（英語）English Summary drafted by PIDS.

Asia-Pacific Forum 2017

Integration and Inclusiveness in a Digital Society
The Japan Economic Foundation (JEF), in partnership with the Philippine Institute forDevelopment Studies (PIDS), organized the 2017 Asia-Pacific Forum with “Integration andInclusiveness in a Digital Society” as the main theme. The forum, which was held on November
24, 2017 at the Marco Polo Ortigas Manila, was attended by experts from various Associationof Southeast Asian Nations (ASEAN) member-states and other East Asian economies, andrepresentatives from government, academe, and civil society organizations.
Opening Remarks
JEF Chairman and Chief Executive Officer Kazumasa Kusaka, in his opening remarks, lauded
the efforts of the Philippines as ASEAN chair as well as in successfully hosting the ASEAN
Summit this year. He said that JEF, for its part, has also been holding dialogues with the UnitedStates, Europe, and Asia in order to achieve sustainable growth in the regions. Mr. Kusaka
recalled how JEF began its first Asia-Pacific Forum (APF) in 2003 in Singapore to promote free
trade agreements (FTAs) in the Asia-Pacific region with the belief that FTAs are crucial toachieving sustainable economic growth. This year marks the sixteenth forum.
Explaining the theme of this year’s APF, he emphasized that the advancement of digital society,also known as the Fourth Industrial Revolution, has cut open the walls of space, and that
globalization will further pick up speed with institutional help such as FTAs. Mr. Kusaka addedthat this progress is predicted to cast both light and shadow on the domestic industrial
structure and the labor environment but the challenge is how to manage its impact.
Specifically, he noted that the deepening integration in ASEAN has an effect on the region’s
domestic economy, society, and politics. To overcome challenges such as the growing andpersisting income and asset disparities among ASEAN member-states, Mr. Kusaka said it isnecessary for countries similarly situated to work together, hold dialogues, and enter into newagreements. He cited the Trans-Pacific Partnership (TPP) and the Regional Comprehensive
Economic Partnership (RCEP) negotiations as means to accelerate structural reforms not only
for Japan but also for the East Asian region.
Meanwhile, Dr. Roehlano Briones, who read the opening remarks of PIDS President Gilberto
Llanto, said that the theme is timely and relevant considering that the world is beingtransformed by new technologies. These digital innovations, he said, have a great potential to
improve quality of life, open opportunities to increase growth, and unlock broader societal
benefits.
According to Dr. Briones, digital technology also disrupts markets for products, services, andjobs. An example of this, he said, is the intensive use of data and 3D printing in the
manufacturing industry, which could enhance both value and production chains and bringconsumers closer to a more solid economy. He added that the use of automation, robotics, andartificial intelligence can also improve major industries including those in the fields of logistics,
retail, and white-collar professions. Briones explained further that digitization can reducesocial exclusion and advance social cohesion, and create productive mixtures of national,
cultural, and religious identities.

He also noted the significant role of digital technology in building infrastructure as a result ofurbanization, population growth, mobility, and climate change and transition. Through the aidof digital technology, Briones explained, smart cities can optimize urban planning andtransport, and utility and community services such as waste collection and law enforcement. In
agriculture, the smart use of big data from sensors and earth observations can increase
productivity, food security, and farmer incomes at the same time, he added.
Moreover, Dr. Briones pointed out that a major challenge in digital technology is how to makeit inclusive, especially with the ongoing ASEAN integration. He said it is important for ASEAN
countries to ensure that technological advancements do not result in more income inequality
in the region and for them to take into consideration the rising protectionism in the West, as
well as explore how digital technology can advance the goals of the RCEP. But, he cautionedthat while there are significant advancements because of technology, it also resulted toproblems that caused the divide between the rich and poor as well as the developed anddeveloping countries. Taking this into consideration, Dr. Briones said that the ASEAN regional
bloc has to make sure that those who are really in need benefit the most from digitaltechnology and that collaborative action is required among member-states to bend the curveof digital transformation.
Meanwhile, Socioeconomic Planning Secretary Ernesto Pernia, in his keynote speech,
underscored the important role of information and communications technology (ICT) in nationbuilding. ICT, he explained, has the power to foster inclusivity, enable security and efficiency,
as well as strengthen connections between individuals, communities, and sectors.
He disclosed that the Philippine ranked 71st globally in the 2016 UN e-Government
Development Index with a 38.8-percent increase in online service index and 54.7-percent
increase in the telecommunications infrastructure index. The 2016 Philippine data from theInternational Communication Union also indicate that 47.8 percent of respondents use theinternet while 32 percent of households have internet access at home. Dr. Pernia also cited the2016 data of the United Nations Conference on Trade and Development, ranking thePhilippines 89th out of 137 countries worldwide in terms of readiness to support online
shopping and other business-to-consumer electronic commerce.
The largest impact of ICT, he said, is expected to be in the health-care, manufacturing, andnetwork industries including banking and financial institutions and local governments. To
create economic opportunities, Dr. Pernia said the government needs to facilitate a faster andmore strategic rollout of ICT infrastructures in order to meet the growing demand forinfrastructure services particularly in underserved areas.
He said the use of technology to support financial services, also known as FINTQ, seems tobridge the gap between banks and unbank and underserved markets. According to him, the2017-2018 FINTQ report Voyager and FINTQ by PLDT shows that the majority of borrowers
with access to FINTQ’s digital platforms are actually from the provinces despite theconcentration of financial services in Metro Manila, which means that digital technology has agreat potential in transforming the financial landscape in the Philippines and in other similar
situated countries.
In addition, he said the growth of the internet and the increased mobile penetration raised
access to financial institutions especially those who live in rural areas. An example of this, heshared, is the collaboration between FinTQ and the Camalig Bank in Catanduanes this year.
According to Dr. Pernia, digital lending was introduced to teachers and personnel of local
government units via an online platform called Lender. To date, FinTQ and the Camalig Bank
were able to disburse a loan of at least PHP15 million to qualified individuals in several towns

of Catanduanes through online transactions thus eliminating the need to physically appear in
the bank.
