Asean

Redazione published in Asean, Economy and trade

Southeast Asia beacon of growth

The region is benefiting from a restructuring of global supply chains as it sits at the intersection of two of the world's largest free trade agreements

By Tommaso Magrini

A year and a half after the start of a historic interest rate hike cycle, Southeast Asia's economic outlook continues to stand out in a world of high inflation and weak demand. This is highlighted in an editorial published in Nikkei Asia, which points out that HSBC expects the six largest economies in Southeast Asia -- Indonesia, Thailand, Malaysia, the Philippines, Singapore and Vietnam -- to grow by 4.2 percent this year and 4.8 percent next year. This pace would far exceed the 1.1 percent expansion projected for the developed world in 2022 or the 0.7 percent estimated for next year. This acceleration is all the more remarkable considering that Chinese tourism dollar inflows have not returned to Southeast Asia as expected. A recovery in tourism would certainly be a boon for Southeast Asia. But in the meantime, trade, energy transition and digital transformation are set to fuel the region's economic growth for decades to come and ensure that this dynamic region remains a global growth engine. Southeast Asia has come a long way as a manufacturing hub. It now accounts for 8 percent of global exports and has overtaken the European Union as China's largest trading partner since 2020. The region is benefiting from a restructuring of global supply chains as it sits at the intersection of two of the world's largest free trade agreements, the Regional Comprehensive Economic Partnership (RCEP) and the Comprehensive and Progressive Agreement for the Trans-Pacific Partnership. The RCEP in particular, with its business-friendly tariff reductions and rules of origin, is increasing Southeast Asia's attractiveness as a manufacturing base, a fact that more and more companies are recognizing. According to a recent HSBC survey, Asia-Pacific companies plan to base 24.4 percent of their supply chains in Southeast Asia in the next one to two years, up from 21.4 percent in 2020.

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Lorenzo published in Asean, Politics and strategy

What to expect from the ASEAN summit

From 5 to 7 September the 43rd summit of the South-East Asian countries will take place in Jakarta, Indonesia. Objective: to prepare the bloc for the challenges of the next 20 years.

The Chairmanship now handled by ASEAN, Indonesia, declared it had invited 27 global leaders and executive directors of international bodies to the 43rd ASEAN Summit in Jakarta, scheduled from 5 to 7 September. The three day-meetings will bring together not only the leaders of the ASEAN member States, but also external partners of the bloc. Also global financial institutions such as the World Bank and the International Monetary Fund (IMF) are invited to the dialogue. “We expect the participation of leaders from 27 countries and international organizations at the imminent summit. The Canadian Prime Minister [Justin Trudeau] is expected to attend the summit”, declared the General Director for ASEAN Cooperation at the Ministry Affair Sidharto Suryodipuro. Discussion on strengthening the capacity and the institutional effectiveness of the bloc in order to help the organization in meeting the challenges of the next 20 years will continue at the summit.Suryodipuro declares that Indonesia intends to lay the foundations of ASEAN cooperation to address the present and future challenges. The 43rd ASEAN summit will also see the handover of the regional group to Laos, which will lead the bloc through 2024. In parallel, President Joko “Jokowi” Widodo will lead 12 meetings during the three-day forum, including the 18th East Asia summit. In addition to the group’s talk with dialogue partners, including the United States and India. Among others, the Canadian Prime Minister Justin Trudeau and the Indian one Narendra Modi are expected to attend, despite the fact that a few days later he will host the G20 summit in New Delhi. India and ASEAN have also recently reported their will to upgrade their free trade agreement by 2025. Instead, it seems that Joe Biden, who has chosen to travel only between India and Vietnam during his Asian trip in September, will be absent. This decision will note please the Indonesian host. Jakarta is now seeking to enjoy the Organization for Economic Cooperation and Development (OECD). If the plan succeeds, Indonesia will become the third Asian country to join the organization, after South Korea and Japan.

