ASEAN still struggling to close development gap

via CAAI

Abdul Khalik, The Jakarta Post, Vientiane

Sun, 02/27/2011

Standing along the Mekong riverbank in Vientiane, Laotians can clearly see Thailand’s blistering prosperity compared to their own, with high-rise apartment buildings coupled with concrete housing standing along the river on the other side.

For many Laotians, it’s like watching others enjoy rising prosperity just a hundred meters across the river, but not being able to partake of it themselves, often leading to feelings of frustration.

“It’s just an everyday fact of life to look across the river to see what the Thai people have achieved,” Thongkham, who owns a shop along the river bank, said.

While both countries are members of ASEAN, the regional grouping of 10 Southeast Asian countries, nowhere across the region is the prosperity gap so wide.

While Thailand’s per capita income shot above US$4,700 in 2010, Laos registered only $980. Neighboring both states is Cambodia, with a per capita income of only $700, while the most developed ASEAN state, Singapore, has a per capita income of more than $37,000.

All ASEAN leaders have come to realize the significance of the issue and the lack of efforts to close the gap as the grouping’s economic ministers start their two-day meeting in Laotian capital Saturday.

During the meeting, Indonesia, which this year chairs ASEAN, openly underlined the need for the grouping to do something to lift the region’s poorest nations higher. The plan has the support of other members, especially Cambodia, Laos, Myanmar and Vietnam.

“Indonesia views that we need to do more to create an equitable ASEAN and closing the development gap between developed members and less developed ones. This is one of Indonesia’s focuses during the meeting and its chairmanship,” Trade Minister Mari Elka Pangestu, who chairs the ministerial meeting, said.

She expressed optimism that the meeting would result in concrete projects to close the gap.

Indonesian deputy trade minister Mahendra Siregar, who heads the Indonesian delegation, warned that if ASEAN failed to close the gap, those who could not benefit from the grouping’s integration would look for other alternatives to ASEAN.

“Indonesia has the duty of ensuring that everybody benefits from ASEAN. We have proven in the past that not only do we deal with our interests but also help others. How can we become a community if the gap is too large, and if not Indonesia, who else would pursue the issue?” he said.

Many observers have warned that if ASEAN neglected its poorest members then other countries would take advantage, pointing to the dependence of Myanmar and Laos on China, which has invested aggressively in both countries.

One effort that has been launched in improving the economic level of ASEAN’s poorest is the building of roads and railways as part of enhancing the grouping’s connectivity.

“We hope that opening access to Cambodia, Laos, Myanmar and Vietnam can raise the standard of living in those countries,” Indonesian Foreign Ministry director for ASEAN economy Rahmat Pramono.

China has been quick to help finance the building of railways from Kumming to Singapore, which will pass through Laos and Cambodia, but many have warned that China’s help was not free, raising concerns that China would obtain economic benefits and political influence in those two countries.

Connectivity is also expected to boost trade among ASEAN members. The ASEAN Secretariat estimates that trade among member states is valued at $400 billion, while ASEAN trade with the world market is worth $1.7 trillion.

ASEAN Secretary-General Surin Pitsuwan said that after regional integration and connectivity to non-ASEAN states, the grouping’s trade with the world market should reach $3 trillion by 2015.