Apart from this, Dr. Pernia also discussed the introduction of digital platforms in the healthsector. He said the Department of Health vision under its e-health strategic and framework
plan is to have an ICT-enabled Philippine health system by 2020. This, said Dr. Pernia, will
increase access to quality health-care services as well as real time and quality health data andinformation for evidence-based decisionmaking. To date, the accomplishments of this vision
include (a) the creation of an interagency health national e-health governance steeringcommittee and technical working group, (b) the creation of various e-health experts andgroups and other teams including advisers from the private sector, (c) consultations,coordination, and facilitation of tactical activities, and (d) joint issuance and operations ofagreed e-health policies, strategies, plans, guidelines rules, and procedures.
Additionally, Dr. Pernia revealed that deli-health and e-health bills have already been draftedand endorsed for inclusion in the list of priority health bills for approval under the 17th
Congress. A joint administrative order has also been issued to institutionalize an interagency
national e-health governance committee of the national e-health system. However, despite
these accomplishments, Dr. Pernia expressed concern on the continuing challenges posed bydigital technology such as weak/poor network connection in remote areas and people’s low
level of literacy and capacity in terms of these developments. He said that while digitaltechnology has great potential to support human, societal, and environmental development,
several safeguards need to be put in place to ensure data protection and security.
Session 1
Emerging Populism: Contributing Factors, Impacts, and Countermeasures
The first session is on rising populism, its causes and effects on economic and social security tocountries in the ASEAN and East Asian region.
Professor Choong-Yong Ahn of Chung-Ang University, Seoul, South Korea and Chairman of theCommission for Corporate Partnership defined populism as “a political approach that seeks to
disrupt the existing social order by solidifying and mobilizing the animosity of the “commonman” or “the people” against the privileged elites” and “the establishment”.
According to Prof. Ahn, populists can fall anywhere on the traditional left-right political
spectrum of politics and often portray both bourgeois capitalists and socialist organizers as
unfairly dominating the political sphere. He said that populists tend not to juxtapose the purepeople against “the corrupt” and that it is most common in democratic nations as it is inherent
to a representative democracy.
He added that populism can take the left-wing, right-wing, and even centrist forms, as well as
certain forms of politics that bring together groups and individuals of diverse partisan views.
Historically, Prof. Ahn explained that populism appeared in authoritarian movements and in avariety of fascism, to include that of the recent Occupy Wall Street Movements, “Brexit”, andthe election of the youngest president Emmanuel Macron in France.
Sharing South Korea’s experiences in terms of emerging populism, Prof. Ahn said that his
country has demonstrated a mature political democracy during the last May presidential
elections, swinging from a conservative ideology to a people-centered progressive one backand forth. He disclosed that South Koreans alternated their choice of political regimes from a
conservative to a labor-friendly progressive regime. He added that South Korea’s electedPresident Moon Jae-in promised to adopt an “income-led growth” for the common people withbroad-based welfare programs for low- and middle-income people and anticorruption
measures. He also noted that his government is pushing for an innovative growth side by side
an income-led growth by elevating the Office of Small Business Administration to a ministerial
level for the first time in Korean government history.
After two economic crises, the first one being the Asian financial crisis in 1998 and the second
one the global economic crisis in 2008, Prof. Ahn explained that South Korea’s income
distribution has been markedly polarized in the Asia-Pacific economies and its youth
unemployment has been the highest among the OECD economies.
He also disclosed that the rising income inequality and the acute dichotomy between large
conglomerates and small and medium enterprises (SMEs) in South Korea, especially microbusinesses, require a new approach for inclusive growth and inclusive economic policies as
highly recommended by the International Monetary Fund and the OECD. He said that one wayof achieving inclusive growth is to pursue a win-win growth under a mutual cooperation
framework between big companies and SMEs, especially micro family businesses as evident in
the ideals pursued by the Korean Commission for Corporate Partnership (KCCP).
Prof. Ahn stressed that it is imperative for Korea to have a clean and transparent governmentand global standards in business governance, as well as social harmony to pursue inclusive andsustainable development.
In terms of the impacts of President Donald Trump’s international trade policies, Prof. Ahn
posited that it has invoked a new wave of protectionism and unilateralism to protect American
jobs and American interest first. He said that President Trump appears to keep a
confrontational relationship against China to correct the lopsided trade imbalance in favor of
China, adding that the US president has scraped a much heralded TPP to protect Americanjobs.
He said that the implementation of this policy would have far-reaching impacts on theeconomic integration outlook for East Asia, and broadly on Asia-Pacific economies. The
departure of the US from the TPP, Prof. Ahn noted, has shattered a possible ideal scenario of anenlarged, upgraded, and open regionalism in the Asia-Pacific region. This, he explained, islikely to cause a serious setback of new set of trade rules, which will set the tone for renewed
multilateralism on a regional basis.
He further opined that in the absence of US leadership in ushering in an open East Asian
regionalism, China is likely to take advantage of the US leadership vacuum in Asia and is poised
to establish itself as an economic hegemon in the unfolding Asian century. Countries like Japan,
Australia, or South Korea could also take a leadership role for an East Asian integration
movement, he added.
Prof. Ahn also emphasized the need to recognize that a domestic populism for a political votegathering could be against international norms, values, openness, trade liberalization, andcross-border people-to-people flows. He said that for East Asia to keep its trade liberalism
intact, new entrants should be proactively pursued. Also, he urged for RCEP to be accelerated
simultaneously toward its early conclusion in order to maintain East Asia’s high growth regime
and revive East Asian identity.
Likewise, he said that the East Asian economy needs to upgrade its economic system to global
robust standards, which will facilitate economic integration. To do this, East Asian countries
need to adapt to current needs and realities, and to mitigate the negative consequences ofglobalization and openness such as social and income inequalities by employing effective
inclusive growth measures and to reshape the institutions of global governance.
He also urged East Asian countries to act together to stop terrorism, cyberattacks, and thenuclear plots of North Korea. Apart from pursuing systematic dialogue mechanisms, Prof. Ahn
proposed to have a regional carbon emission market as well as regional environmental
cooperation to combat global climate change.
