Policy Brief

Initiative for ASEAN Integration

Policy Recommendations for Narrowing the Development Gap in ASEAN

There is significant variance in development achievements between ASEAN countries. Gaps in development assessed using various indicators (including the Human Development Index) are large and will require comprehensive and sustained efforts to reduce over the coming years. For example, the gap in income per capita between the ASEAN-6 and CLMV has increased by approximately 10% over the last 11 years, and shows little evidence of becoming smaller (see Figure 1), while the gap in average human development achievement between the ASEAN-6 and CLMV, which is also large, has converged by about 13% during the same period (see Figure 2). A number of development driver disparities influence relative and absolute development achievements across ASEAN. These include differences in infrastructure endowment, and in governance and institutional quality measurements. Overall, the relative rankings for measures of governance and institutional quality have fallen for almost all ASEAN countries over time. ASEAN can therefore be characterised as a region with increasing income disparity and inequality, slowly converging human development, but increasingly poor governance and institutional quality. This analysis stresses the importance of focusing on inclusive growth and improving governance and institutional capacity across all ASEAN countries but with priority given to the CLMV group of countries. That priority be given to the CLMV countries in all areas of policy is absolutely essential to reducing the ASEAN development gap. If future policy interventions equally benefit all ASEAN members then it must follow that the development gap will increase given that the ASEAN-6 countries presently experience higher levels of human development achievement than their CLMV counterparts. The aim of policy should be to assist all ASEAN member states to achieve higher levels of development, but the intention should be to assist the CLMV to benefit disproportionately in this regard. It is for this reason that the policy recommendations outlined herein focus largely on the CLMV countries. 

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Australian AID