Association of Southeast Asian Nations · Opinion: Growing Stronger and Maybe Wiser After 40 by S. Pushpanathan

Opinion: Growing Stronger and Maybe Wiser After 40 by S. Pushpanathan

for NST Online
10 August 2007


Asean celebrated its 40th birthday recently. In the past decades, the organisation has had its ups and downs, good and bad times, writes S. PUSHPANATHAN, as he gives an accounting of its efforts and its hopes for the future THE Association of Southeast Asian Nations turned 40 on Wednesday. The last four decades of Asean history is a story of mixed fortunes. While Asean has brought about peace and stability to Southeast Asia and cordial relations with major powers of the world, regional integration has been sluggish.

One can argue that this is so because the main thrust of regionalism was more to establish a stable Southeast Asia so that countries could focus on economic development and nation-building after newly gaining independence. This thrust, supported by export-oriented economic strategies, did pay off for some of its members which experienced dynamic growth and development in the last four decades.

The admission of Cambodia, Laos, Myanmar and Vietnam into Asean by the turn of the century was a success story for the grouping as it brought all the 10 Southeast Asian countries into one regional fold. However, the development gap between the original Asean members and the newer members remains wide. Concerted efforts are being taken to bridge this gap since integration cannot be accomplished without addressing this issue.

The Treaty of Amity and Co-operation in Southeast Asia (TAC) of 1976 and the Treaty of Southeast Asia Nuclear Weapons Free Zone (SEANWFZ) of 1995 have bolstered peace and security in the region. TAC continues to serve as a major diplomatic instrument for governing inter-state relations in Southeast Asia.

Under the plan of action for strengthening the implementation of the SEANWFZ Treaty, Asean would look at accession to the International Atomic Energy Agency safeguard agreements and related instruments and specific regional projects such as networks for early notification of nuclear accidents, emergency preparedness and response, and strengthening capacity on nuclear safety issues.

One recent milestone for Asean security co-operation was the establishment and convening of the Asean Defence Ministers Meeting aimed at promoting dialogue, mutual trust, transparency and co-operation in security and defence matters. The co-operation would be outward-looking, given the need for Asean to play a pivotal role in Asia-Pacific. Areas for initial co-operation could include counter-terrorism and maritime piracy.

In the economic realm, the Asean Free Trade Area (Afta) is now virtually in place in the Asean-6 countries of Brunei, Indonesia, Malaysia, the Philippines, Singapore and Thailand. Tariffs have been brought down to 0 to 5 per cent for 99.8 per cent of all goods traded under Afta for these countries, and 91 per cent for the four newer members. All tariffs for Asean-6 will be eliminated by 2010, and by 2015 for the new members. The next immediate target of Asean will be to dismantle non-tariff barriers and reduce transaction costs through enhanced trade facilitation measures.

Similarly, the Asean Framework Agreement on Service of 1995 has helped to open up the sector through several rounds of negotiations. The services sector now contributes about 40 to 50 per cent of Asean’s gross domestic product, and it is increasingly linked to foreign direct investments. The Asean Investment Agreement of 1998 has assisted in promoting intra-Asean investment. It is being reviewed to identify and implement measures to make the region more attractive to investors.

Co-operation in areas such as agriculture, forestry, energy, transport, information technology and tourism has contributed to buttressing Asean economic integration. Finance co-operation has intensified, after the financial crisis of 1997-98, to put in place measures and initiatives to prevent and mitigate any future crisis. It is also increasingly focusing on supporting regional economic integration.

More has to be done to ensure that Asean timely implements commitments made in agreements, since only about 30 per cent of all Asean agreements have been ratified and implementation of commitments under these ratified agreements need to be more concerted.

In external relations, Asean has done well. It has engaged all key players and its major trading partners with resounding success. Strategic partnerships are in place with China, Japan, the European Union, India and the United States.

Almost all Asean dialogue partners have acceded to the TAC. This includes Asean’s neighbours such as Australia, China, India, Japan, New Zealand and South Korea as well as nuclear weapon states such as France and Russia. The United Kingdom and the EU have formally expressed their intention to accede to the TAC.

The Asean Regional Forum (ARF) has kept the US and major powers engaged with the region. While confidence-building measures continue, the ARF has taken the next big step to look into preventive diplomacy.

This includes issues such as denuclearisation, disarmament and control of chemical and biological weapons. Non-traditional security issues have also been incorporated into the work of the ARF, reflecting its dynamic nature. Counter-terrorism, disaster relief and energy security are some areas that ARF is now focusing on.

Free trade agreements (FTAs) are being negotiated with several key trading partners of Asean. China is the pace-setter with the conclusion of the trade in goods and services and soon, the investment chapters of the Asean-China FTA.

South Korea is close behind with the signing of the trade in goods chapter and soon the services chapter of its FTA with Asean. Other FTAs between Asean and its other dialogue partners such as Australia and New Zealand, the EU, India and Japan are at different stages of negotiation. With the US, Asean has concluded the Trade and Investment Framework Arrangement, which could be the first step towards an FTA between the two in the future.

Besides, Asean has become the hub for regional processes. The Asean+3 co-operation between Asean and China, Japan and South Korea, which started in 1997, has paid dividends. Co-operation covers about 20 sectors, the most prominent being finance co-operation where the Chiang Mai Initiative for bilateral swap arrangements is in place to assist needy countries in financial situations. Creative ways should be devised to utilise the massive financial reserves in East Asia to support Asean integration so that Asean can truly play the driver’s role in integrating East Asia.

The East Asia Summit (EAS) is the new dimension of East Asian co-operation and includes the participation of the Asean+3 countries, Australia, India and New Zealand.

The EAS is a leaders’ driven forum which uses existing mechanisms to promote co-operation in priority areas such as energy, finance, education and natural disaster.

The next 10 years is going to be crucial for Asean as it builds its community. Asean needs a change in mindset and heart to do this and will have to work harder. It has to think and act as one region to stay relevant and competitive in an increasingly dynamic and integrated world.

Asean has to leverage on its collective strength so that it can strike win-win partnerships with emerging economic giants such as China and India, while continuing to work with its traditional partners such as the US, the EU and Japan.

The promising initiatives and efforts of Asean, including the Asean Charter and Asean Economic Community Blueprint, are only as good as their implementation. When implemented, the benefits to the region and members will be substantial. A people-centred, responsive and rules-based Asean Community will then emerge and celebrating Asean anniversaries will have special meaning to the people of Asean.

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*S. Pushpanathan is principal director for the Bureau of Economic Integration and Finance in the Asean Secretariat, Jakarta. The views expressed here are his own.

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