In the same panel, Dr. Yose Rizal Damuri of Indonesia’s Centre for Strategic and International
Studies discussed the growing discontent over trade and economic openness. The current
dissatisfaction, he said, can be attributed to two things. One is because of common perceptionthat only a few enjoy the benefits of globalization. Another is due to the failure of policies
implemented to reduce the negative impacts of globalization, despite various studies showing
otherwise.
Dr. Damuri cited the CSIS Survey conducted in Indonesia in 2017. The survey shows that only
slightly more than half of the sample (randomly chosen from national population) that sees
trade to be beneficial to Indonesian economy, despite that Indonesia is among the emerging
economies that has got a lot of advantages from economic integration. The negative perception
is even more obvious in the case of foreign workers, which only less than 25% of the
respondents consider foreign workers bring economic benefits. This shows that populist
measures and economic nationalism can be easily activated among misinformed constituents.
That explains Indonesia’s trade policy swings from an open to a more restrictive regime, whileat the same time the country also witnessed the decline in tariff rates and a surge of nontariffmeasures (NTMs).
At the regional level Dr. Damuri explained that ASEAN, as a regional bloc, has a lot of potentials
to push for greater economic integration, by continuing openness initiatives in the greater East
Asia region (i.e. RCEP and ASEAN Economic Community). Those successful initiatives would
show economies in the region, and also the world, the importance of continuing greater
economic integration. More importantly, those initiatives are among few trade agreementsthat emphasize the importance of more inclusive policy, including measures for capacity
building among member countries.
But the risks and uncertainty remain high, said Dr. Damuri. He identified technologicalprogress, the need for new trade and development strategy, increasing complexity of trade
agreements (e.g., the spaghetti bowl effects), and difficult reforms as among the issues thatneed to be acted upon. To rise above these challenges, Dr. Damuri recommended memberstates to have: (a) greater understanding on what the benefits of economic openness can bring;(b) better communication and information to general audiences; (c) broad-based development
and market policy; (d) continuing reform initiatives to increase ease doing business andfacilitate investment and trade; (e) more flexible labor market and human capitaldevelopment; (f) more specific and targeted policy to ensure equitable development between
and within countries; and (g) capacity building for SMEs to increase internationalization,
provision of social safety net and protection system, retraining and adjustment program, andgreater support to multilateral trading system and liberalization.
In the case of Thailand, Dr. Nonarit Bisonyabut of the Thailand Development Research Institutesaid the rise of populism in his country started when the Thai Rak Thai Party, a new politicalparty with a populist platform, won the legislative election in 2001. He claimed that populism
had a good start in Thailand with the implementation of the universal health coverage reformand One Tambon One Product (OTOP) program by the new administration. However, populist
policy started to turn bad when it had reached a trade-off point: that is, the improvement inthe welfare of the majority comes at the cost of others’ welfare (minority, future generation, or
people from other countries).
Learning from this experience, Dr. Bisonyabut proposed some countermeasures to keep
populism under control such as the creation of competition in politics, improvement of theparliamentary check and balance system, support to direct democracy, and improvement oflaws that control budget discipline.
Meanwhile, Dr. Thomas Aquino, Chairman of the Board of Directors of NOW Corporation,
presented some contributing factors to emerging populism in the Philippines, among which
are the following: (a) political leaderships were supported by traditional influential sectors,
despite awareness of global trends; (b) adoption of useful changes in society seemed
formidable and reforms were slowly coming in; (c) the needs of a young and growing
population clamored for positive action as dangers of inadequate national attention took its
toll; (d) poor infrastructure, corruption, weak enforcement of laws; and (d) the rise of recent
political leadership reflected a reading of what ails society and a promise of actions translated
to popular political mandate.
The result of populism in the country, according to Dr. Aquino are the following: (a) free trade
movement took a back seat as priority turned to addressing the ills of society; (b) priority was
given to development initiatives that are inclusive and integrating society via new legislation,use of technology, social media, and challenges facing Mindanao; (c) bilateral issues gravitatedtowards basic aspects of bilateral relationships (i.e., respect for sovereignty, domestic
priorities defining the kind of development assistance, among others); (d) active and high levelof participation in the ASEAN region and cultivating deeper friendship with immediateneighbors of the Philippines; and (f) strong expectations on what the ASEAN Economic
Community (AEC) can achieve and what the RCEP can truly deliver.
Explaining the same topic, Prof. Prabir De of the Research and Information System forDeveloping Countries (RIS) in India said that the emerging populism has resulted to
uncertainty in the global economy. He explained that global growth has fallen to 2.3 percent in2016 (WEO, October 2017) and will likely go slower in coming months. He also noted China’s
shift in its growth model, from heavy reliance on manufacturing exports and investment
towards domestic consumption. Aside from this, he stressed that trade protectionism is rising
fast and that there are downside risks to growth include rising policy uncertainty, particularlyin the United States and Europe, financial market disruptions, and growth disappointments inmajor economies.
But along with populism, Dr. De said there are expected developments in Asia such as: (a)capital out flight and more people seeking freedom in China; (b) India’s small and medium
enterprises facing existential problems due to demonetization and GST in the country; (c)more populists’ measures by advanced economies in coming years; and (d) the rise of antitrade measures and the slowing down of globalization.
To counter the possible negative effects of populism, Dr. De suggested the promotion ofphysical and digital connectivity development, establishment of mega corridors vis-a-vis mega
FTAs, easing the burdens of nontariff measures, facilitating global and regional value chains,implementing the Sustainable Development Goals, and investing on human resources, health,education, soft connectivity, and faster communication.
He also cited some issues to watch for like: (a) the performance of the Chinese economy and its
governance; (b) the rise of nationalism, terrorism, war environment, natural disaster, climatechange, etc.; (c) the use of technology and innovation; and (d) the Indian election in 2019.

Session 2
Innovation as a Catalyst for Deepening Inclusiveness and Regional Integration
As the ASEAN moves forward to the next 50 years, member-states should look at how it can
maximize innovation, technological revolution, and digital age to make these more inclusive,
instead of causing more divide.
Out-of-the-box Consultancy CEO Dr. Man-Jung Mignonne Chan pointed out that as of January
2017, more than 3 billion of the 7 billion total world population are already internet users,with more than half of them being active social media users. Furthermore, out of the total
world population, there are 4.9 billion mobile users. She added that innovation and technology
have changed the nature of business operations and employment sectors for the better,
especially in the manufacturing, commerce, health, education, and tele-working industries.
