“Witnessing Regional Integration in Southeast Asia”

by Ambassador Lee Sun-Jin

2020.9.9.

Ambassador Lee Sun-Jin served as a career diplomat for 33 years at the Ministry of Foreign Affairs of the Republic of Korea. He served in various positions including Ambassador to Indonesia and Deputy Minister for Policy Planning and International Organizations.

Whenever I explain that the Association of Southeast Asian Nations (ASEAN) bloc’s combined gross domestic product ranks fifth in the world, there are people who try to dismiss it, arguing that such an indicator is no less than a simple sum of numbers. Naysayers even criticize the ASEAN Community founded in 2015, saying it is just a “talk shop” with not much action. While I can understand what they are trying to point out, I can say with confidence that such a view sees only “half the truth.”

I concluded my career at the Foreign Ministry of the Republic of Korea after serving as ambassador to Indonesia. From 2009, I started teaching in universities and since then, I have visited Southeast Asia more than 30 times to witness the vibrant regional integration. I use the term “Southeast Asia” to refer not only to the 10 ASEAN member states but also including China’s Yunnan and Guangxi provinces that border ASEAN countries. Also, “regional integration” here means the “free movement and exchanges of people (human resources), goods (trade) and money (investment) crossing borders.” What makes such free movement across borders possible is the infrastructure such as roads and communications network along with legal and institutional cooperation among governments in the region.

1.Cases of regional integration

While traveling in Southeast Asia, I visited the same areas every year or two using the same routes and relying mostly on land transportation such as buses and trains. By doing so, I was able to observe the development of and changes in transportation, traffic (volume of freight, people-to-people exchanges), cities and border gates. This article focuses on the development in long-distance and cross-border bus services, communications networks and railways. These facilities are important as they foster the growth of other sectors and regional integration.

[Case 1] Development of international bus lines across borders

In January 2017, I began a journey from Danang, Vietnam and visited nine cities in four countries -- Vietnam, Laos, Thailand and China -- by crossing five national borders.

● Itinerary: Lao Bao in Vietnam - Savannakhet in Laos - Mukdahan and Kon Kaen in Thailand - Vientiane in Laos - Kunming and Hekou in China - Lao Cai and Hanoi in Vietnam

During the journey, I took long-distance and cross-border buses except when flying from Vientiane to Kunming and riding a train from Kunming to Hekou. I bought flight and train tickets before I embarked on the travel. For accommodation, I only booked a hotel room in Savannakhet, my first stop. Even though I did not make reservations for buses and other accommodations, I did not encounter any problem with following my itinerary as planned. Any hitch in the schedule would have forced me to give up on my deposit on the flight and train tickets and hotel reservations, but no such accident happened as international bus services in this region are that much advanced and well connected.

What led to the development of international bus lines in ASEAN

First, the Asian Development Bank began constructing transportation infrastructure in 1992, paving roads even in rugged mountain areas and building numerous bridges over the Mekong River.

Second, the exchanges of goods and human resources are substantially growing. Official statistics indicate that the number of intra-ASEAN visitors is 46 million as of 2015, a threefold increase since 2002.

Third, visas are not required for ASEAN citizens when visiting another ASEAN country in case of short trips. Moreover, those living in border areas can visit neighboring countries for 24 hours simply by presenting their resident IDs.

Fourth, ASEAN countries signed the Framework Agreement on the Facilitation of Cross Border Transport of Passengers by Road Vehicles, facilitating movement of buses, cargo trucks and private vehicles across borders.

Effects of transportation related infrastructure development

The transportation infrastructure in the region is transforming the image of the traditional borders as great walls. According to official statistics from Laos, 2.3 million Laotians, about a third of its total population, visited Thailand by crossing four bridges on the Mekong River in 2015. In fact, in contrast to the comparatively low GDP per capita (USD 2,200) of Laos, the level of development in transportation infrastructure and cross-border bus services is quite impressive. Such development in infrastructure provides the people of Lao PDR with better access to traveling neighboring countries.

At 6 o’clock in the morning, the border between Myanmar and China becomes crowded with merchants from Myanmar waiting to cross the border to sell soybean oil, tofu and vegetables in Chinese markets. Also, the construction of transportation infrastructure is creating synergy effects in various areas, including tourism, transportation, border trade, restaurants and hotels along the routes of buses and cargo trucks. This is precisely where we can witness the progress of regional integration.

