The Search for Alternative Regionalism in Southeast Asia

by Jenina Joy Chavez

When the Association of Southeast Asian Nations (ASEAN) was formed in 1967, the original members did not have an a priori vision of what they wanted the Association to be. It would take another 30 years before the vision of an ASEAN Community1 would emerge. ASEAN members are now preparing to flesh this out in an ASEAN Charter.2

The ASEAN Charter has drawn a lot of interest among civil society and social movements who see the process as an opportunity to bring to the regional arena aspects of their advocacy that are regional in nature. Throughout 2006, many civil society groups expressed their aspirations for regionalism by submitting inputs to the Charter. Despite limited engagement with ASEAN in the past, the submissions were put together with relative ease because they are based on existing local, national and global advocacy.

It remains to be seen to what extent civil society input will be included in the Charter. ASEAN has largely been inaccessible to civil society, and is not known for initiatives that directly target broad sections of the ASEAN population. Many groups therefore question the value of engaging the ASEAN Charter process, or ASEAN itself.

The skepticism with ASEAN, however, is not generalised to the idea of regionalism and regional integration. Outside of Southeast Asia, there are many attempts at regional cooperation and integration. Recent examples from South America suggest that it may be possible to have “an integration of, and for, the peoples.” 3

This idea of alternative regionalism provides the motivation to engage ASEAN. Civil society members’ approach to ASEAN should be the same as their approach to their government, because they lay as much claim to what it does in ASEAN as in their country. With ASEAN, two major weaknesses provide the starting point for engagement. First, ASEAN has failed to identify a clear vision to guide regional integration. Second, ASEAN has also failed to act appreciably on issues requiring regional response. Addressing these weaknesses would be the first step towards building a regional community.

Integration without a Clear Vision

At 40, ASEAN is considered one of the most established regional groupings in the world. However, this staying power veils the absence of a clear vision for the region. ASEAN still has no strong identification with or articulation of regional interest despite its years. It has achieved success in cozy diplomatic relations that serves the interest and provides comfort to the political leadership of its members, but accomplishes little for its peoples. When it started to take economic cooperation seriously, objectives were limited to developing the region as a platform for third country exports and to attracting foreign investments into the region through trade liberalisation. Broader objectives beyond opening up were left behind. Initial dreams of regional import substitution or the development of regional production bases were abandoned. Most regional initiatives cater to big business, but there were no projects directly targeting basic producers and workers. As a result, ASEAN has yet to establish itself as a popular concept, and failed to elaborate its rhetoric to popular consciousness.

In its first 25 years, political security rather than economic cooperation had been ASEAN’s main focus. A voluntary preferential trading arrangement introduced in the late 1970s covered a measly two percent and five percent of intra-ASEAN trade in 1980 and 1986, respectively.4 It was not until 1993 that a more comprehensive ASEAN Free Trade Area (AFTA), through the Common Effective Preferential Tariff (CEPT) Scheme, was established as the key economic project of ASEAN. AFTA’s goal is the complete abolition of tariffs for the ASEAN-65 by 2010 and 2015 for the newer members, with flexibility on some sensitive products until 2018. To date, more than 99% of tariff lines in the inclusion list of ASEAN-6 are within the 0-5% range; almost two-thirds of which have 0% tariff. More notably, with the full inclusion of Malaysia’s completely built-up and completely knocked-down automotive units in 2004, there are no more ASEAN-6 products temporarily excluded from the CEPT scheme.6 A short list of highly sensitive agricultural products (e.g., rice for Indonesia, Malaysia, and the Philippines) has until 2010 to be integrated in the trade arrangement. Average tariff for the ASEAN-6 under the CEPT Scheme is now down to 1.87%.7

Yet even with AFTA, there had been marginal increases in intra-ASEAN trade since the 1990s. Intra-ASEAN trade as a percentage of total ASEAN trade is 22.5% in 2004.

