The Changing Face of ASEAN: Myanmar, Laos, and Vietnam offer an unlikely breath of fresh air.

With much of ASEAN stuck in the economic doldrums and its senior members beset with issues ranging from unprecedented levels of corruption to violent insurgencies and maritime disputes with China, the regional bloc has known better days.

(From L to R) Malaysia's Prime Minister Najib Razak, Myanmar leader Aung San Suu Kyi, Singapore's Prime Minister Lee Hsien Loong, Thailand's Prime Minister Prayuth Chan-ocha, Vietnamese Prime Minister Nguyen Xuan Phuc and Laos President Bounnhang Vorachith attend the opening ceremony of ASEAN Summit in Vientiane, Laos (September 6, 2016).

Image Credit: REUTERS/Jorge Silva

But from the most unlikely corners of northern ASEAN, a more common sense approach to the region’s increasingly complex political dynamics appears to have accompanied leadership change.

Five Risks to ASEAN Growth

Last week, the Asian Development Bank downgraded the 2015/2016 growth rate forecasts for most ASEAN countries, and the region as a whole. The latest revised figures revel some of the risks that continue to challenge growth prospects in the region.

Sub-regional growth has been revised down to 4.4 percent from an initial forecast of 4.9 percent, owning to various domestic factors such as disappointing growth in Thailand, slow government spending in Indonesia and the Philippines, wavering business confidence in Malaysia, and external shocks such as falling global energy prices and slowing growth in China.

EAN may attract new investor attention in 2015

Deeper economic integration and a growing middle class attracts manufacturing investment in the ASEAN region in 2015. However, a lack of political will to eliminate barriers to intra-regional trade could also dent the region’s appeal as a manufacturing hub.

As the end-2015 deadline for economic integration approaches, the ASEAN region will be a major focus for manufacturing investment. In pursuit of a single market and production base, the ten ASEAN member states intend to transform the region into an EU-style economic area characterized by free flow of goods, services, investments, and (skilled) labor.

Euro Lessons for East Asia

East Asia could learn two valuable lessons from the eurozone crisis. First, do not rush the process of financial and monetary integration; and, second, develop adequate institutional frameworks before proceeding.

Illustration by Pedro Molina

In fact, East Asian countries are unlikely to move toward a regional fixed exchange-rate system or a monetary union with a single currency in the immediate future, owing to the region’s great diversity in terms of economic and political conditions. Perhaps, in a few decades, the region’s countries will develop institutions to promote financial integration, such as a single bank supervisory agency of the type that the European Union is now creating.

Nevertheless, Asian policymakers should improve cooperation mechanisms designed to prevent and manage crises. Most promising is the Chiang Mai Initiative Multilateralization (CMIM) of the ASEAN+3 – the 10 members of the Association of Southeast Asian Nations plus China, Japan, and South Korea. This $120 billion regional reserve pool was launched in 2010 to provide short-term liquidity to members in an emergency.

China Daily: ASEAN-US leaders institutionalize annual Summit

The leaders of the 10 member states of the Association of Southeast Asian Nations (ASEAN) and the US leader agreed to institutionalize the Leaders Meeting to an annual Summit as a further step towards raising the ASEAN-US partnership to a strategic level, according to a press statement on Tuesday.

The press statement, released by the White House's Office of the Press Secretary, was made after the Fourth ASEAN-US Leaders' meeting co-chaired by Cambodian Prime Minister Hun Sen, chair of ASEAN in 2012, and US President Barack Obama on Monday evening at the Peace Palace in Phnom Penh, the capital of Cambodia.    

Newly re-elected US President Barack Obama (5th L) poses for photos with ASEAN leaders during the 4th ASEAN-US Leaders' Meeting in Phnom Penh, Cambodia, Nov 19, 2012. [Photo/Xinhua]

"The Summit deepened our diplomatic, economic, security, and people-to-people ties with the key Asian multilateral organization, " it said, adding that with a population of approximately 620 million and a combined GDP of over $2.2 trillion, ASEAN is the United States'fourth largest export market.