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Pierfrancesco Mattiolo published in Asean, Economy and trade

Five countries inaugurate ASEAN network for QR Code payments

Malaysia, Indonesia, Thailand, Singapore and the Philippines have interconnected their national QR code payment platforms. Consumers will be able to instantly make payments, including in foreign currency, with reduced costs for both them and sellers. The region solidifies its position as a global fintech hub.

Last June, Malaysia and Indonesia connected their digital payment platforms based on QR code technology. Kuala Lumpur had already completed the connection with Singapore in April and, even earlier, with Thailand. These initiatives are not isolated or bilateral but are part of a coordinated ASEAN project that also involves the Philippines. Five prominent economies in the region have decided to coordinate the technical standards of their respective national platforms, creating a network that allows users to make payments using their national provider's QR codes issued in another country. The project also enables instant currency conversion. The initiative was announced last year during the G20 summit of finance ministers and central bank governors, chaired by Indonesia. The five partners intend to continue the project, and in the future, consumers may also be able to make instant transfers or purchase national digital currencies through platform interconnections. Other countries may also join the network.

The ASEAN initiative is part of a global context of rapid QR code development, increasingly used for digital payments. By 2025, this payment method could move $3 trillion globally. Its main strength lies in its accessibility, as in certain regions of the world, owning a smartphone is much easier than having a credit card. This condition could enable Southeast Asia to drive “a digital payment revolution". Over 50% of ASEAN consumers living in urban areas already use e-wallets for their payments, and this number is expected to reach 84% by 2025. The figures are not equally impressive in rural areas, where less than 20% of consumers used e-wallets in 2020, but this number is projected to approach 60% by 2025. This trend aligns with what is happening in China with Alipay and WeChat. The main barrier to this conversion is the scepticism of merchants who consider the transactions to be unreliable and too costly, leading them to reject electronic methods. However, the adoption of QR codes and their ASEAN-level interconnection provides a response to these concerns and will undoubtedly contribute to the spread of digital wallets. QR code advocates also claim that the method is safer, as it requires less personal data to be provided to sellers.

This "revolution" will have an impact on the future development of many sectors of the economy, creating winners and losers. Traditional banks, already less present in certain areas of ASEAN countries, risk being replaced by fintech competitors. To pay with a credit card or withdraw cash from an ATM, a current account and a physical distribution network are required. These are not easy obstacles for traditional banks to overcome due to costs and difficulties in obtaining creditworthiness information about potential customers. Fintech companies, on the other hand, are not burdened by these requirements and can more easily attract new customers in Southeast Asia and extract value from their transaction data. It is a market with immense potential, and "unlocking" it will allow ASEAN companies to further grow and consolidate the region's position as a global laboratory for digital and fintech innovation.

However, these initiatives also have a political dimension. QR codes reduce the costs of individual transactions and, as mentioned earlier, are easily accessible even to individuals normally excluded from traditional banking channels. The so-called "financial inclusivity," which aims to make the financial system accessible to the middle class and those living in rural areas, is a strategic objective for ASEAN governments and can make their economies more prosperous and competitive. Moreover, the fact that the coordination of technical standards occurred at the ASEAN level, rather than just bilaterally, is evidence of the organization's potential as a forum to discuss and strengthen regional integration, both economically and digitally. However, this project is limited to some of the most competitive and closely aligned economies within the organization. Which other national platforms could join in the future? Vietnam has already worked with Thailand to connect their QR payment systems, and if it participates in the network with the other four countries, all the wealthiest economies in the region would be part of it. Involving smaller countries with fewer resources is more challenging.

