Kuala Lumpur, 12 June 2019: The two-day EU-ASEAN regional workshop on circular economy took place in Kuala Lumpur, Malaysia from 11 to 12 June 2019.
The workshop, conducted back- to-back with the European Commission DG Environment Circular Economy Mission to Malaysia, emphasised the importance of collaboration between the EU and ASEAN towards a circular economy, and contributed to the EU-ASEAN High-Level Dialogue on Environment and Climate Change.
Joint Opening Remarks of the EU-Malaysia Conference on circular economy and the EU-ASEAN regional workshop on circular economy were delivered by Mr. Daniel Calleja Crespo, European Commission Director-General for Environment, and Minister YB Yeo Bee Yin for Energy, Science, Technology, Environment, and Climate Change, Malaysia.
The workshop served as an opportunity for the EU and ASEAN to reaffirm their commitment to strengthen cooperation on regional and global environmental challenges.
“Circular economy is not just another environment policy, it is not just another climate policy, and it is not another trade policy either. It’s all that and more – a truly cross-sectoral effort, built around people’s needs, and built together with industries and companies like you.”said Director-General for Environment, Daniel Calleja Crespo.
Minister YB Yeo Bee Yin underlined that “it is important whenever we talk about circular economy, we cannot put the system boundary to the national level – it is the global circular economy to be taken into account, and concrete global actions need to be undertaken.”
Addressing the public and private sector, she added, “While governments need to provide incentives and support ‘replacement’ as 4th R (reduce, reuse, recycle, replace), it is up to the private sector to introduce innovative solutions, or otherwise facing the consequence of being left behind.”
Southeast Asia’s contribution to plastic pollution of the oceans over the last years has steadily increased
Plastic, identified as a key priority in the European Commission Action Plan on Circular Economy, if facilitated and driven by enabling policy frameworks, has the potential to bring new opportunities for innovation, boost countries’ competitiveness, and create new jobs.
A world-wide problem, waste and pollution harm ecosystems and fisheries, fill up landfills, clog urban water systems, contribute to global warming, and have negative impacts on human health.
As a hotspot for these issues, Southeast Asia’s contribution to plastic pollution of the oceans over the last years has steadily increased. Tackling the problem by addressing changes in policy and legislation on plastics are seen as the most efficient ways to bring solutions.
With a longstanding experience on waste management and circular economy, in its recently adopted Plastics Strategy, the European Union has committed to assist other regions in shifting towards a circular economy for plastics. Both regions, ASEAN and the EU, have jointly agreed to collaborate in tackling these issues and bringing solution to the problems.
Under this collaboration framework, the EU and ASEAN Secretariat launched a regional gap-analysis on the state of circular economy for plastics in ASEAN Member States. The analysis, conducted by a team of experts from the Institute for Global Environmental Strategies (IGES) with support from the EU, developed a knowledge base for follow-up actions by the EU to inspire and assist circular economy approaches to plastic issues in the ASEAN region.
The importance of facilitating the negotiation of a regional framework agreement and the development of regional circular economy guidelines for plastic pollution, followed by the support to develop technical standards for plastics, recycled plastics, and products made of plastics, were among the main findings presented during this two-day workshop.
Overall the findings highlighted the main conclusions from all ten ASEAN Member States, while presenting the EU policy and legislation related to plastics, plastic waste and its promotion of use, and plastic waste regulations.
With high participation from EU and ASEAN public and private sector, as well as civil society organisations, the workshop created opportunities for multi-stakeholder engagement in plastic waste management and minimisation, while providing room for discussion on what shall be achieved at the regional level.
Forward looking, the sectoral dialogue on circular economy with ASEAN will be further enhanced through sharing of EU experiences on waste, circular economy and plastic strategy in alignment with the upcoming Partnership Instrument project on marine litter, and in advising interested ASEAN Member States on changes in policy and legislation on plastics, plastic waste and single use plastics.
The workshop was supported by the Enhanced Regional EU-ASEAN Dialogue Instrument (E-READI), a development cooperation program that facilitates dialogues between the EU and ASEAN in priority policy areas of joint interest. Drawing on the EU’s experience of regional integration, the E-READI policy dialogue facility further strengthens both the ASEAN regional integration process as well as the overall ASEAN-EU partnership.
Assessing the economic impacts of COVID-19 on ASEAN countries
All ASEAN countries are dependent on tourism flows but Thailand is probably the most dependent.