Furthermore, Chan said people fear more about losing their jobs with the emergence of hi-techmachines and spend more time in chat rooms, neglecting personal interaction. Thus, she urged
the government to help facilitate the use of technology among citizens, saying that they havenothing to dread about innovation and technology. According to her, the government should
focus on policies on social re-engineering (e.g., preparing for phase-out industry retraining andreemployment), industry sectoral restructuring (e.g., phasing out industries that harm theenvironment and encouraging green technology), and regional integration (e.g., promoting
cooperation in technological innovation).
This was supported by PIDS Senior Research Fellow Jose Ramon Albert who said that“technology brought change but widened divide” globally, pointing out that while internet
penetration rates in 2017 “vastly improved”, half of the world’s population still do not haveaccess to various resources available on the internet.
In the case of the Philippines, Albert presented the 2015 Survey on Innovation Activities which
revealed that only less than half of firms in the country are innovators. He added that althoughfirms know of the high returns from technological innovation, “developing countries
unfortunately appear to invest very little in R&D and innovation.” Albert also explained that
innovation does not always mean a change in a firm’s product but can also include innovationin the firm’s operations or processes.
Meanwhile, member-states should also consider if they can actually keep up with the new“mega trends”, according to Dr. Vo Tri Thanh, a senior researcher from the Central Institute for
Economic Management.
While technology makes lives easier, it has also become one of the reasons for income
inequality in Asia, according to UP School of Economics Professorial Lecturer Josef Yap. He said
that technological progress has opened vast economic opportunities, which in turn increased
returns to human capital and skill premium, “with individuals having higher educational
attainment and skill endowment able to benefit more from the new opportunities”. He citedthe business process outsourcing (BPO) sector in the Philippines as an example, saying that
only those who have college degrees and the ability to speak fluent English benefit from it.
To address this, Yap also said that there is a need to make innovation and technology more
inclusive in three aspects—industrial inclusiveness, territorial inclusiveness, and social
inclusiveness. He also highlighted the role of education in all of these aspects, saying that it is across-cutting issue.

Likewise, Chinese Academy of Social Science Professor Yunling Zhang said that the “catching
up model based on existing industrialization model no longer works” and thus suggested toprioritize sustainable, inclusive, balanced, and cooperative development amid the rapidchanging digital society.
Session 3
People-centered ASEAN as a Way Forward to the Wider Regional Integration
Speaking in the last session, Dr. Hank Lim’s discussion focused on three main points: (1) How
rapid technological changes impact economics and trade and how to counter the negative side
effects brought about by these changes, (2) What are the connectivity issues that prevent theformation of a people-centered ASEAN and its role in regional integration, and (3) How to
strategically invigorate discussions and overcome problems regarding RCEP and TPP.
According to Dr. Lim, trading nations react differently to changes in technology—especially torapid economic changes that digital technology brings because of their different political,
cultural, and social structures and characteristics. He noted that some political systems andcultures are more adaptable to rapid technological changes than others.
The rise of protectionism, anti-globalization, and intense nationalism could be a result of thedisequilibrium between the rate of change in technology and the rate of change in political andsocial systems among different trading countries. In most cases, changes in political and social
systems lag behind changes in technology. Thus, countries that are able to catch up are
benefiting more from these technological changes, widening income disparity internationallyand domestically.
To counter the negative side effects of rapid digital technology and globalization, Dr. Lim
recommended the setting up of workable regional and bilateral systems to promote economic
and technical cooperation for human and physical capacity building and special differential
treatment in developing and in trade-deficit countries. These initiatives must be funded mainly
by countries that have persistent huge trade surpluses.
Currently, there are multilateral and bilateral partnerships for human capital development
among countries in the region. However, Dr. Lim pointed out that these initiatives are notsustainable given that they are based on voluntary and nonbinding principles.
On connectivity issues, Dr. Lim identified physical geographic barriers, existence of different
languages, and social and cultural diversity as obstacles for the formation of a people-centered
ASEAN. It will therefore take time and persistent effort to move toward an ASEAN Community
based on a people-centered framework and for the benefits of ASEAN cooperation andintegration to trickle down to the vast majority of ASEAN people.
Also, he noted that for people-centered policies to work, effective implementation of inclusive
policies and harmonization and standardization of commonly agreed rules and policies topromote ASEAN Economic Community, ASEAN Socio-Cultural Community, and ASEAN Security
Community are needed. ASEAN Secretariat must therefore be upgraded and empowered tomonitor and assess the implementation of commonly agreed policies.
Meanwhile, Dr. Lim observed that there is a collective push for “accelerated progress” in many
RCEP Working Groups. However, he pointed out that additional flexibility and long-term
strategic overview from the countries involved are required to push it forward. He highlighted

the need to include more concrete agreements on e-commerce and micro, small, and medium
enterprises (MSMEs), market access, and a schedule and rules in the RCEP.
On TPP minus the US, the 11 participating countries should proceed to rectify the agreementwith deletion or suspension of the major controversial elements or appendices that wereinserted into the Agreement due to pressure or insistence by the US.
For integration to take place in the ASEAN region, not just the commercial interests need to be
met but also the wider needs of the people, said Datuk Seri Jayasiri Jayasena, Secretary Generalof Malaysia’s Ministry of International Trade and Industry. A people-centered approach, hesaid, will certainly contribute towards regional integration, as the needs of the larger segmentof the population are met and people reap the benefits of region-wide initiatives.
However, for this to happen, he noted that individual actions at the national level as well as
collective actions at the regional level across all ASEAN member-states have to be put in place.
First, he cited the need for creating greater awareness and appreciation of ASEAN and its
initiatives. According to him, a one-off celebration of ASEAN day yearly is not enough. Topdown decision-making process at the national and regional level on ASEAN matters need to becomplemented with regular stakeholder engagements, which should include nongovernmentorganizations, civil society, small businesses, youth, and other interest groups. He alsosuggested for ASEAN to hold more people-oriented activities regularly and to reducebureaucrats’ meetings. ASEAN music, film, arts, food and sports festivals need to be permanentfeatures in each ASEAN country’s annual calendar of events.