Japan, the United States (US), the European Union (EU), China and Korea remain ASEAN’s largest trading partners, together accounting for more than 51% of ASEAN trade in 2003.8 Though CEPT tariff levels are generally far lower than those committed by ASEAN Members to the World Trade Organisation (WTO), intra-ASEAN trade is limited and the Association has not really paid attention to addressing such limitation. From its inception, AFTA was not seen as a vehicle to address the sluggish intra-ASEAN trade. Rather, it was designed to boost the competitiveness of ASEAN and to attract foreign investments into the region. The preferential nature of AFTA was not the main interest for ASEAN members. This is the reason why in some instances, WTO commitments are realigned to CEPT rates, as in the case of Singapore (complete liberalisation) and the Philippines (some CEPT rates become the most favored nation9 rates).

Another indication that a bigger intraregional market network is not the raison d’etre for AFTA or ASEAN is its involvement in a network of trade and investment arrangements outside the immediate economic integration initiatives the Association itself has initiated. Individual ASEAN member countries are involved in a total of 128 free trade agreements (FTAs) in varying stages of development. Almost two out of five of these agreements have either been signed or are under implementation. Singapore, Thailand and Malaysia have the most number of FTAs proposed, signed or implemented (See Table 1a). Outside of AFTA, ASEAN as a bloc is involved in six other FTAs with Australia and New Zealand,China, the EU, India, Japan and South Korea. The FTAs with Australia and New Zealand, India and Japan are under negotiation (with Framework Agreements signed with India and Japan). The ASEAN-China FTA is being implemented, initially with an Early Harvest Programme for Indonesia, the Philippines and Thailand; while the ASEAN-Korea FTA has been signed and is due for implementation in January 2007. The FTA with the EU is still under study. An East Asia Free Trade Area, covering the Plus Three countries (China, Japan and South Korea) and the other East Asian Summit countries (India, Australia and New Zealand), has also been proposed (See Table 1b).

That ASEAN seems to be uninterested in developing its own internal market is rooted in the extreme competition among its members. ASEAN’s response to the low level of complementarity in the region is to invite foreign investors and use the region as a platform for production and export. Meanwhile, national industries are eaten up by foreign capital, weakened or decimated, further diluting the possibility that ASEAN as a bloc would someday be able to speak of a regional capital and production base. While there are dreams for an ASEAN brand, it is not necessarily a dream for having regionally integrated production using regional capital selling to the region and using the region’s vast human and knowledge resources. Rather, it is to consolidate regional production networks that will make it possible for foreign investors to base all the different stages of production in the region, selling both to the region and outside.

Nor is ASEAN able to play a significant role in the different trade initiatives entered into by its members. In the WTO, ASEAN is not known to carry common positions even as some ASEAN members are part of various coalitions.10 ASEAN members in the WTO only came together to support the appointment of Dr. Supachai Panitchpakdi as Director General in 2002; and in December 2005 there was a joint proposal11 by ASEAN WTO members on the services negotiations. The Association was not, for example, able to provide substantial assistance to Cambodia in its accession process. In the end, Cambodia had to offer more than what existing WTO members offered initially, and give up many of the flexibilities it was entitled to as a least developed country (LDC). Overall, Cambodia “accepted limitations not only with respect to trade policies, but also limitations in other areas…associated with…rights to benefit from special and differential treatment.”12

 

 

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How do ASEAN members’ appetites for bilateral FTAs affect initiatives like AFTA? Do they strengthen or dilute them? The signed FTAs13 approximate the ambitions of AFTA and other ASEAN economic initiatives14 within periods very close to ASEAN targets, a clear indication that whether in trade, investments or services, ASEAN does not prioritise the region but uses it as the platform to get more deals from outside the region.

In short, the importance of engaging ASEAN on these issues lies not just on what it does, but also on what it does not.

Signing bilateral agreements is a country’s prerogative, but the absence of institutions in ASEAN to facilitate better coordination among members erodes not only ASEAN’s relevance as a bloc, but also weakens the negotiating position of its members. For the ASEAN-China Free Trade Area (ACFTA), there is an absence of mechanism for common positions to be developed, and most negotiations are done on a bilateral basis. This was the case when China separately negotiated terms of the Early Harvest Program with Indonesia, the Philippines,and Thailand. Lacking is the mechanism by which ASEAN members can process among themselves how concessions and/or commitments should be made, and how the group as a whole can be more supportive of the more hesitant or otherwise more economically vulnerable members. It is this deficiency that makes it difficult for ASEAN to develop harmonised region-wide positions in multilateral fora. It is even more difficult to come up with common policies to present to external partners, whether ASEAN is negotiating as a bloc or the members negotiating individually.

