By Paolo Gentiloni, Minister of Foreign Affairs and International Cooperation.
Over the last years we have been witnessing a substantial increase of attention in Italy about ASEAN, in a wider context of greater interest for the East Asia region as a whole. The Asia-Pacific area, which accounts for 54% of global GDP and 44% of international trade in goods, is an undisputed protagonist of the global economy. The data concerning the ASEAN region alone are just as eloquent: taken together, the 10 member countries of this Association represent jointly the 7th economy and the 4th exporter globally, and there are good reasons to believe that they might become the 4th economy in the world by 2050.
Despite being countries with differing levels of development, they have all adopted open and trade oriented economies capable of ensuring an average annual growth rate of around 5 to 6%. Leveraging on their greater productive and consumption capacities, ASEAN countries are reaching even higher standards of social and economic well-being, as proven by the expansion of their middle class, and increased levels of employment and education, as well as by the consolidation of their economic institutions. These are a few of the reasons which account for the high consideration we attach, in Italy, to these countries as our natural partners for trade, direct investment and employment growth.
Many Italian companies have already chosen to pick the growing opportunities been offered by the ASEAN Region. Just to mention a few, Piaggio is a real success story in Vietnam; Salini is building an important dam and hydro-electric power station in Malaysia; Saipem has selected Indonesia as the destination of one of its major investments; Ducati, Italcementi e Danieli have invested in plants in Thailand; ENI operates in all major countries in the region.
On the other hand, ASEAN companies too are looking at the Italian market. For instance the sovereign funds from Singapore and Brunei have already invested in Italy, Thailand has bought the retail trade la Rinascente Group, Malaysia has invested in the Rome Theater and Indonesia and Thailand in Italian soccer (Inter FC and Milan AC). However, despite the great potential of the ASEAN area, Italy’s trade with ASEAN countries represents, according to the 2014 figures, merely 1.09% of our trade with the rest of the world and 1.6% of our total export. This is illustrative of a general pattern throughout Asia considering that the Far East accounts for 12% of Italy’s total foreign trade and 10% of total export.
This should not restrain our commitment in the area, on the contrary, it should encourage us to achieve more in the future. It is vital in this regard that we continue to develop our action in a coordinated way from a political, economic and business standpoint. Due to the geographic distance and to cultural diversities, Asian countries require a constant and tangible commitment, aimed at strengthening relations and mutual trust. It is therefore necessary for Italy to move forward so as to ensure a more effective and constant presence. In line with this strategy, the recent visits at Government level by Italy in the Region are evidence of the growing attention of our Government for ASEAN countries. Prime Minister Renzi has chosen Vietnam for his first visit in Asia and likewise, the President of the Italian Republic will visit Vietnam and Indonesia in November.
The Italian Ministry of Foreign Affairs and International Cooperation has actively been working to increase interest in Italian public opinion about this area. One of the main events organized was an ASEAN Awareness Forum with Confindustria and Roma Tor Vergata University in 2012, which set a precedent for subsequent similar events in the rest of Europe. We then followed up with a second ASEAN Awareness Forum, which was organized in Milan in September 2015, showcasing to Italian companies an overview of business opportunities in the most promising sectors in the Region. In addition to diplomatic relations with all South-East Asian countries, Italy decided to open a Consulate General in Ho Chi Minh City in Vietnam in September 2014 with a view to further increase institutional support to companies in the framework of Italian Economic Diplomacy.
The Italian Ministry of Foreign Affairs operates in close coordination with the Italian Ministry of Economic Development and the Italian Trade Agency in organizing and supporting a wide range of business and institutional delegations such as those that recently visited Vietnam, Indonesia and Malaysia, in order to further encourage trade and investment. The Ministry of Foreign Affairs is also active in pursuing strategic partnership agreements with ASEAN countries, such as those we signed with Indonesia and Vietnam, as well as in negotiating or updating new agreements on double taxation (such as those we have with Vietnam, Singapore, Thailand, Malaysia, the Philippines and Indonesia), using them as a mean to generate mutual investment and remove the red tape which often burdens enterprises. We also believe that in some cases Social Security Agreements, such as the one we concluded with the Philippines, may alleviate taxation for companies sending their employees to work in Italy.
