Itasean

The flourishing relation between Italy and ASEAN

After Germany, also Italy (and France) becomes ASEAN's Development Partner, highlighting the increasing interest for Southeast Asia in the European continent

The trade war between the United States and China, together with the severe consequences of the pandemic, are redesigning the global trade and geopolitical landscape. In Europe as well as in Asia, political elites are looking for new commercial partnerships with the aim of dealing with the upheavals in the global economic system of recent years. In this regard, Italy and Europe are looking with increasing interest at the Indo-Pacific region, considered a young, dynamic and appealing region. 

Since the first visit of President of the Italian Republic Sergio Mattarella to the ASEAN Secretariat in 2015, Italy has been committed to strengthen relations with the region. Through the organization of meetings and events, representatives of Italian and ASEAN institutions have worked hard to foster dialogue and trade exchanges between the two parties. On September 9th of this year, Italy officially became ASEAN's Development Partner, crowning a process of rapprochement successfully carried out in recent years. In addition, the recent entry into force of the EU-Vietnam Free Trade Agreement (after the agreement with Singapore in 2019) represents a further positive factor that signals the ongoing process of cooperation between Italy, Europe and South-East Asia. 

Also from the commercial point of view, relations between Italy and ASEAN have grown in recent years. According to data from the ASEAN General Secretariat, in the period between 2009 and 2019 Italian exports to ASEAN countries have increased from 7.14 to 13.29 billion dollars, while imports have increased from 5.27 to 9.65 billion dollars. Among the main Italian goods exported, machinery, equipment and chemical products, while ASEAN countries mainly exported to Italy computers, electronic and agri-food products. However, it is worth noting that the volume of trade between Italy and ASEAN is still quite low, especially in relation to other European countries. The ASEAN bloc is Italy's 14th trading partner in terms of exports, imports and foreign direct investments, while Italy is more than 20th among ASEAN partners, well behind Germany, France, the United Kingdom and even the Netherlands and Switzerland. 

In light of these data, it is clear that the news of the partnership between Italy and ASEAN signals the intention of the Italian political establishment to catch up with its European partners and global competitors. After all, ASEAN is one of the most dynamic regions in the world, with a population of over 600 million inhabitants, the fifth largest economy in the world and an average growth rate of around 5% of total GDP in the last 10 years. 

This newborn partnership is therefore not a point of arrival, but a starting point for improving and deepening the political, economic and cultural relations between Italy and Southeast Asian countries. In the coming months, it will be necessary to monitor and evaluate progresses in order to understand the scope of this process and to seize the countless opportunities that will emerge. 

Global Economic Recovery – New Goals & New Drivers

On June the 9th and 10th, the International Conference on Global Economic Recovery – New Goals & New Drivers was held in Beijing, organized by the China Center for International Economic Exchange, within the Global Think Tank Online Forum on International Cooperation to Combat Covid-19.

The Vice-President of the Italy-ASEAN Association, Professor Romeo Orlandi, attended the event. Here is the transcript of his speech:

It is obviously difficult to ascertain whether the recovery after the Covid-19 pandemic will be quick, full, partial and which shape it will take. Still, some forecasts are possible, based on current data and past experiences. Very likely, the L shaped recovery will be avoided. Actually, in this case it would be a stagnation, not a recovery. We have already signs in China, in Asia and in some European countries that probably and hopefully the worst is behind us. A fast rebound is on sight, as envisaged by the majority of international organizations and governments. If so, we have a couple of questions to be answered. Will the recovery compensate the recession? In addition, is a new crisis a clear and present danger? The first answer is quite easy: in a short period, the recovery will not regain what we have lost in terms of GDP. The negative impact has been – and still is – so deep that wiping out the loss would be a dream. Statistically, too, that will not be possible. Moreover, there is a good possibility of another crisis, due to the dynamics of the economy and the unpredictability of the Coronavirus. The best guess is a W shaped recovery, which means we are supposed to live with uncertainty, in both good and difficult times. Crisis and recoveries will probably be on governments’ agendas and on ordinary people’s lives for quite some time.

As a consequence, we will be asked to manage a complex situation, where concepts like collaboration and sharing will not simply sound as tools of propaganda. Take the case of the decoupling. Many augur that the economies of the industrialized countries should and must separate their destinies from those of emerging countries. The rationale for this position is in front of our eyes: a decline in China and Asia’s supply have repercussions on the global value chain. This is an obvious result of the globalized delocalization originated in the West. A virus in Asia affected the whole world. Then, with the spread of the epidemic, also the industrialized countries were affected with a tremendous slowdown in economic activities, a painful and blatant crisis of demand. So, what is the good in finding the culprit, to point the finger to others? Is it a wise policy to cancel the integration of different economies and replace it with protectionism and trade war? It is not a matter of right or wrong. It is crucial to consider if we can go back to the old times. Reshoring is now deemed fashionable, aimed at creating new employment in industrialized countries. Will it be possible? Are we going to see the restoration of smoking chimneys now dismissed? Are we ready to create overnight another “factory of the world”, the same we witnessed in Asia over the last few decades? The answer is probably not. You cannot build another industrial powerhouse overnight. So, my final remark, is that the only way to pass this tragic moment is to negotiate, continuing trade talks and accept the best sides of globalization without demonizing it after having created it.

