ASEAN Connectivity: A New Battle Ground for Japan and China

Although ASEAN’s inception was mainly driven by security reasons, it has increasingly become an important driver of economic development. Due to concerns about losing its competitive edge to China and India, in 1992 ASEAN created the ASEAN Free Trade Area (AFTA) in order to turn the region into a competitive destination to absorb foreign direct investment (FDI). However, the implementation of AFTA has not sufficiently turned the region into the competitive destination that was envisioned. Concretely, ASEAN countries need to have massive, well-connected infrastructure throughout the region in order to realise the aforementioned goal. Having perceived ASEAN’s need for regional infrastructure development, Japan and China have begun competing for influence over ASEAN through investment in infrastructure projects. Does this competition provide a net benefit to ASEAN? Though competition affords ASEAN countries more funding options and opportunities to have more quality infrastructure in the region, it may also create an internal struggle for funding among ASEAN member states.

Thearith Leng , Director, Mekong Centre for Strategic Studies Asian Vision Institute (AVI)

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