Active with South East Asia

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SOUTHEASTASIA

ACTIVEWITH


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Southeast Asia and the OECDA mutually beneficial partnership

Southeast Asia is one of the fastest-growing regions in the world,

with vast endowments of natural resources, a diversified economy,

an expanding middle class, and a young and dynamic population.

The creation of an integrated ASEAN economic community beginning

in 2015 will generate even more opportunities for growth and

employment across the region.

However, sustaining this growth, and closing the development gaps that exist within and among Southeast

Asian economies, will require reforms in critical areas, such as investment, education, infrastructure and

tax. Strong institutional capacity will be needed to make these reforms happen.

The OECD has a long history of work with countries of the region and has defined Southeast Asia as a

region of strategic priority. We are pleased that this engagement has been further strengthened by thelaunching of the OECD Southeast Asia Regional Programme at the 2014 OECD Ministerial Council Meeting.

This new Programme will help enhance OECD engagement with Southeast Asia and foster the exchange

of good practices and mutual learning among policy makers in the region and OECD countries. It will raise

the political relationship to a more strategic, whole-of-government level. The Programme will help support

domestic priorities and regional integration efforts by informing and supporting policy reforms.

The OECD looks forward to a closer partnership with the countries of Southeast Asia. We believe that this

collaboration will not only help strengthen regional growth and development prospects, but also help us

address joint global challenges, where we can all gain from sharing perspectives. The partnership between

Southeast Asia and the OECD will help us deliver to all our citizens better policies for better lives.

ANGEL GURRA, OECD Secretary-General


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CONTENTS. 1

EMPLOYMENT AND SOCIAL DEVELOPMENT 35

Seeking best practices of social and health policies 36

Tackling gender inequality 38

Supporting SME development and entrepreneurship 40

Fostering skills through education and training 42

Promoting effective consumer policy 44

Managing international migration 45

INDUSTRY AND I NNOVATION 46

Building a knowledge economy 47

Developing first-class shipbuilding and steel capacities 48

Enhancing chemical safety 49

Boosting tourism 51

ENVIRONMENT AND ENERGY 52Towards a cleaner and healthier environment 53

Combating climate change 54

Improving water management 55

Ensuring reliable, affordable and clean energy 56

ANNEXES

Adherence to OECD instruments 57

Participation in OECD bodies and OECD Asian networks 58

THE OECD AND SOUTHEAST ASIA 2

SUSTAINABLE, BALANCED AND INCLUSIVE GROWTH 8

Maintaining economic resilience 9

Supporting green growth initiatives 11

Promoting regional development and urbanisation 12

Increasing agricultural productivity and food security 13

Promoting development and effective

co-operation worldwide 14

Better data for better policies 15

SMOOTH FUNCTIONING OF MARKETS 17

Enhancing co-operation on international investment 18

Promoting trade and upgrading in global value chains 19

Regulating export credits 20Promoting sound competition 21

Developing a robust financial system 22

Strengthening connectivity, capital investment

and public-private partnerships (PPPs) 23

Improving financial education 24

PUBLIC AND CORPORATE GOVERNANCE 25

Regulatory reform and administrative simplification 26

Budgeting and public expenditures 27

Public procurement 28

Increasing performance in the public sector 29

Disseminating open government 30

Enhancing public sector integrity 31

Fighting transnational corruption 32

Improving tax transparency and compliance 33

Raising the bar on corporate governance 34

CONTENTS

Contents


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2. ACTIVE WITH SOUTHEAST ASIA


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The OECD and Southeast Asia have a longstanding and

mutually beneficial relationship that has steadily developed

since the late 1990s. In 2007, OECD Ministers identified

Southeast Asia as a region of strategic priority for the

Organisation and Indonesia became a Key Partner along

with Brazil, China, India and South Africa.

In recent years, Indonesia and the other Southeast Asian

countries (Brunei Darussalam, Cambodia, Lao PDR,

Malaysia, Myanmar, the Philippines, Singapore, Thailand

and Viet Nam) have intensified their participation inOECD committees and working groups, peer reviews and

studies and have increasingly contributed to statistical

data collection and international benchmarking exercises

such as the Programme for International Student Assessment

(PISA). Several Southeast Asian countries have adheredto international standards and norms developed by the

OECD, in such areas as tax, chemicals, and development

co-operation. In order to further strengthen the OECDs

engagement with the region, in 2014 the OECD is

establishing a comprehensive Southeast Asia Regional

Programme.

THE OECD AND SOUTHEAST ASIA. 3

L High-level representatives from ASEAN

and OECD countries at the opening of the

OECD Southeast Asia Regional Forum,

hosted by the Government of Indonesia in

Bali on 25-26 March 2014.

THEOECDANDSOUTHEASTASIA


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To enhance and broaden the OECDs engagement with the

region, in 2013 at the Ministerial Council Meeting (MCM),

OECD Ministers called for the establishment of a comprehensive

Southeast Asia Regional Programme. The Programme, to

be officially launched at the 2014 MCM, aims to strengthen

engagement with the region with a view to support the regional

integration process and national reform priorities. The creation

of the Programme will take place as ASEAN economies strive to

build the ASEAN Economic Community (AEC) by the end of 2015.

The Southeast Asia Regional Programme will aim to foster

the exchange of good practices and mutual learning between

policy makers in Southeast Asia and OECD countries, bringing

perspectives from the region to enrich the policy debate at the

OECD. The Programme will help bring participating countries

closer to OECD standards and practices, facilitate access to the

expertise of OECD bodies and adherence to its instruments.

Building on the substantial existing work with the region, anintensive consultation process was launched to shape the

Programme, including with OECD Committees, Southeast Asian

governments and regional stakeholders.

The Programmes structure is designed to encourage a

systematic exchange of experience to develop common

solutions to regional and global challenges. It is comprised of

thematic Regional Policy Networks, which will build on the

work programme of substantive OECD and Southeast Asianbodies and dialogue processes. The initial areas of focus for the

Networks are tax, investment, education and skills, small and

medium-sized enterprises, regulatory reform, and connectivity

and public-private partnerships (PPPs)to support connectivity

for infrastructure development. Further work will be developed

in trade, innovation and gender. Each Regional Policy Network

will be composed of policy experts from Southeast Asia and

OECD countries, who will jointly decide on its work programme:

lTAX POLICIES AND ADMINISTRATION: The OECD has

co-operated with Southeast Asian countries on tax issues

since the launch of the OECD-Korea Tax Centre in 1997. In

2013, all Southeast Asian countries were involved as hosts or

participants in some of the 22 technical events in the region

organised by the Committee on Fiscal Affairs on international

tax issues, tax administration, and tax policy. The Regional

Policy Network on Tax policies channelled and expanded on

this fruitful co-operation to build up a community of bestpractices.

Connectivity

and PPPs

Regulatory

Reform

6 Regional Policy

Networks

(RPN)Tax

Education

and Skills Investment

SMEs

3 Initiatives:

GENDER

INNOVATION

TRADE

In order to remain at the forefront of global

governance, the OECD needs to develop its

relations with the rest of the world and

especially with its most dynamic regions. TheSoutheast Asian countries, which are playing

an increasingly key role in the global economy,

are thereby important partners for the OECD.

