ASEAN Small Less Developed Economies: Need for a New Approach

Cambodia, Laos and Myanmar, the three ASEAN ‘low incomes countries’ (LICs), all aspire to progress to middle income countries over the next decade. This chapter presents a political economy perspective on possible new approaches to development and regional cooperation for these ASEAN small low income and least developed economies, with some reference also to Vietnam which, although having recently graduated to lower middle income country status, still shares many of the domestic development policy challenges facing the other three. It argues that, despite their differences, these countries share some common development challenges that must be met if the ‘development gap’ in ASEAN and East Asia is to be bridged or narrowed. These include - hard and soft infrastructure for connectivity; economic diversification and private sector development; agricultural development diversification and productivity; trade, transport and trade facilitation; regional integration and the cross-border movement of goods and people; human resource development particularly education and labor market responsive skills development; institutional capacity development and systems of governance; improved aid effectiveness and graduation from aid dependency. This will require a new approach directly linking domestic policy, development cooperation and regional economic integration in the Greater Mekong Sub-region, the Association of Southeast Asian nations (ASEAN) and broader East Asia. Various policy recommendations are made to achieve this including the use of ASEAN’s Regional Comprehensive Economic Partnership (RCEP) initiative as its primary vehicle.