Datuk Seri Jayasiri likewise noted that for economic growth to be more inclusive, ASEAN mustensure that trade initiatives should benefit not just the big corporations, but more importantly,
the MSMEs. Likewise, he emphasized the need to remove the barriers to the movement of
natural persons within the region, which is “core to a people-centered ASEAN” and an essential
component for border trade potentials to be fully realized.
Likewise, Datuk Seri Jayasiri emphasized the importance of connectivity within ASEAN. Good
connectivity, he said, includes physical infrastructure to facilitate movement of goods, services,and natural persons. This includes roads, railways, airports, and ports. He added that digital
infrastructure to enhance information connectivity is a must for a people-centered ASEAN.
Lastly, he lamented the slow progress of the negotiations under the ASEAN-centered proposal
for a regional free trade area, the RCEP. He noted that the very slow progress of RCEP is giving
the impression that there is no collective will to conclude it. There is also no clear champion topush the process to the finish line. On the other hand, he noted that the TPP, a mega trade deal
involving 11 Pacific countries, has been given a fresh breath of life after the remaining parties
reached a partial agreement in November 2017.
Meanwhile, Dr. Ponciano Intal, Jr., senior economist at the Economic Research Institute for
ASEAN and East Asia, in his presentation focused on four topics: (1) highlights of the results ofthe ERIA survey on ASEAN; (2) framework for inclusiveness and social equity; (3) digital
economy, inclusiveness, and people-centeredness; and (4) engendering robust growth andeconomic inclusion in integrating ASEAN in the digital world.
At the outset, Dr. Intal discussed the results of the ERIA survey on ASEAN. According to Dr.
Intal, ASEAN peoples aspire for and largely expect an ASEAN in 2025 that is integrated,connected, resilient, and a significant voice and player in global and regional affairs. However,
he pointed out that there are large gaps between aspirations and expectations in the areas ofgood governance, equity, environment, and human rights. On their perception about the mostpressing problems facing their country, ASEAN peoples, he said, were most concerned about
corruption, income disparity, and social inequality.
Dr. Intal highlighted two main elements of achieving inclusiveness and social equity in ASEAN:(1) poverty reduction and (2) reduced inequality.
In order to achieve these, he highlighted the need to enhance direct investment and growth
drivers and indirect equity enablers. These include seamless trade facilitation (particularly
those pertaining to MSMEs and global value chains that link MSMEs) and reduction in NTMs
and standards and conformance as these barriers make access to export markets more difficultfor MSMEs. He likewise identified good connectivity (physical, digital, institutional, people-topeople), services liberalization and cooperation, as well as good regulatory practice andregulatory cooperation as growth drivers and indirect equity enablers.
Furthermore, he stressed the importance of strengthening equity drivers and growth enablers.
These include education, health, and access to electricity, irrigation, and farm-to-market roads,
as well as the provision of social safety net for increased economic resilience.
Dr. Intal also argued that digital innovation, although it comes with certain risks, can facilitate
inclusiveness and people-centeredness. Digital trade, he noted, offers MSMEs global value
chain reach for market niches without requiring huge volumes. Likewise, digital revolution ande-governance can lead to more effective targeted subsidies, more efficient delivery of
government services, and greater voice from various stakeholders (people centeredness).
In conclusion, Dr. Intal emphasized that moving toward robust and inclusive integration would
require synergy among integration and domestic reform, connectivity and cooperation,
together with adjustment measures and institution building. He added that economic
integration in ASEAN is acritical part of ASEAN community building. A successful AEC thatdelivers benefits to all people needs robust ASCC, MPAC and APSC. Lastly he emphasized theimportance of implementation and coordination, along with political will and people support
in ASEAN community building.
For his presentation, Prof. Shujiro Urata of Waseda University Graduate School of Asia-PacificStudies, centered on the following points: (1) modes of multilateral partnerships for humancapital development among countries in the region; (2) connectivity issues that prevent theformation of a people-centered ASEAN; (3) the role of a people-centered ASEAN in regional
integration; and (4) invigorating discussions and overcoming difficulties regarding RCEP and
TPP.
According to Prof. Urata, there are already various frameworks—multilateral, regional, andbilateral partnerships—for human capital development among the countries in the region.
Example of multilateral partnership is the Sustainable Development Goals on Quality
Education of the United Nations. In the regional level, APEC has the Human Resource
Development Working Group. ASEAN also has human development programs, as well as
human capital development initiatives under RCEP. For bilateral initiatives, there are several
official development assistance (ODAs) between countries like Japan and the US and ASEAN
member- states. One example of such ODAs is Japan and Viet Nam’s cooperation to set up aJapan-Vietnam University. Under this program, Japan has formed a consortium of about 10
universities to set up graduate as well as undergraduate programs. Through this joint
program, both countries hope to provide technical assistance and training, not just toVietnamese students but also to students from other ASEAN countries.

However, for cooperation agreements and programs like this to succeed, there is a need for
coordination and for recipient countries to incorporate these cooperation programs into theirown programs. This way, recipient countries will have a sense of ownership toward thesecooperation programs.
On people-centered ASEAN, Prof. Urata reiterated ASEAN’s aspiration as a region that engages
and benefits people—one that is responsive to people’s needs as stated in the ASCC Blueprint
2025. To do this, however, ASEAN must empower people, promote equitable access to social
protection and enjoyment of human rights, with people as the main beneficiaries of theeconomic activities in the region.
On connectivity issues, he noted that barriers to people-to-people connectivity, as well as
information connectivity, are the main issues that ASEAN must prioritize.
A people-centered ASEAN, according to Prof. Urata, is key to a successful regional integration
since it would benefit people, who would then support the promotion of regional integration.
In the long run, this would help nurture an ASEAN identity. He likewise recommended that
East Asia (ASEAN+3 and ASEAN+6) pursue economic integration. He noted that RCEP would
contribute to economic growth, as well as peace and stability in the region.