ASEAN places its strategic sights on steering East Asian regionalism, wanting to be a “winning gate to Asia”15 by securing linkages with the bigger Asian economies through the different FTAs. As mentioned, an East Asian FTA had been proposed, amidst thorny debates on whether or not non-Asians (particularly Australia and New Zealand) should be part of it. The proposal is already being challenged by yet another proposal for an Asia Pacific Free Trade Area, pushed as deserving serious consideration by no less than US President George W. Bush himself during the November 2006 Asia Pacific Economic Cooperation (APEC) Summit in Vietnam. While ASEAN and most of its East Asian partners led by Japan would want to consolidate East Asia first, the US is adamantly against it. The US view is articulated by former US Assistant Treasury Secretary Fred Bergsten who believes that instead of “draw(ing) a line down the middle of the Pacific”, both EAFTA and the Asia Pacific FTA should be implemented simultaneously.16 Now it becomes not just a question of whether ASEAN can be an effective driver for East Asia. It is also a question of whether ASEAN can stand up to the US and thwart its attempts to foil the already limited East Asian consolidation it hopes to steer.

Integrating Southeast Asia economically is a complicated process, one that requires the support of all sectors to succeed. Unfortunately, ASEAN’s way of integration is confined to opening up regionally, and opening up some more to outside the region. While this strategy may satisfy ASEAN’s desire to be integrated with its bigger neighbors, it does not capture the breadth of economic imperatives for the region. Integration success should not be limited to increases in trade or the economic growth rate, but should strengthen the region’s productive sectors. It is in this area that ASEAN fails miserably.

Weakness in Other Significant Trans-boundary Concerns

If in its more developed initiatives ASEAN does not hold a glowing record in terms of community building, it is a disappointment in most other areas. Inequality between and among members, intra-regional migration, internal conflicts and human rights, regional health, and regional identity – these are some of the issues where ASEAN response leaves much to be desired.

Inequality and the Development Gap.

The optimism about ASEAN’s ambitious economic initiatives is tempered by the stark realities in the region. Huge disparities in-country and among member countries exist. ASEAN is characterised by different stages of development and variable economic structures, ranging from the most open economy Singapore, to predominantly agricultural Laos and petroleum-based Brunei. Per capita income ranges between $191 for Myanmar and $25,209 for Singapore;17 while unemployment can be as good as 1.5% in Thailand and as bad as 10.9% in the Philippines.18

The distribution of the in-country growth achieved in the region in the last 20 years had been highly skewed. In the older Asian tigers Japan and South Korea, the richest 10% of the population captures a proportion of income that is only 4.5 times and 7.8 times more than the poorest 10%, respectively. In contrast, in the richest ASEAN countries of Singapore and Malaysia, the proportion is a high 17.7 and 22.1, respectively.19 The difference can be attributed to the relatively broader base of growth and planning in Japan and South Korea, and the narrower financial base of the nouveau prosperity in Malaysia and Singapore.

The lack of a broad vision constrains ASEAN from developing more appropriate, even activist responses to bridge the gap between members. ASEAN needs to better appreciate its own economic history. The fastest growth in Asia came from various experiments in the 1970s, 1980s and until the early 1990s. ASEAN benefited from these patently non-neo-liberal experiments, yet it is more than ready to set aside these lessons because liberalisation is now regarded as the key to growth and development. Not enough attention is given to facilitating the process of preparation and maturation for newer members, or even older members with weaker economies. There are no systematic catch-up mechanisms and/or programs for smaller (e.g., the CLMV countries or Cambodia, Laos, Myanmar and Vietnam) members. The assistance available now pertains mostly to technical assistance to help newer members cope with liberalisation.

ASEAN would do community building a great service if it starts to consider and implement programs that more proactively bring all members to a higher level of development, by seriously pooling alternative sources of development finance, and promoting economic and social policies that integrate the lessons of ASEAN’s own tigers.

