Association of South-East Asian Nations (ASEAN)
The Association of South-East Asian Nations (ASEAN), was established on 8 August 1967 in Bangkok as an inter-governmental organization for regional cooperation. Its primary objectives are to promote political cooperation and stability, trade and economic growth, as well as the social development of member countries. ASEAN initially comprised 5 member countries – Indonesia, Malaysia, the Philippines, Singapore, and Thailand – and later expanded to a total of 10 member countries across South-East Asia.
ASEAN has progressively evolved throughout the years. Cooperation under ASEAN initially focused on fostering political stability within the region. After the region became more politically stable, the focus then shifted towards economic cooperation, which led to the establishment of the ASEAN Economic Community (AEC) in 2017. ASEAN is the world’s 5th largest economy. In 2021, ASEAN had a population of 663.81 million people and GDP of approximately US$3.3 trillion, accounting for 3.5% of world GDP.
The ASEAN Economic Community will help facilitate business and investment within ASEAN by lowering costs, while at the same time utilizing each member’s economic strengths to support and enhance member countries’ productivity.
Furthermore, border trade with neighboring countries remains an important mechanism in driving economic growth for provinces along the border, and ASEAN is considered Thailand’s largest export market, at around a quarter of total exports.
The Ministry of Finance and the BOT are Thailand’s main representatives for financial cooperation and regional macroeconomic surveillance under the ASEAN Finance Ministers’ and Central Bank Governors Meeting (AFMGM). The BOT plays a role in promoting and driving financial integration and cooperation with 3 overarching objectives: Integration, Inclusion, and Stability.
Financial integration has been continuously developed through various Working Committees (see picture). The BOT is involved in the Working Committees on Capital Account Liberalization, Capital Market Development, Payment and Settlement Systems, Financial Inclusion, and Financial Services Liberalization, as well as the ASEAN Banking Integration Framework which facilitates access for member financial institutions under the Qualified ASEAN Bank (QAB) framework. QAB represents bilateral negotiations between member countries on a voluntary basis based on each members’ readiness. An example is the QAB arrangement between the BOT and Bank Negara Malaysia.
In 2019, Thailand was the ASEAN Chair under the theme “Advancing Partnership for Sustainability” with aimed for ASEAN to closely cooperate under the principle of ASEAN centrality which emphasizes mutual benefits and leaving no one behind. 3 key areas of focus included:
1) Connectivity: To support financial integration and promote increased financial services connectivity so that the private sector can carry out financial transactions more efficiently. The BOT implemented key strategies such as promoting local currency usage and cross-border payments between member countries.
2) Sustainability: To support various financial institutions and financial instruments that act as financial intermediaries in allocating capital to businesses with a focus on sustainability and social growth rather than short term benefits. The BOT puts forth Sustainable Finance as a primary agenda for ASEAN and elevated awareness on Sustainable Banking.
3) Resilience: To promote regional financial stability and safety, the BOT will emphasize financial cyber security framework so that ASEAN member countries have an efficient cyber data exchange framework, as well as develop cybersecurity knowledge for financial personnel in ASEAN member countries.
International Cooperation Team 1-2, International Cooperation Department, Corporate Relations Group