 

Working breakfast with Ivan Scalfarotto, Undersecretary to the Ministry of Foreign Affairs

Ivan Scalfarotto Associazione Italia-ASEAN

Undersecretary Scalfarotto described the strategy to support the internationalization of Italian enterprises.

On February 17th, the Italy-ASEAN Association had the pleasure to host a meeting in Milan with Mr. Ivan Scalfarotto, Undersecretary to the Ministry of Foreign Affairs and International Cooperation. Undersecretary Scalfarotto discussed alongside Secretary General Alessia Mosca and the Members of the Association about the position of Italy in the current state of international trade.

Undersecretary Scalfarotto confirmed the commitment of the Italian Government to strengthen the economic and diplomatic ties with ASEAN and described the strategy to support the internationalization of Italian enterprises

He highlighted the importance of international trade for the Italian economy. As a matter of fact, exports were fundamental for economic growth during the latest financial crisis: between 2010 and 2017, Italian export grew of +6,4%, while the GDP shrank of -0,8%. Italy would have suffered even more of the economic crisis, if its enterprises were not able to rely on foreign markets.

Furthermore, the “Made in Italy” brand is based on the production of high-quality goods from imported products, such as agri-food and textile products. For example, Italy is well-known for coffee and chocolate, but it does not produce coffee beans and cocoa. Italy does not even produce enough wheat to support its pasta industry

Given the skills of the Italian enterprises, one might be tempted to think that companies can compete on global markets on their own. However, Undersecretary Scalfarotto stressed that, globally, the value of G2G (Government to Government) agreements far exceed those of B2B (Business to Business). He explained that the government can and should play a role as a pro-active actor in facilitating economic exchange. Indeed, it is hard for single companies to install a stable and trusty dialogue with foreign partners without receiving the support of the Government (especially in Asian countries).

To this matter, Undersecretary Scalfarotto then proceed by reporting cases where the Italian Government - through its agencies - was crucial for the internationalization of Italian enterprises. As an example, he cited the role of Cassa Depositi e Prestiti Group in filling the void left by financial institutions in providing funding credit to Italian companies. He also stated that the Italian Government is currently addressing in a unified manner critical issues to international trade, such as external tariffs and duties.

Undersecretary Scalfarotto emphasized that trade can play a key role as a foreign policy instrument, as the Trump administration have showed. Therefore, Government should intervene in crucial sectors where irregularities can emerge (as it is the case with 5G technologies), in order to establish a level playing field. level playing field.

In conclusion, Undersecretary Scalfarotto highlighted the strategic role of the Association of South-east Asian Nations. From the economic point of view, it represents in total the 5th largest economy in the world. From a geopolitical point of view, instead, the region is a great stabilizer to the tensions between bigger regional powers. Therefore, Italy and the European Union should play a more active role in South-East Asia, filling the void left by the US in Asia-Pacific. In fact, strengthening the economic relations with Asian countries can be a tool to promote political stability and growth in the region, a strategy already adopted by the European Union in Latin America.

 

 

Lecture by Vivian Balakrishnan, Singapore's Minister for Foreign Affairs

On his first official visit to Italy, the Singapore's Minister of Foreign Affairs met with the Italy-ASEAN Association

On December 19th 2019, Singapore's Foreign Minister Vivian Balakrishnan held a conference on the evolution of globalization at the office of the Italy-ASEAN Association in Rome.

During his speech, Mr Balakrishnan stressed the long-lasting and stable relationship between Italy and Singapore. In particular, Italy was one of the first countries in the world to recognize Singapore's independence in 1965.

Today, more than 600 Italian companies are active in Singapore and, at the same time also Singaporean investments in Italy are considerable. The recent trade agreement between the European Union and Singapore, which came into force in November 2019, has the potential to further intensify economic exchanges.

Today, more than 600 Italian companies are active in Singapore and, at the same time also Singaporean investments in Italy are considerable. The recent trade agreement between the European Union and Singapore, which came into force in November 2019, has the potential to further intensify economic exchanges.

The Straits Times, an influential Singaporean newspaper, reported a more detailed account of Mr Balakrishnan's visit to Italy. The article is available at the following link.

