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CPTPP Serving Vietnam as Opportunities and Challenges

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CPTPP is originated from the Trans-Pacific Strategic Economic Partnership Agreement (TPSEP) (it is also so call P4) signed in 2005 by Singapore, Chile, New Zealand and Brunei. Since September 2008, the United States, Australia, Peru, Vietnam, Malaysia, Canada, Mexico and Japan have jointly negotiated at the aim of setting up the Trans-Pacific Partnership Agreement (TPP). The TPP negotiation process ended in 2015 under the agreement of the 12 member states; however, Trump administration announced its withdrawal from the agreement in January 2017. After a number of adjustments, including postponing the implementation of the 20 TPP provisions with the expectation that the United States would return to the Agreement, the 11 remaining TPP members unanimously continued to promote this process by establishing Comprehensive and Progressive Agreement for Trans-Pacific Partnership -CPTPP). After completely reviewing the content and approved by the member parliaments, estimated by March 2018, CPTPP will officially become a large economic zone in Asia-Pacific with a population of over 460 million, contributing 14% of world GDP and 1/6 of global trade.

The agreement is expected to establish a new common framework for regional free trade arrangement for Asia-Pacific countries, to support trade, to attract foreign investment, and to promote institution reformation in those countries. CPTPP has the basic advantages as the members of the negotiation are the countries that have been strongly committed to the trade liberalization. Given the disclosed commitments, CPTPP is considered as a model treaty for the 21st century because of its overwhelming scale and influence in comparison with other trade agreements regionally and globally.

Given the competitiveness, the economic size and the inadequacies of the current institutional system, it is surprised that Vietnam has strongly participated in CPTPP. Compared with other members, it has the least competitive economy and the loosest legal system. Despite its 20-year-old experience in the process of international economic integration, Vietnam lacks the practices in a highly competitive and demanding integration environment since it is only familiar with first-generation FTAs, where the open commitments and reform pressures are readily accepted in a transitional and distinctive economy.

Meanwhile, CPTPP’s regulations set out in the negotiations are evaluated as far beyond the ability of the current economy of Vietnam. What is the motive of Vietnam to join CPTPP?

Given the economic size of the members and the terms of trade liberalization, joining CPTPP is obviously advantage to empower Vietnamese economy in the Southeast Asia in terms of economic growth, trade as well as FDI attraction. In the economic perspective, Vietnam is a country to achieve the most benefit from the CPTPP.

Firstly, the opportunities to increase the export of goods that are the advantages of Vietnam (i.e. textiles, footwear, electronic products and equipments) are relatively high by combining the tariff reduction and the experiences in these markets.

Secondly, the attraction of foreign investment into Vietnam is greatly promising. The access to large markets such as Japan and Canada together with the clearer commitments to improve the investment environment and protect intellectual property rights will become a significant attraction for international investors. Moreover, Vietnam, under the framework of CPTPP, is able to attract large inflows from the member countries through the membership of regional economic organizations such as AFTA and ACFTA.

Thirdly, the chances of faster economic growth are strongly wide. The expansion of the major export industries such as textiles, footwear, fishery, etc., will help stimulate the income growth from domestic production, thereby support the increase of the overall demand.

Fourthly, Vietnam will have an opportunity to form a more comprehensive economic structure. CPTPP will urge the domestic investors as well as the regional ones to invest in the supporting industries to create local material resources given the extremely high standards on the place of origin.

Fifthly, it is a chance to complete the institutions that govern the market economy. CPTPP sets out a clear legal framework for not accepting concessions to any business. Because of its high and foreseen requirements on policy transparency, compared to many other agreements, CPTPP could become one of the important premises for Vietnam to carry out institutional and market reforms thoroughly and comprehensively.

However, among the countries participating in CPTPP, Vietnam achieves the lowest level of development and faces big challenges.

