strengths, but also allows economic integration to move forwards more effectively. I don’t have all the answers, but working with WEF and ADB, we have come up with the idea of the ASEAN secretariat turning itself into a platform organisation where it serves more as a convenor for multi-stakeholder groups to drive change and set standards in various industries and activities. The secretariat would need more funding and empowerment to move at speed. The organisation itself needs to be reformed with perhaps a private sector-style CEO driving the day-to-day, and outsourcing some functions to have larger ecosystems to manage the sheer scale of engagement and implementation that would be required. ASEAN would also need new communications tools so that it can get constant feedback and ideas, while keeping the public engaged. 

From what I have seen in the financial services sector and projects in other industries, I believe that there are many integration initiatives that can bring great benefits without infringing on sovereignty or the principle of fairness. It is about leadership and the ability to explain the benefits and risks carefully, and distinguishing between vested interest and national interest. I believe much more progress can be made, and I think the 4IR just made it imperative that ASEAN steps up for ASEAN. 


In recent years, bruised and battered campaigning for ASEAN economic integration, I have described myself as a being “enthusiastic, but pessimistic” about ASEAN. In Manila in November last year, I had the opportunity to present the case for ASEAN and the 4IR to the ASEAN Heads of State and, in Davos recently, I followed up with the Singapore mission led by DP Tharman. Am I still pessimistic? Maybe slightly less so because:

  1. Singapore is ASEAN chair; looking at its Smart Nation plans, Singapore understands the 4IR threats and opportunities, and Singaporeans can be very efficient!
  2. Most ASEAN countries are working on national responses to the 4IR; why not a regional one,
  3. In a recent WEF survey of ASEAN youth, 90% said they knew about ASEAN and 64% said they believe ASEAN will make them better off.

Your generation believes in ASEAN and one thing politicians are good at is doing what is popular. So maybe, just maybe, 50 is the new 40 and we will have an “ASEAN Way” 2.0 for the 4IR.

Thank you. 

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