Here’s to a politically astute Asean

It is strong political cohesion among member nations in Asean that have kept grouping together through thick and thin. MANY would recall Bill Clinton’s slogan, “It is the economy, stupid.” Ceteris paribus (all things being equal), this phrase can be applied to Asean as an economic community.

By BA Hamzah – 18 November 2014 @ 8:09 AM

THE TIES THAT BIND: It is strong political cohesion among member nations in Asean that have kept grouping together through thick and thin. MANY would recall Bill Clinton’s slogan, “It is the economy, stupid.” Ceteris paribus (all things being equal), this phrase can be applied to Asean as an economic community.

The argument is: for Asean to achieve a respectable level of economic integration, it has to deepen intra-Asean trade in goods to at least 50 per cent (25 per cent in 2010; about 67 per cent in the European Union). This will be a tall order.

In short, the competition between Asean countries, for example in the manufacturing sector, is stiff, and this could undermine the goal of regional integration as an Asean economic community (AEC).

Not only is intra-Asean trade minimal, cooperation in the services, labour and financial sectors is equally dismal.

For many critics, achieving the much-talked about Asean Economic Community by the end of next year is an uphill struggle, but not for the lack of trying. The problem lies with the inherent regional economic structure; nine member states remain largely agrarian.

Only Singapore has achieved an industrial-state status.

Significant improvement in intra-Asean trade in goods, for example, is unlikely within the next 365 days (Jan 1 to Dec 31 next year); after all, the figure has remained stagnant in the last 47 years (1967-2014)! However, if 2015 is seen as an important milestone in a long journey, where Asean leaders can take stock of their achievements so far, few would be troubled by its shortcomings.

This is not an indictment of Asean political leadership or its industry captains; they all want more trade. However, the market structure is prohibitive. Thus, Malaysia should not be blamed if Asean fails to realise its dream of a single integrated market by early 2016. The challenge for Malaysia as chair for next year is to facilitate market integration and ensure that the political climate in Asean remains robust and friendly.

This calls for creative leadership that balances the external threats to regional security with internal problems and crises (e.g., political violence and human rights issues) that could split Asean. Currently, intra-Asean trade in the manufacturing sector, for example, is dominated by three countries: Singapore, Malaysia and Thailand. Trade between them amounts to almost 70 per cent.

Asean is essentially an interstate regional organisation. The governments of its member states have done their best to facilitate trade between members by bringing down, for example, the barriers to trade. However, actual business in a market economy depends on the private sector, the business community that thrives on profit making.

If the level of intra-Asean trade is used as the only measure of regional integration, Asean is a failure. However, since its formation in 1967, the primary unwritten premise of Asean has been political and security. Here, Asean has achieved a respectable measure of success. In Karl Deutsch’s term, Asean has attained a security community status.

Asean was born against the background of political tensions in the region (the Vietnam War, military dictatorships and the unfortunate Sukarno’s policy of confrontation, among others). Asean leaders promised at Bangkok that they would not resort to war as a national policy. This promise was further enshrined in the 1976 Treaty of Amity (Asean Concord 1), where member states pledged to solve their differences by peaceful means with or without economic integration.

Article 10 of the 1976 treaty binds member states not to undertake “in any manner or form, participate in any activity which shall constitute a threat to the political and economic stability, sovereignty, or territorial integrity of another High Contracting Party”.

As Asean expanded, it became necessary to reaffirm its commitment to regionalism. Through the 2003 Declaration of Asean Concord II (Bali Concord II), Asean leaders made a solemn declaration to establish an Asean community based on three pillars: Asean political-security cooperation, economic cooperation and social-cultural cooperation.

At the same time, the leaders took pains to uphold two major principles in interstate relations: non-interference in the internal affairs of member states and consensus in decision-making. Both principles can be at odds with Asean’s aspiration for an economic community.

The thrust of Asean cooperation has been primarily to promote security and political cooperation, and it remains essentially so to this day. It is unfortunate that many take regional peace for granted. They have forgotten that Southeast Asia was “once an area of turmoil, of mutual suspicion, of mutual hostility, of mutual dislike, even of mutual disinterest”.

Milton Osborne described Southeast Asia in the late 1960s as a “region of revolt”.

Where we are today is a measure of success and a testament of political maturity, and commitment to peace by our leaders. True, there were a few worrying border skirmishes along the 47-year journey, but fortunately, no leader has lost his/her cool and resorted to force as a solution. On the contrary, member states should be complimented for resolving disputes by peaceful means, through negotiations and by resorting to judicial mechanisms, like arbitration.

A few examples would suffice.

Thailand and Cambodia re-sought the help of the International Court of Justice (ICJ) last year to redefine their boundary around the Preah Vihear Temple. The case was first referred to the ICJ in 1962.

Malaysia and Indonesia took their long-standing territorial dispute to the ICJ to determine the sovereignty and ownership of the islands of Ligitan and Sipadan (judgment in 2002).

Similarly, Singapore and Malaysia sought the help of the ICJ to determine the ownership and sovereignty of Pulau Batu Puteh/Pedra Branca (judgment in 2008), which first came into the open in the 1970s.

In 2003, Singapore and Malaysia appeared before the International Tribunal on Law of the Sea (ITLOS) in a land reclamation case (decision rendered in 2005).

Most recently, in October, the Permanent Court of Arbitration at The Hague made a ruling on the Malayan Railway Land in Singapore that Singapore and Malaysia had submitted for arbitration.

Such territorial disputes would probably result in wars elsewhere. The resolution of the territorial disputes was possible only because of the high level of political maturity and cooperation within Asean. Clearly, the ties that bind Asean are politics.

The chemistry between the leaders is critical to the peace and security in Asean. However, political cooperation should not be taken for granted. Complacency can also undermine Asean’s political cooperation that is being challenged at two levels: internally and externally.

Internally, violations of human rights in Myanmar, political violence in South Thailand and in Mindanao, the Philippines, can engulf the whole region, they can put member states at odds with each other. Similarly, externally, political cohesiveness could be threatened if member states are entangled in “proxy wars” in the South China Sea.

Without strong political cohesion, Asean might as well bid farewell to the economic community. It is politics, stupid!