Firstly, the production industry structure is not consistent with the provisions of CPTPP. The economy is not well-prepared and the supporting industry is weak. With regard to the requirements of origin, the sectors which are the advantages of Vietnam’s export sector are not able to exploit the concessions from the CPTPP because their inputs do not contain domestic factors.

The second challenge is from the stagnation of the enterprise system. The adaptability to the market economy of Vietnamese enterprises is weak. The lack of an effective investment strategy for the supporting production industry and “traditional outsourcing” works have made the overall benefit of the economy declined.

Thirdly, the limitation of state enterprises’ role in the national economy becomes a content of CPTPP. The external pressure is positive only if it meets the community benefits. If the selection of CPTPP is purely commercial-economic aspect, it will not cause the objection against the reformation within the SOE system.

The fourth challenge is from the increasing competition of goods from the members of CPTPP. At present, Vietnamese enterprises are well-protected by the high tariffs. The trend and demand for zero tariff reduction will be applied to CPTPP members in the coming time. In the analysis of the export structure of CPTPP countries, it can be seen that the manufacturing industries of Vietnam facing difficulty are automobile industry and agriculture, especially the husbandry which remains mall and fragmented, and unable to compete against the large, experienced and traditional competitors.

The fifth challenge from the requirements of intellectual property protection in CPTPP is much more critical. The continuing possibility of “appearing to court” by infringing intellectual property law is present in countries previously without adequate preparation of intellectual property law. Furthermore, the requirements for increasing the level of protection of intellectual property rights over inventions, copyrights, and trade marks can lead to the escalation of drug prices and create a health burden to the emerging economy like Vietnam. More than that, the measures to protect intellectual property related to biology also affect agriculture which accounts for more than 60% of the population of Vietnam. The prices of agricultural products such as veterinary drugs, fertilizer, etc. will thereby grow significantly, which increases costs and reduces the efficiency of agricultural production in general.

In regard of the need for economic reform and the promotion of economic growth, the process of further integration into the world economy is not allowed to slow down. The question is what Vietnam needs to do to facilitate the upcoming integration roadmap.

Firstly, administrative reform and severely corruption offence are the most important things. It is shown that the WTO supports free market economy so that it could operate and develop only in a healthy competitive environment. Since the joining in the WTO, Vietnamese economy has not really created a healthy competitive environment. Meanwhile, corruption has created more conditions for interest groups to ramp up and distort even the good national policies. If the administrative procedures remain cumbersome and troublesome, corruption will still restrain the required transparency in corporate management. In accordance, CPTPP is not an opportunity, but a challenge to the whole system.

Secondly, the reformation of the legal environment and policies to ensure a single “standard” prescribed by CPTPP is a difficult for Vietnam. But in the long run, this reform of the institutional environment towards the international “rules” is a necessary condition for growth in the context of globalization. In this perspective, although adjusting the policy system involving the regulation of CPTPP is a difficult and costly process, Vietnam’s commitments can be seen as an external “push” to provide additional momentum for domestic efforts towards a transparent institutional environment and economic growth.

Thirdly, it is needed to organize the perfect communication to all classes of people, especially the business and the production circles in the countryside. The participation in CPTPP without fast updating to the farmers might cause the loss of market, the high pressure of competition, and even the legal disadvantage in disputes and sues.

Fourthly, the reform of SOE and the development of SMEs is the key solution. Given the population and economic growth, the number of enterprises in Vietnam is relatively low. This is a major constraint in economic development, employment, creation of competitive markets and the mobilization of resources from society.

In the context of limited resources and high demands of work, the development of these types of enterprise is appropriate not only to the internal capacity but also the preferences of CPTPP. Hence, it is essential to reform SOEs in a substantial way and enable them to have a transparent business environment.

