What is Asean? | CNBC Explains

Summary

Southeast Asia, home to ASEAN, has become a global economic powerhouse, attracting major powers' attention. Founded amidst Cold War tensions, ASEAN now includes 10 diverse nations, with a collective GDP on par with the UK. It boasts rapid growth rates, especially in countries like Vietnam and the Philippines, and is a key player in the digital economy, with tech giants vying for a share. However, it remains in the crosshairs of superpower rivalries, particularly over the South China Sea, where it must carefully navigate its relations with both the US and China.

Takeaways

• 🌏 Southeast Asia is recognized for its beaches, street food, and traditional architecture, but it's also an emerging economic powerhouse.
• 🎉 ASEAN, established during the Cold War, celebrated its 50th anniversary last year, highlighting its long-standing role in regional stability.
• 🔄 ASEAN was founded by five countries and later expanded to ten, creating a diverse economic and political alliance.
• 💹 ASEAN is the world's sixth-largest economy, with significant growth potential, particularly in countries like Vietnam and the Philippines.
• 📈 ASEAN's growth reached a five-year high of 5.2%, attracting global business interest and investment.
• 💼 The EU is ASEAN's largest investor, while China is its biggest trading partner, reflecting the region's importance in international trade.
• 🌐 ASEAN has the world's third-largest labor force and a youthful demographic, which is a draw for tech giants looking to expand in the digital economy.
• 📱 Southeast Asians lead the world in mobile internet usage, making the region a prime market for tech companies.
• 🚢 The South China Sea dispute is a significant geopolitical challenge for ASEAN, with China's claims affecting four member nations.
• 🔄 ASEAN nations are navigating their relationships with both China and the U.S., trying to maintain a balance amid superpower rivalry.
• 🌐 Other countries, including India, Australia, and Singapore, are seeking to deepen ties with ASEAN, indicating its growing global influence.

Q & A

What is the significance of Southeast Asia in terms of global economic growth?

Southeast Asia, particularly the ASEAN member countries, has emerged as a leader in global growth, attracting interest from major powers like the United States and China due to its economic potential and growth rates.

What was the original purpose of forming ASEAN?

ASEAN was founded during the height of the Vietnam War by five countries to promote stability and contain the influence of communism during the Cold War.

How many countries are currently members of ASEAN?

There are 10 member countries in ASEAN today, including the original five and five others that joined after the Cold War.

What is the economic disparity like within ASEAN member countries?

There is a significant economic disparity within ASEAN, with Indonesia representing nearly 40% of the region's economic output, while Singapore has the highest GDP per capita, which is 24 times higher than that of Cambodia, the lowest in the group.

What is ASEAN's position in terms of global economy?

ASEAN is the sixth largest economy in the world, comparable to the United Kingdom and ahead of France and India.

What was ASEAN's growth rate in the last reported year?

In the last reported year, ASEAN's growth reached a five-year high of 5.2%.

Who are ASEAN's major investors and trading partners?

The EU is ASEAN's biggest investor, while China is its biggest trading partner.

How does the demographic profile of ASEAN contribute to its economic potential?

More than half of ASEAN's population is below 30 years old, and they are highly engaged with mobile internet, making the region attractive for tech giants and digital economy growth.

What is the projected value of ASEAN's digital economy by 2025?

The digital economy of ASEAN is forecasted to grow to $200 billion by 2025.

How does the South China Sea dispute impact ASEAN countries?

The South China Sea dispute risks making ASEAN countries pawns in the superpower rivalry, as China claims almost all of it, while four ASEAN nations have competing claims.

How has the Philippines' stance on China changed recently?

The Philippines, which previously fought China in an international legal case, has under President Rodrigo Duterte pursued stronger ties with China, straining its relationship with the U.S.

What is the current status of talks between ASEAN and China regarding the South China Sea?

ASEAN and China have begun talks around adopting a code of conduct in the South China Sea to manage tensions and safeguard economic growth.

Outlines

00:00

🌏 Southeast Asia's Economic Rise and Superpower Attention

The paragraph introduces Southeast Asia as a region known for its beaches, street food, and traditional architecture, but highlights its emergence as a global economic leader. It discusses the role of Asean, the Association of Southeast Asian Nations, in fostering stability and economic growth since its founding during the Cold War by five countries: Thailand, Indonesia, the Philippines, Singapore, and Malaysia. Post-Cold War, five additional countries joined, making Asean a group of ten with diverse economies. Despite disparities in economic output and GDP per capita, Asean collectively is the sixth-largest economy globally, with significant growth rates, particularly in countries like Vietnam and the Philippines. This growth has attracted substantial investment from the EU and China, positioning Asean as a world growth engine. The paragraph also touches on Asean's demographic advantages, with a large, young, and digitally engaged population, attracting tech giants' interest in its burgeoning digital economy.