Prof. Urata also hoped TPP11 would be concluded and signed in the near future. He noted that
although the US led the first part of the TPP negotiations, Japan also contributed a lot for theconclusion of TPP 12. On the other hand, he noted the lack of strong commitment from ASEAN
Plus leaders to conclude the RCEP. He maintained that for RCEP to succeed, there should bestrong determination and commitment among the leaders to conclude the negotiations. A new
approach is also needed such as setting high-standard goals and allowing flexibility forachieving goals depending on the situation of the countries.
On innovation and inclusive growth, Prof. Urata noted that advancement in innovation leads toglobalization, which, in turn, promotes innovation. Thus, he suggested that innovation must be
used to promote SMEs’ activities in order to reduce income inequality.
But then, he argued that there is a more direct way to reduce income inequality—
redistribution of income through progressive income taxation and other tax policies. He cited
the Japanese government’s recent policy to increase the progressiveness of inheritance tax andincome tax, among others, with the goal of improving income distribution. This is somethingthat perhaps ASEAN countries could consider to redistribute incomes and ultimately reduceincome inequality, he said.
On the other hand, Dr. Yap gave a quick response to Prof. Urata’s point on globalization andtechnological innovation. According to him, the BPO sector in the Philippines has somewhat
addressed the poverty situation but it has also increased income inequality. He agreed that
ASEAN should consider more direct ways of addressing income inequality in the region. For
the Philippines, he noted that the most direct approach to this problem could have been theland reform program, but unfortunately, it has been unsuccessful.
Another speaker, Amb. Murray McLean AO, Chairman of the Dunmore McLean Pty Ltd.,observed that by achieving sustained economic growth and development, as well as
improvements in terms of social conditions in the individual member-countries, ASEAN has
become a cohesive force within the region. He lauded the achievements and the commitmentsof ASEAN to achieve greater integration and connectivity. However, he pointed out that muchpotential remains untapped, and in order to realize the commitments embodied in the ASEAN
master plan for 2025, both ASEAN and its regional partners must work together towards that

goal. He recommended that ASEAN should continue the regional dialogue and consultation,
particularly on the maintenance of peace and stability, advancement of trade and investment,
and greater connectivity.
He, however, noted that despite the strong growth that ASEAN has achieved, development
within and between ASEAN countries has remained uneven. Millions of people still live on lessthan USD 1.25 per day and significant inequalities exist in income, education, access to formal
labor markets, financial services, and infrastructure.
Amb. McLean presented three examples of pathways through which some of these challenges
faced by ASEAN countries can be addressed.
First, ASEAN countries must continue to push for the conclusion of TPP11 and RCEP to further
sustain trade and investment liberalization in the region. This way, domestic and regional
economic growth will be maximized, resulting in decent living standards, creation of morejobs, and greater business opportunities.
Second, regional partnerships between specific ASEAN countries facing the most difficult
inequities and challenges and countries like Japan, China, Australia, New Zealand, South Korea,
and India (not to mention the US) must continue to be pursued. Initiatives supporting
infrastructure connectivity such as China’s One Belt One Road initiative, Japan’s Expanded
Partnership for Quality Infrastructure, and South Korea’s ASEAN Connectivity Forum can eachplay an important role, provided that these initiatives are aligned and in synergy with ASEAN’s
own master plan to improve connectivity. Aside from transport infrastructure, enhancement ofdigital connectivity is likewise important.
Third, ODAs from major donor countries as well as institutions such as the Asian Development
Bank and the World Bank, particularly those pertaining to education and skills development
support, need to be carefully targeted through full and collaborative consultation. Suchsupport, according to Amb. McLean, has played a significant and positive role in ASEAN overthe past 50 years. ODAs through targeted scholarship arrangements, alongside privatelyfunded overseas education exchanges and placements will also remain important in building
productivity and overcoming inequalities.
In his presentation, Dr. Min Ye Paing Hein, executive director of the Myanmar Development
Institute focused on people, peace and security, connectivity, and integration in the Myanmar
context. At the outset, he discussed Myanmar's national economic policy, which according tohim, has four objectives: (1) to support national reconciliation and the emergence of a unitedfederal democratic union; (2) to achieve balanced economic development across the states andregions; (3) to create opportunities for the emergence of capable and skilled new generations
for the benefit of the country; and (4) to establish an economic system that can achieve andmaintain positive development outcomes through the participation, innovation, and efforts of
all citizens.
He then presented Myanmar's 12 economic pillars, which include among others, theidentification of changing environment in ASEAN and the development of physical andinformation technology infrastructure, which are both related to regional integration.
He also discussed Myanmar’s investment law, which he explained is a combination of foreign
investment law and Myanmar Citizen’s investment law. Likewise, he informed the audiencethat Myanmar is currently drafting a Company Law, which will increase the percentage of
foreign shares allowed in the country from the current 1 percent to 35 percent.

In terms of gross domestic product, Dr. Min noted that Myanmar’s share of agriculture has
been declining over the years, while manufacturing and services have been on the rise.
However, in terms of the share of employment by sector, he noted that there has been nochange, with share of labor force in manufacturing and agriculture at the same levels despite
strong economic growth in the past decades.
Dr. Min attributed Myanmar's growth primarily to exports such as petroleum gases. Between
2010 and 2015, he explained that there has been relatively no change in the composition ofexports. Similarly, he pointed out that foreign direct investment (FDI) has been predominantly
concentrated in the oil, gas, and power industries. In terms of inflation, there was a huge
inflation in 2015, but this has recently stabilized as Myanmar government focused on
macroeconomic stability.
On connectivity, Myanmar has the lowest in terms of road density in the Greater Mekong
Subregion (GMS) and electricity consumption per capita. Likewise, Myanmar also has thelowest infrastructure stock per person for all low-income countries in the sample of 50
countries according to the Global Infrastructure Hub released in 2017.
Dr. Min maintained that the presence of more roads increases both growth and convergence asshown in a study by MDI. The same study also concluded that infrastructure plays a major rolein bringing states and region together in terms of economic growth. Likewise, it noted thatborder states benefit more from within-country integration and market access. For example,
Myanmar states that are close to Chinese borders benefit more from Mandalay than from trade
spillovers from China.