Assoc.Prof.Dr.BuiThanh Nam, University of Social Sciences and Humanities, Vietnam National University, Hanoi

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Southeast Asia

The Malaysian Model

Hareem Aqdas

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Prime Minister Imran Khan paid his visit to Malaysia later the last month, which was concluded as successful, endorsed by the Prime Minister of Malaysia- Mahathir Mohamad himself. The visit was planned for two days with the two prime ministers having a one-on-one meeting, followed by delegation-level talks. The visit provided an opportunity to further cement the existing friendly and cordial bilateral relations by enhancing economic, trade and commercial ties for the mutual benefit of the two countries. It has been a success in the view that it has been a way forward for the terminating of trade cooperation agreements between the two countries. At the end of the visit, the energy sector especially LNG, tourism, greater collaboration between high-tech industries in Malaysia and Pakistan, and possibility of Malaysian investment in Special Economic Zones were discussed.

Imran Khan was welcomed warmly by the Malaysian delegation on his arrival. The purpose of the visit was for Imran Khan to inspect analytically the Malaysian economic model as of how they have been successful in achieving a great economy, without the interruption of the West. Imran Khan with an intention of following the model Malaysia had adopted scheduled his visit. There is no qualm over saying that this decision is to be appreciated by the new government if they are successful in implementing in Pakistan whatever they learned in Malaysia. Malaysia by targeting on the direct social realities of their country has been able to achieve the zenith of economic and social success.

Malaysia has followed an indigenous economic model, basing their economy on purely autarky by developing products what their local conditions and society were in need indigenously rather getting the dictation from the western models of economy, without ever feeling the need of foreign assistance for their local expense decisions- the position where Pakistan lacks.

Malaysia has continued over four decades of brisk inclusive growth, declining its reliance on agriculture and commodity exports to become a diversified, contemporary and open economy. The profit of development have been extensive and the high levels of income inequity inherited at independence progressively reduced through a development model emphasizing impartial growth, including increased participation of the Bumiputera (ethnic Malays and indigenous groups) in the modern economy. Growth has been determined by a series of structural reforms and the country cultivated its complimentary geographical location on global trade routes to promote export-oriented industrialization and endorsing regional incorporation. This has facilitated the improvement of manufacturing, boosting growth, employment and yield by expanding access to global markets, capital, knowledge and technology.

Pakistan since its birth has been following the western model of economy where Pakistan does not decide what its economic needs ought to be, but the west decides what the Pakistani economy needs. This dependence on the west has lead Pakistan in having the detrimental economic situation it has today where the “Dollar” seems to be getting more expensive and the rupee, de valued, thus the economy crippling.

Socially, Malaysia stands as the only country globally that has in actuality criminalized war in their national law. The society has always been free from political turmoil since politics has been very stable for the country, unlike Pakistan.

It will be unfair if it is advised that Pakistan starts following the complete Malaysian model of economy since the politico-economic situation and history of both the countries have been very different, thus applying the exact replicated model will not be possible. Pakistan unlike Malaysia has been subject to political and economic instability, has witnessed change in policies, dealt largely with the menace of corruption, have had government that would reverse economic models of each incoming government to start anew etc. It was pointed out rightly by PM Imran Khan that if “Malaysia, with a population of 30 million people, has exports worth $220 billion, and we, with a population of 201 million people have exports worth $24bn, then clearly we are doing something wrong”.

A solution can be applied in the act that Pakistan rather relying on the West for its economic build up, shall shift its focus on countries with the similar background and a more tangible yet acceptable economic model as that of Malaysia and other Asian economic giants. Pakistan can try to learn from them and follow their economic models as a replacement of the West. Following a pattern of economic development of similar nations will be much easier to pursue, less exploitative and attainable compared to the unrealistic western models.

Pakistan should realize what their need is indigenously rather letting the west dictates it for them. The Western model has always been exploitative towards countries like Pakistan and this is the right time to abandon it and take other inspirations in view.

