Asean

Plastic pollution is a crucial challenge for the future of the ASEAN region, with more than 31 million tons of plastic waste generated annually in 6 out of 10 countries. But there is potential to solve the problem

By Tommaso Magrini

Plastics are a major problem in Southeast Asia and one of the main obstacles to the region's transition to a green economy. Of the ten most polluting countries, six are in Southeast Asia, according to data from the World Economic Forum. The Philippines alone dumped 356,371 metric tons of plastic waste into the ocean in one year, about 35 percent of the global figure. It is followed by Malaysia (73,098), Indonesia (56,333), Myanmar (40,000), Vietnam (28,221) and Thailand (22,806). Together, these countries are responsible for more than half of the plastic pollution in the oceans.

However, ASEAN seems determined to tackle the problem head-on. Member states recognized their duty to work together to protect their coasts, seas and livelihoods from marine plastic pollution back in 2019 when they adopted the Bangkok Declaration on Combating Marine Debris in the ASEAN Region. Based on this commitment, they launched the Regional Action Plan for Combating Marine Debris in 2021. This five-year plan aims to support regional policies and improve coordination in three main areas: reducing plastic use and production, improving collection and recycling, and promoting reuse.

A further step was taken in recent weeks, to be precise at the September ASEAN summit in Indonesia, at the end of which came the publication of the ASEAN Blue Economy Framework. Bans on single-use plastic products are an example of national policies being developed by an increasing number of countries in the region. 

Another policy tool being introduced is "extended producer responsibility" (EPR) schemes. These require producers to rethink the way they design and develop products, taking responsibility for the entire life cycle, including disposal and recycling. Manufacturers are required to meet waste reduction targets and pay fees that will finance the plastic waste collection and recycling system.

In 2022, Vietnam became the first Southeast Asian country to issue a decree imposing packaging, recycling, and waste treatment obligations on producers and importers. The Philippines followed, enacting the EPR law in July 2022. In many cases, the initiatives are only voluntary, as in the case of Thailand. Companies are also urged to develop reusable products, reduce virgin plastic use on the one hand and contribute to post-consumer collection and recycling on the other. For the goals to be ambitious and achievable, it is important to consider the local context, ensuring that all actors in the plastics value chain are able to meet them.

Regional collaboration, as the World Economic Forum always emphasizes, becomes key to developing better policies. Facilitating dialogue between countries is beneficial for governments and businesses. It provides an opportunity to share lessons learned from pilot projects and to disseminate successful solutions developed locally. Strong integrated action to combat plastic pollution can pave the way for a new era for ASEAN: from being known as the region most affected by plastic pollution in the oceans, it can become the region with the boldest green ambitions.

Expansion of metro networks is a key factor in combating urban traffic and emissions in urban areas of ASEAN countries

By Carola Frattini

As Southeast Asia's urban population grows, the region's urban centers are becoming increasingly important transportation and logistics hubs. But while this development is a symptom of rapid economic growth, it has also led to serious problems of traffic congestion and air pollution. In order to reduce travel time, traffic, and consequently emissions, the expansion of metropolitan networks therefore appears to be a key investment for Southeast Asian governments. 

Currently, among ASEAN countries, Malaysia and Indonesia stand out as leaders in sustainable urban transportation; however, the Thai government's latest significant investments in rail infrastructure are bringing Thailand closer to these two industry pioneers. The recent debut of the Yellow Line in Bangkok has attracted a great deal of attention, as during the trial period in June 2023, it recorded an impressive turnout of about 680,000 passengers in just over two weeks. The monorail spans 23 stations over a distance of 30 kilometers and connects the outskirts of Bangkok to the neighboring province of Samut Prakan. Prime Minister Prayuth Chan-ocha also praised the service, calling it "comfortable" and encouraged citizens to use this new link. 