Armed conflicts in Myanmar also affect connectivity. According to Dr. Min, about 118 ofMyanmar’s 330 townships are affected to some extent by conflict and associated tensions
between the government and ethnic armed organizations. These townships are home to morethan 12.3 million people, or close to one-fourth of Myanmar’s population. He therefore
suggested for Myanmar to double its efforts in restoring peace and order in areas affected byarmed conflicts. He also said that transportation and electricity are key to creating jobs andattracting FDI.
In creating a people-centered ASEAN, Dr. Min posed the following questions and issues: (1)
Who are the people being referred to in this context and who represents them? (2) Where are
the boundaries? Are we focusing on trans-border problems or local issues? (3) Are we moving
towards civic regionalism or rights-based regionalism? If so, which rights and whose rights are
we protecting and what are the mechanisms to do so? (4) What are the preconditions for civic
regionalism or participatory regionalism?
Lastly, Dr. Min discussed an initiative by Myanmar government called Sustainable
Development Action Plan. According to him, the plan consists national-level initiatives that arealigned with the global and regional frameworks such as the SDG 2030 agenda, as well as the
AEC and GMS frameworks.
Meanwhile, Mr. Tadayuki Nagashima, chief senior researcher of the Overseas Research
Department, Japan External Trade Organization (JETRO), focused on two points: (1) the
globalization of Japanese companies and (2) JETRO’s initiatives to promote inclusive trade inJapan.
According to Mr. Nagashima, there has been a big change in globalization trend among
Japanese companies since the financial crisis in 2008. For example, he noted that Japan’s
exports figures have not returned to the pre-financial crisis level. On the other hand, FDI from

Japan, although it declined after the financial crisis in 2008, has started to rise, even exceeding
pre-financial crisis level since 2013. Thus, FDI is becoming more important for Japanesecompanies to expand globally. This increase in FDI from Japanese companies, Mr. Nagashima
pointed out, has happened despite the weak yen.
Mr. Nagashima then discussed the result of a survey conducted by Japan’s Ministry of Tradeand Industry which shows that Japanese companies tend to invest more in countries where
local product demand is robust or expected in the future. Also, he noted that Japanese firms
usually look at countries where Japan has existing FTAs or economic partnership agreements(EPA) in deciding to expand globally.
Mr. Nagashima enumerated three initiatives of JETRO to promote inclusive trade in Japan,
namely: (1) support for SME in terms of human resources and rule making; (2) support for
agricultural, forestry, and fishery industry; and (3) promotion of regional investment.
Each of these groups, he said, were left behind in the globalization process. Thus, JETRO hastaken these initiatives to support these sectors. During fiscal year 2016, JETRO launched theConsortium for New Export Nation to support SMEs, particularly those that have limited
capabilities and experience in trading globally.
According to Mr. Nagashima, the most effective way to help SMEs is to provide them with wellexperienced human resources. For example, large general trading and manufacturing
companies can provide technical assistance and training to SMEs. Under a JETRO project, 500
experts from large Japanese companies have been dispatched to provide hands-on support to
SMEs. JETRO also has a network of local chambers of commerce and over 1,000 support
organizations like local banks to handle requests from 3 million SMEs in Japan. These
organizations also provided research studies that SMEs used to facilitate business expansion
overseas. According to Mr. Nagashima, there were already 6,000 companies that benefited
from this program since it was launched
JETRO also provides advice to SMEs, particularly those involving cross-border e-commerce.
Under this program, SMEs can go to a trade promotion organization to seek advice on issues
and barriers in using e-commerce. They can also use related research results that are available
in coming up with a proposal to government.
In terms of support to agriculture, forestry, and fishery sectors, JETRO has 45 local offices andexperienced human resources to help SMEs in these sectors, especially in strengthening theircapability to export their products. Examples of regional products that are promoted to theworld market are rice products, Japanese sake, vegetables, fruits, seafood, etc.
The third initiative of JETRO is on the promotion of regional investment. Nagashima
maintained that supporting SMEs, especially those engaged in agriculture, leads to thedevelopment of rural areas. It also promotes investment into Japan’s local regions.
Finally, he reiterated that the key to inclusive trade, not only in Japan, is human resource
development.
Closing Remarks
In her closing remarks, Assistant Secretary Ma. Hellen B. De La Vega of the Office of ASEAN
Affairs under the Philippines’ Department of Foreign Affairs, highlighted three points: First isfor people to be watchful and mindful of the influence of populism and its implications to free
trade multilaterism, economic growth, and the socioeconomic being of ordinary citizens.
Second is to take seriously the role and impact of innovation so that everybody benefits
positively and not to further alienate or widen the digital gap among nations.
Third is about the top-down and bottom-up approaches in promoting a people-centered andpeople-oriented ASEAN. Asec. dela Vega stressed the need for ASEAN member-states to go
horizontal (shift the focus to grassroots/people) because ASEAN, she said, is more about
relationships, cooperation, and listening to people on what needs to be done.
She said the peace dividend is something that ASEAN should be proud of and that there is noalternative to dialogue in resolving issues among member-states. The first challenge, she said,
is how to balance national interests with regional interests/regional aspiration, national laws
versus regional aspirations. Asec. dela Vega explained that there is no alternative to a free
trade which is the reason why the Philippines has taken on the theme of “Partnering for
Change and Engaging the World” during its chairmanship.
The second challenge is the need to increase ASEAN awareness and its international-led
mechanisms. She emphasized that part of the success of an East Asian economic community is
not just ASEAN alone, but the strong and robust relations among the Plus 3 countries of China,
Japan, and the Republic of Korea. Asec. Dela Vega said that despite the challenging times formany of the countries in East Asia, there is still a strategic dialogue-led mechanism called theEast Asia Summit which was attended by US Pres. Donald Trump.
The third challenge, she said, is strengthening the ASEAN secretariat so it could better support
and assist ASEAN. She pointed out the need for ASEAN to be self-reliant and to have moreresources which can be achieved through a deeper sense of integration. She hopes that in thenext 50 years, ASEAN would realize the vision of a rules-based people-centered and peopleoriented ASEAN.
