Asean needs leadership in 2019

The high chance that Thailand’s general election will be postponed from Feb 24 is disappointing news to me. Hopes that poll-related activities will brighten the gloomy economic picture are fading and uncertainties are mounting about the country’s return to democracy, long a concern of outsiders.

The delay also bodes ill for Thailand’s chairmanship of the Association of Southeast Asian Nations (Asean) for 2019. With the election date not settled, the current government will be busy with domestic preoccupations. There won’t be much time left for pushing the development agenda of the regional bloc forward, especially at a time when Asean needs strong leadership. Tensions between the United States and China, uncertainty surrounding Brexit and the slowing global economy all represent challenges to our region.

Elsewhere in Asean, Indonesia goes to the polls in April and the Philippines has a midterm contest in May. Key trading partners India and Australia also have elections this year.

Thailand is no stranger to chairing Asean as it is a founding member, but its turn in the rotation this year comes at a time of domestic, foreign and wider regional and global challenges. Bangkok’s ties with western countries have been complicated since the 2014 coup and the transition to democracy bears close watching, especially in the context of the country’s relations with the US.

Regionally, the 10-member Asean will be working hard to sustain its economic momentum. The growing regional market of 630 million consumers, with a GDP per capita of about US$6,500 (excluding Singapore, the region’s only developed economy), has been experiencing demographic changes, particularly in Singapore and Thailand.

For a start, the workforce is about to shrink in some rapidly ageing economies. That makes it necessary to improve the productivity of current manpower and the quality of the education system, while immigration policies must be adapted to meet demand and supply in each country’s job market.

While domestic political challenges such as the Rohingya human rights crisis in Myanmar have drawn attention from outside, Asean as a whole also needs to address geopolitical stability. Some member states are enmeshed in territorial disputes with larger powers. China’s claim to territory in the South China Sea, for example, overlaps with competing claims by Brunei, Malaysia, the Philippines and Vietnam. All those involved, including China, have been talking for years about a “code of conduct” but it has still not materialised. Meanwhile, China has colonised vast tracts of the sea and is now protecting its illegitimate claims with military bases.

On the economic front, inclusive growth is an issue for Asean as member states span a wide spectrum of income levels, ranging from GDP per capita of $57,714 in Singapore to $1,384 in Cambodia and $1,298 in Myanmar. Even though lower-income states have made important gains in recent years, regional economic gains have fallen short of erasing significant differences among member states.

According to the most recent 2017 edition of the World Bank Global Findex, 98% of adults in Singapore and 85% in Malaysia had a bank account, compared to just 22% in Cambodia and 26% in Myanmar. These disparities illustrate the need for broad, robust investment in infrastructure, financial institutions and strategic planning.

While further regional economic integration is required, Asean members must thrive for greater integration with the global economy through massive multilateral free-trade agreements (FTAs) being negotiated. Some members have joined the revised Trans-Pacific Partnership (TPP), while talks for the Regional Comprehensive Economic Partnership (RCEP) continue. A successful conclusion to the RCEP would help reduce an over-reliance on one or two major trading partners as geopolitical friction intensifies globally.

To continue to thrive as one of the fastest-growing regions globally, Southeast Asia must be innovative and resilient. Digital technology will play a catalysing role. Asean is home to the world’s fastest growing population of internet users, with more than 125,000 new users forecast to come online every day through 2020.

Almost all of that growth will come via mobile use, and it has the potential to stimulate new industries, leapfrog legacy business models and fundamentally change the lives of millions of people. However, technology adoption varies greatly among Asean countries, and there is a need to build a regional internet infrastructure.

Given the importance of pushing the regional development agenda forward, one hopes domestic issues do not distract some countries from larger goals. Thailand, in particular, is no stranger to turbulence and has proved resilient in the past. How current domestic events play out could help determine whether the country can assert leadership in Asean in 2019.