Keywords

💡Southeast Asia

Southeast Asia refers to the geographical region comprising the southern part of Asia, including countries like Thailand, Indonesia, and the Philippines. In the video, it is highlighted as a region that has transformed from a holiday destination to a global economic leader, attracting the attention of major powers like the U.S. and China.

💡Asean

Asean, or the Association of Southeast Asian Nations, is a political, economic, and sociocultural organization comprising 10 Southeast Asian countries. The video explains that Asean was established during the Cold War era to promote regional stability and has since evolved into a significant economic bloc, influencing global powers' strategic interests.

💡Cold War

The Cold War was a period of geopolitical tension between the United States and the Soviet Union and their respective allies. The video mentions that Asean was founded during this time to contain communism and promote stability in the region.

💡Economic Powerhouse

An economic powerhouse refers to a country or group of countries that have a significant impact on the global economy. The video describes Asean as the sixth-largest economy in the world, indicating its growing influence on the global economic stage.

💡Growth Rates

Growth rates are the percentage increase in economic indicators such as GDP over time. The video points out that countries within Asean, like Vietnam and the Philippines, have 'phenomenal growth rates,' contributing to Asean's status as a global growth engine.

💡Foreign Direct Investment (FDI)

Foreign Direct Investment refers to an investment made by a firm or individual in one country into business interests located in another country. The video notes that despite a dip in 2016, FDI from the EU and China to Asean increased significantly, reflecting the region's attractiveness to global investors.

💡Digital Economy

The digital economy encompasses all economic activities that result from digital technologies, data, and the internet. The video highlights the rapid growth of Asean's digital economy, with tech giants like Google, Facebook, and Alibaba vying for a share, anticipated to reach $200 billion by 2025.

💡Labor Force

The labor force consists of all individuals who are employed or are seeking employment. The video mentions that Asean has the world's third-largest labor force, which is a significant factor in its economic potential and attractiveness to investors.

💡South China Sea

The South China Sea is a region of strategic importance due to its rich resources and shipping routes. The video discusses territorial disputes in the South China Sea, where China's claims overlap with those of four Asean nations, creating geopolitical tensions.

💡Code of Conduct

A code of conduct is a set of rules or standards outlining the expected behavior of parties in a particular situation. The video refers to upcoming talks between Asean and China to adopt a code of conduct in the South China Sea, aiming to manage and reduce tensions in the region.

💡Strategic Interests

Strategic interests refer to the long-term objectives and goals that guide a country's foreign policy. The video explores how Asean's economic growth and geopolitical position have made it a focal point for the strategic interests of major powers, including the U.S., China, India, and Australia.

Highlights

Southeast Asia is emerging as a leader in global growth and attracting major powers' attention.

Asean, the Association of Southeast Asian Nations, marked its 50th anniversary last year.

Asean was founded during the height of the Vietnam War by five countries to promote stability.

After the Cold War, five more countries joined Asean, bringing the total to 10 members.

Asean is like an Indonesian gamelan orchestra where each country plays a different instrument.

Indonesia represents nearly 40% of the region's economic output.

Singapore has the highest GDP per capita in Asean, 24 times higher than Cambodia's.

Asean is the sixth largest economy in the world, comparable to the United Kingdom.

Asean countries like Vietnam and the Philippines have high growth rates.

Asean's growth reached a five-year high of 5.2% last year.

The EU is Asean's biggest investor, while China is its biggest trading partner.

Despite a fall in foreign direct investment in 2016, EU investment rose by 46% and Chinese investment by 44%.

Asean has the world's third largest labor force of over 600 million people.

More than half of Asean's population is below 30 years old and is highly active online.

Southeast Asians spend more time on mobile internet than any other region.

Tech giants are competing for a share of Asean's digital economy, projected to reach $200 billion by 2025.

Asean was founded amidst superpower rivalry and still finds itself in the middle of one today.

China claims almost all of the South China Sea, while four Asean nations have competing claims.

The U.S. has sent ships and planes near contested islands in the South China Sea.

Asean countries risk becoming pawns in the superpowers' dispute over the South China Sea.

In 2012, Asean failed to issue a joint statement for the first time due to disagreements over China's claims.