The political impact of this initiative goes beyond ASEAN. The coordination of QR platforms allows consumers to instantly pay bills in foreign currency with minimal exchange rates. In practice, the system converts ASEAN currencies directly, without the need for US dollar intermediation. The digitalization of money flows thus poses an additional challenge to the centrality of the American currency in international exchanges. Lastly, strengthening ASEAN as an innovative and dynamic digital hub enhances the region's role in defining future technological standards. Perhaps even capable of carving out a space amidst the US-China duopoly. Coordinating and facilitating electronic payments creates new opportunities. It is curious to observe that, on the other hand, in Italy and other European countries, it is sometimes still challenging to pay with a credit card, and preserving the role of cash is a political issue. This approach is completely opposite to the dynamism demonstrated by Asian companies and governments, slowing down the progress of our economies towards the new digital "revolution."

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Redazione published in Asean, Politics and strategy

EU-ASEAN, towards new forms of cooperation?

We publish here an excerpt from the introduction of the Carnegie Endowment for International Peace report : “Rethinking EU-ASEAN Relations: Challenges and Opportunities”.

The European Union (EU) and the Association of Southeast Asian Nations (ASEAN) formally marked almost half a century of diplomatic ties at the end of 2022. The summit commemorating the forty-five years of the two blocs was held in Brussels. Paradoxically, despite escalating tensions over the security sphere in both regions, the security dossier has not been central to the EU-ASEAN agenda. This is symptomatic not only of the way the two organisations view each other's capabilities and interests in each region, but also of the way the relationship has gone so far. There have been a series of ups and downs, with many of the more contentious issues - particularly the thorny ones relating to democracy and human rights - left to diplomats or addressed by civil society, given the sensitivity at the political level. The main focus of EU-ASEAN relations has been on trade and investment, reflecting the EU's competence vis-à-vis its member states and areas where ASEAN as a whole has slightly more room for manoeuvre. Despite the inability to push forward a free trade agreement (FTA) between the EU and ASEAN, which has stalled since 2007, the EU has made progress with bilateral FTAs with individual ASEAN member states, including Singapore and Vietnam. On the foreign policy front, both the EU and ASEAN face difficulties. EU members have never made progress in ceding full control of external engagement to the EU's executive arm. Despite the ratification of the Lisbon Treaty in 2009, EU member states have continued to retain national competence over the many challenges affecting the Union's Common Foreign and Security Policy. ASEAN acts in much the same way, but much more strongly favours the prerogatives of individual member states. And there has never been any ambition or coordinated attempt to outsource ASEAN's foreign policy efforts to the regional secretariat. However, over the past decade or so, the geopolitical landscapes in Europe and Asia have changed significantly, leaving the EU and ASEAN exposed to critical economic and security vulnerabilities over which they have limited control. This is why the EU and ASEAN can work together and create a space that is based on their cooperation. The EU and ASEAN have a mutual need for each other's presence in international affairs and a relationship based on genuine cooperation and delivery of concrete results.

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Carola Frattini published in Asean, Economy and trade

The future of ASEAN's youth

The economic growth of Southeast Asian countries will depend largely on the ability of governments to value their young people 

Southeast Asia is one of the most dynamic and fastest growing regions in the world from a labor market perspective. With a total of about 700 million people, the region has a young, dynamic and increasingly educated population. From 1950 to 2020, the Southeast's working-age population grew from 95 million to 453 million. As the working-age population has grown faster than the non-working-age population, the economy's dependency ratio, i.e., the ratio of people considered "non-self-employed" due to age to people who are able to work, has declined leading to a phase of economic growth.

Unfortunately, however, this demographically favorable condition is not likely to last much longer. In Thailand, for example, it is estimated that as early as 2050 the number of people in the 20-64 age group will be 21 percent lower than in 2020. Moreover, if at the moment the average age in ASEAN countries turns out to be 30 in 2050 it will rise to 37.3 years showing that Southeast Asian countries will also move toward a phase characterized by a gradual aging of the population in which economic growth will depend more on the productivity and skill level of young people. As stated by Martijn Schouten, "workforce transformation leader" in Singapore for PWC, the need for a process process of skill adjustment and enrichment to create a workforce with digital and green skills has never been more urgent, considering the commitment made by many ASEAN countries to transition to a zero-emission economy. This transition will add roughly 30 million new jobs in Southeast Asia by 2030. 

