Circles and cycles of cooperation

14 November, 2015
As appeared in TheStar.com.my

asean

IN the theory of functional integration, the premise is that the benefit of cooperation would encourage deeper and wider working together which in the ultimate analysis will establish a community of common interest.

With evident and discernible benefit the propensity towards peaceful co-existence becomes greater than dysfunctional tendencies like conflict and war.

However, in a world of nation-states there are other driving tendencies which can subsume rational benefit. Thus it is a struggle to tame nationalistic pride which political leaders often opportunistically exploit.

There is nothing wrong in nationalism as long as it is harnessed towards positive nationhood but it becomes a problem in the world of nation states when it is used to expand the writ of the state beyond its recognised borders. (We shall not comment on when nationalism is abused to legitimise internal abuse: Hitler did both the external and the internal, and many have to a lesser or greater extent done so since, particularly as the cover for internal abuse).

In the world of nation states there are many circles of cooperative endeavour, even if the order is only of a society or an association, as there is no surrender of national sovereignty to a higher or supranational authority.

Yet there are approximations of such surrender for the good that can be obtained from functional integration, whether in the political, social or economic sphere.

It is in the economic sphere that such association is most pronounced as the benefits are evident and tangible. Thus through the global trade system, despite all manner of dissatisfaction with rules of incongruent benefit, the whole world has been uplifted. And through financial flows, first official then private and massive, which have driven economies and markets, even if accompanied by not infrequent reverses caused by poor economic fundamentals and investor sentiment.

It is this system the world lives by, exclusively since China adopted what it called capitalism with Chinese characteristics from 1978 and following the collapse in 1989 of the alternative offered by the now disintegrated Soviet Union.

China joined the World Trade Organisation (WTO) in 2001 and its economy has been growing by leaps and bounds to the point now that it is the second largest economy in the world. Emerging markets too, especially in East and South-East Asia have benefited greatly from the global economic and financial system to the point now, for instance, we can say Asean is the seventh largest economy in the world if it was one, and the fourth largest by the middle of this century.

With the growth of the economy, especially in China with its great size and past, comes expression of power both hard and soft, in the manner expressed by the US which has been the dominant world economic and military power at least since 1945. The world has been carved in the American image, Pax Americana being largely benevolent, although not always the case everywhere.

Disruption is the buzzword these days, used largely in reference to the way technology is transforming how humankind exists and relates at the personal and organisational level, but a greater disruption is being caused by change in the global political economy effected by the shift in geoeconomic and geopolitical balances.

While primarily this has to do with the impact on American predominance of China’s rise, there are also transnational forces destructive on the one hand (global terrorism) and constructive on the other (regionalism), which challenge the efficacy of the nation-state that remains the foundation of the world community.

However, it is the disruption of the global power shift from the United States to China that could cause the greatest disturbance to the world system, as its management and outcome would determine how all other disruptive forces are addressed.

It is not evident that both are clear about the epochal consequence of their relationship, especially at the level of their internal political system and thinking. This failure could drive global disruption that would undermine all the force for good disruptions in the world and enhance all the force for evil actions. It is not clear, in other words, there is leadership in both the US and China to navigate disruptive forces in their relationship.

It would be a good thing therefore if there was even more and deeper functional integration between the two in conjunction with other states.

Thus it would be a positive development if China was able to join the the TPP (Trans-Pacific Partnership) and America the AIIB (Asian Infrastructure Investment Bank).

It is so important that in the relationship between China and the US that there be a deflection from the greater interest in the muscular stuff, such as the test of resolve in the South China Sea.

Recently an American warship passed close to an atoll claimed by China, within what would have been its 12-mile territorial sea if it was considered to be an actual island. Nothing happened.

The US was trying to find out how good was the word of President Xi Jinping when he stated during his America visit last month that China’s sea claims and reclamation works were not intended to interfere with international freedom of navigation and overflight.

Furthermore the American action was intended to assure and satisfy other claimant states, such as the Philippines, of the US commitment and real presence in the sea which China claims to be its ocean.

There is also of course the need to demonstrate that American global interests can and will be projected to the domestic constituency that condemns China’s South China Sea claims and actions.

However, because there was no Chinese reaction on this one occasion, it does not mean that it will always be the case. It would be far better to work on positive sum than on zero sum games.

Positive engagement will not solve outstanding differences but it would create greater mutual confidence and help build a condominium of regional stability.

When things have gone too far, further accentuation would only polarise opposing parties further, sometimes into positions of no return. Thus, while the South China Sea disputes are really serious, efforts at confidence-building measures should not be abandoned, particularly putting the code of conduct in place as soon as possible.

There is thus some merit in China’s repeated statements about working together in the South China Sea even if issues of sovereignty in the many disputes cannot be resolved. It would be a good start, therefore, if China were to stop all further activities designed to establish a fait accompli in its own interest.

And, if China stops dragging its feet in concluding the code of conduct.

Meanwhile other seemingly unrelated initiatives should be pursued. The TPP and the AIIB, initiatives by the US and China respectively, offer just such an opportunity.

Recently, the Chinese media mused on China becoming a member of the TPP, while the president-designate of the AIIB Jin Liqun, in an interview with the Financial Times, invited both the US and Japan to become members of the AIIB.

Without underestimating the many difficulties involved – not least US Congressional opposition and obduracy – it would do the world of good if China was in the TPP and the US in the AIIB.

Having the other in each organisation, while instilling cooperation between the two powers, will also help limit the extent of their domination of both the TPP and the AIIB, which would be of benefit to the other member states.

Asean, which always prides itself on its centrality, would do well to work more actively on proving its centrality by initiating more strategic discussion when holding these big summits, like the ones coming up on Nov 21-22.

It is not too late to instigate such a discussion at the coming summits, especially at the EAS (East Asia Summit). After all it would not be a one-shot thing. What is important is to start such an Asean-driven discussion and to pursue it assiduously – and not just at set piece occasions. Wisma Putra should provide the Asean chair with the main strategic talking points at this last summit under Malaysia’s chairmanship, to get the ball rolling.

Tan Sri Dr Munir Majid, chairman of Bank Muamalat and visiting senior fellow at LSE Ideas (Centre for International Affairs, Diplomacy and Strategy), is also chairman of CIMB Asean Research Institute.