As such, we are delighted at the launch of the

Southeast Asia Regional Programme during

the 2014 MCM which will allow our Organisation to establish

the foundations of a powerful and sustainable partnership with

this region.

Pascale Andreani, Ambassador of France to the OECD, Chair of the External Relations

Committee (which oversees the Organisations overall global relations)


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THEOECDANDSOUTHEASTASIA

lINVESTMENT POLICY AND PROMOTION: The OECDs work

on investment policy in Southeast Asia is well-established.

The OECD has been co-operating with the ASEAN Secretariat

on Investment Policy Reviews (Viet Nam 2009; Indonesia

2010; Malaysia 2013; and Myanmar, Lao PDR, the Philippines,

and a second review of Viet Nam, in 2014). Through these

country-level reviews, officials from the region participate

in OECD Committees, such as the Investment Committee

and the Advisory Group on Investment and Development,to engage in a peer review and exchange best practices

with OECD Delegates. The Regional Policy Network will

work to strengthen co-operation on investment policies and

promotion.

lEDUCATION AND SKILLS DEVELOPMENT: The Regional

Policy Network on Education and Skills will co-ordinate

and streamline a host of ongoing activities through which

the OECD aims to help the region to benefit from a betterqualified workforce. Since 2000, the OECD has been

evaluating the knowledge and skills of the worlds 15-year-

olds through its Programme for International Student

Assessment (PISA). Results of the PISA 2012 survey were

published on 3 December 2013, with five Southeast Asian

countries participating: Indonesia, Malaysia, Singapore,

Thailand and Viet Nam.

lSMALL AND MEDIUM-SIZED ENTERPRISES (SMES)

POLICIES: The OECD and the ASEAN Secretariat are workingtogether on a comparative assessment of SME policies

in the ten ASEAN member countries, with the objective

of supporting policies aimed at promoting enterprise

development in the ASEAN region and enhance the dialogue

and co-operation on SME policies. In March 2014, the results

of the first OECD-ASEAN SME Policy Index were presented

and priorities for future work were discussed. The Regional

Policy Network on SME Policies will support the design and

implementation of SME policies and enterprise development.

lREGULATORY REFORM POLICIES: The OECD has been

engaged in issues of regulatory reform in Southeast Asia

for over a decade. In 2000, the OECD and APEC signed an

agreement to co-operate in order to improve regulatory

practices in the region, resulting in the 2005 APEC-OECD

Integrated Checklist on Regulatory Reform. Bilateral

Southeast Asia has become a growth

engine of the world economy and a strategic

region in the global value chain. The OECD

has expertise which can further promote

prosperity and stability in the region by, for

example, strengthening connectivity and

innovation. The resulting dynamism of the

region further contributes to the OECDs work

in enhancing its global relevance. Japan, asthe 2014 MCM Chair, is honoured to be engaged in launching the

OECDs Southeast Asia Regional Programme and continues to support

the relationship with the region based on mutual Liking, Listening

and Learning at a time when ASEAN is reaching for integration in

2015.

Kazuo Kodami, Ambassador of Japan to the OECD

Chair of the 2014 Ministerial Council Meeting

ASEAN will benefit from learning the

best practices of economic integration as

experienced by other regions. In that regard,

co-operation with the OECD, with its rich

experience and expertise on the issue of

economic integration, would be highly

beneficial for ASEANs own effort.

H.E. Mr. Muhamad Chatib Basri , Minister of Finance

Republic of Indonesia


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The OECDs Global Relations Strategy seeks

to make the Organisation a more effective and

inclusive global policy network, in particularthrough close co-operation with five Key

Partners (Brazil, China, India, Indonesia and

South Africa) and strengthened engagement

with dynamic regions such as Southeast

Asia. The newly-created OECD Southeast

Asia Regional Programme will build on

two decades of co-operation and dialogue between OECD and SEA

countries.

Marcos Bonturi, OECD Director of Global Relations

Southeast Asia is a dynamic region with a

vibrant economy, enormous potential and a

population of about 600 million people. It is

therefore not surprising that the OECD has

identified this region as a region of strategic

priority. At the 2013 Ministerial Council

the Members of OECD further called for an

establishment of a comprehensive OECD

Southeast Asia Regional programme.As I could witness myself as the Chair of the Informal Reflection

Group on Southeast Asia at the OECD Southeast Asia Forum on

Bali on March 25 and 26, the countries of the region showed great

interest in an increased exchange on standards, best practices and

their implementation. The further economic integration of the ASEAN

region would be of benefit to the member countries but also to the

world economy as a whole.

By strengthening its engagement with this important region,

the OECD will promote policies designed to achieve the highestsustainable economic growth and employment and thus contribute to

the development of the world economy.

Dr Hans-Jrgen Heimsoeth, Ambassador of Germany to the OECD

Chair of the Informal Reflection Group on Southeast Asia


Policy Reviews were conducted for Viet Nam (Review

on Administrative Simplification, 2010) and Indonesia

(Regulatory Reform, 2012). A country specific project with

Malaysia on Good Regulatory Practices was launched in 2012.

The OECD will also conduct a Product Market Regulation

survey in 2013-2014 with Brunei Darussalam, Malaysia,

Myanmar, the Philippines, and Thailand. The Regional

Policy Network on Regulatory Reform Policies will work

with regional and OECD partners to improve governmentcapacities for efficient and effective regulations.

lCONNECTIVITY AND THE ROLE OF PUBLIC-PRIVATE

PARTNERSHIPS FOR INFRASTRUCTURE DEVELOPMENT:

The needs for infrastructure investment in Southeast Asia

can only be met if traditional forms of public investment are

supplemented with private financing of infrastructure, for

example via the use of PPPs. The Regional Policy Network for

Connectivity will support the regional efforts to establish awell-connected ASEAN Community by 2015. The networks

activities will include diagnostic work, tailored advice,

comparative data collection, training and other capacity-

building activities relating to PPPs, capital investment and

regional connectivity.

The OECD Southeast Asia Regional Forum, co-hosted in March

2014 in Bali by the Indonesian Ministry of Finance, brought

together over 300 high level officials and representatives fromOECD and Southeast Asia governments, regional institutions, policy

experts and the private sector to discuss how the Programme can

most effectively foster regional competitiveness for sustained

growth in the region. The event created strong momentum for

the Programmes official launch at the OECD Ministerial and

for its work moving forward to support the regions ambitious

development goals.

www.oecd.org/globalrelations/seaprogramme.htm

OECD Southeast Asia Regional Programme


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Southeast Asian countries are confronted with the challenges of transforming economic

growth into sustainable development that benefits all citizens. Creating resilient economic

structures that can withstand external shocks, building liveable cities and lowering

urban-rural divides, improving agricultural efficiency, and promoting global stability

and prosperity through effective development co-operation are all important issues for

Southeast Asian countries in moving towards a more balanced and inclusive growth.


SU


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How can economies increase resilience to soften economic

shocks or recover quickly from them? Does structural reform

positively impact a countrys economic resilience?

Through four series of publications, the OECD examines

macroeconomic and structural policies and developments.