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Southeast Asia

Can disruption empower youth in politics? Interview with Malaysian Minister of Youth and Sports Syed Saddiq

Rattana Lao

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Bangkok – On a hectic Wednesday night, I rushed to the heart of Bangkok for an event hosted by Oxford Foundation and Talk Foundation. The audiences were debaters, students, and young politicians from leading Thai political parties eager to have a glimpse of ASEAN’s youngest Minister.

Eager to learn from his “success”.

A special guest was in town; it was a fireside conversation in the honor of Malaysian Minister of Youth and Sports, Syed Saddiq Syed Abdul Rahman.

In the landslide election in May that brought Mahathir, a veteran, 93 years old, back to office, it was undoubtedly clear that youth voters were amongst the key component to that victory and Syed Saddiq was the player in that triumphant election.

Amongst all the techniques he used, he mobilized new millennials through social networks. With 1.5 million followers on Instagram, he told the audience how he used these online platforms for his political purpose.

Youth votes accounted for 41% of Malaysian electorates.

“On the eve of the election, we told everyone to watch Facebook Live at 10 pm. On that day, all Party members were garnering support through local places and online platforms to build up for the 10 pm Live. By 10 pm, we broadcasted Mahathir speech to the public.”

“The parents’ and grandparents’ generations were still with the current government. So, we relied on youth. We asked them to use their cell phones and they showed that to their parents.”

“It worked”.

When asked what can youth bring to politics, Saddiq seemed fixed that “disruption is the only way to go”.

“We need to disrupt, disrupt the old ways of doing things, disrupt old politics, disrupt corruption.”

“The lowering of voting age is the case in point where disruption is a successful technique to champion youth agenda.”

Malaysia has recently been successful in lowering the youth eligibility to votes from 21 years old to 18 years old.

He was not naïve, however. He went on to elaborate his points that one needed to “pick the battle”.

All politician do.

Saddiq gave an interview that it is important for youth to strategize their precious voices for things that matter to them. Saddiq was confident it was education, a better and fairer education system, employment, and good standard of living.

“I said time and again that the Ministry of Youth and Sports must work hands in hands with the Ministry of Education. The two issues are different, but intertwined”.

In a casual, meticulous, leather jacket, Saddiq won the crowd on that day with his wit and humor. Instead of talking top down and being patronizing, the young politician was vibrant with energy and optimism.

He was on point.

The night was straightforward and inspiring. A young man aimed high and succeeded. He brought a new face to the old politics of Malaysian longstanding cronyism.

Saddiq stood tall and high as an epitome of youth empowerment.

But youth in politics is nothing new. The 1970s in Thailand democratic demonstrations to topple military dictatorship, the Vietnam war uprising in the United States or the recent rounds of youth activism for debt, LGBT and sexual harassment as well as the Apartheid Disinvestment in the 1970s to 1980s saw youth participation in good numbers.

There is no debate on whether the young are powerful. Of course, they are. The power of the young is immeasurable and there is a lot youth can bring to politics.

But youth in politics must bring more than young faces in the old regime. Youth in politics requires a new way of thinking – disruption perhaps – but how to make it sustainable? Youth in politics demands us to take ourselves seriously and reflect respect in our opinion as something serious and accountable.

When talking about youth, most of the time, it is the case that the loudest and most privileged are the ones that get heard and make noise. How can the new system ensure all kinds of youth voices count?

This reminded me of Les Miserables by Victor Hugo. If I could paraphrase the Broadway famous song:

“Do you hear the youth sing? Singing the song of angry men and women and gay and the poor? This is the song of young people who will not be slave again.”

To make politics work for youth, it must not be a rich boy game.

The fight has just begun. I wish you well.

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Southeast Asia

Letter to heaven: An eulogy to Luang Poo Boonyarith Bundito

Rattana Lao

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Luang Poo Boonyarith with a Pagoda in the Thai Forest

Everyone knows him as a great monk who was an exceptional teacher of meditation. From the royal family to a layman, Luangpoo Boonyarith Bundito was well loved and respected.

