ASEAN in the age of disruption
HOM ASEAN remarks
2 October, Curtin University
Thank you to Vice Chancellor Professor Deborah Terry. Welcome distinguished guests, ladies and gentlemen.
I am very pleased to be giving the inaugural ASEAN Lecture for Curtin University in Singapore.
We are here at critical time for the region. Even as we’ve enjoyed an extended period of stability and prosperity, several trends are converging to create a more uncertain outlook for Australia and the region, and the rest of the world.
It’s always hard to compare, but some would say that the pace and scale of change is without any precedent in human history. Technological change, challenges to globalisation and the rules-based international order, shifts in strategic power regionally and globally, terrorism and climate change are among the significant trends shaping our world.
In the Indo-Pacific region, we are witnessing a historic shift of power with South East Asia a theatre for major power competition.
The Australian Government’s latest Foreign Policy White Paper has assessed these trends, including the shifting power in the broader Indo-Pacific region.
China’s growth is accelerating shifts in relative economic and strategic weight. In parts of the Indo–Pacific, including in Southeast Asia, China’s power and influence are growing to match, and in some cases exceed, that of the United States.
Japan and India, major economies and military powers in their own right, are also playing stronger roles in Indo–Pacific security and political affairs and are seeking to influence the balance of the regional order.
In this dynamic environment, competition is intensifying, over both power and the principles and values on which the regional order should be based.
And South East Asia and ASEAN is where much of this major power competition for influence is playing out.
At a time when questions hang over the ability of multilateral institutions to address common problems, the ‘ASEAN Way’ has shown how patient statecraft has worked for our region.
ASEAN has made an extraordinary contribution to the region’s transformation from poverty and conflict to peace and stability by fostering dialogue and establishing habits of dialogue over the past 50 years.
Over this period, ASEAN has used its influence to amplify its voice on the global stage.
It has done this by become the region’s strategic convenor of diplomatic forums that bring the region’s top leaders together. These include the US, China, Japan, India, ROK, Russia, Australia and NZ.
The ASEAN centred EAS is the region’s premier forum for leader’s dialogue on political security issues. Its frank exchanges and the decisions it takes establish and set out norms of acceptable strategic behaviour. This may be in response to tensions in the South China Sea, or the Korean Peninsula, or may be on dealing with responses to terrorism or non-proliferation. I look forward to supporting Australia’s Prime Minister on his visit to Singapore for the East Asia Summit in November.
ASEAN’s challenge is to show that the impressive statecraft of the past can be sustained in a more complex future.
This includes how ASEAN will respond to geo-economic competition in the region.
Even as economic growth has bound economies in our region closer, infrastructure development and trade policies are being used as instruments for strategic as well as commercial advantage.
This poses policy dilemmas for countries in the region.
The infrastructure needs in the Indo-Pacific are massive and wide-ranging.
The Asian Development Bank has estimated this will need at least A$33.1 trillion between 2016 and 2032 for developing economies in the region.
There are a number of initiatives underway – from those shepherded by multilateral institutions like the World Bank and the Asian Infrastructure Investment Bank to national plans including the Belt and Road initiative and Japan’s Free and Open Indo-Pacific and India’s Act East initiatives.
Australia welcomes all initiatives, as long as they are transparent in their operations, commercially sustainable and welcome private investment.
We want to work with partners to enhance regional connectivity in both physical and soft infrastructure as a pathway to further economic development in our shared region.
We also see ASEAN as a key plank against the anti-trade pressures re-surfacing globally. Now more than ever, it is important to think clearly about the benefits that trade and openness have bestowed upon our region. ASEAN has outpaced global economic growth for more than a decade and Australia is in its 25th year of continuous economic growth, in part because we have been opened our economies to the world.
As nations understandably look for fairness in global trade, the best response to unfair competition is to use the global enforcement mechanisms that are available, in particular the dispute settlement processes provided by the World Trade Organization.
The ASEAN-led Regional Comprehensive Economic Partnership with its FTA partners would strengthen the regional trade and investment environment, boost regional economic confidence and benefit consumers.
