Brexit vote offers lessons for Asean

Brexit vote offers lessons for Asean

The world will be watching closely as the British decide on Thursday whether to remain in the European Union, as the outcome will not only affect the future of the 28-member bloc but also have repercussions for non-member countries.

Already there is speculation that a Leave vote will trigger short-term fluctuations in currency markets. Siam Commercial Bank recently predicted that if Britain decides to leave the EU, the baht may be weakened against the US dollar in response to the expected depreciation of the British pound.

The impact on Thai trade and investment is likely to be limited, as exports to the UK accounted for only 2% of total exports. Thailand's foreign direct investment in the UK represents only 4.4% of total Thai FDI, according to the recently released report from Siam Commercial Bank.

Nonetheless, Brexit would likely have a psychological impact on public perception towards the regional grouping, and would provide momentum for Eurosceptics in other EU nations to push for a similar exit.

The results will be particularly poignant for Asean, which is in the process of integration inspired, more or less, by the EU model.

If Britain decides it would be better off by leaving the EU, then, it will raise serious questions about how the concept of a regional grouping can remain relevant.

Evolved from the European Coal and Steel Community in the 1950s, the EU was set up with the aim of securing lasting peace by ending wars among neighbouring countries in Europe. Decision-makers kicked off the cooperation by lowering tariffs to promote the free flow of goods across borders to convince people that regional integration would contribute to better standards of living.

Although Britain decided to stay out of the euro currency, the UK surrendered sovereignty in certain areas, such as external trade, as part of its obligation to stay in the group.

However, as Britain endures a long period of economic stagnation and high unemployment, its people must decide whether they will be better off by leaving the EU. As of press time, the odds for the Remain and Leave emerging victorious on Thursday were too close to call.

For Asean, the formation of a single regional currency in the foreseeable future is unlikely. But the bloc was also founded in 1967 with the similar motive of bringing sustainable peace to the region.

Similar to the EU, Asean countries set up an Asean Free Trade Area in the early 1990s to show people that they would benefit from intra-regional trade and investment to create economies of scale to compete with the rise of China. This year, the launch of the Asean Economic Community marked another effort to promote freer flow of goods and services.

During the good times, the regional grouping concept proved popular both in Europe and Southeast Asia and attracted eager new members.

However, when the effects of the financial crisis were exacerbated by emerging issues such as migration, people started to blame the supranational body for their misfortune. Former London mayor Boris Johnson, leader of the Brexit camp, has stated that it would be a riskier option for Britain to stay in the EU. "The risks of remaining in this over-centralising, over-regulating, job-destroying machine are becoming more and more obvious."

At any rate, a "British exit" vote has also reflected the discrepancy between the government's desire to remain in the bloc and the sceptics who don't have such a strong sense of ownership in the EU.

For Asean leaders, as they try to move forward with their own regional grouping, Brexit can offer some lessons. First of all, as the leaders advance regional cooperation from the top down, it is essential to communicate the benefits and justify the existence of Asean at the grass-roots level.

Instead of being merely a forum for idle talk, Asean must show its citizens how the grouping is relevant by addressing questions of how regional economic regulations could help distribute wealth and guarantee people's rights. Asean can also be relevant in helping countries deal with issues beyond national boundaries, such as migration, human rights, human trafficking or maritime security.

But so far, Asean has failed to present itself as a united force, as seen at the Asean foreign ministers' meeting with Chinese Foreign Minister Wang Yi last week. The Asean ministers decided to water down a joint statement which should have helped build regional order in the South China Sea. Consequently, Asean's central role in building regional peace is in question.

After all, people would prefer to be part of a club only so long as they feel that it is practical and meaningful to them.

Editorial

Bangkok Post editorial column

These editorials represent Bangkok Post thoughts about current issues and situations.

Email : anchaleek@bangkokpost.co.th



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