Luang Poo Boonyarith was a forest monk who ordained since the age of 31. Like forest monks before him from Luang Poo Mann Puritat to Luang Poo Chob Thannasamo, he followed a strict tradition of solitude. For decades, he traveled to the furthest parts of Thailand and remained there on his own. For at least 9 years, he lived by himself in the peak of a Karen Mountain in the Northern Part of Thailand.

“The karen has an innocent mind” he said in his meditation preaching.

In 1974, he was sent by Wat Bawornnivetviharn on a diplomatic mission to preach Buddhism in Australia. During more than 30 years of his tenure there, he built, strengthened and taught the beauty of mediation to foreigners and Thai alike.

An epitome of what a modern diplomacy is.

With his compassion and open-mindedness, he welcomed Christian, Jewish and Muslim into his temples to learn how to meditate, even though they were clear not to be Buddhist.

He was equally straightforward to them. “Meditation and Buddhism is intertwined and Buddhism is a religion, not a philosophy nor a lifestyle”.

Something that would kill the New Age followers.

I had the privilege of knowing him since I was nearly four years old, where he would stay at our house during his trips and sabbatical to Bangkok. Sometimes he stayed for a couple weeks, sometimes that would last for a couple months. At least for 20 summers, we were lucky enough to host him.

While his disciples came to our house to seek truth and find peace, for a 4 years old me, Luang Poo was my English tutor. Having been fluent in French, German and English, Luang poo was a great linguist who paid attention to details of grammatic rules and depth of meaning and complexity of the vocabulary.

He is an avid reader – with extensive collection of books on philosophy, history, maps, arts and great classics. His gifts for me involved pens and notebooks, collection of postcards from foreign lands I never been or books I had never heard of.

At the age of 16, he gave me Brave New World by Aldous Huxley. With the density of idea and complexity of vocabulary, I quickly returned it to him.

He insisted: “keep it, when the time comes, you will get it.”

I did. When I joined Thammasat as an undergraduate student, Brave New World became my favourite, inspiring reference to make a difference in a toxic society.

As I became more interested in graduate schools and had my eyes on the most prestigious scholarship in Thailand, the Anandamahidol scholarship under the royal patronage the late king Bhumibol of Thailand, our conversation became more intense, focused and intellectual.

We debated ideas. With his wealth of knowledge on world history, we would always talk current affairs and politics. Theories and concepts.

Who would have thought a forest monk would be on point on world political affairs?

Luang Poo continued to guide me through the hardship of graduate schools. We would talk on the phone on the books I read, the papers I wrote and the difficulty things were for me to conceptualise.

“Sati, Ninja, Sati.” Conscious that meant. He said, “one word at a time. Never skim”.

He loves dictionary so he taught and trained me to open up every word I don’t understand.

If you open his books, you will find scribbles on the sideline on the explanation of words he did not know or his interpretation of them.

As studying theories became more complex, that kind of attention to detail allowed me to be on point, concise and succinct.

He said however that a Buddhist is not a theorist. A Buddhist is a doer. Test the theories, he meant.

When I consulted him with the idea of creating UNITE Thailand, he was on board and gave me the most life changing advice to an idealistic me with heavily foreign influences.

“Forget the theories, forget democracy, forget Buddhism, make kids happy, as many as possible.”

We did.

Before the tragic day of the 14th of November 2018 where he parted this world for heaven, he has suffered severe health issues and complication for 7 years that he could not talk, move or eat by himself.

He was the educator who loved Thailand so much. The last sentence he ever said to me was “a great person is one with gratitude. We are indebted to this land, be good. Be kind. Be nice. Be helpful.”

Thailand loses a great monk who taught them Dhamma. I lost a grandfather who helped me through the intensity of life, who taught me to read, write and question, who taught me the beauty of life, the necessity to serve our society.

Enjoy heaven, Luang Poo.

I will always remember you.

Ninja.

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