Therefore, it is critical that governments in the Southeast Asian region invest in the education and training of young people in order to increase productivity and innovation, fostering dynamic and competitive economic growth. An analysis conducted by PWC shows that extensive investment "in upskilling" would also have the potential to increase the region's GDP by 4 percent, thereby unlocking up to 676,000 new jobs by 2030. In terms of employment, the greatest benefits would be in Indonesia, Vietnam and the Philippines. 

Taking note of the situation, many Southeast Asian countries are acting accordingly. For example, in Malaysia, where the under-35s make up about 60 percent of the population, the government has allocated 2.1 billion ringgit of funds in order to empower young people to become productive, innovative and socially responsible citizens; these include an allocation of 500 million for the National Digital Skills Program, aimed at helping young people upgrade their digital skills. There is also an allocation of 150 million euros for the Youth Entrepreneurship Program, aimed at supporting young entrepreneurs and their start-up initiatives. In contrast, the Singapore government has allocated $400 million in grants from the Financial Sector Development Fund (FSDF) through 2025 to support skills training for professionals in the financial sector. Thailand's Ministry of Labor has partnered with Microsoft Thailand to provide digital skills to 4 million people to support key sectors, including manufacturing, creating new jobs and business opportunities. The first phase of the partnership has boosted the digital skills of 280,000 Thai employees from 2020 to 2022, but a plan to create an additional 180,000 job opportunities is already in place.

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Redazione published in Asean, Global Lens

Ambassador Alessandro bids farewell to Vietnam

The Italian diplomat prepares to leave Hanoi. His farewell meetings as told by Vietnamese media

In Vietnam since November 2018, Italian Ambassador Antonio Alessandro paid two important farewell visits last week. Specifically to the Chairman of the Hanoi People's Committee, Tran Sy Thanh, and the Minister of Foreign Affairs, Bui Thanh Son. "Over the years, people-to-people exchanges have fostered mutual trust and understanding between Vietnam and Italy in general, and between Hanoi and Rome in particular, paving the way for extensive cooperation in the economic, trade and investment fields," said Tran Sy Thanh. As told by the Hanoi Times, he then expressed gratitude to the ambassador for his valuable insights and acknowledged his contribution to the overall development of bilateral relations between the two nations. With a commitment to promoting cooperation, Tran Sy Thanh assured that the local government will continue to facilitate the activities of the Italian Embassy in Hanoi by creating favorable conditions. The Vietnamese media reports that "during the meeting, Ambassador Antonio Alessandro expressed his deep gratitude and sense of belonging after serving in Vietnam for more than four years, saying he feels like a citizen of Hanoi." Alessandro went on to say that the Italian Embassy has received excellent support and cooperation from the Hanoi People's Committee, which has led to remarkable achievements in the various fields of cooperation between Vietnam and Italy, ranging from culture and society to economy, trade and tourism. Bilateral trade between Vietnam and Italy has seen positive growth, with Italian companies participating more and more actively in the Southeast Asian country's market. The Ambassador then anticipated new progress in relations between Vietnam, Hanoi and several Italian localities. Initiatives such as the Memorandum of Understanding on cooperation between Rome and Hanoi and Rome's bid to host EXPO 2030 offer promising prospects for greater cooperation. All this while just this year marks the 50th anniversary of the establishment of official diplomatic relations. Concluding his speech, the Hanoi Times reports, "Alexander said that although his term is now over, his affection and bond with Hanoi and Vietnam will last indefinitely." 

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Sabrina Moles published in Asean, Culture and society

Barbie & co.'s problems with maps in Vietnam

Depicting the South China Sea is a tricky thing, given the territorial disputes between some ASEAN countries and China. And it sometimes happens that movies or bands have problems 

It may be a "childish doodle," as Warner Bros. called it, but enough is enough. The map that appears behind Barbie's back in a scene in the trailer was enough to have the film removed from Vietnamese theaters. And it is not even nine features, but eight. Their location next to a parallelepiped sketched with the words "Asia" conveys an unmistakable image: that is the "nine-dash line," the demarcation line of those territories in the South China Sea that China claims as its own. 

