ASEAN leaders

ASEAN’s leaders always have to do this at each summit. For extra nerd points, name the country each one is from! (Here’s a hint for #2.) Image source: Official Gazette of the Republic of the Philippines

In the name of unity, strength, and expanded markets, countries have been banding together into regional unions since World War II destroyed colonial empires and discredited old-fashioned international relations. The European Union (EU), with its common currency, multi-armed bureaucracy and regional parliament, is the most famous of these, and justly so — it’s the world’s 2nd-largest economy (or #1, depending on whom you ask) and has its own foreign relations. But there are other regional unions, too, with their own distinctive identities and cultures.

The Association of Southeast Asian Nations (ASEAN; pronounced asean, not eizien) is probably the 2nd-most important of these, even though only Southeast Asians and foreign policy wonks seem to know about it. But it’s an increasingly relevant and interesting group, so it’s high time for us to check it out.


Image source: ASEAN UP

Southeast Asia, above all else, is characterized by its diversity. Thanks mostly to its geography — with most of its people living on a series of islands scattered around the sea and the long Malay Peninsula being the only land link with the river-based kingdoms on the mainland — Southeast Asians went through most of their history without a sense of common identity or much interest in their neighbors. The Khmer Empire and, later, Siam might have dominated the mainland, and Srivijaya and Majapahit may have dominated the islands, but there was no pan-Southeast Asian identity until recently. Even religiously, the region isn’t on the same page: the mainland is fervently Buddhist while the islands mostly prefer Islam. The Philippines was converted to Christianity by Spain; Vietnam has its own religion strongly influenced by China.

The colonial era gave Southeast Asia a new sense of identity simply because almost everyone was colonized. India, to the west, was dominated by Britain; China, to the north, remained independent. Southeast Asia came under British, Dutch, French, Spanish, American and Portuguese rule. That marked it off from the rest of Asia, but it still didn’t do much to unify it. The real dawn of a sense of “Southeast Asia” came during World War II, when the region was finally unified by Japan. Even then, “Southeast Asia” was a term mostly used by foreigners.

In the postwar period, though, some Southeast Asians began to see common links and interests among them. The big concern then was Communism; Communist insurgencies plagued most of the area’s new countries after the war, and Indonesia had one of the world’s biggest and most active Communist parties. A Communist regime took power in North Vietnam in 1954 and went on to destabilize and interfere with its neighbors. The innately conservative leaders of Southeast Asia were worried about social unrest, economic collapse and an impending Commie takeover. America threw together a Southeast Asia Treaty Organization in 1954 to guard against this, but it only included Thailand and the Philippines (the rest were all foreigners!) and never amounted to much. Besides, after the struggle against colonists and Japan, Southeast Asians were eager to throw off foreign domination.

There were other impetuses behind the group’s formation. Indonesia and Malaysia went to war in 1963 over who would get northern Borneo. Malays in southern Thailand launched an (ongoing) insurgency in the hopes of secession. With the Communist threat looming, Indonesia’s new dictator, Suharto, was annoyed at the thought of petty squabbles like these distracting local leaders. He wanted to focus on the Communist threat and purged his country’s Communist party in 1965. He was the figure behind ASEAN’s creation in 1967.

Beyond the political motivations, ASEAN’s founders also had economic ambitions for their new union. It was meant to promote trade links and eventually create a common market for local goods. The original members — Thailand, Malaysia, Singapore, Indonesia and the Philippines — all had close links with the global economy and often their old masters and wanted to promote openness and cultural exchange. Tariffs were gradually reduced and protected sectors opened up until a free trade area was declared in 1992. (Meanwhile, tiny Brunei joined in 1984.) These ambitions ran into some difficulties due to basic economic realities, though: like the rest of the developing world, Southeast Asia is mostly rural, and depends on commodities and raw materials for its foreign exchange. It buys manufactured goods in return. This led it to try tricks like industrial investment projects involving components from different countries in ASEAN; they didn’t turn out very well.

Meanwhile, Communism was indeed held at bay (although the extent to which ASEAN was responsible for this is dubious). North Vietnam conquered South Vietnam and Communists took over Laos and Cambodia, but the results were stagnant, and none of the Communist insurgencies elsewhere in the region ever caught on. When the Soviet Union collapsed in the late ’80s and early ’90s, the Communist countries of Indochina had no leg to stand on. They opened up their economies, privatized many of their state-owned enterprises, and reversed collectivized agriculture. In the late ’90s, ASEAN’s old enemies joined the club, implicitly endorsing its liberal agenda. In a move that surprised many, even Myanmar, a non-Communist but closed, repressive, and impoverished country, joined in 1997. This makes ASEAN almost complete, encompassing all of Southeast Asia except East Timor.

ASEAN regularly holds summits and meetings of its members’ ministers, and occasionally meets with important foreigners (Americans, Indians, Chinese), but its meetings have a reputation for being staid, boilerplate and overall uneventful. But it made headlines recently for finally inaugurating the ASEAN Economic Community in 2015… on the very last day of the year.

The economic community was a long time in coming, although few predicted that it would actually come together in time. It aims to forge ASEAN into a single market and production base, encourage competitiveness and equitable development, and further integrate Southeast Asia into the global economy. And indeed, 70% of trade in the region is tariff-free. There are international rail, road, and energy infrastructure projects. The standards for some skilled positions have been unified, creating a common labor market and giving employers access to a broader base of talent.

To get the community going in time, though, involved a bit (O.K., maybe a lot) of fudging. Lim Hng Kiang, Singapore’s Minister of Trade & Industry, described ASEAN as “Like the swan, we do not always move forward. We sometimes go in rounds – but always gracefully.”