TheEconomic Outlook, released twice a year, analyses recent

developments in the global economy and provides economic

projections for 41 economies, including Indonesia. The Goingfor Growthpublication provides a comparative overview of

structural policy developments in Member and key non-OECD

countries. The 2013 edition highlights the potential gains

Indonesia can reap from improving the quality of education,

promoting infrastructure, reforming stringent labour market

regulations and capping the minimum wage. Indonesia would

also benefit from reducing energy subsidies, easing barriers to

entrepreneurship and investment, and strengthening institutions

to fight corruption.

The annual Economic Outlook for Southeast Asia, China and

India, jointly produced by the ASEAN Secretariat and the OECD

Development Centre, monitors short-term macroeconomic

Maintaining economicresilience

challenges and medium-term economic trends in the Southeast

Asian region. The 2014 edition contains an assessment of

national structural policy reforms, a medium-term plan and an

in-depth look at how Emerging Asia can grow beyond the middle

income trap by unleashing productivity through investment in

human capital and innovation and shifting towards a technology-

intensive economy. The 2015 edition of the Outlook will include

a special focus on building strong and effective institutions

from rule of law to government regulation, administrationand implementation together with appropriate medium-term

development plans which are needed to realise the regions

long-term potential.

The collaboration with the OECD based on the

Economic Outlook for Southeast Asia, China

and India has proven to be an intellectually

stimulating venture. The Outlook itself and

the ASEAN-OECD Narrowing DevelopmentGap Indicators have become undeniable policy

reference tools for the region.

Rony Soerakoesoemah, Assistant Director of the

Economic Community Department, ASEAN Secretariat

SUSTAINABLE, BALANCED AND INCLUSIVE GROWTH. 9

USTAINABLEGROWTH
http://www.oecd.org/eco/economicoutlook.htmhttp://www.oecd.org/eco/economicoutlook.htmhttp://www.keepeek.com/Digital-Asset-Management/oecd/economics/economic-policy-reforms-2013_growth-2013-en#page3http://www.keepeek.com/Digital-Asset-Management/oecd/economics/economic-policy-reforms-2013_growth-2013-en#page3http://www.keepeek.com/Digital-Asset-Management/oecd/economics/economic-policy-reforms-2013_growth-2013-en#page3http://www.keepeek.com/Digital-Asset-Management/oecd/economics/economic-policy-reforms-2013_growth-2013-en#page3http://www.keepeek.com/Digital-Asset-Management/oecd/development/economic-outlook-for-southeast-asia-china-and-india-2014_saeo-2014-en#page1http://www.keepeek.com/Digital-Asset-Management/oecd/development/economic-outlook-for-southeast-asia-china-and-india-2014_saeo-2014-en#page1http://www.keepeek.com/Digital-Asset-Management/oecd/development/economic-outlook-for-southeast-asia-china-and-india-2014_saeo-2014-en#page1http://www.keepeek.com/Digital-Asset-Management/oecd/development/economic-outlook-for-southeast-asia-china-and-india-2014_saeo-2014-en#page1http://www.keepeek.com/Digital-Asset-Management/oecd/development/economic-outlook-for-southeast-asia-china-and-india-2014_saeo-2014-en#page1http://www.keepeek.com/Digital-Asset-Management/oecd/economics/economic-policy-reforms-2013_growth-2013-en#page3http://www.oecd.org/eco/economicoutlook.htm


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The Economic Surveys,published biennially for each OECD

member and Key Partner country, analyse major economic

challenges in those countries and propose reform options drawing

on international best practices. The forthcoming Economic Survey

of Indonesia, to be released September 2014, will include in-depth

chapters on Getting the Most Out of Natural Resources and

Making Growth More Inclusive and Sustainable.

OECD Multi-Dimensional Country Reviewsevaluate howcountries are performing with regards to meeting the multiple

objectives of growth, sustainability and equity, looking not just

at the absolute levels which a country has achieved but also

at how the underlying dynamics of a countrys development

process affects these objectives. The Multi-dimensional Review

of Myanmar, released in July 2013, identified key existing

constraints to economic development in Myanmar and provided

recommendations to ignite growth and embark on a higher, more

sustainable and equitable development trajectory.

Myanmar is a country under challenging

conditions of triple transitionsguided to

multiparty democracy, planned to market

economy, and war to peacerequiring the

Government of Myanmar to design multi-

dimensional and comprehensive reforms

to transform the country. OECDs Multi-

dimensional Review of Myanmar is one of

essential guidebooks for our reforms.H.E. U Soe Thane, Minister of the Presidents Office of Myanmar

www.oecd.org/eco

www.oecd.org/dev/asiapacific

SCAN TO READTHE REP ORT


Maintaining economic resilience
http://www.oecd.org/eco/surveys/http://www.keepeek.com/Digital-Asset-Management/oecd/economics/oecd-economic-surveys-indonesia-2012_eco_surveys-idn-2012-en#page1http://www.keepeek.com/Digital-Asset-Management/oecd/economics/oecd-economic-surveys-indonesia-2012_eco_surveys-idn-2012-en#page1http://www.keepeek.com/Digital-Asset-Management/oecd/economics/oecd-economic-surveys-indonesia-2012_eco_surveys-idn-2012-en#page1http://www.keepeek.com/Digital-Asset-Management/oecd/economics/oecd-economic-surveys-indonesia-2012_eco_surveys-idn-2012-en#page1http://www.oecd.org/dev/development-pathways.htmhttp://www.oecd-ilibrary.org/fr/development/multi-dimensional-review-of-myanmar_9789264202085-enhttp://www.oecd-ilibrary.org/fr/development/multi-dimensional-review-of-myanmar_9789264202085-enhttp://www.oecd-ilibrary.org/fr/development/multi-dimensional-review-of-myanmar_9789264202085-enhttp://www.oecd-ilibrary.org/fr/development/multi-dimensional-review-of-myanmar_9789264202085-enhttp://www.keepeek.com/Digital-Asset-Management/oecd/development/economic-outlook-for-southeast-asia-china-and-in%20http://www.keepeek.com/Digital-Asset-Management/oecd/development/economic-outlook-for-southeast-asia-china-and-india-2014_saeo-2014-en#page1dia-2014_saeo-2014-en#page1http://www.keepeek.com/Digital-Asset-Management/oecd/economics/oecd-economic-surveys-indonesia-2012_eco_surveys-idn-2012-en#page1http://www.oecd-ilibrary.org/fr/development/multi-dimensional-review-of-myanmar_9789264202085-enhttp://www.oecd.org/dev/development-pathways.htmhttp://www.keepeek.com/Digital-Asset-Management/oecd/economics/oecd-economic-surveys-indonesia-2012_eco_surveys-idn-2012-en#page1http://www.oecd.org/eco/surveys/


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The environmental risks faced by emerging and developing

countries today call for a fundamental shift in approaches

to growth and development. By integrating environmental

considerations and the value of natural capital into economic

decision making and development planning, green growth can

help Southeast Asian economies secure a stronger and more

sustainable future.

