Challenge for bloc is whether to play a larger role

Challenge for bloc is whether to play a larger role

The Philippine International Convention Center, the venue for the Aug. 2-8, 2017 50th ASEAN Foreign Ministers' Meeting, is seen on Wednesday in Pasay city south of Manila. (AP photo)
The Philippine International Convention Center, the venue for the Aug. 2-8, 2017 50th ASEAN Foreign Ministers' Meeting, is seen on Wednesday in Pasay city south of Manila. (AP photo)

From its humble birth in 1967, the Association of Southeast Asian Nations (Asean) has expanded and fulfilled a dream of having 10 family members. Despite some ups and downs, it has evolved into a regional platform which has allowed major players to discuss political and security issues, helping bring stability and peace to a region once described as "the Balkans of Asia".

Asean has also contributed greatly to the vast improvement in the living standards of people in the region. Over half of Asean's 620 million people now enjoy middle-class status with rising purchasing power and sustainable growth, contributing to total GDP of US$2.5 trillion (83 trillion baht). The region has also benefited from the relocation of many global industries, along the way creating lucrative markets for imported consumer goods. Combined trade volume has reached $2.6 trillion, while Foreign Direct Investment (FDI) has been hovering around $130-150 billion a year.

But Asean does not exist in isolation. As member countries pursue greater integration through shared political, economic, social and cultural goals, globalisation and regional changes will increase pressure on Asean to achieve its aims. Global power plays will also inevitably impact the region.

The challenge for Asean is whether it is willing, capable and ready to play a larger role. All indications are that the regional grouping will need to enhance its capacity, streamline its decision-making process, reconfigure its working processes and adopt a new mindset from its passive "Asean Way" of the past 50 years. It's inevitable that more pro-active engagement will be needed to deal with the new challenges.

External challenges

In the past, emerging economies opposed globalisation and multilateralism for fear of domination by, and dependency on, what American economist Paul Krugman calls the "core countries". These are the wealthy, industrialised Western nations which stood to benefit most from it.

But Asean states learned to adapt, and eventually benefited from waves of globalisation in the form of open trade, free flow of investment, relocation of manufacturing, effective transfer of technology and development of human resources.

Asean member states have become export-oriented economies and some of the "core countries" have found themselves on the losing end of globalisation.

Now they want to rewrite the rules of the game.

This is evidenced in the withdrawal of commitment to global trade deals, the redirection of investment to domestic Western economies, a rise in protectionist policies and an emphasis on a "my country first" philosophy. All these developments are potentially damaging to the Asean approach of welcoming and accommodating trade and foreign investment. As a result, FDI is likely to shrink and markets are showing signs of fatigue for foreign goods. It seems the global goodwill for Asean products is reaching a ceiling.

There are now unmistakable signs from the United States, a major dialogue partner of Asean, that the rules of the game will be changed. Major powers will pick and choose whether they engage with Asean as a group, or with member states on an individual basis. This is potentially damaging to the group's traditional collective-bargaining power, and represents a formidable challenge to the future of Asean.

Having replaced the EU, Japan and the US as Asean's largest trading partner, China has now chosen to reconfigure its relations with its southern neighbours. In doing so, Asean's agenda has been frustrated, its normal practices altered, and, its traditional solidarity undermined.

The next 50 years

On top of the rapidly changing global landscape, Asean faces fierce competition from other emerging economies. For the Asean Community to face the global challenges and survive increased competition, member states need to tackle key issues.

First, deliver on the agreed commitments. Asean has prided itself on achieving most of the legal instruments it set out to establish the 2007 Asean Charter, and the blueprints to make the Asean Community a reality. But what is lacking is the will to implement those instruments at the national level. In the past, we made do with accommodation and collegial compromises. This "Asean Way" of procrastination and evasion of responsibility will not work in the future. The global community would like to see delivery on the promise.

Achieving economic integration and making the region attractive under the Asean Economic Community blueprint is the most daunting. Connectivity is crucial. Asean has embarked on a Connectivity Plan to facilitate the transport of goods and people across the region, increasing the need for infrastructure financing.

The funding solution could lie in the creative mobilisation of the combined foreign exchange reserves of all the Asean member states, which exceeds $1 trillion. If the member states want to show commitment to the much-touted Asean Community, a mere 10% of the combined reserves would go a long way towards bridging the Connectivity Plan funding gap.

Expanded regional economic integration with larger nearby economies is crucial to our success and survival. The Regional Comprehensive Economic Partnership with six trading partners: China, Japan, South Korea, India, Australia and New Zealand must be concluded urgently. We are talking about turning existing bilateral trade agreements with these countries into one trading bloc.

There is also an urgent need for solidarity in Asean's dealing with external partners, whether in strategic and security matters, trade negotiations or global issues. If Asean is unable to develop a strong united stand, it will succumb to the strategic power plays of major nations. The regional grouping will risk losing the global trust and confidence it has carefully cultivated.

Asean should also rethink and broaden its definition of its "security and strategic" interests to reflect changes in the global arena. The grouping has been proud of its "centrality" and enjoyed its leadership role in the consultative processes of the larger Asia-Indo-Pacific region. The East Asia Summit (EAS), born in 2005 with Asean plus six states as participants, has been billed as "the leader-led political, security and strategic platform" of the region.

The US and Russia were included in 2010, but the EU has been kept at arm's length, largely because of the traditional perception that it has no geographical interest in the region and no capacity or desire to project force. But the reality is that the EU has been a major force for trade and investment in Asean for many years, and one of its top trading partners in recent decades. A seat for the EU on the EAS should be reconsidered by Asean.

Member states will have to better listen to a wider range of voices and concerns from their own people. Under its charter, Asean promises to be a "people-oriented organisation" with adherence to the principles of democracy and respect for human rights. But so far, Asean has been driven by political leaders and diplomats. But as individual states evolve and transform, people from all levels of society want to play a greater role in setting the future course of the regional body.

They will find out sooner or later that some states are benefiting more than others from the community. They will also inevitably discover that for them to benefit as much, it will require reforms in political governance and economic management. Without such reforms, and some will be painful, inequality among member states will remain. This will lead to a demand for change and reform at the national level, which will be best managed by a more open democratic system. However, many of the Asean member states are still resisting this growing demand for change.

Asean has survived many challenges over the past 50 years. The second half of the first century of Asean will require full ownership, active participation and meaningful contributions from all of its people.

Surin Pitsuwan is former secretary-general of Asean and former foreign minister of Thailand. This is an abridged version of his speech at the Asean media forum in Manila on Aug 4.

Surin Pitsuwan

Former Asean secretary-general

Surin Pitsuwan is president of the Future Innovative Thailand Institute (Fit), a former Asean secretary-general, and a former foreign minister of Thailand.

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