Non-tariff barriers to economic integration remain, from language tests for those skilled workers to quotas. There are still lots of protected sectors, even ones that are supposed to be open to competition across ASEAN — Indonesia protects its airlines, for example, and Malaysia shields its car industry. Except in Indochina and the Singapore area, few of ASEAN’s international transport links have come to fruition. The ASEAN Power Grid and Trans-ASEAN Gas Pipeline are only half-complete.

Southeast Asia’s biggest businesses tend to have cozy ties with the state, either via what’s called “crony capitalism” (as in Malaysia) or through state-owned enterprises (as in Vietnam). Industries are still in their infancy and governments feel obliged to protect them. Most of Southeast Asia’s businesses are small or medium-sized and can’t compete on a global scale. For all these reasons, ASEAN leaders only enact trade reforms when they want to. Intra-ASEAN trade still doesn’t make much economic sense, either. Singapore has been the local trading hub ever since it was founded in 1819, so it has been in the forefront of the drive to liberalize trade, but other countries trade more with China, Japan, or the West. Most Southeast Asian economies are part of a manufacturing chain with China, and there’s only so much lowering trade barriers can do.

As a result, ASEAN has developed its own culture of taking it easy and not enforcing the standards it sets. There is no penalty for breaking the rules. Unlike the EU, there is no political requirement — it started as a dictators’ club, and countries like Thailand and Vietnam are still staunch authoritarians. There is virtually no Brussels-style bureaucracy, just a small secretariat in Jakarta (the capital of Indonesia, ASEAN’s giant) with 400 employees and a budget of $17 million. ASEAN values consensus and harmony and avoids criticizing its members. This has led many (perhaps most) foreigners from writing it off as toothless.

Although ASEAN is primarily an economic union, it also has a big political component, which is why such a weird collection of economies has grouped together in the first place. It has been caught in the geopolitical tremors caused by the rise of China. Many of ASEAN’s members (Vietnam and the Philippines, and increasingly Malaysia and Myanmar) are worried about China’s growing assertiveness and its arrogance in diplomacy with the region. Vietnam and the Philippines, in particular, are embroiled in a dispute with China over the sea and islands between them and have been visibly drawing closer to America in response. But everyone also has close business and diplomatic ties with China and is nervous about too sharp of a break. Myanmar, Laos and Cambodia, in particular, are very poor and heavily dependent on China for infrastructure projects and development aid. When Cambodia hosted the ASEAN summit in 2012, Chinese pressure kept the group from issuing its usual joint statement. The same thing happened with a defense summit last November.

Part of the problem is a lack of leadership. France and (especially) Germany are the clear leaders of the EU, but history, geography and the aforementioned culture of consensus mean that the 10 countries of ASEAN rotate the chair each year and have equal power. Indonesia, with 40% of the area’s population and by far its biggest economy, would seem to be in a better position than Germany to dominate, but it lacks a history of imperialism, has a culture of diplomacy and persuasion, and is mostly inward-focused anyway. In fact, it’s been shown up by the small city-state of Singapore, which has a large, professional, English-speaking and culturally savvy diplomatic corps, a vision of economic and cultural integration, and a multiethnic composition that keeps nationalism out of the way. Thailand has been distracted by its political problems; Vietnam is a rising star catching up with the bigger economies, but still mostly focused on internal development and its relations with China and America.

This lack of cohesion, enforcement mechanisms, common culture, and failure to hold itself to strict standards has led foreigners to dismiss ASEAN as only a “talking shop” for heads of state to get together and compare notes with. It’s definitely nowhere near as coherent as the EU and doesn’t present much of an obstacle to Chinese ambition. If ASEAN wants to be taken seriously on the world stage, it will need to unite a little more.

I personally do not share the Western consensus of dismissal of ASEAN. It definitely has its problems, as I’ve pointed out, but sometimes I think the comparison with the EU gives rise to unrealistic expectations.

The EU has a fundamental common heritage and a shared trauma of conflict to pull it together. ASEAN lacks this. Myanmar’s people speak different languages, worship different gods, and have different cultures from, say, Filipinos. If ASEAN had stricter rules and standards, it would not have grown as fast as it did. ASEAN’s leaders welcome the club because they are treated fairly (as they perceive it) and face no overt pressure.

ASEAN’s founding declaration emphasizes things like “collaboration… on matters of common interest” and “assistance to each other in the form of training and research facilities.” It’s meant to provide for closer links between its members, which helped prompt a sense of common identity and gradually spread the ideal of open borders and free trade among its members. In this sense it has made great strides since its founding. When ASEAN celebrates its 50th anniversary next year, it can look back on decades of peace, economic dynamism, and the successful integration of Myanmar, Laos, Cambodia, and Vietnam — some of Asia’s poorest countries when they joined in the ’90s. No, it doesn’t have a common currency, but how could it? The gap between Myanmar (with $23 billion in trade) and Singapore (with $783 billion in trade) is just way too big.

Europeans also need to keep in mind that Asia has different cultural values. Democracy and public participation is not cherished as highly, especially not among the governing classes. Consensus and community are important. Cracking down on troublemakers and trying to clarify its culture and goals might alienate some members and even drive them out. ASEAN prefers to lead by example. It may lead to cheating and frustratingly slow progress, but I’m not convinced that it’s an ultimately ineffectual style. With the EU now mired in crisis and mutual hostility, ASEAN may even have something to teach the rest of the world.

ASEAN flag

The ASEAN flag. Guess what the bound stalks represent. Image source: World Flag Database


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