Can a region as complex and rapidly changing as Asia design and implement a comprehensive development plan? The Jakarta-based Economic Research Institute for ASEAN and East Asia, which has just released its third comprehensive development plan for Asia, thinks so.
The plan deserves serious consideration. Drawing on the research and insights of experts from the Association of Southeast Asian Nations secretariat and institutes from 16 countries – including Australia, New Zealand and East Asia – describes how Asia could deepen regional economic integration, reduce development gaps and advance sustainable development. development.
The Third Comprehensive Asia Development Plan represents a major step forward from its predecessors. The first plan, published in 2010, focused largely on transport infrastructure, from roads to airports. The second plan, published in 2015, recognized that true connectivity, essential for regional integration, also depends on information and communication technologies. The third plan goes further by looking at the role of digitalization in supporting integration, innovation, inclusiveness and sustainability.
This sequence mirrors the “three separations” described by economist Richard Baldwin, each defining a phase of globalization. The first, the separation of production and consumption, occurred when advances in transportation dramatically reduced the cost of transporting goods. The second — the separation of different parts of the production process — arose when information and communication technologies reduced the costs of moving ideas, allowing coordination at any distance.
The third unbundling is the separation of the provision and use of services. From teleconferencing to telerobotics, technology is increasingly enabling people to deliver services without having to travel. This means that service workers in developing countries can increasingly do knowledge work for clients in advanced countries, but at a much lower cost. As Baldwin points out, wage rates in the service sector represent “the greatest remaining global arbitrage opportunities.” At the same time, professionals from advanced economies can also provide services to customers in developing countries at high rates.
The Third Comprehensive Development Plan for Asia seeks to seize the opportunities created by the Third Unbundling. He urges countries in East and Southeast Asia to invest in artificial intelligence and industrial robots, expand 5G broadband networks and leverage the comprehensive regional economic partnership to improve data standards and digital rules. Ultimately, East and Southeast Asia would create a digital single market, underpinned by a shared data infrastructure and common rules and standards.
It’s hard to argue with the logic behind this view. But in a region as diverse as Asia, translating it into reality would be difficult, to say the least, especially at a time when ideological and geopolitical divides are widening.
The main obstacle to success is neither technological nor financial. Rather, it is the implementation capacity—or lack thereof—of local, national and international institutions.
The Comprehensive Development Plan for Asia 3.0 is a broad strategy to simultaneously advance a large number of complex and interconnected goals in areas ranging from rural poverty and aging populations to water security and to pollution. The level of on-the-ground coordination required by the plan may well be beyond the capacity of most bureaucracies in developing countries, particularly given their siled structures.
Multilateral development banks and aid agencies, for their part, are well equipped to manage large-scale projects and programs. But they have considerable operational weaknesses when it comes to managing a large number of projects involving various micro, small and medium enterprises.
No matter how elegant and compelling a top-down development plan for Asia may be, it is unlikely to be implemented. Instead, we need to take a bottom-up approach.
Digital technologies should play a central role in such an approach. For example, they can provide the data and processing power (via AI) to provide bottom-up feedback and facilitate coordination. In addition, hubs of connectivity – from regional financial hubs like Singapore and Hong Kong to new technology hubs – can improve the allocation of finance and know-how. Direct engagement and building consensus will be key to avoiding the pitfalls of collective action.
Stories are key here. Top-down plans often lack the appeal to emotion and feeling that is needed to change human behavior. But bottom-up efforts reflect people’s ideas and aspirations. This supports the creation of stories that can inspire and empower social movements and trigger large numbers of small changes, creating systemic change.
The relatively slow pace of ASEAN integration is probably frustrating for those who think a clear plan is the key to progress. But integration can never be an orderly and efficient process in a region comprising very diverse countries at very different stages of development. Actors need time to learn how to work with each other, build local and regional consensus, and develop the necessary design, implementation and oversight capacities.
Development is a complex adaptive process, and we live in a time of profound geopolitical, technological and environmental change. As attractive as top-down plans like the Asia 3.0 Comprehensive Development Plan may be, they cannot provide what Asian integration requires: bottom-up institutions that tell compelling stories and can respond with agility to new information and imperatives.
Opinions do not necessarily reflect those of China Daily.
Andrew Sheng is a Fellow of the Asia Global Institute at the University of Hong Kong and a member of the UNEP Advisory Council on Sustainable Finance. Xiao Geng is president of the Hong Kong Institution for International Finance and director of the Institute of Policy and Practice at the Chinese University of Hong Kong, Shenzhen.