Intra-ASEAN Migration. ASEAN has a population of more than half a billion people, and is home to one of the biggest migrant sending countries in the world (the Philippines). The economic changes in the last two decades, and long-standing internal conflicts in some countries, prompt the continuous rise of intra-ASEAN migration, and the increase in the population of undocumented intra-ASEAN migrants. Estimates place the number of undocumented Southeast Asian workers in ASEAN at 2.6 million. Majority of the undocumented migrants (82%) are Indonesians and Filipinos, and 83% of them are in Malaysia and Thailand.20 Aside from workers lacking official credentials to work legally in the countries of destination, refugees fleeing conflicts at home (e.g., Myanmar/Burma, Mindanao in the

Philippines) add to the numbers of undocumented migrants. Migration is an issue that ASEAN conveniently dances around despite its ability to create tensions among its members. There is yet to be a substantive recognition of the contribution of migrant workers to the economy, unless they are skilled and professional talents. ASEAN has initiatives towards mutual recognition arrangements (MRAs) of intra-ASEAN migrant professionals, but is silent on the issue of the mass low and unskilled or otherwise undocumented migration that persists in the region. Discussion of undocumented migration is limited to issues of trafficking in persons, a security concern.

A comprehensive discussion of migration is needed in ASEAN to (1) acknowledge the contribution of migrant workers in the region’s development; (2) address the social impacts of migration, including the need to protect migrants’ rights; and (3) come up with regionally acceptable mechanisms to tackle migration, and promote/protect migrants’ rights. Integration implies greater movements of people across the region, and provides an occasion for the socialisation of an ASEAN identity. And because ASEAN also exports workers to countries outside the region, a regional framework on migration will increase ASEAN members’ capacity to negotiate migration issues with those countries, especially the Plus 3 partners where a sizeable number of Southeast Asian migrants are undocumented.

Internal Conflicts and Human Rights.

Part of what is considered ASEAN success is the Association’s ability to mute political conflicts, and the absence of raging wars between countries in the region.21 This is a feat considering the volatile context surrounding ASEAN’s founding, and the involvement of some members in territorial disputes that have yet to find final resolution.

Yet internal conflicts, punctuated by struggles for self-determination, pervade and persist in the region. Aceh and Irian Jaya/West Papua in Indonesia, the south of Thailand, Mindanao in the Philippines, and Myanmar/Burma are conflict areas that ASEAN have so far neglected to discuss officially. Such internal conflicts affect ASEAN’s overall security, which can only deteriorate unless ASEAN stops hiding behind the principle of non-interference and starts discussing principles and mechanisms that will bind members to certain norms and standards (e.g., human rights). Ironically, some members find motivation to speak about the issue of Myanmar/Burma from the US expressed displeasure over the worsening situation, rather than on a clear commitment to facilitate transition in the country.

The issue of internal conflicts is related to the issue of democracy and human rights. ASEAN is known to have cuddled dictator governments in the past, and at present host two military governments. The concept of human rights is not something expressed explicitly in its official documents, and ASEAN remains the only regional association that has yet to establish a human rights mechanism. In fact not all ASEAN members have national human rights bodies (courts or commissions). Despite persistent advocacy for human rights in the region, ASEAN has not been particularly responsive, yet another reason why ASEAN peoples do not feel a strong affinity with it.

Regional Environment and Health. Southeast Asia is an environmentally diverse region that enjoys abundant land, mineral, forest, and aquatic resources. These resources often become the cause of conflict between governments and/or between their citizens. Increasingly access to these resources is being privatised, and negative externalities related to their exploitation are dealt with market mechanisms (polluter pays, etc.). The ASEAN approach to environmental resources tends to be piecemeal, and often contingent on the exigencies dictated by commercial needs (e.g., need to develop intellectual property regimes). What is needed now is a comprehensive approach that defines not only the rights of access, but also the responsibilities for stewardship, protection, and renewal.

On health, the threat and/or incidence of infectious diseases like HIV/AIDS, severe acute respiratory syndrome (SARS) and avian flu continues to increase in the region. There are various initiatives at the ASEAN level to address this, also in collaboration with its external partners and international institutions. To be more effective, there needs to be sharper focus on the welfare of ASEAN citizens rather than on the negative impact of these diseases to the economy (e.g., bad for tourism or agriculture).