The OECDs Green Growth Strategy is built upon three reports Towards Green Growth; Towards Green Growth: Monitoring

Progress OECD Indicators; and Tools for Delivering on Green

Growth through which the OECD provides concrete and targeted

advice to member and partner countries on integrating green

growth policy into the design and implementation of economic,

environmental, investment and innovation policies. Its 2013

report, Putting Green Growth at the Heart of Developmentproposes

an agenda to guide policy action in support of green growth

in developing countries. It examines 74 policies and measuresfrom 37 developing countries and five regional initiatives.. The

DAC Network on Environment and Development has recently

launched work to identify good practices in development co-

operation that supports developing countries efforts to make

growth more green and inclusive.

A two-year multi-disciplinary project is now underway on green

growth in Cambodia, Indonesia, Lao PDR, Malaysia, Myanmar, the

Philippines, Thailand and Viet Nam. A synthesis paper, Whathave we learned from attempts to introduce green growth

policies? was published in 2013 as the first part of this project.

The publication discusses green growth instruments, policy

frameworks and indicators and seeks to draw lessons applicable

to green growth policies, relying on both country-specific and

cross-country analyses undertaken at the OECD. The second part

of the project will be a 2014 report on Toward Green Growth in

Emerging and Developing Asiafocusing on: 1) key economic, social

and environmental trends; 2) how green growth strategies can bebest incorporated into national development plans;

Supporting green growthinitiatives

3) how to achieve sustainable management of natural resources

in the context of growing energy and food demands; and 4) how

to manage the challenges arising from rapid urbanisation. In

addition, the OECD collaborated with the Cambodian Ministry

of Environment and its National Council on Green Growth to

produce a country case study onMaking Growth Green and

Inclusive: The Case of Cambodia, released in 2013. The paper

identifies several areas of potential improvement for Cambodia

and through international co-operation in order to achieve thecountrys national green growth objectives.

The OECD is currently carrying out the Urban Green Growth in

Dynamic Asia project which aims to provide Asian countries

and cities with short-term and long-term policy options towards

green growth at the city scale, building on the previous OECD

urban green growth studies. The projects emphasis is on

integrating policies across different domains, since much of the

discussion that has taken place to date is sector-specific. Severalcity-based case studies are under preparation in cities in ASEAN

countries, China and India for 2014-2015.

www.oecd.org/greengrowth

www.oecd.org/greengrowth/asia.htm

SCAN TOREAD THE

REPORT

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Countries need competitive dynamic regions to achieve

their economic, social and environmental objectives. The

OECD examines how territorial development policies can

best promote regional competitiveness and effective and

innovative territorial governance and provides policy advice to

government at the national and sub-national levels.

The rapid transformation of some Asian countries into

innovation and knowledge-led economies has not necessarilybeen characterised by a balanced and inclusive territorial

development. Important differences in terms of income and

overall opportunities remain between cities and less-densely

populated areas. Central and local governments are increasingly

interested in sharing experiences and knowledge on the design

and implementation of policies and governance arrangements

that promote sustainable development.

Territorial Reviewsat the city and metropolitan levels aim toevaluate the economic, social and environmental performance

of an urban area and assess the policies put in place to

strengthen competitiveness, social inclusion and environmental

sustainability. National Urban Policy Reviewsprovide a

comprehensive assessment of a countrys urban policies by

focusing on policies that explicitly or implicitly affect urban

development. The OECD also offers a unique forum to address

issues in urban areas with its organisation of the Roundtable

of Mayors and Ministers the only global platform conveningrepresentatives from both high-level national and local

governments.

Rural regions are important economically and demographically.

OECD research seeks to understand growth factors in rural

regions over the long term (innovation, natural resources, etc.);

how rural regions contribute to national growth; and ways of

maintaining the vitality of rural areas through the provision

of goods and services that support growth and well-being. Theseries of National Rural Policy Reviews seek to explain the shift

Promoting regional developmentand urbanisation



in rural development policies to account for important economic

changes and the new approach to governance that these policy

approaches require.

The OECD Development Centre is carrying out a study to better

understand how developing countries can benefit from collective

action and the accumulation of social capital in order to promote

sustainable and self-reliant rural development. The comparative

study will build on the experience and lessons learned fromthe transition of Koreas economy, and analyse two developing

countries (in Southeast Asia and Africa) from a comparative

perspective. Based on these findings, the Development Centre will

build a toolkit that provides policy guidance on designing and

implementing development programmes that strengthen social

capital and promote local development in rural areas.

www.oecd.org/gov/regional-policy/urbandevelopment.htm

www.oecd.org/gov/regional-policy/oecdworkonruraldevelopment.htmwww.oecd.org/dev

SUS
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STAINABLEGROWTH


Boosting productivity and innovation, improving access to

food, and increasing agricultural trade flows will enhance food

security in the ASEAN region.

In recent years, large population groups in Southeast Asia have

been exposed to risks of food insecurity. Improving long term food

security remains a high priority in the region, and a number of

regional initiatives are underway. The OECD provides evidence-based

analysis and policy advice in support of enhanced food security, inparticular through rigorous risk assessment and management, and

in the areas of improved productivity and access to trade.

In 2013, the OECD launched a project on transitory food insecurity

in Indonesia. The aim of the project is to engage with Indonesia in

an evidence-based policy dialogue and analysis of the best policy

responses to food insecurity risks. Together with the relevant

Indonesian authorities and stakeholders, the project will analyse

the sources of risk that threaten food security in the country, andthe profile of assessed risks and impacts of policy responses. The

project is part of the OECDs broader work on food security that

includes work on other important aspects such as trade policy,

agriculture productivity and innovation, agricultures enabling

environment, and reviews of agricultural policies in countries such

as Indonesia and Viet Nam. A regional conference on food security

is planned in Indonesia in November 2014 to further engage

interested countries from the region in this policy dialogue. The

conference will be co-organised with the ASEAN Secretariat and theAsian Development Bank (ADB).

The OECD works closely with the Indonesian government on

several agricultural policy projects. The first is the OECD Review of

Agricultural Policies: Indonesia 2012 a two year project with the

Ministry of Agriculture. The resulting policy dialogue between OECD

and Indonesian officials on the policy recommendations from the

Review helped to identify potential further areas of engagement,

in particular the notion of self-sufficiency that appears to drivemany agricultural policy measures in Indonesia, including the new

Increasing agricultural productivityand food security

Food Law. The second area of engagement with Indonesia is in the

2013 edition ofAgricultural Policy Monitoring and Evaluation: OECD

Countries and Emerging Economies. The Indonesia chapter provides

policy recommendations based on the latest agricultural policy

developments in the country and on updated estimates of the level

of support of Indonesian farming sector.

The OECD and the UN Food and Agriculture Organisation (FAO)

annually publish theOECD-FAO Agricultural Outlook. The 2013edition includes detailed projections of the medium-term outlook

for commodities for OECD countries and emerging economies for

2013-2022, including Indonesia. The OECD has begun work on OECD

Review of Agricultural Policies: Viet Nam which will be completed in

2015. It will pave the way for Viet Nam to be included in the OECDs

regular reports onAgricultural Policy Monitoring and Evaluation: OECD

Countries and Emerging Economies.

www.oecd.org/agriculturewww.oecd.org/fisheries

www.oecd.org/tad/agricultural-policies/risk-management-agriculture.htm
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The OECD Strategy on Development, adopted in the 2012

Ministerial Council Meeting, gives fresh impetus to OECDs

founding mission of contributing to the development of all

countries by sharing knowledge and policy experiences. As

the Southeast Asia regions international assistance continues

to expand, the OECD stands ready to support countries to

improve its management of the South-South Co-operation

and the effectiveness of its foreign aid.