First the posters disappeared from theaters, then on Monday, June 26, came the final news: Greta Gerwig's film will not be released "because of some scenes depicting the nine-dash line map, which is considered a violation of Vietnam's territorial sovereignty." Word from the National Council for the Evaluation and Classification of Films. Social media also favored the government perspective: regretful but infuriated with the producers, Vietnamese netizens were equally offended by the pro-China map.

Manila also considered the option of outright censorship. "The map legitimizes Chinese claims, which no government in the world supports" and is "offensive to all" countries in the region, argues military analyst Jose Antonio Custodio. These are smaller markets, but not so indifferent, explains Hollywood Reporter: a Hollywood cult in the Philippines and Vietnam can add between five and ten million dollars to Warner Bros. budget. Quite a risk if national pride starts infecting neighboring countries. The Asian archipelago, moreover, spearheaded the 2016 petition to the international tribunal in The Hague denouncing Chinese incursions and demanding compliance with the United Nations Convention on the Law of the Sea (UNCLOS).

Pop nationalism

The same "oversight" in 2019 cost Vietnamese film distributor CJ CGV as much as $170 in fines: it had marketed The Little Yeti, a DreamWorks-signed cartoon that ended up in the crosshairs of the Philippines, Vietnam, and Malaysia for the same reason. 2019, after all, has been one of the most tense years in the South China Sea, caused by the operations of the Chinese vessel Haiyang Dizhi 8 around the Spratly Islands.

La stessa “svista” nel 2019 è costata ben 170 dollari di multa al distributore di film vietnamita CJ CGV: aveva commercializzato Il piccolo Yeti, un cartone animato firmato DreamWorks finito nel mirino di Filippine, Vietnam e Malesia per la stessa ragione. Il 2019, d’altronde, è stato uno degli anni di maggiore tensione nel Mar cinese meridionale, causata dalle operazioni del vascello cinese Haiyang Dizhi 8 nei dintorni delle isole Spratly. 

The nine-dash line, which takes up about 90 percent of the three million square kilometers of water that bathes mainland Southeast Asia, has infuriated the Philippine government with Netflix over its appearance in some scenes of the Australian series Pine Gap. So much so that the streaming giant proceeded with their removal from the platform.

On the other hand, critics say, there would be an ongoing process of self-censorship and condescension toward China by the cultural industry giants. Between multimillion-dollar investments in U.S. production companies coming in from the PRC and the obvious preponderance of the Chinese market - the second largest in the world - here even Hollywood would be prone to the subtleties of Chinese soft power.

In 2016, a bipartisan group of sixteen members of Congress had taken it upon themselves to expose Chinese business around the U.S. entertainment industry, gaining the consensus of the Committee on Foreign Investment in the United States (CFIUS). In ASEAN countries, at least those most aggressive against Chinese incursions into claimed areas, the process is less complicated: the government takes care of it directly.

Not just cinema

The rhetorical battle is not limited to the cinematic sphere. Initially denounced on social media, the controversial graphics on the website of the organizers of the Vietnamese leg of the k-pop group Blackpink generated the same boycott threats. The company, iMe Entertainment Group Asia, soon responded to the Culture Ministry's demands by promising to remove the tour map. It explained in a statement, "The map does not specifically represent the territory of any country, we are aware of and respect the sovereignty and culture of each country."

Hanoi also did not relent when it came to validating entry visas into the country on new Chinese passports. In 2012, these passports clearly showed the map that since 1949 would justify the historical belonging of the South China Sea territories to China. And Vietnam then asked to issue separate documents instead of stamping the dedicated pages.

