Master Plan on ASEAN Connectivity: assessing growth impacts and interdependencies
by Tilak Abeysinghe; Khee Giap Tan; Le Phuong Anh Nguyen
International Journal of Logistics Economics and Globalisation (IJLEG), Vol. 8, No. 1, 2019

Abstract: The ten members of the Association of Southeast Asian Nations (ASEAN) have quietly but steadily been taking steps to deepen economic linkages with the region. A milestone was reached in 2015 with the adoption of a blueprint on the ASEAN Economic Community (AEC) which came into force in 2016. As increased intra-regional connectivity is central to the realisation of the AEC, in October 2010, the ASEAN member states adopted the Master Plan on ASEAN Connectivity (MPAC), the regional blueprint for improved physical, institutional and people-to-people connectivity. This paper offers an empirical examination of the economic impact of the MPAC on the ASEAN region's growth. An individual country-based trend analysis shows very little effect of MPAC. A structural VAR analysis that accounts for both direct and indirect effects also shows that the impact of MPAC has hitherto been very low. Obviously the analysis also shows the decreasing influence of OECD and increasing influence of China on ASEAN with India remaining weak as an engine of growth for ASEAN. This calls for measures to enhance the region's intra-regional interdependencies as well as the interdependencies vis-à-vis ASEAN's traditional and emerging trading partners.

Online publication date: Tue, 18-Jun-2019

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