The OECDs Development Assistance Committee (DAC) is a unique

international forum where bilateral providers of development co-

operation and multilateral agencies work together to improve the

quality and quantity of their development co-operation. The DAC

collaborates with many countries and regional bodies in Southeast

Asia to advance mutual learning and joint action on development

and development co-operation. This includes participation in DAC

subsidiary bodies, which cover development finance statistics,

development evaluation, gender, governance, conflict and fragility,and environment and development co-operation. The DAC engages

with a range of public and private stakeholders to promote

mutual learning and facilitate innovative, integrated approaches

to development co-operation. A key forum for such engagement

is the Global Partnership for Effective Development Co-operation,

established after the Busan High-Level Forum on Aid Effectiveness.

Indonesia is an important partner in this work Armida

Alisjahbana, Minister of State for National Development Planning

of Indonesia, co-chairs the Global Partnership and plays aspecific lead role in work on knowledge sharing, an important

component of southsouth co-operation.

Through the Global Network of Foundations Working for

Development (netFWD), the OECD Development Centre

has established strong partnerships with foundations and

philanthropists groups in OECD and non-OECD member countries.

The network allows foundations to engage with stakeholders

ranging from policy makers to practitioners, while collectivelylooking into the challenges linked to project implementation,

Promoting developmentand effective cooperation worldwide


effectiveness, impact and sustainable results. The Network

is actively contributing to the post-2015 debate by promoting

dialogue between foundations and governments, e.g. through

the development of a set of Guidelines for Effective Philanthropic

Engagement (GEPEs), aimed at providing guidance on how these

two actors could better co-operate. netFWD collaborates with the

Asian Venture Philanthropy Network AVPN which is growing

the venture philanthropy community across the Asia Pacific region

Knowledge sharing in different policy areas is taking a prominent

role in todays changing global landscape of international

cooperation, especially in the Southeast Asian region. Achieving

sustainable and inclusive development is now at the heart of

countries efforts as economies progress towards improving the

quality of life for all. As policy dialogues move from discussion

to learning on equal footing, more purpose-focused knowledge

sharing tools and practices are increasingly being used attracting

interest in efforts to support exchanges of experiences and newapproaches between countries and regions. The Knowledge

Sharing Alliance (KSA), created in January 2013, is one of the

outputs of the OECD Strategy on Development. It aims to leverage

the OECDs multi-disciplinary expertise, engage in conversations

and mutual learning processes with emerging and developing

economies, and increase impact by working closely with bilateral

and multilateral and other organisations, having a field presence

and implementation capacities, and/or networks.

www.oecd.org/dac

www.oecd.org/site/netfwd

www.oecd.org/knowledge-sharing-alliance

SUST
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TAINABLEGROWTH

The OECD maintains comprehensive databases of comparable

statistics to support its analytical and policy work. The

Organisation also works with countries to develop their

knowledge in producing and managing statistics.

Indonesia has been included, for a number of years now, in

some of the most high profile and important OECD databases.

These include a range of short-term economic statistics, for

example, international trade, monthly financial statisticssuch as monetary aggregates and interest rates, balance of

payments, production indices, and prices. These frequently

consulted statistics provide an overview and comparison of

recent international economic development and are used in the

modelling of the business cycle.

The OECD-hosted Partnership in Statistics for Development

in the 21st Century (PARIS21) is in initiative that aims to

promote better use and production of statistics throughoutthe developing world. In Southeast Asia, PARIS21 has provided

assistance in the design and implementation of National

Strategies for the Development of Statistics (NSDS) in

Better datafor better policies

Cambodia, Lao PDR, and Viet Nam; review and updating of

the statistics law in Cambodia; facilitation of a user-producer

dialogue on inclusive growth in the Philippines; and preparation

of the Myanmar NSDS roadmap. At the sub-regional level, it

provides support to the ASEAN Community in strengthening

its regional statistical system particularly in the review of its

existing Regional Strategy for the Development of Statistics

(RSDS) and in designing one for 2016-20.

The OECD is working closely with ASEAN countries to build

comparable statistical data on tax revenues. The Revenue

Statistics, Trends and Policy Challenges in Asia: the Case of

Indonesia and Malaysiapublication will provide comparisons

on fiscal performance and tax mix of these countries, with that

of Japan, Korea and OECD countries as a whole. The objective

of the report is to endow policy makers with a solid basis for

better informed decisions on how to enhance taxation and how

to best spend revenues to leverage inclusive growth. The currentedition will be released in early 2014. The second edition of the

report will be delivered by early 2015 expanding the coverage of

countries.


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The Asian Business Cycle Indicators (ABCIs)is a tool which

provides comparable information on the short-term economic

climate of the Asian economies. Its purpose is to produce early

warning of potential macroeconomic risks and act as a tool

to trace business cycle synchronization in Asia. The ABCIs

are constructed jointly by the OECD Development Centre and

OECD Statistics Directorate and are based on the growth cycle

approach like the OECD composite leading indicators (CLIs).

This Quarter in Asiacompiles these ABCIs and includes datafrom 7 major Asian economies: China, India, Indonesia,

Malaysia, the Philippines, Singapore, and Thailand.

The joint OECD WTO Trade in Value-Added (TiVA) was

launched in March 2012 to provide the statistical tool and

evidence needed for the development of both industrial

and trade policies in the light of increasing international

fragmentation of production. The database contains a suite

of indicators for 57 economies (including 8 ASEAN countriesproviding important statistics on the integration and evolution

of Factory Asia value chains) and covering 18 industries. The

OECD is continuing to engage with national standardisation

organisations and other international agencies to expand the

timeliness and country coverage of this database and also

to develop the statistical capacity of countries to provide

the necessary inputs. It also identifies improvements in core

statistics that improve the quality of results, notably by

encouraging links between trade and business registers andin the level of detail provided in national tables, in particular

by motivating new breakdowns that better reflect the

characteristics of firms engaged in international trade.

The OECD has organised Asia Regional Seminars on insurance

statistics and monitoring in Southeast Asia to examine avenues

to enhance transparency and monitoring of the insurance

industry as a means to assist policymakers and supervisors in

assessing its financial strength and performance Five non-OECD

partners, including Indonesia, Malaysia and Thailand have

subsequently joined the OECDs Global Insurance Statistics

(GIS) exercise and provide statistics on an annual basis. Given

regional interest in the seminars as a platform for the sharingcountry insurance monitoring experiences, the OECD will

continue organising regional seminars in Southeast Asian in co-

operation with other relevant international organisations.

www.oecd.org/std

www.oecd.org/statistics

www.oecd.org/dev/asiapacific/abciswww.paris21.org

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SMOOTH FUNCTIONING OF MARKETS. 17

Well-functioning markets are essential to growth and development.