In countries such as Vietnam, culture is one of the outlets granted by the Party. This was the case with the wave of demonstrations in 2011 and 2014 that brought masses of angry citizens to the streets of major Vietnamese cities, all in protest of Chinese manoeuvres in the claimed areas of Hoàng Sa (Paracelsus Islands) and Trường Sa (Spratly Islands). 

Bringing down the language of nationalism to the culture industry could allow this too. What better than a global cinematic success to ignite the flame of public participation where few-if any-are the venues for dissent? A process that occurs, by contrast, in China, where geographic definitions on a T-shirt can trigger a brand ban.

Philosopher Alfred Korzybski argued that "the map is not the territory," but an ideological construct. For Asian countries bordering the South China Sea, the map is something more: an always necessary history, and never a "doodle."

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Redazione published in Asean, Economy and trade

The depths of diplomacy

Among the most coveted projects is the Southeast Asia-Middle East-Western Europe 6, or SeaMeWe-6, which connects France to Singapore, touching a dozen other countries. A project at the center of competition between the United States and China, it will place Singapore even more at the heart of world diplomacy

By Chiara Suprani

Among the means that countries take to direct their "economic diplomacy," there is one less popular than semiconductors, but just as central: it lies underwater, connecting continents with "only" the power of a cable. These are undersea telecommunications cable networks, which have become critical infrastructure over the years for digital economy, international data traffic but also for logistics. Italy, too, is planning its own submarine cable: it is called Unitirreno, and it connects Genoa to Mazara Del Vallo, providing access to a "carrier-neutral" data center that does not belong to any telecommunications company. Submarine cables make connections faster, dilute data traffic, enable better telecommunications and digital phases of countless economic sectors. And a cable is as much a part of the network as it is a node.

Among those nodes is Singapore, which has 25 operational submarine cables under its belt, making it the largest underwater Ethernet hub in the region. And in addition to the already planned 14 future projects, the city-state will double the number of cable attachment points in the coming years through billions of dollars of investments.

Companies such as Meta, Google along with countries such as the Quads, which are Australia, Japan, India and the United States have set their eyes on Singapore. The companies are investing in projects called Echo and Bifrost, both of which will be finished next year and Echo will connect Singapore to the United States for the first time, directly; the Quads have signed a new agreement to increase undersea Ethernet cables in the Indo-Pacific.

And as critical infrastructure, their fragility has not gone unnoticed either. Submarine ethernet cables have often been the subjects and victims of diplomatic disputes between countries: for Wired, the global network of undersea cables makes up most of the skeleton of the internet nowadays, irreplaceable even by Elon Musk's famous Starlink project. As the number of undersea cables has increased, hubs became at the same time "choke points" or breaking points, as in the case of Egypt from which 17 percent of all the world's internet traffic passes. Similar could be the fate of Singapore, which will have to ensure uninterrupted data traffic and be a reliable resource. The city-state will have to develop a disaster mitigation response plan, disaster such as those that affected the Solomon Islands in 2018, the Federated States of Micronesia in 2021 and the Matsu Islands in February this year. Among the most coveted projects is the Southeast Asia-Middle East-Western Europe 6, or SeaMeWe-6, which connects France to Singapore, touching a dozen other countries. A project at the center of competition between the United States and China, it will place Singapore even more at the heart of world diplomacy.

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Redazione published in Asean, Economy and trade

ASEAN will lead the next decade of global trade

Southeast Asia is set to become a major growth center in the coming years. This is supported by a new report from Standard Chartered Bank

