Abstract
The report Comprehensive Asia Development Plan 3.0 (CADP 3.0): Towards an Integrated, Innovative, Inclusive and Sustainable Economy published by Economic Research Institute for association of Southeast Asian Nations (ASEAN) and economic research institute for ASEAN and East Asia (ERIA) was written for the ASEAN and East Asia Summits. Nearly seven years have passed since the previous plan CADP 2.0 was published in 2015. The CADP 3.0 covers a new development framework covering challenges, such as poverty, education, foreign investment and trade, with respect to four key pillars integration, innovation, inclusiveness and sustainability, and deep consideration of the COVID-19, geopolitical tensions and the impact of digital technology. The report consists of 18 chapters, of which the first chapter is a detailed overview of the above four key perspectives. Chapters 2–7 are based on the integration framework; chapters 8–12 are related to innovation techniques; part three of the report contains four chapters which are dedicated to inclusiveness and lastly the report addresses the issue of sustainability in chapters 17–18. The report intensively discusses policy recommendations at the end of each chapter.
The first chapter discusses in detail the issue, types and policy suggestions of the four main pillars and two immediate challenges, COVID-19 and geopolitical tensions with new elements, digital technology and environmental concerns. Three kinds of shocks, negative supply shock, negative demand shock and positive shocks, were generated by COVID-19. The US–China confrontation and Russo-Ukrainian war present extreme danger, increasing the geopolitical tensions for the future of global value chains (GVs). Further, the concept of bundling is proposed which is useful in categorising the pattern of the international division of labour. The report conceptualises inclusiveness in three dimensions, geographical, industrial and societal. Finally, the multidimensional issue of sustainability covers issues such as climate change, waste management and disaster management. The issue is linked to the EU’s expected trade policy of the carbon border adjustment mechanism. The report suggests investment in digital technology and e-commerce as some immediate actions to work towards a ‘quality supply chain’.
The second chapter aims at the trade facilitation framework focussing on four key areas, transparency and predictability, risk management, effective implementation and efficient movement of goods and information across the border. The chapter also intensively discusses measures such as paperless trade, electronic single window systems and e-payments for digital trade facilitation. Further, ASEAN has introduced four initiatives to streamline and simplify non-tariff measures (NTMs). The pandemic accelerated the use of digital technology for instance in the Philippines incentives helped accelerate online services. The third chapter unveils the importance of regulations in encouraging businesses to participate in the market and spurring more innovations and digitalisation. But, good governance in terms of government effectiveness and regulatory quality is a prerequisite for achieving efficiency. The report assesses the small and medium- sized enterprises (SMEs) policy index and ease of doing business (EODB) rankings for the quality and quantity of measures adopted. In the end, suggestions such as blending internal standards and evidence-based approaches are listed by the OECD.
The fourth chapter extends Asia as the centre of pan-regional connectivity initiatives. The master plan on ASEAN connectivity (MPAC), Belt and Road initiative (BRI), Asia–Africa Growth corridor, EU Global Gateway and Asia Europe Meeting aim to deepen Asia’s economic dynamism. In addition to transport infrastructure, the digital component is a key connectivity feature of BRI. Mega regional initiatives, such as comprehensive and progressive agreement for trans-pacific partnership (CPTPP) and regional comprehensive economic partnership (RCEP), are also integral to this region. The trade tensions between the US and China, repeated natural disasters, the advent of digital technology and a slowdown in the trade of goods further create a need for new supply chains. Thus, emphasis is laid on governance standards, transparency and accountability. Global development programmes and multilateralism provide greater linkages with the help of government and multilateral institutions. The fifth chapter is based on the development of digital connectivity and regulations for free-flow data with trust. Four factors, (a) data connectivity, (b) logistics, (c) financial connectivity, and (d) seamless links between cyber and physical space, are considered. The report discusses types and measures for each of these factors, for instance, the World Bank logistics Index ranks Singapore highest. The Asia-Pacific Economic Cooperation (APEC) financial technology e-payment Readiness Index indicates an increase in cashless payment in populous economies like the Philippines and Indonesia. The policy framework is based on the idea of digitalisation, data governance and the third unbundling concept. The e-commerce joint initiative at the 11th World Trade Organization (WTO) conference calls for balancing the interest among governments.