Southeast Asian countries have been moving towards an open, outward-

looking, inclusive economy as part of the ASEAN Economic Community

plan. Making rules more open, fair, transparent and predictable for trade,

investment, competition and financial sector will be key to accelerating

regional integration.


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International investment has been a driver of Southeast Asias

economic dynamism and integration into the global economy.

Some countries in the region were among the first to welcome

foreign direct investment (FDI) as part of a strategy of export-

led development.

The OECD promotes investment policy reform and international

investment co-operation, with a view to enhancing the

contribution of international investment to growth andsustainable development. In particular, the OECD monitors

investment protectionism in the context of the G20, produces

statistics on foreign direct investments, and develops

international instruments and tools which are used worldwide.

The OECD also hosts the inter-governmental Freedom of

Investment (FOI) Roundtable, through which governments

exchange information and experiences on investment policies

and emerging issues for instance, recipient countries policies

towards sovereign wealth funds, international investment lawand the investor-state dispute settlement system.

The OECD is deepening its co-operation with Southeast Asia

on investment through Investment Policy Reviewsconducted

in collaboration with the ASEAN Secretariat and through

regular regional investment policy dialogue and training for

government officials using the Policy Framework for Investment

(PFI). Indonesia, Lao PDR, Malaysia,Myanmar, the Philippines

and Viet Namparticipate in the Investment Policy Reviews.

The regional component of the OECDs investment co-operation

with ASEAN effectively links strengthening national investment

policy frameworks to regional investment policy development

and harmonisation. This has given individual ASEAN member

states a platform to showcase their reforms and to learn from

peers, while at the same time strengthening regional integration

initiatives and national reforms.

Enhancing cooperationon international investment

Southeast Asia was the host of the first meeting of the Task

Force to update the Policy Framework for Investment - a

cornerstone of OECD investment work - at the margins of the

2014 OECD Southeast Asia Regional Forum in Bali.

The recommendations from the Reviews are candid, impartial and

highly practical.

Aung Naing Oo, Director General at the Ministry of National Planning

and Economic Development of Myanmar

The Reviews provide the necessary impetus for countries within

the region to work towards realising the ASEAN Economic

Community in 2015.

YB Dato Sri Mustapa Mohamed, Minister of International Trade and Industry

of Malaysia

www.oecd.org/investment/

www.oecd.org/investment/seasia.htm

www.oecd.org/investment/countryreviews.htm




The Regional PolicyNetwork for investmentwill strengthenco-operation oninvestment policies andpromotion.

FUNCTI
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Trade liberalisation has played a key role in the economic

transformation of Indonesia and other counties in Southeast

Asia. International production, trade and investment are

increasingly organised within global value chains (GVCs)

in which the different stages of the production process are

located across different countries.

Today, trade in intermediate inputs makes up over 50% of

goods and 70% of services trade. This change presents newopportunities for those emerging and developing countries that

can reduce their trade costs. By reducing the costs of importing

as well as exporting, and by deepening connectivity with the

global market, they can tap into GVCs to accelerate their trade,

jobs and income growth. However, the emergence of GVCs poses

new challenges. Countries without adequate infrastructure or

with trade related policy barriers to integration may not reap full

benefits from GVCs.

The ASEAN framework, and its core goal of establishing the

ASEAN Economic Community by 2015, has promoted trade and

investment liberalisation which in turn has facilitated GVCs

throughout the Southeast Asia region. To help countries reap

the full benefits of GVCs, the OECD is currently undertaking

work along a range of different dimensions to address the new

challenges GVCs create for policy makers in Southeast Asia and

beyond. More broadly, the OECD is actively working with other

international agencies to improve the effectiveness of aid fortrade, and welcomes the active engagement of Southeast Asian

countries in the OECD/WTO Aid for Trade Initiative. Current data

show that Asia is now the largest recipient of Aid for Trade.

OECDs work underscores that GVCs impact an economys

competitiveness and shows that in addition to openness to trade

and investment , investment in knowledge-based capital (KBC) -

and innovation more generally - has an important role to play in

increasing productivity and helping countries move up the valuechain (see section on Innovation and Industry).

Promoting trade and upgradingin global value chains

The OECD is compiling a regulatory database of services

regulations Services Trade Restrictiveness Index (STRI)

encompassing 17 services sectors and sub-sectors in 40

countries, including Indonesia. The project is developing a toolkit

that contains two distinct but complementary instruments,

which allows countries to consider specific regulatory provisions

that may be restrictive and may reduce sector efficiency in their

economy, and to contrast their own situation in a given sector

with that in less restrictive and more efficient jurisdictions.It provides the core information for countries to pursue

desirable policy reforms, whether on a unilateral, plurilateral or

multilateral basis. The STRI will be released in May 2014 at the

OECD Ministerial Conference in Paris.

A critical issue for many countries today is the importance

of reducing trade costs through trade facilitating measures.

Following the conclusion of the WTO Trade Facilitation Agreement

2013 December in Bali, the OECD re-estimated the potential tradecosts reductions from the full implementation of this Agreement

to be as high as 15% for many individual developing countries.

The indicators allow individual countries to benchmark their

performance relative to best practice in their region and globally

and to highlight priority areas for action. The OECD also tracks

donors efforts targeted towards

assisting countries to implement

trade facilitation reform.

www.oecd.org/trade

www.oecd.org/trade/stri


ONINGMARKETS

SCAN TOREAD THE

REPORT

The Trade Initiative isidentifying areas forfurther engagement ontrade issues relevant toenhancing connectivity inSoutheast Asia.
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Eliminating subsidies and unfair practices in economic

competition helps form the foundation of a healthy and

dynamic global economy. OECD export credits work is

precisely one of the basic building blocks of the ever-growing

structure of global trade agreements that aim to maintain

open and efficient markets.

The OECD provides a forum for discussion and coordination

of national export credit policies relating to good governanceissues, such as anti-bribery measures, environmental and social

due diligence, and sustainable lending. OECD-housed rules

ensure that export credit programmes conform to anti-subsidy

obligations made under the auspices of the WTO and contribute

to open markets and fair trade.

Governments provide official export credits through Export

Credit Agencies in support of national exporters competing

Regulating exportcredits

for overseas sales. The OECD provides a forum for discussion

and co-ordination of national export credit policies relating

to good governance issues, such as anti-bribery measures,

environmental and social due diligence and sustainable lending.

In addition, the Arrangement on Officially Supported Export

Credits stipulates the most generous financial terms and

conditions for officially supported export credits. These OECD

housed rules ensure that export credit programmes comply with

anti-subsidy obligations made under the auspices of the WorldTrade Organisation (WTO) and contribute to open markets and

fair trade. Non-members are also invited to fully participate

in negotiating and administering these rules and may do so

without assuming any OECD non-export credit obligations.

www.oecd.org/trade

http://oe.cd/gvc

http://oe.cd/tiva


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ONINGMARKETS

Regulatory barriers to competition can potentially hamper

development and prevent consumers from benefiting from

economic growth.