[Case 2] Development of communications network

In February 2012, I tried to make an international phone call to China during my stay at one of the best hotels in Mandalay, the second-largest city in Myanmar. After numerous failed attempts, I went to the business center in the hotel, this time, trying to send an email. Even then, I tried for one and a half hours, however, in vain, due to the poor internet connection at the time. There was a long queue of about 10 people waiting to use the internet outside the booth. No longer able to monopolize the device, I gave up sending the email, but it still cost me 45 dollars for the internet usage.

This was less than 10 years ago, but back then, using the internet or a mobile phone in the comfort of my hotel room was not so common, not even in wealthy cities such as Singapore and Kunming. Connection was not always successful even with costly charges in the business centers of luxury hotels.

Establishment of Wi-Fi infrastructures

Within two years time, by 2014, communications infrastructure substantially improved across the ASEAN region. You could get a Wi-Fi connection on your mobile phone or computer in a hotel room, even in rural areas of Myanmar. I have seen many vendors in the rural markets of Laos enjoying popular Thai TV shows on their phones. The 10 member states of ASEAN had agreed to complete the construction of the communications network before the launch of the ASEAN Community in 2015, and their citizens were benefiting from this decision.

I, too, was one of the beneficiaries. In January 2016, I was once again on one of my road travels in the region. Just as I got on the bus in Ho Chi Minh City bound for Phnom Penh, I received an emergency phone call from Seoul. Without internet connection on the bus, I would have been disconnected for six to seven hours. Thanks to Wi-Fi, I was able to solve the urgent matter by the time I got off the bus by texting, searching the internet and making international calls all on my way to Phnom Penh. The development of communications network has led to a wider distribution of mobile phones and internet use which in turn has spurred growth of e-commerce and logistics -- delivery services in particular.

[Case 3] Improvement of railways

While trade volume in the region is rapidly growing, trucking which accounts for 70-80% of cargo delivery has reached the limit. Cross-border movement of cargo via trucks also carry the potential risk of a unilateral border control from one side. Accordingly, many ASEAN countries are diversifying its logistics means to include railways. However, many of the existing railroads in ASEAN are narrow-gauge railways on which trains cannot run faster than 60-70 kilometers per hour. With modification to broad-gauge railways-the current international standard-they could speed up to 150-200 kilometers per hour.

Singapore-Kunming (broad-gauge) rail link project agreed by ASEAN and China are under construction, including those sections in Lao PDR, Thailand and Malaysia. The original schedule expected completion by mid-2020 but construction has been marked by repeated delays given the large-scale of the project. However, once construction is completed, a unilateral blocking of train passage (as opposed to unilateral border closure) will be more difficult and therefore exchange of goods and human resources will be even more accelerated in this region.

2.Benefits of regional integration in ASEAN

Currently, an enormous economic bloc is emerging in the ASEAN region which also includes the southern part of China. The effect of this integration in the region has brought a continuous upward trend in economic growth.As of 2019, ASEAN is the fifth largest economy in the world with a population of 650 million and a cumulative GDP of USD 3.17 trillion. For the past five years, the region recorded an average growth rate of over 5% per annum. Despite the power struggle in the region among the US, China, Japan, India and Russia, the economic outlook of ASEAN is relatively bright. ASEAN continues to strategically maintain its centrality without taking sides with one major power and has been able to attract large influx of foreign direct investment. In 2018, USD 154.7 billion was invested in the ASEAN region which far outweighs the foreign direct investments made in Korea (USD 27 billion), China (USD 135 billion) and Japan (USD 9.8 billion). This, I believe, is the fruitful outcome of ASEAN’s integration efforts.

Implications for Korea

The US, China and ASEAN are the three key economic partners of Korea. The on-going tensions between the US and China is expected to adversely affect Korea’s economic exchanges with both of these countries. However, with ASEAN, there is great potential for further expansion in economic cooperation including in the areas of trade, investment, resource development, tourism and people-to-people exchanges. The importance of economic partnership with ASEAN needs no further explanation. At the same time, Korea should actively support ASEAN’s integration efforts, especially in the following areas:

First is the ASEAN-led Regional Comprehensive Economic Partnership (RCEP) of 15 East Asian countries. This mega-FTA, when in effect, will mitigate some of the negative impact of the US-China tensions on the regional political and economic landscape.

Second is the envisioned digital economy of ASEAN which includes construction of smart cities, 5G communications network, e-commerce, logistics and railways.

ASEAN-Korea relations have thrived in the broader context of East Asia regional cooperation. Also, the pattern of “led by ASEAN and supported by Korea” has greatly contributed to the development of regional cooperation and economic growth across the region. I look forward to greater creativity in Korea’s engagement and partnership with ASEAN.

The views and opinions expressed in the above article are those of the author and do not necessarily reflect the official policy or position of the ASEAN-Korea Centre.