The year 2017 sees the Association of Southeast Asian Nations (ASEAN) celebrate its 50th anniversary. And there is indeed much to celebrate. But just as importantly, the anniversary is also a moment to think about the future of the region and what lies ahead.
The theme of the summit is Youth, Technology and Growth: Securing ASEAN’s Demographic and Digital Dividends. Each of these ideas holds important questions for the future of the region.
Economic growth is critical as the engine that drives rising incomes and prosperity. ASEAN as a whole has a good record in recent years, growing by around 5% a year, and powering the creation of a giant middle class. At the start of 2016, the 10 economies of ASEAN were collectively the seventh largest economy in the world. By the start of 2017, that rank had improved to sixth, and by 2020 it will be fifth.
To achieve 7%, the region must focus on many individual national issues, such as infrastructure and education. But there is also an important regional dimension too. The region would benefit significantly from pushing forward the implementation of the ASEAN Economic Community (AEC).
Youth is a second essential consideration for the region. Having a young and growing population creates a golden moment in a country’s economic development journey, promising a powerful demographic dividend. As the working-age population grows in number, it will boost the region’s spending, but also increase its savings and hence its capacity to invest.
ASEAN celebrates its 50th anniversary, the world stands on the cusp of the Fourth Industrial Revolution, driven by technologies such as artificial intelligence, machine learning, autonomous vehicles, ubiquitous mobile internet, and accelerating progress in genetics, materials science, and ultra-cheap automation.
ASEAN is today the fastest growing internet market in the world.
ASEAN is a microcosm of the world today – highly developed nations, middle income countries and those just emerging. It has become a beacon of multilateral cooperation in a world darkening with greater protectionism, a shift to bilateral trade and changing attitudes towards globalization.
Problems Faced by ASEAN:
Just as critical as the quantity of growth is the quality of growth. Sadly, inequality is rising across many ASEAN nations. Not everyone is benefitting equally.
The World Economic Forum’s Inclusive Growth and Development Report 2017, released in January this year, looks closely at the policy levers governments can deploy to ensure more equitable outcomes.
What needs to be done:
Governments and policy-makers must ensure they pursue the right policies today to guarantee their demographic dividend is realized. They must think deeply about education and how best to prepare workers for the jobs of the future. They must identify areas of inter-generational tension, such as the environment and the funding of pensions and healthcare. Growth today cannot come at the expense of future generations.
If ASEAN is to prosper for another 50 years, it must tackle difficult questions about how to navigate the accelerating pace of technological change and digital disruption.
There must be a hierarchy of needs, with basic infrastructure – electricity, healthcare and clean water – at the top of the list.
Power plants can be up and running in three months in challenging locations, with the latest technology and digital solutions to maximize efficiency and minimize carbon emissions; healthcare equipment is now portable and connected, allowing remote locations access to improved healthcare, facilitating improved infant and maternal care; and clean water for hospitals enhances the quality of patient care and allows facilities to spend precious budget on patient programmes rather than bottled water.
Need to shape the future for the region’s youth by balancing vocational and digital skills education and training, with companies playing a bigger role, in partnership with governments and educational institutions.
Upgraded skills, increased financing for SMEs, encouragement of more gender diversity and investments in digital infrastructure will help to decrease poverty by providing more livelihood opportunities, sustain growth and improve productivity. This will ensure the workforce of the future is resilient and flexible.