"Global trade is increasingly shifting toward Asia as high-growth corridors emerge within the region and to new markets in Africa and the Middle East. The bloc of Southeast Asian countries that are part of ASEAN is obviously at the top of the list, with trade among the bloc's member states set to accelerate to nearly 9 percent annually over the next decade." Michael Spiegel, global head of Transaction Banking at Standard Chartered Bank, strongly argues this in a commentary published in the Business Times. "While these trends signal great opportunities, businesses are also facing a polycrisis, or a set of interdependent challenges, from rising geopolitical tensions, inflation and energy prices to the increasingly urgent need to address climate risks," Spiegel writes. According to the Standard Chartered Bank expert, "to succeed, companies must act now, connecting to new markets to diversify both sourcing and production to achieve more resilient supply chains. Sustainability is increasingly an imperative for both investors and consumers, making environmental, social and governance (ESG) compliance more urgent than ever, not only for corporations but also for their suppliers." Spiegel argues that "companies must balance growth objectives with resilient and sustainable supply chains. They need to identify and connect to growth opportunities, then execute a sustainable and resilient growth plan." The Standard Chartered Bank expert concludes by asking a precise question to which he proposes an equally precise answer: "So where will the growth hubs of the future be? We believe they will be in Asia, Africa and the Middle East, which are set to propel global exports from $21 trillion to $32.6 trillion by 2030, according to our new Standard Chartered Bank Future of Trade report."

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Sabrina Moles published in Asean, Global Lens

The water problem

The effects of rising temperatures on the Himalayas in a new report: the continent's main water supply risks running dry in 2100. With consequences for an area where the Yangtze and Yellow River, Indus, Ganges and Mekong are born

Asia will lose its main water reserve by 2100. This is the alarm raised by researchers at the International Center for Integrated Mountain Development (ICIMOD) in Kathmandu, who in their latest report predict a reduction in the Himalayan glaciers up to 80% of the current volume. The estimate is based on forecasts of a 4C rise in global temperatures, well beyond the limits promised by the Paris climate accord but close to actual projections unless significant action is taken.

The Hindu Kush area, object of the research, hosts what is today the largest ice reserve in the world after the two Poles. Here there are 15 thousand glaciers for a total of 100 thousand square kilometers of surface, from where the Yangtze and the Yellow River begin their journey, as well as the Indus, the Ganges and the Mekong. An area so vast as to directly affect the 240 million people who live on the plateau and another 1.65 billion along the river basins. 

According to ICIMOD forecasts, the melting of the glaciers will cause a peak in the water supply to the valley by the middle of the century, and then slowly begin to decline. From that moment on, the availability of water will begin to decrease and there will no longer be sufficient reserves upstream for the maintenance of local ecosystems.

From the dependence of energy systems on hydroelectricity to the instability of water resources for agriculture, the melting of glaciers will have and already has an epochal impact on the continent. This is in a region where 80% of rainfall is concentrated in the four months of the monsoon season, today increasingly intense, short and hot. In 2021, the president of the United Nations Office for Disaster Risk Reduction Mami Mizutori called drought "the next pandemic". Too bad, he added, that there is no vaccine for drought. 

Water scarcity comes into play in an area where investment in hydroelectricity has exploded over the past two decades. One hundred dams are now operational in the sixteen countries reached by the waters coming from the plateau, while another 650 dams are expected to be built in the next few years. Enthusiasm for the opportunities stemming from this seemingly sustainable source was soon dampened by record heat waves year after year. A prolonged peak in temperatures which, as has been happening in Vietnam for over five weeks, has led to the gradual closure of some of the country's main hydroelectric plants.

But the attractiveness of water resources to support the rampant energy demand of new industrial centers has generated very different narratives in the community of international investors. From the Irrawaddy for Myanmar to the Mekong for Laos, there are many companies and institutions that would like to take the opportunity to transform these countries into the "batteries of Asia". The water potential of Asia's major rivers is often referred to as a "missed opportunity" or "largely underexploited".

A gradual conversion of global supply chains in South Asia and Southeast Asia is contributing to this due to rising Chinese labor costs and international tensions. No less important are the tax breaks adopted by governments to attract foreign investors, as well as the numerous trade agreements. All measures that are expanding access to Asian markets and, by facilitating regional exchanges, make it possible to relocate an entire production chain on the basis of the fiscal or economic benefits of the various countries.

