Sense and perspective in Asean integration

By Tan Sri Dr. Munir Majid
04 June, 2016
As appeared in TheStar.com.my

asean
THESE past couple of weeks or so have been replete with discussion on Asean.

The Minister of International Trade and Industry had a frank and open dialogue at an event organised by the Asean Business Club which focused on what is still not happening on the ground despite pronouncement of the Asean Economic Community (AEC) at the end of last year.

Some really very simple things – like Asean lanes at every major point of entry – remain to be implemented. Also, any visa requirement in intra–Asean travel is a travesty – especially when non–Asean nationals can gain entry without a visa. There is also the outstanding matter of the Asean Business Travel card.

The Prime Minister – in his opening speech at another event, the World Economic Forum on Asean – also alluded to these very simple things to realise.

It is embarrassing that we have to talk about these things in front of non–Asean foreigners, and yet call ourselves a community. It is about time they are cleared once and for all at the Asean summit in Laos in September. If Asean leaders cannot ensure they are done, it is a poor reflection indeed of proclaimed Asean integration.

There are, after all, more serious issues to be addressed, such as not only the stubborn existence of non–tariff measures but also their growth; such as the race to the bottom as individual members countries attempt to attract foreign investment; but perhaps most of all, how to give a life to the integration process that compensates for the anaemic growth of the world economy.

And how to enhance intra–Asean trade and investment, and generate domestic consumption in individual Asean economies.

There is also, of course, the thorny South China Sea issues which worry the Laotian foreign minister who was in Kuala Lumpur for a couple of the big discussion events. He will be chairing the next Asean foreign ministers in Vientiane in July. Clearly Laos wishes to avoid an acrimonious meeting, let alone one which ends in disarray like the one in Cambodia in 2012.

One positive development on this matter I picked up was an early prospective meeting on the Code of Conduct in the South China Sea – actually initiated by China, which has hitherto been dragging its feet on finalising the code.

If a target date for the finalisation of the code this year can be agreed on, it will remove perhaps the main source of disagreement among Asean states and set them to address more vigorously – and also more honestly – the so many outstanding issues of Asean integration.

Indeed, of all the events that took place in Kuala Lumpur, including the usual grand one by the World Economic Forum, it was the 30th Asia–Pacific Roundtable (APR) organised by ISIS Malaysia that was the most focused, substantive and sober.

It gave me such pride as a member of the board of ISIS Malaysia to see how the current chairman Tan Sri Rastam Isa carried through what was started by my dear departed friend and colleague Tan Sri Noordin Sopiee in 1987.

As I said at the APR when addressing the subject “The Asean Community in an Age of Contending Interests,” the most important thing is to have a sense of perspective in expectations of the Asean community.

Just because the community has been proclaimed, we all know it does not mean there is one. Not by a long chalk.

The Asean rhetoric may mislead, but it serves as a benchmark, many benchmarks, that make it very difficult for member states to act violently against the Asean community idea, however ill–formed. There is word and spirit capture.

Acting positively toward realisation of the community, however, is completely another matter. Too often too slow. Not always steady. And so frustrating, particularly to the business sector, although so many, especially from outside the region, have bought into the direction Asean is going.

If we remember Asean is an association of states seeking to become a community of nations, we would become less agitated. But impatient we must remain.

The modern nation state first established by the Treaty of Westphalia in 1648 remains the strongest social organisation in the world. If states that emerged then – nearly 370 years ago – still are driven by concerns of sovereignty and national interests, what more states born since the end of the Second World War, like almost all members of Asean, just 70 years ago.

The passionate and emotional Brexit debate is just the more observable evidence of the pull and power of statehood, which drive and permeate domestic policies and international relations.

At the same time, forces of globalisation integrate nation states and disrupt their condominium within and without. Social media enabled by the ICT revolution creates a marketplace for good and bad ends. Massive global financial flows riding on that technology can make or break economies, depending on whether they are coming in or going out.

Free trade is a good thing when you are gaining, not so good when you lose. Early proponents of free trade have become more resistant to it and those then deemed protectionist now are its champions.

America lost five million manufacturing jobs from free trade between 2000 and 2015. China’s gained from the time of its membership of WTO in 2001 and peaked at 234 million in 2012, and now has to make its own structural adjustments.

But from this blue-collar jobs hit, there will be more to come in the white-collar sector. The World Bank expects China to have 200 million college graduates by 2030 – more than the entire US workforce. American dominance in finance, medicine and IT will be under threat.

Meanwhile, massive trade and investment areas are being pursued, well over and above the AEC. The Trans-Pacific Partnership and the Regional Comprehensive Economic Partnership are not incompatible with the AEC, but they offer an affiliation beyond it, which would challenge the shopping and priority list of Asean member states.

Then there is the Free Trade Area of the Asia–Pacific, and even the Trans-Atlantic Trade and Investment Partnership, which will challenge Asean member states further.

China has its One–Belt One Road project, which is not just talk, with financial firepower to make it happen, such as through the Asian Infrastructure Investment Bank.

All this is intended to establish centrality, either for America or China. For as long as this intense competition does not break out into conflict, there are benefits which Asean member states will want to latch on to, which could place them in different competitive camps.

This does not mean the AEC is of no import. But what we must remember that all its member states face complex and complicated challenges from globalisation and great power rivalry.

Asean is a significant circle, level, layer and platform but its existence does not exempt member states from facing such challenges and having to make choices – more frequently as a nation state than as a community.

Fact of life. Good to cooperate and aspire. There are huge benefits to come. But it is also a dynamic world out there. Let us not be starry–eyed.

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.