ASEAN leaders proclaimed to create an ASEAN Economic Community (AEC) by 2015. While the fundamentals for creating a single market and production base are a work in progress, it is also crucial for ASEAN to facilitate the realization of the ASEAN community through “connectivity”. This is because community building through physical, institutional and personal connectivity is not only expected to reduce business transaction cost, time and travel cost, but also to connect the “core” and the “periphery” in ASEAN, thus distributing the benefits of multifaceted growth wider in the region and reducing the development divide in ASEAN. Moreover, better connectivity within ASEAN is essential for further connectivity with other regions, such as East and South Asia, which will help ASEAN to maintain its centrality in the evolving regional architecture.

In 2010, during the 17th ASEAN Summit in Vietnam, the Leaders adopted the Master Plan on ASEAN Connectivity (MPAC). The plan strives to integrate a region of over 600 million people with a combined GDP of about US$1.5 trillion.

THREE LINKAGES AND STRATEGIES

The MPAC has three components:

1. a) physical connectivity;

2. b) institutional connectivity and;

3. c) people-to-people connectivity

a) Physical Connectivity

Currently, in ASEAN, the physical infrastructure, particularly in the less developed members, is characterized by structural weaknesses — low responsiveness to users, organizational inefficiencies, insufficient funding, heavy dependence on official development assistance, low foreign direct investments (FDI), and lack of environmental awareness. Most ASEAN countries are also short of the “soft” infrastructure (ICT), which are important prerequisites for the next stage of development. This calls for the upgrading of existing infrastructure, the construction of new infrastructure and the harmonization of regulatory framework.

The key strategies for enhanced physical connectivity include the completion of the ASEAN Highway Network (AHN); fully implementing the Singapore-Kunming Rail Link (SKRL); establishing an efficient and integrated inland waterways network; forming an integrated, efficient, and competitive maritime transport system; building integrated and seamless multimodal transport systems; accelerating ICT infra-structure and services development in member states; and prioritizing the processes to resolve institutional issues in energy infrastructure projects.

b) Institutional Connectivity

While ASEAN has been successful in eliminating tariffs, it is still struggling with the issue of non-tariff barriers (NTBs) to trade and investment. While some such barriers are necessary — for example, to protect the environment or the health of humans, animals and plants — others unnecessarily distort trade flows and restrict competition.