Traffic congestion has also been a serious problem in Manila, Philippines, for a long time: already in 2017, traffic-related economic losses amounted to approximately 3.5 billion pesos per day. In order to solve this problem, the Philippines is also focusing on new metro lines. The Metro Rail Transit network in the Manila metropolitan area is expanding with the construction of Line 7, financed by the San Miguel Corporation, one of the country's largest multinational corporations. This 22-kilometer elevated rail line will reduce the travel time from North Avenue, Quezon City, to San Jose del Monte, Bulacan, from the current two to three hours to about 35 minutes. Vietnam is also trying to upgrade its public rail transportation system. The Vietnamese government has declared that work on Ho Chi Minh City's first subway line will be completed in 2024. This project will result in Vietnam having 33 kilometers of subway lines next year, after the first subway service in Hanoi was only inaugurated in November 2021.

The metro infrastructure sector in ASEAN countries has become an important market for rail infrastructure companies especially from Japan and Europe. With more than 300 kilometers of subway lines in Tokyo, Japanese companies are eager to share their expertise with the region. One such company, Shimizu, has already won a contract in Indonesia to build a railway line that is scheduled to open in 2029. Meanwhile, French train supplier Alstom has also entered the Southeast Asian market, supplying new cars for Singapore's north-south and east-west lines. Deliveries have already begun, with 16 sets of trains, and Alstom plans to deliver a total of 106 sets by the end of 2026. As demand for rail infrastructure in the region grows, it seems likely that other companies will follow suit in the coming years. 

However, these companies will most likely have to compete with an increasing role of Chinese companies, which although they have had limited success in Southeast Asian rail markets for now, have led in recent times the construction of the high-speed railway connecting Laos to China's Yunnan province, which opened in December 2021, and Indonesia's high-speed rail line, which opened on October 2. Thus, it cannot be ruled out that China will use this experience to compete with Japanese and European suppliers in metro line projects in ASEAN countries.

At the recent summit of the bloc of Southeast Asian countries, the development framework promoted by the group was relaunched. Here is an excerpt from the policy document

ASEAN defines the Blue Economy as an integrated, holistic, cross-sectoral and cross-sectoral approach that creates a value-added and value-chain of resources from the oceans, oceans, seas and freshwater in an inclusive and sustainable manner, making the blue economy the new engine of future economic growth for ASEAN. The ASEAN blue economy covers upstream and downstream sectors, acting as an accelerator for the conventional marine sector such as fisheries, aquaculture, fish-only processing and tourism, and as a catalyst for emerging sectors such as renewable energy, biotechnology, marine and freshwater research and education, and other emerging sectors. The Framework also promotes ASEAN's ambition to develop an inclusive, equitable and sustainable blue economy, making the region a significant contributor to economic growth and prosperity. It is an ambitious vision, building on the strengths of existing ASEAN initiatives, identifying priority areas for action, principles to guide decisions and tools to accelerate the realisation of a blue economy in the region. The ASEAN Blue Economy Vision emphasises value creation through the advancement of sustainable practices that promote sustainable and inclusive economic and social development related to marine and freshwater activities and livelihoods, contributing to ASEAN's economic integration efforts, economic growth and sustainable development. By harnessing the potential of the blue economy, ASEAN envisions a new growth engine that is socially, economically and environmentally sustainable. The framework can be an important driver of economic growth, social inclusion and environmental sustainability in the region. Benefits include: increasing sustainable economic growth; maximising the use of marine resources for aquaculture, fisheries, renewable energy production, transport and tourism; sustainability in the pursuit of economic objectives; mitigation of climate change and its impacts; and facilitation of cross-sectoral collaboration.

Read the full document here.

Launched last year, the project highlights Beijing's shifting focus toward improving maritime connectivity. 

The Pinglu Canal will stretch over 134 kilometers from the Xijin Reservoir near Guangxi's capital Nanning to the port of Qinzhou in the south, complementing existing highways and railways for moving goods. The huge $10.3 billion canal will have locks capable of accommodating 5,000-ton merchant ships. This would demonstrate--according to observers--Beijing's shifting focus toward improving maritime connectivity for its Belt and Road Initiative, at the expense of land routes. Officials say the canal will reduce the navigation distance between inland river networks and the sea by 560 kilometers, compared to passing through Guangzhou, resulting in savings of up to 5.2 billion yuan per year.

By creating convenient and cheap access near Southeast Asia, the Pinglu Canal also promises to boost industries in Guangxi and other parts of relatively less developed western China. In addition, geopolitical dynamics could make the project's implementation even more urgent.

