Asean has been celebrating its 50th birthday this year amid rising protectionist sentiment, which provides a challenging global context. Consequently, there has been much debate and reflection recently on the impact of globalisation and the fate of regional blocs.
As the world becomes more connected through business, travel and technology, we have also become more disconnected. We see a widening economic and social divide, weakening cultural understanding and deepening concerns about environmental protection. But our response should not be to turn our backs on globalisation and connectivity but to modify our approach, so that the ramifications are more thoroughly considered and managed, to ensure that its benefits are more widely appreciated and equitably shared. What is needed is a more inclusive and sustainable model for collaboration.
In this context and time, there is wisdom in Asean's pragmatic and paced approach to integration, based on the principles of non-interference and consensus. Since its founding, Asean has progressed in terms of economic growth, social and cultural development, while maintaining peace and security in the region. This achievement can neither be understated nor taken for granted.
Wee Ee Cheong is the deputy chairman and chief executive officer of UOB in Singapore
At this 50th anniversary, while other parts of the world are turning inward, Asean should stay focused, persevere and accelerate on its path to realise its original intent.
Regional relevance: The vision for an integrated Asean is a compelling one. Asean is a diverse region of 10 countries at different stages of development, with different political systems, national priorities, cultures and languages. Each country has its own competitive edge.
Taken individually, most Asean countries are too small to be effective globally. As a whole, their collective potential is far greater than the sum of its parts. Its diversity, which some may view as a hurdle to harmonisation, is also its strength.
Geographically, Asean's proximity to major markets such as China and India reinforces its strategic role in the global manufacturing and supply chains, especially with the recent connectivity initiatives such as China's Belt and Road and the Regional Comprehensive Economic Partnership. Emerging economic centres, such as those in the Mekong Subregion, are new frontiers of untapped potential.
Demographically, Asean's population of 630 million is the third largest in the world after China and India. Its young, driven and enterprising population will underpin Asean's workforce and consumer base in the coming years. The number of middle-class households in Asean is projected to double to 163 million in 2030, which will drive not only domestic demand but intra-regional trade and investment flows.
Economically, Asean as a bloc is now the seventh largest in the world and is expected to be the fourth largest by 2030, behind the United States, China and India. Intra-regional trade has grown steadily and its share of Asean's total trade has held steady over the last two decades, suggesting that integration within Asean has remained strong through two economic crises. The region has emerged stronger since then.
Asean's potential also lies in its urbanisation rate of 48% versus the average 80% for high-income countries. Rising urbanisation will drive demand for infrastructure investment, projected to exceed US$110 billion annually, spurring foreign direct investment (FDI) into Asean. FDI inflows into Asean have risen 2.6 times to $126 billion in 2015 from 2009.
Realising potential: Structurally, digital trends are redefining cross-border and traditional boundaries, transforming industries and consumer behaviour at an unprecedented pace.
Technology and innovation can be effective enablers to level the playing field for economies, industries, enterprises and individuals, helping to promote inclusive and sustainable growth. But we also need to manage the impact on jobs that are displaced and livelihoods affected. Equipping and preparing industries, businesses and our workforce to be ready and relevant for the future is a priority.
Proactive public and private sector-led policies and initiatives are needed to invest in areas such as infrastructure, industry capabilities, education and skills upgrading and environmental protection, while pacing and cushioning the impact of transition.
Building on the Asean Economic Community Blueprint 2025, the new Master Plan on Asean Connectivity 2025, adopted in September 2016, can be a powerful catalyst, by accelerating the development of the region's infrastructure, logistics, innovation, regulations and human mobility.
Importantly, we have to move from vision to action, from intent to execution. We recognise the complexities involved, the importance of conviction and concerted efforts needed to stay the course. In our interconnected and interdependent world, Asean members share a common destiny. We must safeguard the peace and prosperity in our neighbourhood, and promote our mutual and collective interests in order to thrive as a community.
With the accelerated pace of developments globally, Asean needs to strike while the iron is hot to realise its potential given this window of opportunity. Governments, industries, businesses and individuals -- each has to do its part. The financial industry, in enabling economic value creation, can play a pivotal role.
At UOB's third annual Asean Conference earlier this year, we shared how, having operated in the region for 82 years, we have been facilitating connectivity and sustainable growth of businesses, big and small, across the region through our integrated and comprehensive network of over 500 offices in 19 countries.
As a firm believer in Asean's potential, UOB was the first bank in Southeast Asia to launch FDI advisory units across Asia from 2011 to provide companies with financial solutions, to help them understand the complexities of operating locally and to bridge them with opportunities across the region.
We continue to strengthen our network and capabilities, including tie-ups with government agencies and industry and ecosystem partners such as financial technology companies, to support our clients' long-term growth.
Shared future: In times like this, to realise our full potential in the larger community, we need greater collaboration, coordination and commitment. As the Confucian saying goes, "Gentlemen seek harmony despite diversity". This has been the Asean way. In appreciating and harnessing the diverse and complementary strengths of each, with a clear focus on our common goals, we will achieve much more together.