The Philippines, which previously fought China in an international legal case, is now pursuing stronger ties with China.

Some Asean countries have allied with one superpower, while others maintain ties with both.

Other countries like India, Australia are looking to deepen their relations with Asean.

Singapore, as the Asean chairman, will host the Asean Summit and navigate talks on a code of conduct in the South China Sea.

Transcripts

Think about Southeast Asia and you’re likely to think about beautiful beaches,

street food, and even traditional architecture like this.

But here’s the economic reality – this holiday destination has emerged as a leader

in global growth and is being courted by all the major powers, especially the United States and China.

So how did a group of emerging economies draw the attention of the superpowers?

That’s where Asean comes in.

The association of Southeast Asian nations, more commonly known as Asean,

marked its 50th anniversary last year.

Asean was born out of the superpower rivalry between the U.S. and the then-Soviet Union.

It was founded during the height of the Vietnam War by five countries,

Thailand, Indonesia, the Philippines, Singapore and Malaysia.

Its purpose was to promote stability and contain the influence of communism during the Cold War.

After the Cold War ended, five other countries, Brunei, Vietnam, Laos, Cambodia and Myanmar joined,

rounding off the 10 members of Asean today.

The alliance seems to make sense because all the countries are in the Southeast Asian region.

But it’s crucial to think of Asean as being more like this Indonesian gamelan orchestra.

Everyone plays a different instrument.

For instance, Indonesia represents nearly 40% of the region’s economic output, while

the GDP per capita of Singapore, the highest in the 10, is 24 times higher than that of the lowest, Cambodia.

But as a group, Asean is a powerhouse.

It’s the sixth largest economy in the world, on par with the United Kingdom and ahead of France and India.

It’s poised to be the world’s growth engine as Asean countries,

like Vietnam and the Philippines, boast phenomenal growth rates.

Last year, Asean’s growth reached a five-year high of 5.2%.

The group’s fast growth has drawn interest from businesses.

The EU is Asean’s biggest investor, while China is its biggest trading partner.

While foreign direct investment to Asean fell in 2016,

overall investment from the EU rose by 46% to $30.5 billion,

while Chinese investment rose by 44% to $9.2 billion.

Those ties look set to grow.

Asean has the world’s third largest labor force of more than 600 million people,

behind China and India, but ahead of the EU and U.S.

More than half of Asean’s population is below 30 years old and they love going online with their mobile phones.

Southeast Asians spend more time than on the mobile internet than anyone else on the planet.

That’s why tech giants like Google, Facebook and Alibaba are scrambling for a share of

Asean’s digital economy, forecasted to grow to $200 billion by 2025.

But Asean is about more than just business.

The group was founded amidst a superpower rivalry, and it still finds itself in the middle of one today.

China claims almost all of the South China Sea, while four Asean nations have competing claims.

While the U.S. says it doesn’t take sides in territorial disputes, it has sent ships

and planes near contested islands, calling them freedom of navigation operations.

This year, it sent one of its nuclear-powered super aircraft carriers into Vietnamese waters

for the first time since the end of the Vietnam War.

China followed with the largest naval display of its kind.

Asean countries risk becoming pawns for the superpowers in this dispute,

and the South China Sea issue has been particularly divisive.

In 2012, the ten states failed to issue a joint statement for the first time in its history

because the nations couldn’t agree on how to deal with China’s claims.

But the calculations of Asean states are ever-evolving.

Just over a year ago, the Philippines fought China in an international legal case.

But new Filipino president Rodrigo Duterte has pursued stronger ties with China,

straining those with its longstanding ally, the U.S.

China’s growing clout is unnerving some Asean countries.

Indonesia, which doesn’t even have a claim in the South China Sea, is now lobbying Asean to patrol its waters.

Some Asean countries have allied themselves with one of the superpowers,

but others, like Singapore, have substantive ties with both.

We hope not to have to pick sides.

The U.S. and China have long been dominant in this region,

but many other countries are looking to deepen their relations with Asean.

Earlier this year, India invited Asean leaders to its annual Republic Day celebrations for the first time.

Last month, Australia and Asean held an unprecedented joint summit.

This year, Singapore is the Asean chairman and hosts the Asean Summit in April.

And it has a challenging year ahead, as Asean and China begin talks around adopting

a code of conduct in the South China Sea.

As tensions escalate, Asean will be looking to safeguard its economic growth

and carefully navigate, as it’s always done, between two major powers.

Hi everyone, it’s Xin En. Thanks for watching.

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