Friday, May 25, 2012

Grading the ASEAN Economic Community Scorecard

Today I attended “Examining the ASEAN Economic Community Scorecard,” the 2012 ASEAN Roundtable co-hosted by the ASEAN Studies Centre at the Institute of Southeast Asian Studies (ISEAS) and the Konrad Adenauer Stiftung.  As always, ISEAS and its co-sponsors organized a great event!

The conference focused on the AEC scorecard, which is used to assess the progress made in implementing AEC-related programs by the 2015 deadline. The AEC scorecard is the (only) measure used to ensure ASEAN member states’ implementation of AEC measures.  In effect, it subjects ASEAN member states to “peer pressure” from the rest of ASEAN, as deficiencies in implementation become known.

As of the end of 2011, the ASEAN Secretariat found that 67.5% of AEC measures had been met in the first two phases of the AEC Blueprint
One positive development, discussed at the conference, is that there is some discussion of individual ASEAN member states’ performance with regard to the AEC scorecard:
This is a marked improvement from the previous AEC Scorecard, which did not mention ASEAN member states on an individual basis if at all possible. 

Hence the caveat to this discussion of the AEC Scorecard is that the private sector only has access to the public version of the document. The negative publicity associated with non-compliance is muted when ASEAN member states are not mentioned at all as in the previous ASEAN Scorecard.  Although the updated ASEAN Scorecard does provide some more analysis on an individual ASEAN member state basis, there is still not much detail.  For example, Cambodia was specifically named for not enacting double-taxation agreements with its ASEAN partners; that’s helpful to know.  However,  for the “yellow” dot measures identified above, we cannot tell which particular measures were or were not enacted. 

This lack of transparency limits the ability of the private sector to provide feedback on AEC Blueprint implementation. This was noted by a participant from the ASEAN Business Advisory Council.  If the power of negative publicity is truly going to be effective (and since it is the only major tool of the ASEAN Secretariat for AEC implementation, it needs to be), then more detail on areas of progress and lack of progress needs to be provided on an individual ASEAN member state basis.

The other major deficiency noted by almost all participants was that the current form of the AEC Scorecard is purely quantitative.  The AEC Scorecard only examines whether an ASEAN member state has performed the AEC task or not. In other words, it is a “yes or no” analysis.  The more “yes” answers, the higher the AEC Scorecard score.   

Yet the next stage of the AEC Scorecard needs to go beyond this quantitative analysis and move on to a qualitative analysis.  It is not enough that an ASEAN member state ratifies the ASEAN Comprehensive Investment Agreement (ACIA), for example. It is even more important to assess how effective the ASEAN member state has been in implementing the ACIA on the national level.  The Economic Research Institute for ASEAN and East Asia has been tasked to study how the next generation AEC Scorecard will conduct qualitative analysis, and a workshop will be held next week in Jakarta on the subject.  Hopefully the World Bank funds and expertise will also help with this effort.

Woody Allen once said that “eighty percent of success is just showing up.”  Well, in this case, ASEAN has scored 67.5% for just showing up, since the current AEC Scorecard analysis is based on “just showing up,” e.g., just passing the legislation or signing the agreement.  Given the relative lack of resources and strong domestic interests in some ASEAN member states, “just showing up” is in fact an achievement to be celebrated.

However, ASEAN needs to make progress on Woody Allen’s remaining twenty percent, e.g., to do something with the legislation and agreements that have been passed through the AEC process.  This requires both a new generation AEC Scorecard that properly evaluates progress on an qualitative basis, as well as the political will in the ASEAN member states to push forward with the AEC.