Furthermore, scientific and cultural cooperation agreements are worth mentioning, such as those we concluded with the Philippines, Indonesia, Malaysia, Singapore, Thailand and Vietnam, in addition to others we are negotiating, which will all further increase exchanges of students, academics, qualified staff and know-how. Indonesia and Vietnam are also target countries in the Italian Ministry of Foreign Affairs program called “Invest Your Talent In Italy”, which provides for scholarships to foreign university students combined with training opportunities in Italian companies.
Italian Aid and Development Cooperation is funding projects in Myanmar, Vietnam and the Philippines, ranging from rural development to programs on climate change and on support to increase the SME’s performance. Just as important are our Debt Swap Agreements, which we turn into cooperation projects, notably in Indonesia and Vietnam where we a have successfully tested the establishment of technological centers. Finally, I wish to mention our Italian projects on archeology in Cambodia, Laos, Myanmar, Thailand and Vietnam, which we are very proud of, aimed at preserving local cultural heritage.
Notable is our cultural cooperation project in Myanmar, for the inclusion of the Pyu archeological site in the UNESCO World Heritage List.
Along with bilateral cooperation, we attach strategic importance to our dialogue with ASEAN countries on regional and global issues. All the ASEAN countries are concerned by the major challenges posed by climate change, food and energy security, migration, terrorism and maritime security. The contribution of these states to global efforts on such issues is crucial for international security. ASEAN is acquiring growing influence in the regional balance in Asia and it is expanding its cooperation with other regional organizations such as the European Union. Italy shares with all other EU member states a strong a common interest for the peaceful economic development of Asia and wishes to contribute to democracy and freedom. The creation of an ASEAN Economic Community by 2015, similarly to the European Economic Community, is also relevant from a social and political perspective and it represents a crucial contribution for the maintenance of peace and security and regional stability. The European Union has already concluded a Free Trade Agreement with Singapore and is currently wrapping up a second one with Vietnam; it intends to establish a Strategic Partnership with ASEAN, which already represents one of the major trade partners for the EU.
The EU-ASEAN Partnership played also an important role in generating the Asia-Europe Meeting (ASEM), a forum of informal dialogue comprising the economic, political and social dimensions, which is now composed by over 53 Asian and European members and whose last 10th summit was hosted by Italy in Milan in October 2014.
Italy supports the EU’s outreach and cooperation strategy in Asia and the ambition of the EU to join the East Asia Summit, a forum of strategic dialogue initially comprising 16 Asian countries and most recently enlarged to the US and Russia. In addition, we believe that ASEAN countries should recognize Italy’s commitment in the area as proven by our decision to join the Asian Infrastructure Investment Bank (AIIB). This new Bank, we believe, should be instrumental in funding infrastructure projects in ASEAN countries too, promoting closer integration with the European market.
In conclusion, our cooperation with ASEAN and its member states is based on fundamental political, economic and strategic considerations. We appreciate that this Region is relevant not only for its growing economic and financial weight, but also because of its increasing geopolitical role in the global arena. For this reason, we seek further interaction with the ASEAN countries with a view to contributing to the growth and to the stability of the Region. There can be no growth without security and no security without commonly shared rules, based on a commonly shared political and social assessment. Accordingly, we are committed to work with ASEAN countries on the issue of connectivity, which is of growing interest in the Asia-Europe dialogue and which relates not only to economic integration or infrastructure and trade connection but also to our institutional relationship, to “people to people” exchanges and to civil society.
The Italian Foreign Policy with ASEAN
By Paolo Gentiloni, Minister of Foreign Affairs and International Cooperation.