Author: Jayant Menon, ISEAS–Yusof Ishak Institute
The COVID-19 pandemic is first and foremost a human tragedy. Measures introduced to deal with the pandemic could save lives but are having wide-ranging economic effects and inducing economic contagion.
There are already studies estimating the economic impact of the virus. But greater focus is needed on the transmission mechanisms of the economic contagion and in critiquing how assessments of the economic impacts are made, concentrating on the ASEAN region.
The effects of COVID-19 are hitting ASEAN economies at a time when other risk factors, such as a global growth slowdown, were already rising.
COVID-19 is disrupting tourism and travel, supply chains and labour supply
Uncertainty is driving negative sentiment. This all affects trade, investment and output, which in turn affects growth. Tourism and business travel, as well as related industries, especially airlines and hotels, were the first to be affected. And the conditions are worsening as more countries go into shutdown.
The supply disruptions emanating mostly from China will reverberate throughout the value chain and disrupt production. Since China is the regional hub and accounts for 12 per cent of global trade in parts and components, the cost of the disruption in the short run will be high.
The negative effects of quarantine arrangements on labour supply could also be high depending on duration and sector. Manufacturing has been hit harder than service industries, where telecommuting and other technological aids limit the fall in productivity.
All these disruptions will lead to sharp declines in domestic demand. And their impact on economic growth will further propagate these disruptions. This compounding effect can magnify and extend short-run effects into the long run.
The highest economic cost could come from the intangibles
The effects of negative sentiment about growth and general uncertainty — which is already affecting financial markets — will feed into reduced investment, consumption and growth in the long run.
Rolling recessions around the world now appear inevitable, despite the stimulus measures being contemplated. If so, there will be sharp increases in unemployment and poverty. Some degree of decoupling from China, or de-globalisation in general, may also be a permanent reminder of this pandemic.
Among ASEAN countries, Singapore, Malaysia and Thailand are heavily integrated in regional supply chains and will be the most affected by a reduction in demand for the goods produced within them. Indonesia and the Philippines have been increasing supply chain engagement and will also not be immune.
Vietnam is the only new ASEAN member integrated into supply chains with China and is already suffering severe supply disruptions.
Given time, supply-side adjustments will alter trade and investment patterns. The main adjustment will involve relocating certain activities along the supply chain from China to ASEAN countries. Although the pandemic will disrupt the relocation phase, ASEAN countries can benefit from the new investments, mitigating overall negative impacts.
Thailand is probably the most tourism dependent Asean country
All ASEAN countries are dependent on tourism flows but Thailand is probably the most dependent. Cambodia and Laos receive most of their investment and aid from China, and a marked growth slowdown in China will affect them the most.
The Philippines and Mekong countries have large overseas foreign worker populations and restrictions on their movement or employment prospects as COVID-19 spreads will affect sending and receiving countries. Brunei and Malaysia are net oil exporters and the price war indirectly induced by the pandemic will hit them hard. Others will benefit from lower oil prices, as will the struggling transport sector.
In measuring the impacts of COVID-19, it is important to separate its marginal impact from observed outcomes. This is important because the remedy may vary depending on the cause of the disruption. This requires an analytical framework that can measure deviations from a baseline scenario that incorporates pre-existing trends. A model-based analysis, rather than casual empiricism, is required to reduce the problem.
Even before the outbreak, risks of a global growth slowdown were rising
The restructuring of regional supply chains had started, driven initially by rising wages in China and accelerated by the US–China trade war. While COVID-19 may further hasten the pace and extent of the restructuring, it is only partly responsible for what may happen. It would be misleading to attribute all of the current disruption to COVID-19. Had the trade war not preceded it, COVID-19 may have resulted in greater disruption to supply chains.
Any assessment of impacts must recognise that the spread of COVID-19 is unpredictable, and so too the response by governments. It is difficult to estimate the impacts of a shock that is uncertain in itself. This reiterates the need for rigorous modelling and scenario analyses. The current trend points to risks rising, often accelerating, as with previous epidemics. This uncertainty underscores the need for caution in assessing, and regular recalibration in producing assessments.
Jayant Menon is a Visiting Senior Fellow in the Regional Economic Studies Programme at the ISEAS–Yusof Ishak Institute, Singapore.
A version of this article first appeared in ISEAS Commentary.
This article is part of an EAF special feature series on the novel coronavirus crisis and its impact.
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