In order to promote sound competition principles and build

mutual understanding and cross-border convergence, the OECD

has developed international best practices on co-operation

between competition enforcers, on hard core cartels and on

assessment of government policies for anti-competitive effects.The OECD has developed a Competition Assessment Toolkit

that provides a highly functional methodology to review

laws and regulations that could restrain competition. It has

also developed Guidelines for Fighting Bid Rigging in Public

Procurementto assist governments in raising awareness of the

risks and costs of collusion in this sector.

Indonesia was one of the first ASEAN members to introduce

competition law more than a decade ago. Competition policy hasplayed a substantial role in underpinning Indonesias economic

achievements since 1999. Peer reviews of Indonesia, including

the OECDs 2012 Regulatory Reform Review, have highlighted the

policy measures necessary to strengthen the competition regime

and its contribution to Indonesias National Development Plan,

in particular by promoting further pro-competitive regulatory

reforms.

The OECD works closely with ASEAN member countries and theASEAN Secretariat to support their efforts to introduce national

competition law and policy by 2015. Through targeted national

and regional workshops, the OECD helps Indonesia and other

ASEAN members build domestic competition capacity, which

lays the foundations to improve regional enforcement co-

operation and policy convergence. In particular, ASEAN member

state competition authorities are active participants in the

Competition Programme of the OECD Korea Policy Centre, which

serves as a hub to train and assist officials from across the Asia-Pacific in developing and implementing effective competition

Promoting soundcompetition

law and policy. In 2013, competition officials from across the

region met in Malaysia to participate in an OECD Korea Policy

Centre workshop, co-hosted by the Malaysia Competition

Commission, on the topic of fighting bid rigging. In 2014, the

OECD Korea Policy Centre plans to hold a dedicated workshop

for ASEAN member states in Thailand on fighting cartels.

Indonesias Commission for the Supervision of Business

Competition (KPPU) is an active participant in the work of theOECDs Competition Committee and a regular contributor to

the debates in the Global Forum on Competition. The Forum is

an annual event in Paris and open to all competition authorities

from across Southeast Asia and the rest of the world. The

OECD Global Forum on Competition provides an opportunity

for competition authorities from around the world to meet and

exchange policy experiences and lessons-learned through open

and multilateral debates with peers.

www.oecd.org/competition

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REPORT
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The OECD promotes efficient, open, stable and sound

market-oriented financial systems, based on high levels

of transparency, confidence and integrity. It monitors and

surveys current market developments and structural changes,

publishing its key findings in the biannual publication

Financial Market Trends.

The OECD also suggests reform measures related to banking,

securities and institutional investors, in particular withregard to insurance companies and private pension schemes.

In addition, it facilitates policy dialogue and exchange of

experiences on capital market reform, insurance, private

pensions, financial education and financial consumer

protection.

The OECD seeks to enhance policy analysis and dialogue on

disaster risk financing strategies for natural and man-made

disasters and develop good practices where relevant. Buildingon long-standing work in disaster risk management and risk

financing, the OECD developed a G20/OECDMethodological

Framework for Disaster Risk Assessment and Risk Financing

Developing a robustfinancial system

that supports the development of effective strategies to

manage the financial impacts of disasters. The OECD is actively

supporting an Asia-Pacific Economic Co-operation (APEC)

Finance Minister initiative on disaster risk financing that seeks

to promote information exchange and good practices among

APEC economies, some of which are from Southeast Asia. An

APEC seminar on disaster risk financing in the Asia-Pacific

region will be held in Indonesia in June 2014. Countries from

Southeast Asia will be invited to participate in this major event.

Established in 1999, the OECD-Asian Development Bank

Institute Roundtable on Capital Market Reform in Asia meets

annually in Tokyo to allow Asian and OECD country regulators,

policymakers, experts, practitioners and scholars, as well as

international organisations, to discuss the latest developments

in capital market reform in Asia. The Roundtable has examined

the development of Asian bond markets as well as policy

frameworks for effective and efficient financial regulation inSoutheast Asia.

www.oecd.org/finance


SCAN TOREAD THE

REPORT

FUNCTION
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Infrastructure gaps present a major challenge for deepening

regional economic integration and establishing the ASEAN

Economic Community in 2015.

The OECD Economic Outlook for Southeast Asia, China and

India 2014identified infrastructure investments as a critical

component for ASEAN countries to foster economic growth and

reduce poverty. According to ADB estimates, ASEAN Member

countries need to invest USD 60 billion annually until 2020 tomaintain and expand the existing infrastructure. To raise the

required resources, public funds need to be complemented by

privately-financed infrastructure investments including public-

private partnerships (PPPs).

PPPs are an important tool for decision makers to strengthen

economic and social development. By harnessing private sector

expertise and allocating risks to the parties, governments can

make great strides in ensuring value for money. The OECDNetwork of Senior PPP Officials was established to ensure that

PPPs and capital investment projects bring value for money

and that potential risks are managed properly. The Network

Strengthening connectivity, capital investmentand public-private partnerships

has developed the OECDPrinciples for Public Governance of PPPs,

which examine institutional capacities, selection of PPP projects

based on value for money and use the ordinary budget process

to ensure fiscal sustainability.

The OECD has also developed conceptual frameworks on how

to manage fiscal risks through good capital budgeting, ensure

value for money from capital procurement and set up dedicated

PPP units.

www.oecd.org/gov/budgeting


NINGMARKETS


The Regional Policy

Network for connectivity

and PPPs will strengthen

the regulatory PPP

environment, providing a

dialogue platform for OECD

and ASEAN countries.
http://www.keepeek.com/Digital-Asset-Management/oecd/development/economic-outlook-for-southeast-asia-china-and-india-2014_saeo-2014-en#page1http://www.keepeek.com/Digital-Asset-Management/oecd/development/economic-outlook-for-southeast-asia-china-and-india-2014_saeo-2014-en#page1http://www.keepeek.com/Digital-Asset-Management/oecd/development/economic-outlook-for-southeast-asia-china-and-india-2014_saeo-2014-en#page1http://www.keepeek.com/Digital-Asset-Management/oecd/development/economic-outlook-for-southeast-asia-china-and-india-2014_saeo-2014-en#page1http://www.oecd.org/governance/oecdprinciplesforpublicgovernanceofpublic-privatepartnerships.htmhttp://www.oecd.org/governance/oecdprinciplesforpublicgovernanceofpublic-privatepartnerships.htmhttp://www.oecd.org/gov/budgeting/PPP-Recommendation.pdfhttp://www.keepeek.com/Digital-Asset-Management/oecd/governance/public-private-partnerships_9789264046733-en#page1http://www.oecd.org/governance/oecdprinciplesforpublicgovernanceofpublic-privatepartnerships.htmhttp://www.keepeek.com/Digital-Asset-Management/oecd/development/economic-outlook-for-southeast-asia-china-and-india-2014_saeo-2014-en#page1


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The importance of financial literacy and the need to promote

financial education are now globally recognised to improve

financial inclusion, foster individuals financial well-being, and

support financial stability.

Southeast Asian countries are actively promoting financial

education as a powerful tool for economic growth and financial

stability and as a starting point for more inclusive societies.