Working Breakfast on Malaysia

A working breakfast on Malaysia was held to pave the way for the nextHigh Level Dialogue in Kuala Lumpur

On December 3rd 2019, the Italy-ASEAN Association organized a working Breakfast on Malaysia in its Milan office at the presence of H.E. the Ambassador Abdul Malik Melvin Castelino

The event represented the first step towards the fourth High Level Dialogue, which will be held in Kuala Lumpur on July 1st and 2nd 2020. High Level Dialogue, che si terrà a Kuala Lumpur il 1° e 2 luglio 2020.

The High Level Dialogue is an annual summit, jointly organized by the Italy-ASEAN Association and The European House - Ambrosetti. It represents the most important Italian event in ASEAN, bringing together business and institutional leaders of the two regions.

During the event, Ambassador Abdul Malik Melvin Castelino introduced the opportunities Malaysia can offer to Italy. Gaia Brandolin, on behalf of the Malaysia Investment Development Authority, presented the tools that Malaysia provides to foreign companies interested in investing in the country

Moreover, Lorenzo Tavazzi (Associate Partner and Head of Scenario & Intelligence Department, The European House-Ambrosetti) updated participants on the preparatory work for the High Level DialogueHigh Level Dialogue.

Finally, the Secretary General of the Italy-ASEAN Association, Alessia Mosca, moderated a discussion among participants.

L’Associazione Italia-ASEAN partecipa a Bookcity 2019

Il Presidente Letta e il Vice presidente Orlandi presentano ASEAN for Italy e Le Anime dello Sviluppo

L’Associazione Italia-ASEAN partecipa a Bookcity, organizzando due eventi: Il Sud-est Asiatico dopo Salgari e “Apocalypse Now”. Un viaggio tra geopolitica, economia, culture e tradizioni e Le anime dello sviluppo: dialogo su geoeconomia e religione da Milano all’Asia. Entrambi gli eventi si terranno il 15 novembre, a Milano.

Il primo evento si terrà alle ore 17.00 nell’ufficio dell’Associazione a Milano in Corso Buenos Aires 56. Il Vice presidente Romeo Orlandi presenterà il libro ASEAN FOR ITALY. L’ASEAN per il sistema Italia. Assieme al giornalista, Danilo Taino, e all’Ambasciatrice dell’Indonesia in Italia, Esti Andayani, si discuterà a fondo del “miracolo” ASEAN.

Il secondo evento avrà luogo, invece, alle ore 19.00 nel Castello Sforzesco. Il Presidente Letta si confronterà con S.E.R Mario Delpini, Archivescovo di Milano, su come la dimensione geopolitica ed economica del sud-est asiatico sia fortemente intrecciata alle questioni religiose.

Il complicato connubio tra religione e geopolitica nell’odierno villaggio globale è infatti il tema principale del libro Le anime dello sviluppo. Religioni ed economia nel sud-est asiatico.

E-commerce as an opportunity to enter ASEAN market

The Italy-ASEAN Association analyses the growth of the digital market in South-East Asia.

On 14th October 2019, the Italy-ASEAN Association held a working breakfast on e-commerce opportunities in South-East Asia.

During the event, the development of the e-commerce sector in the region was discussed, highlighting the implications for Italian companies.

The speakers of the event were Giulia Ajmone Marsan (Strategy and Partnership Director at ERIA), Tito Costa (partner at Global Founders Capital), and Marco Ogliengo (founder and CEO of ProntoPro).

ASEAN countries have increased their investments in the digital sector, whose growth has been impressive in recent years. Three factors have favoured the development of the sector in the region: technological progress, demography and - paradoxically - the low level of traditional infrastructure.

E-commerce represents a possible solution to market imperfections in Southeast Asia. However, the sector is still complex and has not yet reached its full potential.

ASEAN's e-commerce market is expected to be worth $350 billion by 2025.

Presentation event of the Italy-ASEAN Association, in Naples and Vicenza

The Italy-ASEAN Association presented the opportunities offered by South-East Asian markets, in two meetings in Naples and Vicenza.

The Italy-ASEAN Association keeps presenting the opportunities offered by the South-East Asian markets to Italian businesses.

The Association has promoted two events in Naples (on 25th October) and Vicenza (on 13th December), in order to presento local companies its activities and ASEAN's growth figures. The events were organized in collaboration with Unione Industriali di Napoli and Confindustria Vicenza, which we thank for their support.

The Italy-ASEAN Association has already planned to organize other meetings in the first half of 2020, in Bologna and Turin, with the aim of strengthening the awareness of the Italian entrepreneurial community regarding the opportunities offered by South-East Asia.

The Italy-ASEAN Association has already planned to organize similar meetings in the first half of 2020, in Bologna and Turin, with the aim of strengthening the awareness of the Italian entrepreneurial community regarding the opportunities offered by South-East Asia.