Culture and Identity. The idea of ASEAN has to be explained to the people of the region, and this is best done by emphasising the regional aspects that can bring the peoples of ASEAN together. A common understanding of ASEAN’s proud history and legacy, promoted through the media and national and regional educational institutions, would be a good start. For it to go beyond a public relations campaign, new ideas and trends that define the region (mobility and migration, international labour solidarity) should be incorporated. The search for identity should not turn a blind eye to the phenomenal diversity ASEAN is known for, and instead should celebrate it.

Most importantly, identity is best ensured by common agenda that peoples of ASEAN can identify with. A platform for third country exports and attractor of foreign investments is hardly an appealing identity that will make the peoples of ASEAN support the idea of a regional community. For ASEAN to be truly people-centered or peopleempowered, key terms being mainstreamed in the Association these days, the political leadership of ASEAN needs to give attention to the issues of great concern to them. Mechanisms to ensure the equitable distribution of benefits of, and protection from the negative impacts of, integration; positive assistance from the bigger and stronger to the smaller and weaker members; the establishment of a regional instrument on migration; the establishment of a regional human rights mechanism; the protection of the regional environment; increasing the capacity of members to protect their citizens from regionally pervasive communicable or infectious diseases – these are some of the minimum initiatives ASEAN needs to institutionalise to be relevant to people. Failing this, ASEAN will remain a government-centered Association pursuing a floating dream of community, unable to foster an ASEAN identity that Southeast Asians will happily embrace.

Ways Forward for Southeast Asian Regionalism

Southeast Asia is a region of diverse peoples and cultures, of variable economic and political structures, and of uneven capacities and resources. The region’s diversity is often used as an excuse for many things, from the slow pace of democratisation to the shallowness of economic integration. But Southeast Asia is also home to common threats (e.g., environmental degradation, trans-boundary health problems), aspirations (e.g., rights, democracy), and needs (e.g., social development, economic growth). Developing common agenda around these threats, aspirations, and needs will be a big bold step towards defining a community. Embracing the common agenda is crucial in developing a regional identity. That is, a regional identity can be developed through a common imagination of a regional setup, something the region’s people can build together.

As an institution for regional community building, ASEAN is wanting. Its milestones have been alien to people, because it has proceeded with a very government-oriented perspective and involved highly-specialised groups. However, there are people and community issues involving ASEAN countries, and spaces to respond to these issues should be explored at the regional level. Being an inter-governmental body, ASEAN has the responsibility to represent the region’s people, and it should be taken to task for this responsibility.

In engaging institutions like ASEAN, the operative terms should be stakes claiming and demanding accountability. Evaluating ASEAN should lead civil society and social movements to the conception of alternative regionalism, including what kind of ASEAN will work for them. Presently, the process of creating an ASEAN Charter provides an opportunity for engaging ASEAN organisationally as civil society/social movements clarify what kind of regional alternatives will work for them.

However, the process of engagement should not be limited to and should not stop with the official process. ASEAN’s history is marked by the glaring absence of wide-ranging participation from civil society and social movements, and it is high time that the situation is rectified. The process must be taken to the people, the streets, the schools, the local communities. It is time to wrest the initiative from the political elite, and let the people define what kind of regional governance they want, and to articulate their vision for the region.

To be effective, regional engagement should have strong local and national foundations, and should complement global advocacies. It only makes sense that the issues brought to the regional arena are the same issues that groups promote in their own countries. At the same time, local and national advocacies should be given a regional articulation, not because it is a natural progression in campaigning, but because it can facilitate regional solidarity. Only in the spirit of solidarity can truly regional alternatives emerge.

 

Jenina Joy Chavez is Senior Associate with Focus on the Global South and heads its Philippines Programme. She may be reached at <This email address is being protected from spambots. You need JavaScript enabled to view it.>.

 

This article originaly appeared on “Revisiting Southeast Asian Regionalism,” published by Focus on the Global South in December 2006.

 

Endnotes

1 ASEAN Leaders, “ASEAN Vision 2020,” Jakarta: ASEAN Secretariat, 1997.

2 An Eminent Persons Group (EPG) on the ASEAN Charter was formed in December 2005 to draft recommendations on the content of the Charter. The Solidarity for Asian People’s Advocacy (SAPA) Working Group on ASEAN made three submissions to the EPG in April, June and November 2006. In coordination with SAPA WG on ASEAN partners, seven national consultative processes on the Charter and on general issues of engagement with ASEAN were also held between September and November 2006.