As emerged at the mid-May Group of Seven summit in Hiroshima, just as the United States and Western allies are determined to "reduce risks" from China, Beijing also aims to reduce its trade dependencies. In a report published in March by the Peterson Institute for International Economics, analysts said that "both sides have the same fear, that the other will suddenly use trade flows as a weapon -- cutting imports or exports -- in the name of security."

The channel aims to strengthen already growing trade with ASEAN states, which are all joined with China under the Regional Comprehensive Economic Partnership (RCEP) free trade framework, officials said. ASEAN and China have now become each other's largest trading partners, with two-way trade increasing 52 percent from 2019 to 2022, surpassing the 20 percent increase with the European Union.

In addition to reducing China's dependence on trade with the West, some say that stepping up business with Southeast Asia could also ease disagreements between Beijing and various governments in the region. According to Phar Kim Beng, CEO of the Malaysian consultancy Strategic Pan Indo-Pacific Arena (SPIPA), China and some ASEAN countries need such cooperation to mitigate the bitterness of their territorial disagreements in the Spratly and Paracel Islands in the South China Sea.

As noted by Yang of the Danish Institute, lessons from the pandemic have further pushed authorities to strengthen transportation infrastructure. COVID-19 restrictions in China caused severe supply chain disruptions as logistics were concentrated at key ports on the country's east coast. In his view, as a result of China's difficulties in handling global logistics during COVID, it is therefore necessary to strengthen some ports in China so that it does not rely on the larger Shanghai ports.

In fact, the canal is just one part of a much larger effort to create an efficient land-sea corridor. Guangxi government officials say the emerging corridor has already accelerated logistics, shortening the duration of shipments from Chongqing-in western China-to Singapore from twenty-two to seven days. However, even with such improvements, some experts warn that the full economic benefits of the canal and high-tech port infrastructure will not be automatically resolved.

According to Stephen Olson-researcher at the Hinrich Foundation in Singapore-there may be limits to the growth of trade with the Southeast Asian bloc, as "building efficient infrastructure alone cannot create trade synergies where they do not exist, nor can it create competitive industries in ASEAN that are capable of producing what Chinese importers will demand. The Chinese economy is much larger than any single economy in ASEAN, and this creates leverage that can sometimes lead to unbalanced and unsustainable trade relationships." Olson also expressed skepticism about efforts by both the United States and China to bring ASEAN countries closer to their side. "For most ASEAN countries, their national interests are protected by sitting on the fence and maintaining strong economic and strategic ties with both," he said.

Another area of concern is the environmental and financial costs. A study published in 2022 by the Transport Planning and Research Institute, under China's Ministry of Transport, reported a number of potential side effects of the canal, including isolation or destruction of natural habitats, changes in the ecology of the area, reduction of vegetation, and dust or other pollution caused by passing ships. However, the authors argued that, depending on the route, the risks should be "controllable," while noting that "abundant wetland environments" could be created to mitigate impacts. Project officials also promised to build conservation havens to safeguard the ecology.

The estimated $10.3 billion bill for the canal project comes as Chinese local governments' fiscal health comes under greater scrutiny, now that pandemic-related social restrictions have been lifted, and the real estate sector is experiencing a severe slowdown. 

According to business data research portal Aiqicha.com, the canal project is supported by state institutions in Guangxi, including the Guangxi Beibu Gulf Investment Group. The group in December was assigned a Baa3 rating in its first assessment by Moody's. The rating was supported by the Guangxi government, although the agency noted the group's "rapid debt growth related to its investments in public policy projects."

Separately, both foreign and local manufacturers in Qinzhou say they are beginning to feel both the effects of the new port facilities and the consequences of the RCEP. The trade agreement, also signed by Japan, South Korea, Australia and New Zealand, which went into effect last year, eliminates 90 percent of tariffs on goods traded between signatories. "Tax clearance has been reduced from three days to only one to two minutes," said Zhou Ju, an official of Asia Pulp and Paper in Qinzhou, backed by Indonesian conglomerate Sinar Mas Group. According to Zhou, this is due to the certificate of origin, as export documentation is available online under RCEP.

Officials insist that the Pinglu channel will allow China to make even greater gains from the RCEP.