Vientiane, 16 September 2024: The Ministry of Industry and Commerce of Lao PDR and ERIA co-hosted the ‘High-Level Forum on ASEAN Supply Chain Connectivity: Key Issues and Challenges’ at the Landmark Hotel in Vientiane. The forum, attended by nearly 100 participants, aimed to address key issues related to ASEAN’s supply chain connectivity – a theme of Lao PDR’s ASEAN Chairmanship in 2024.

In his opening remarks, H.E. Malaithong Kommasith, Minister of Industry and Commerce of Lao PDR, emphasised ASEAN’s ongoing efforts to realise its vision of a single market and production base. He highlighted how several initiatives have enhanced physical and institutional connectivity. However, with emerging challenges such as geopolitical tensions, digital transformation, and sustainability, ASEAN must harness its collective strength to ensure a sustainable economic future. He also stressed the importance of digital connectivity, including the free flow of data, movement of digital talent, policy coordination in emerging sectors, and developing institutional mechanisms to minimise supply chain disruptions.

H.E. Dr Kao Kim Hourn, Secretary-General of ASEAN, noted the shifting global conversation from a ‘just in time’ to a ‘just in case’ supply chain model, balancing efficiency with resilience. He emphasised that ASEAN’s status as a global economic hub depends on strengthened supply chain connectivity to facilitate trade, deepen integration, and promote regional economic growth. This connectivity supports cross-border production and distribution, boosting competitiveness and forming a key element of the ASEAN Leaders Declaration on Enhancing Supply Chain Connectivity, essential for the development of the ASEAN Community Vision 2045.

ERIA President Tetsuya Watanabe focused on why supply chain connectivity is critical for ASEAN, pointing to evolving geopolitical issues, the need to incorporate sustainability principles, and the changes driven by digital transformation and climate change. He highlighted the importance of infrastructure in overcoming ASEAN’s fragmented geography and called for increased cooperation amongst ASEAN Member States (AMS) to finance connectivity projects. He also noted the role of political will and the private sector in developing logistics hubs like airports and dry ports, as well as the need for artificial intelligence to make supply chains smarter.

H.E. Bountheung Douangsavanh, Vice Minister of Industry and Commerce of Lao PDR, delivered the keynote address, underscoring the vital role supply chain connectivity plays in ASEAN’s economic integration by facilitating the flow of goods, services, and investments, thus driving economic growth and job creation. He stressed that improving connectivity is crucial for landlocked Lao PDR, which has made significant strides in infrastructure, streamlined customs procedures, and enhanced regulatory frameworks, including the completion of the Laos–China Railway. Harmonising standards, reducing trade barriers, and promoting a rules-based trading system are essential for ASEAN’s regional integration post-2025.

Following the opening addresses, a panel discussion, moderated by Prof. Dr Ruth Banomyong of Thammasat University, featured prominent figures from government, the private sector, international organisations, and academia. The panel included H.E. Leng Thun Yuthea, Secretary of State, Ministry of Public Works and Transport, Cambodia; H.E. Ramon M. Lopez, Chairman of the ERIA Governing Board; H.E. Satvinder Singh, Deputy Secretary-General of ASEAN for the ASEAN Economic Community; Hon. Dr Xaybandith Rasphone, Vice President of the Lao National Chamber of Commerce and Industry; Mr Hirohito Toda, Deputy Executive Secretary for Partnerships and Coordination at UNESCAP; and Dr Robert Yap, Executive Chairman of YCH Group.

The panel discussion highlighted the role of the private sector in advancing ASEAN supply chain connectivity. Panellists emphasised the importance of public–private partnerships in developing essential infrastructure, with private sector feedback playing a critical role in shaping regional policies that support supply chain resilience.

Participants also discussed policy misalignments within and amongst AMS, which hinder supply chain efficiency. Without harmonised policies and coordinated implementation of regional trade agreements, the full benefits of connectivity are diminished. The inefficiencies and formalities at borders, including delays at crossings, were identified as significant bottlenecks, with calls for streamlined cross-border coordination and single-stop customs inspections to alleviate these issues.

While infrastructure remains a core element of connectivity, the forum underscored the gap between investment needs and available funding. Solutions such as public–private partnerships, foreign direct investment, and regional cooperation with organisations like the Asian Development Bank (ADB) and the Asian Infrastructure Investment Bank (AIIB) were proposed to bridge these gaps. ASEAN countries must also prioritise digital infrastructure to support the digitalisation of supply chains.

Equitable growth through the inclusion of small and medium-sized enterprises (SMEs) in the supply chain was another key point of discussion. The forum stressed the importance of empowering SMEs through capacity-building initiatives and integrating them into the broader value chain to ensure they are not left behind as ASEAN economies grow. Additionally, non-tariff measures (NTMs) were highlighted as ongoing barriers to trade within ASEAN. Despite reduced tariffs, NTMs such as licensing requirements and bureaucratic procedures continue to obstruct cross-border trade, and the forum called for a review to enhance regional supply chain efficiency.

The increasing importance of technology, particularly artificial intelligence, in supply chain management was also addressed. AI can optimise processes, improve efficiency, and reduce costs, leveraging the vast amounts of data generated by supply chain operations.

Finally, the forum acknowledged the rising importance of sustainability in global trade. ASEAN must adapt to global shifts towards decarbonisation and circular economies, where reusing and recycling materials become integral components of supply chain operations.

Photos Credit: ASEAN Secretariat