Spotlight: Asean - SE Asia’s ‘talking shop’ turns 40

The foreign ministers of the Association of Southeast Asian Nations last week proposed that August 8 should be celebrated annually in the region as Asean Day to mark the day of its founding in 1967 in Bangkok. The move was an attempt to emulate the European Union’s designation of May 9 as Europe Day.

But while Asean is only a decade younger than the EU, it is still struggling to erect much of the organisational framework that has given the EU its cohesion and strength. The group’s first mini-constitution will be submitted to the leaders of the 10 member states in November, 40 years after Asean’s establishment.

Asean lacks a parliament, a court system or the equivalent of the European Commission. There are doubts whether it will even be able to achieve its goal of creating a full-scale common market by 2015. Little wonder that critics have long dismissed Asean as a talking shop.

The reason why Asean has followed a different path from the EU is that it was not originally an economic grouping but a cold war security organisation designed to counter communist insurgencies in Indochina in the 1960s. The five founding members (Indonesia, Malaysia, the Philippines, Thailand and Singapore) all had anti-communist governments and sought to create an united front to overcome conflicts among themselves.

Only a few years earlier, Indonesia and Malaysia had been fighting a guerrilla war against each other on the island of Borneo. Singapore had been kicked out of a brief union with Malaysia because the ethnic Chinese city could not get along with the country’s ethnic Malay rulers. The Philippines was laying claim to parts of Borneo while Malaysia complained about communist insurgents hiding along its border with Thailand.

Given their tangled history, the Asean five adopted the policy of non-interference in each other’s domestic affairs. It has remained the group’s guiding principle, known as the Asean Way. But this principle has been blamed for the organisation’s weakness. The fact that most of the Asean countries had authoritarian governments also made it difficult for them to give up national sovereignty to a regional body.

The group’s headquarters was placed in Jakarta, signifying Indonesia’s status as the largest Asean member and a reward for ending hostilities with Malaysia. But Asean quickly entered a period of drift. Its leaders met only once every five years until 1992.

Asean’s inactivity did not really matter since the region was booming. By the 1980s, south-east Asia had become the favoured destination in Asia for foreign investors because of cheap production costs and a welcoming attitude to multinationals.

But, from the early 1990s, there was a growing realisation within Asean that the rise of China (and later India) meant that they would have to work harder to attract more investment in the future.

Thailand proposed tariff cuts on intra-regional trade of manufactured goods in the first significant step towards economic co-operation. By 2005, the system was in place although it was plagued by numerous exemptions. It has done little to boost foreign investment, which instead has stagnated, although internal trade has more than doubled since 2000.

Meanwhile, Asean expanded, with Brunei joining in 1984, Vietnam in 1995, Burma and Laos in 1997 and Cambodia in 1999. Expansion has brought new problems, particularly with the inclusion of Burma, because of its poor human rights record. Burma’s presence has complicated Asean’s ties with western countries, including a proposed trade pact with EU, while it has been an opponent of such reforms as setting up an Asean human rights commission.

The addition of the Indochinese countries and Burma also has widened the gap between rich and poor Asean countries, which threatens to slow further market reforms such as plans to expand the common market to cover services and capital flows by 2015.

Asean leaders will meet in Singapore in November to consider Asean’s proposed charter, which is meant to give the organisation more powers. The founding five states favour majority voting to replace consensual decision-making, and sanctions on members guilty of serious charter violations.

Asean has achieved more success in transforming itself into the main hub for bilateral trade pacts in Asia, not a surprising development since 75 per cent of its trade goes outside the region. Asean is negotiating trade agreements with China, Japan and South Korea and wants to extend that network to India, Australia and New Zealand.

But whether those deals will lead to more foreign investment will largely depend on Asean getting its own house in order. It is only then that Asean will have something to celebrate every August 8.

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