The sixth and seventh chapters combine the development of hard infrastructure and its impact analysis using the IDEIERIA Geographical Stimulation Model. The CADP 3.0 used the unbundling concept instead of tiers to classify hard infrastructure. A survey was done to identify projects in countries based on certain criteria. The difference between the baseline scenario and the development scenarios of the projects is termed the actual economic impact. The result suggests that ASEAN has a large potential in the service sector. By all scenarios combined then ASEAN Member States (AMS) can develop to a great extent. Chapter eight discusses the optimal innovation system which is not only beneficial for global firms but also national firms, it leads to the reduction of incapable firms and makes full utilisation of digital transformation. Section two of the chapter breaks down productivity gaps into three factors and discusses the importance of total factor productivity (TFP) for improving living standards with an emphasis on macro and firm-level innovation. To catch up with advanced economies, indigenous firms should increase innovation capability and encourage models based on trial and error mechanisms for instance, the US SBIR promotes innovation among start-ups by subsidising R&D.
Chapters nine and ten are based on the importance of skilled force or human capital and GVC, which are drivers of economic growth. It highlights the skill gap in ASEAN by assessing years of schooling, quality education and strategies such as reform in the formal system and upskilling/reskilling the existing workforce in order to enhance the skill development system. The interdependence of economies and the level of growth in service activities are two important aspects of GVC transformation explained through a case study of GVC trends in East Asia. The report suggests policies such as an integrated framework for training, liberalisation of services and openness. The eleventh and twelfth chapter covers the idea behind smart cities and role of the automotive sector with the adoption of digitalisation in the industry. The report supplies different smart city plans adopted by countries, such as Singapore, India, China, Korea and Malaysia, as a key to resolve urban problems. Suggestions to construct incubation centres, and living labs were discussed. The use of digital technology in automotive gives solutions to resolve urban issues, such as congestion, increasing accidents and environmental concerns, as the use of modern solutions such as V2V, the concept of connected, autonomous, shared/service, and electrified (CASE) and mobility as a service (MaaS), and electric vehicles (EVs). The chapter ends with some of the raising challenges such as infrastructure gaps—lack of charging stations, people connectivity and possible solutions towards it.
Chapter 13 gives a view on the concept of inclusiveness through urban and rural development challenges such as the digital divide and infrastructure gaps. The report gives policy suggestions to these gaps through increased use of information and communication technology (ICT), collaborative programmes and partnerships with NGOs and international organisations. Chapter 14 describes micro, small, and medium-sized enterprises (MSMEs’) response to the pandemic from two sides, the demand and supply side. It also explains factors, such as business model, market access and financial relief (credit), that can have positive/negative impact on firm’s behaviour. Section 4 of the chapter enlists policy responses introduced in some countries of which cash voucher scheme was most successful. The chapter concluded with lessons and policy recommendations, such as expanding MSMEs in e-commerce and simplification of financial mechanisms.
Chapter 15 presents the role of ICT in healthcare through techniques, such as e-health facilities, telehealth, m-health, decision support systems and patient clinical management system, their benefits and challenges in each. The report suggests strategies such as data management, analytics, safeguarding shared data and continuous iterations in it for accessible, affordable and high-quality care. Chapter 16 is a detailed view of issues in the agriculture sector, the concept of food security and digital solutions towards it. The chapter covers four main dimensions of regional food security and two indicators, undernourishment and food security in the total population. Regional initiatives, such as the ASEAN Integrated Food Security Framework and Strategic Plan of Action on Food Security in the ASEAN Region 2021–2025 and UN sustainable food system summit, are discussed intensively. Lastly, it discusses recommendations such as cold chain development and the use of digital technology in agriculture.
Chapter 17 focuses on stable economic and demographic expansion to boost East Asia Summit (EAS) energy demand. Section two of the chapter compares business-as-usual (BAU) and alternative policy scenario (APS). It also enlists clean and renewable energy technology initiatives such as the Paris Agreement, NDCs adopted by each economy and the globalisation of carbon technologies. An increase in capital expenditure will require more public–private partnerships as the deployment of new carbon energy technologies, smart grids and integrated energy systems for smart cities comes. The research suggests the use of efficiency and conservation (EEC) goals policies, cross-border electrical networks and use of economic stimulus packages of COVID-19 for low-carbon infrastructure projects to bring energy security. Chapter 18 signifies the role of environmental technology. It discusses collaboration frameworks. Dialogues and collaborations, innovative investment platforms, funding arrangements, partnerships and regular assessment of regulatory and legal frameworks are imperative to promote economic resilience.
In summary, the report viewed in detail the four main pillars: integration, innovation, inclusiveness and sustainability with a central theme of digital technology considering the impact of COVID-19 and environmental degradation. While the report has little to say on rising geopolitical tensions it intensively various policy recommendations related to topics under each pillar such as trade facilitation, soft and hard infrastructure, urban and rural development scenarios, the role of MSMEs and the concept of the low-carbon economy. This book will be of interest to diplomats, scholars, researchers, industry stakeholders, government institutions and policymakers of different departments.