Indonesia developed a national strategy for financial educationfollowing the OECD recommendations, as detailed in Indonesias

contribution to the G20-OECD publicationAdvancing National

Strategies for Financial Education. Indonesia, Malaysia and

Thailand also used OECD methodology to assess the financial

literacy of their populations and develop their national strategies

for financial education. Indonesia has promoted the importance

of financial literacy at G20 level and has contributed to making

financial education policies a policy priority within ASEAN and

APEC.

The OECD formulates financial education recommendations

through the International Network on Financial Education (INFE)

and through its participation in the work of the G20. Established

in 2008, the OECD/INFE brings together public experts from 270

public institutions and 107 economies in order to undertake

analytical work and develop good practices. Cambodia, Indonesia,

Malaysia, the Philippines, Singapore and Thailand are members

of the Network. Indonesia is an especially important partner,having hosted the 2nd meeting of the OECD/INFE in 2008 and an

OECD Asian Roundtable on the Role of Central Banks in Financial

Literacy and Inclusion in 2011. Moreover, Indonesia is a member

of the OECD/INFE Advisory Board, and co-Leader of the OECD/

INFE Expert Subgroup on the Role of Financial Education in

Financial Inclusion.

Improving financialeducation

Co-operation between the OECD and Southeast Asian countries

will continue through the organisation of an Asian Regional

Meeting and Roundtable of Central Banks on Financial Literacy

and Inclusion in Thailand in December 2014 and of a meeting of

the OECD/INFE in Malaysia in 2015. Moreover, the OECD/INFE will

carry out a survey on financial education in Asia, with a focus on

ASEAN countries.

Developing peoples financial literacy is asimportant as developing financial capability.

It is critical that people be taught about the

importance and benefit of accessing financial

services.H.E. Dr Susilo Bambang Yudhotono

President of the Republic of Indonesia, 2010

www.oecd.org/finance/financial-education


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REPORT
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Effective public sector management, reduced red tape and soundcorporate governance are key to promoting growth and development.

Good governance of the public and private sectors requires streamlining

administrations, reforming tax and fiscal relations across levels of

government, combating corruption in business and public sectors, and

strengthening the efficiency and transparency of corporate practices for

both private and state-owned enterprises.

PUBLIC AND CORPORATE GOVERNANCE. 25


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Discussions are underway between ASEAN and the OECD to

develop Product Market Regulationand Regulatory Management

Systemsindicators to support reforms in Southeast Asia. This

work supports ASEAN member states adherence to the 2009

ASEAN Good Regulatory Practice Guideand 2011 APEC Leaders

(Honolulu) Declaration: Toward a Seamless Regional Economy . It also

encourages coherence with the 2012 Recommendation of the

OECD Council on Regulatory Policy and Governance.

We are fortunate to have OECD as our strategic partner to assist

us in this journey towards the implementation of good regulatory

practices in our country. I would also like to urge all ministries and

agencies to leverage on OECDs expertise in providing advisory

services and assistance.

Tan Sri Dr Ali Bin Hamsa, Chief Secretary to the Government of Malaysia

High quality regulation and simple, transparent and public

administrative procedures, together with accountability shallcreate a favourable environment for investment, remove

corruption and waste and remarkably

contribute to overall competitiveness of

Viet Nam economy.

Nguyen Tan Dung, Prime Minister of Viet Nam

www.oecd.org/gov/regref

Regulatory reform is a cross-cutting theme for ASEAN economic

integration and regulatory coherence, as well as for individual

ASEAN member states structural and rule of law reforms.

Regulations are indispensable to the proper function of

economies and societies. They underpin markets and their

integration protects the rights and safety of citizens and ensures

the delivery of public goods and services. At the same time,

regulations are not costless. Businesses complain that red tapeholds back competitiveness while citizens complain about the

time that it takes to fill out government paperwork. Regulations

can also have unintended costs if they become outdated or

inconsistent with the achievement of policy objectives.

The OECD has a long standing engagement with Southeast Asia

on regulatory reform, both regionally through APEC and ASEAN

and bilaterally with individual ASEAN member states. Highlights

of this engagement include the 2005 APEC-OECD Integrated

Checklist on Regulatory Reform, 2011 Review of Administrative

Simplification in Viet Namand 2012 Regulatory Reform Review of

Indonesia. In 2013-14 the OECD has been assisting Malaysia to

build institutional capacity on regulatory impact analysis (RIA), a

new requirement under the National Policy on the Development

and Implementation of Regulations.

In Viet Nam, regulatory reforms between 2007 and 2010 resulted

in 10 000 administrative procedures at the communal level

and 700 at the district level being standardised and simplified

into 63 at both levels. These and other regulatory reforms

were estimated to provide annual compliance cost savings for

businesses and society of USD 1.4 billion. In Indonesia, regulatory

reforms have included efforts to strengthen coherence between

national and subnational regulations, with 37% of 13 200 sub-

national regulations invalidated between 2010-12. Following

the 2012 Regulatory Reform Review of Indonesia, the OECD is

supporting the governments efforts to develop guidelines on

public consultation in regulatory processes.

Regulatory reform andadministrative simplification


The Regional PolicyNetwork for regulatoryreform will work withregional and OECDpartners to improvegovernment capacitiesfor efficient and effectiveregulations.

SCAN TO READTHE REP ORTS

G
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Maintaining fiscal discipline, allocating resources to where

they are most valued, and achieving greater efficiency in

government operations have a crucial impact on overall

national economic performance.

The OECD carries out research across the full range of

budgeting issues through reviews of country budgeting systems,

comparative analysis of specific aspects of the budgeting system

across countries, and maintains a comprehensive databaseon International Budget Practices and Procedures covering 97

countries. The results of this work are published in the OECD

Journal on Budgeting.

The OECD Senior Budget Officials (SBO) meet annually to consider

latest developments in international budget practice. An Asian

SBO meeting, held annually in Bangkok, Thailand, is open to all

countries in Southeast Asia and across the region. In addition,

the OECD is developing a Regional Policy Network on Public-

Private Partnerships and Connectivity, so that the extensive body

of analysis and expertise within the OECD member countries is

accessible to countries in Southeast Asia (see page 21).

As an example of country-specific analysis, the recent report

on Budgeting in Indonesiashows that, since the economic

crisis, important improvements have been made, such as

the creation of a modern legal framework for budgeting and

unification of the budget. Acknowledging the proactive role

that the Indonesian Parliament has taken in the budget process

and the introduction of a national planning function alongside

budgeting, the report suggests that further progress could be

achieved by: introducing an operational expenditure-based

fiscal rule; avoiding the concentration of spending in the last

months of the fiscal year; and reducing unnecessary detail in its

official budget documentation, as excessive detail could hamper

reform initiatives under consideration in Indonesia.

www.oecd.org/gov/budgeting

Budgeting andpublic expenditures

PUBLIC AND CORPORATE GOVERNANCE. 27

GOVERNANCE

SCAN TO

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REPORT
http://www.oecd.org/gov/budgeting/oecdjournalonbudgeting.htmhttp://www.oecd.org/gov/budgeting/oecdjournalonbudgeting.htmhttp://www.keepeek.com/Digital-Asset-Management/oecd

Documents

Active with South East Asia