The contraction of the polar ice cap is to energy exploration in the northern seas what the melting of glaciers is to Beijing's infrastructure and mining ambitions. In fact, it is the People's Republic, in particular, that is betting on the growing accessibility of the Himalayan plateau. Recently some researchers have identified a vein of rare earths that could extend for a thousand kilometers along the southern border of Tibet, a factor that could both strengthen China's dominant position on one of the most strategic markets of our time, as well as re-emerge tensions with neighboring India.

In fact, a greater presence of human activities on the Himalayan plateau is already bringing to light the territorial claims of the various governments of the region. This is the case of the Tibetan county of Lhunze, one of the largest rare earth basins located in an area still contested by India and where infrastructure investments more than doubled between 2016 and 2019. The escalation of a conflict linked both to new mineral resources may soon be just the preview of a more bitter battle for water resources. Barring the Indus Waters Treaty signed by India and Pakistan, there is no regional mechanism dedicated to the redistribution and rights to use the waters of rivers flowing through multiple Asian states. 

The massive presence of Chinese dams upstream of the Mekong is just one example of how marginal the water emergency is still considered which, sooner or later, will no longer be just a problem for a few farmers. Its marginality, the report concludes, is also due to the lack of knowledge on ecosystems beyond data: the human dimension, underlines the document, is essential for understanding what consequences and what solutions are being put in place. Local populations are adapting, but they are doing so through autonomous and small-scale forms of support and redefinition. But the climate crisis is transboundary, and its effects on the already complex relationships between the actors of the region are - still - to be seen.

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Redazione published in Asean, Economy and trade

Southeast Asian textiles soar

Statistics from Trading Economics show that in 2021 Cambodia was ASEAN's second-largest exporter in the sector with $5.82 billion, behind only Vietnam's $1

By Tommaso Magrini

The ASEAN region is emerging as one of the world's major textile hubs, a sector traditionally dominated by mainland China and other players. According to ASEAN Federation of Textile Industries (AFTEX) president Albert Tan, who is also vice-president of the Cambodian member of the AFTEX Textile, Apparel, Footwear and Travel Goods Association in Cambodia (TAFTAC), he pointed out that over the past decade, the overall gap between production costs, which mainly include raw materials, labour, logistics and compliance, and FOB (free-on-board) and retail prices has narrowed. This trend is expected to continue over the next decade. Participants at a dedicated forum on the subject drew up a list of projects and work plans for the coming months under Cambodia's presidency, in an attempt to consolidate the role of AFTEX and stimulate the growth of the regional textile and garment industries. Cambodia earned $1.395 billion from the export of 'garment, knitted or crocheted articles' in the first four months of 2023, down 28.49 per cent year-on-year and 40.80 per cent on a six-month basis (compared to July-October 2022), according to provisional Customs data. This category of items accounted for 19.28% of the $7.234 billion value of the Kingdom's total merchandise exports in the four-month period, compared to 25.64% and $7.606 billion in the January-April 2022 period, as well as 31.97% and $7.368 billion in the July-October 2022 period. Statistics from Trading Economics show that Cambodia was ASEAN's second largest exporter in the sector in 2021 with US$5.82 billion, behind only Vietnam's US$15.73 billion and ahead of Indonesia's US$4.35 billion, which ranked third. Mainland China, on the other hand, exported $86.46 billion in the same year.

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Redazione published in Asean

President Pipan attended 'No time left' conference

On Wednesday 21 June 2023, Ambassador Michelangelo Pipan, President of the Italy ASEAN Association, took part in the works of the conference "NO TIME LEFT. Against the consolidation of dictatorship in Burma/Myanmar" organised by the Association ITALIA BIRMANIA together with CeSPI and BASE Italia. Ambassador Pipan, speaking together with distinguished international guests, emphasised the importance of international cooperation in resolving the Burmese crisis and achieving peace.

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