3 “Let’s construct a real Community of South American Nations in order to ‘live well’.” Proposal from President Evo Morales to the head of states and people of South America, October 2, 2006. Available online: http://www.integracionsolidaria.org.

4 See Jenina Joy Chavez, “Economic Integration in ASEAN: In Need of another Miracle” in Asian Exchange, 1997, vol. 13 no. 2, for a discussion of ASEAN’s early trade and economic integration initiatives.

5 ASEAN-6 refers to Brunei, Indonesia, Malaysia, the Philippines, Thailand and Singapore.

6 ASEAN Secretariat, ASEAN Annual Report 2003-2004 (Jakarta: ASEAN Secretariat, 2004).

7 ASEAN Secretariat, ASEAN Annual Report 2005-2006 (Jakarta: ASEAN Secretariat, 2006).

8 ASEAN Secretariat, ASEAN Statistical Pocketbook 2005 (Jakarta: ASEAN Secretariat, 2005).

9 Most Favored Nation (MFN) rates refer to the best tariff rates a country gives to all of its trading partners without discrimination; also WTO rates. This is distinguished from preferential tariffs, which are rates of concession a country extends to a smaller number of countries it has special trade arrangements with.

10 Indonesia, the Philippines, and Thailand are members of the G20, a coalition with strict focus on agriculture, specifically on the reduction of domestic support, tighter controls on export credits, and access to markets of developed countries. Indonesia and the Philippines take the lead in the G33, an alliance for special products and special safeguard mechanisms.

11 Brunei, Indonesia, Malaysia, the Philippines, and Thailand made a joint submission for the retention of the bilateral request and offer process and against the multilateral benchmarking system proposed by the developed countries (led by the EU and Japan). Under benchmarking, developing countries will be compelled to open up a number of sectors from among a few selected sectors. Under the request and offer method, WTO member countries set their own limits and are allowed to liberalise at their own pace.

12 United Nations Commission on Trade and Development, The Least Developed Countries Report 2004 (Geneva: UNCTAD, 2004).

13 FTAs are not limited to trade in goods but also cover services, and in some cases investments.

14 Aside from AFTA, ASEAN has also agreed to establish an ASEAN Investment Area (AIA) which will confer national treatment to ASEAN investors by 2010; and has signed the Framework Agreement on Services (AFAS) which envisions free flow of services by 2020.

15 “ASEAN: A Winning Gate to Asia!,” Address by ASEAN Secretary General Ong Keng Yong, 7^th ASEAN Forum, Jakarta, 6 December 2005. Available online: http://66.102.7.104/search?q=cache:PAjYcG4vOxIJ:www.aseansec.org/ 17985.htm+East+Asian+Free+Trade+Area+ong&hl=en&ct=clnk&cd=6

16 AFP, “US, Asia differ over free trade mechanics,” posted 01 December 2006. Available online: http://66.102.7.104/search?q=cache:_jbHG60GJ5AJ:www.channelnewsasia.com/stories/
afp_asiapacific_business/view/244682/
1/.html+east+asian+free+trade+agreement&hl=en&ct=clnk&cd=11.

17 Data are for 2004. ASEAN Secretariat, ASEAN Statistical Pocketbook 2005 (Jakarta: ASEAN Secretariat, 2005).

18 Data are for 2004. Asian Development Bank, Key Indicators 2005 (Manila: ADB, 2005).

19 United Nations Development Programme, Human Development Report 2003 (New York: UNDP, 2003).

20 Chris Manning and Pradip Bhatnagar, “The Movement of Natural Persons in Southeast Asia: How Natural?” in Working Paper in Trade and Development, No. 02/2004 (Canberra: ANU Research School of Pacific and Asian Studies Division of Economics).

21 For more detailed discussions of internal conflicts and human rights in Southeast Asia, see Herbert Docena, “Raising a Different Flag: Struggles for Self-Determination in Southeast Asia,” and Rashid Kang, “Democracy and Human Rights in ASEAN.”