Australia hopes RCEP will serve as a platform for open regionalism, and build the next chapter of the remarkable growth story that has been taking shape in the region in recent years.
Naveen Memon, President ASEAN, Cisco Systems, Singapore recently wrote in a piece for the World Economic Forum on ASEAN, that the strength of ASEAN lies in its numbers. With a population of more than 630 million people, rapid urbanisation, a growing middle class and a young working age population, it is currently the world’s 6th largest economy.
Market growth across ASEAN averages 5%, making it one of the top three hubs of global growth.
For Australia, ASEAN is our second largest trading partner – last year there was over 100 billion dollars in two way trade, over 200 billion dollars in two way investment.
The adoption of technology has been one of the biggest drivers of ASEAN’s growth in recent years.
As I travel around the region, what strikes me is the remarkable dynamism in ASEAN and rapid transformation that is taking place.
You can see it in home grown “unicorns” like Grab and Gojek, which were able to explode overnight because the sharing economy concept is not new to Southeast Asia. These platforms were able to add new technology to existing cultures of entrepreneurialism and community.
Myanmar’s State Councillor Aung Sung Suu Kyi told the World Economic Forum on ASEAN in Hanoi last month that in Myanmar, the technological changes were taking place in quantum leaps. 5 years ago a smart phone cost 1500 USD. It now costs around 1.5 USD for a smartphone. Cell phone access has unexpected transformed the business environment. There was no banking culture previously. This transformation has make the unbankable, bankable.
It’s not all a positive news story though.
ASEAN recognises that it will only be able to sustain its high growth and capitalise on emerging megatrends if it can address its significant productivity and skills challenges. Recent academic research suggests that, based on current trends, more than half of all skilled employment in Cambodia, Indonesia, Lao PDR, the Philippines, Thailand and Vietnam could be filled by workers with insufficient qualifications by 2025.
In Indonesia and Myanmar alone, there is a projected under supply of 9 million skilled and 13 million semi-skilled workers by 2030.
And with more than 65 per cent of ASEAN’s population under the age of 35, the demand for skills and training in the region is significant and growing.
Governments and business, and education institutions need to work together to prepare for the future of work. This will be essential for training our youth and reskilling those already in the workforce as technology innovations escalate and labour requirements change.
This will require strong investments in skills, human capital and research and development.
We need to work together on these challenges – challenges which Australia also faces.
Australia and ASEAN’s research and development partnerships will become even more critical to address the future of work. R&D is an important component of a knowledge-based economy. Although research capacity varies across ASEAN, in the region as a whole, there are growing opportunities for international research collaboration.
Many of ASEAN’s key research priorities resonate with Australian research priorities, including in food and agriculture, energy and biodiversity and health and medicine. In the particular case of Singapore, we also obviously have a lot to learn from its culture of innovation and technology, which is why Australia’s national science agency, CSIRO has a solid presence in Singapore, and why we located a ‘landing pad’ for Australian start-ups here.
ASEAN is of crucial importance to Australia for strategic, economic and socio-cultural reasons.
ASEAN’s success is Australia’s success.
This year, Australia each hosted ASEAN leaders in Sydney in March at the ASEAN-Australia Special Summit. Leaders agree do elevate our shared commitment intensify our cooperation efforts for peace, security and prosperity.
It was a fitting outcome and acknowledgement of Australia’s close involvement with ASEAN as its oldest external partner.
The best asset we have in ASEAN-Australia relations is our people. And our education ties are at the very heart of this.
As we celebrate tonight ten years of Curtin University in Singapore, we see another year of talented alumni join the Australian alumni community after many hard years of work. For the students present tonight, I hope the ties that you have formed throughout your experiences at Curtin University remain with you for life and that you continue your connection between our countries.
In closing, it is my hope that Australian institutions can continue education, research and innovation partnerships of all kinds with our ASEAN neighbours.
Congratulations to Curtin University for being part of this rich history and to Singapore for supporting partnerships such as this.