Open Forum (Q&A)
QUESTION 1: Dr. Victor Paqueo, Visiting Research Fellow, PIDS
Dr. Paqueo suggested that massive open online courses (MOOCs) can act as a natural vehicle
for people-centered and people-to-people way of engaging in the region. He explained thatthese are relatively inexpensive, and at the same time, they take advantage of the technologies
brought by the Fourth Industrial Revolution. However, he noted that MOOCs, if implemented,
need to have an ASEAN character. For example, there should be a way for students to learn
about one another’s varied culture and history. How educational systems, as well as thedifferent social sciences that exist in the region, must also be considered. Dr. Paqueo asked if
MOOCs is something that ASEAN should consider and pursue.
QUESTION 2: Dr. Choong Yong Ahn
Dr. Ahn emphasized that in order to successfully create a people-centered ASEAN community,
both top-down and bottom-up approaches to integration must be coordinated. Bothapproaches must also reinforce each other. He then asked who is sitting on the driver’s seat in
the ASEAN integration. Specifically, he asked whether the integration process is driven by acollective leadership of all countries in the region or only by a specific country, or perhaps, acertain group of elite countries in ASEAN.

On the TPP, Dr. Ahn asked Datuk Seri Jayasiri about the timeframe for the signing of the TPP11
agreement, as well as the timeframe for accepting new members like Korea and other nations
that expressed interest to join.
RESPONSE: Dr. Hank Lim
Dr. Lim agreed that MOOCs as an educational platform is something that ASEAN countries canroll out as part of people-centered bottom-up approach to regional integration since it does
not cost much and can be implemented quickly. He likewise informed the audience that
Singapore just launched a national project called Smart City which aims to improve living
standards using technology. This project, he said, can be replicated in other ASEAN countries.
On the question about who is the champion of the ASEAN integration, Dr. Hank Lim lamented
that ASEAN has a leadership problem when it comes to this. He explained that unlike in theEuropean Union where almost all members are prosperous and big countries, ASEAN is
composed of countries with different sizes and levels of development. For example, he notedthat Singapore is the most developed nation in the region but also the smallest, while
Indonesia is the largest but does not have the capacity and resources. According to Dr. Lim, thisis the main reason why a lot of trade negotiations have gone bilateral instead of multilateral.
Also, he said that proposals from Singapore are unlikely to get support from other bigger
countries in the region.
RESPONSE: Datuk Seri Jayasiri Jayasena
Datuk Seri Jayasiri explained that the TPP is a work in progress and is not yet ready forsigning. The TPP 11, he said, has found a way to move forward although there is still a lot ofwork to be done. He likewise noted that there is no timeframe indicated to finish thenegotiations as the group has yet to reach a consensus on the date of the signing. For thesigning to take place, he explained that at least six countries must ratify the agreement.
Guidelines for accession of new members will be worked out after the agreement takes into
force. The current agreement, he said, does not include clear guidelines on how to treat a new
applicant to the TPP.
Meanwhile, he suggested that ASEAN cannot do away with the top-down approach to regional
integration. However, he commented that there needs to have more bottom-up approaches
since these will engage other stakeholders more and will not keep the talks at the bureaucraticlevel. He explained that a lot of ASEAN’s programs and agreements do not seem to take off
because of limited bottom-up engagements. This is the sad part, he said, because the needs ofthe people are not met, with bureaucrats designing programs that they think are good for thepeople. He also proposed that ASEAN establish a good regulatory framework and come up withmore ASEAN collective initiatives.
QUESTION: Dr. Josef Yap
Since there is no process for new TPP applicant, Dr. Yap asked if there will be a provision in the
TPP 11 for those countries that were left but would like to join the TPP talks again in the
future.
RESPONSES: Datuk Seri Jayasiri Jayasena
Datuk Seri Jayasiri replied that there is a review provision in the TPP which is applicable to thesituation when the US decides to join the TPP again.
RESPONSES: Dr. Ponciano Intal, Jr.
Dr. Intal agreed that MOOCs is something that ASEAN should consider. He suggested that
ASEAN should have an ASEAN Open University system. He noted that Assistant Secretary
Helen Della Vega of the DFA and the Office of ASEAN Affairs can help in moving this idea

forward. He also expressed hope that the business sector can also play a major role in thisproject.
In terms of leadership in the ASEAN, Dr. Intal explained that while the ruling system helps,
there are few behind the scenes in various areas in the integration process that are actuallyimportant. For example, he cited that Singapore is very important to ASEAN. There are key
initiatives, he said, that Singapore has initiated. A good example of this is on the AEC or the
AFTA. Although it was Thailand who initiated it, the suggestion actually came from theSingaporean government.
RESPONSES: Prof. Shujiro Urata
According to Prof. Urata, the TPP 11 countries will benefit more in terms of national income if
the partnership will be expanded to 16 countries. His argument was based on a simulation
analysis he did on the impacts of the TPP 11 versus TPP 16. TPP 16 would include Korea, thePhilippines, Thailand, Indonesia, and Taiwan. Thus, he noted that having TPP 16 could lead tomore substantial gains.
RESPONSES: Amb. Murray Mclean AO
According to Ambassador McLean, the well-established tradition of assigning thechairmanship of the ASEAN to a different country each year inevitably led to some a“continuity” issues. Each host/chair country has its own set of priorities so that when anothercountry gets to lead the ASEAN, it may focus its priorities on different items in the ASEAN
agenda than its predecessor. Sometimes this may be an advantage, but it also meant that
continuity in the direction of ASEAN being set by its leaders was not always maintained.
On the TPP, he noted that while Canada has upset the TPP11 leaders’ meeting which had been
intended to announce the successful conclusion of negotiations, it has remained committed toaccession to the TPP, despite the withdrawal of the US. This has given a strong signal forremaining countries to proceed with the conclusion of the TPP early in 2018. He expressedhope that the RCEP would progress as well.
RESPONSES: Dr. Min Ye Paing Hein
Dr. Min commented on how Myanmar is represented in various ASEAN ministerial meetings.
For example, the Ministry of Planning and Finance represents the country in the ASEAN
Economic Ministers’ Meetings instead of the Ministry of Commerce, which does theimplementation. He also pointed to the issue of coordination and information sharing amongst
various branches of government.
(End)