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New Challenges Confront ASEAN

Pranamita Baruah is Research Assistant at Institute for Defence Studies and Analyses, New Delhi.
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  • May 04, 2009

    The collapse of the ASEAN Summit in Pattaya (Thailand) on April 11 following anti-government protests tarnished Thailand’s image. It also brought the regional group’s age-old policy of non-interference in the domestic trivials of a member state under question. The incident impeded ASEAN’s strategy to define a common approach to current global financial crisis. The Pattaya incident also demonstrated the ineffectiveness of ASEAN as a regional organization.

    During the current era of change, the 42 year old ten-nation organization consisting of Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam, continues to be dawdling monolith weighed down by expectations and its own effectiveness. This year, expectations were particularly high after the adoption and ratification of the Association Charter during 2007-2008. While trying to forge an EU-style community, the new Charter aims to establish a single market economy by 2015 for the region inhabited by 500 million people. The Charter also proposed to promote a ‘rule-based, people-oriented’ ASEAN “in which all sectors of society will be encouraged to participate in and benefit from ASEAN integration and community building”. The Charter is definitely a positive symbol and can provide a stronger basis for the organization to proceed. But at the same time, it is crippled by a lot of drawbacks. Today’s ASEAN needs to get its act together in facing future challenges (global and regional) such as the financial meltdown and maintaining competitive capability vis-à-vis the rising economic dynamism of India and China. The organization also needs to take a leading role in institution building within East Asia and to achieve that goal, ASEAN needs to make its member states work together more closely.

    Unfortunately, the newly adopted Charter provides very little in addressing such issues adequately. The absence of non consensus decision-making mechanisms and vagueness of stipulated sanctions for noncompliance are two big disadvantages of the Charter. Despite its call for the establishment of a human rights body to ensure states’ adherence to the Charter’s principles, it remains unclear about how much power the human rights body will have to enforce the principles.

    While commenting on the Charter, the network of more than 40 civil society organizations responsible for monitoring the work of ASEAN under the umbrella of the Solidarity for Asian People’s Advocacy (SAPA) Working Group on ASEAN stated that it was “a disappointment [since] it is a document that falls short of what is needed to establish a people-centered (ASEAN).” This assessment is correct to the degree that in all the chapters relating to the work of the ASEAN Summit, ASEAN Coordinating Council ASEAN Community Councils, or the ASEAN Secretariat, no clause mentions the involvement of ‘the people’. There is no mention of the establishment of any institutionalized mechanism allowing civil society to contribute to ASEAN’s decision making process either. So, the ‘people centered’ principle of the Charter still seems to be a vision and far from actually being implemented. Given that it was basically written by government officials of the member states and not by civic groups, instead of ‘people oriented’, the new Charter of the ASEAN remains highly state centric. Interestingly, some of the member states of the organization are aware of these shortcomings of the Charter.

    The scrapping of the ASEAN Summit in Pattaya definitely disappointed those with high expectations. During the Summit, the ASEAN was planning to ask its dialogue partners to offer financial and technical aid to build modern public infrastructure in all member states. The association also had plans to ask the latter for a larger pool of well-trained workers, particularly at the technical and professional levels, to achieve equal development. With a view to promoting and enhancing people’s participation in the ASEAN community-building process, ASEAN leaders were expected to meet with representatives from regional non-state actors as well.

    Concerns about growing protectionism among ASEAN member states whose exports amount to 70 percent of GDP, were also expected to be raised. Among the deals that were set to be signed during the Summit was the creation of a $120 billion pool of Forex reserves accessible to member states to defend their currencies. A framework agreement worth $455 million between state utility firm PT PLN and the Bank of China for the 3 x 300 MW project in Teluk Naga in Tangerang was also proposed to be signed during the Summit. But the cancellation of the Summit has delayed the signing of these key deals. Now, while the member states have agreed to finalize the $120 billion deal in the upcoming Asian Development Bank (ADB) meeting in Bali to be held during May 1-5, the PT PLN-The Bank of China agreement is to be signed, also in early May.

    After six years of negotiations, India decided to sign a free trade agreement with ASEAN in January 2009. Under the proposed FTA, which was to form the world’s second largest FTA after the ASEAN-China FTA of 2007, both India and ASEAN committed to liberalize 95 percent of trade in goods. About 75 percent of trade in agricultural and industrial goods was proposed to be reduced to zero by 2012, while tariffs on another 10 percent products was to be eliminated by 2015. The sensitive items constituting the remaining goods were to be renegotiated. The proposed FTA would have been quite instrumental in boosting Indo-ASEAN trade relationship. Unfortunately, due to the current general elections, India ultimately decided to delay the inking of the deal further. The implementation of the tariff cuts will now be postponed by more than a month, depending on when the new government decides to sign the pact. Industry leaders, however, strongly favour India’s entry into the FTA with the ASEAN as soon as possible.

    At present ASEAN enjoys a trade surplus with India (in 2007, ASEAN exports to India reached $24.66 billion, while imports from India stood at $12.42 billion). With exports being slashed by 16 percent in January, due to a slump in demand for Indian goods overseas, it is felt that Indo-ASEAN FTA will boost Indian exports. Such an FTA seems highly imperative to counter rising protectionism as well. The Assocham has suggested India pitch for stronger economic ties to trade in services with ASEAN, as India has global competitiveness in service exports with a share of 2.73 percent in world exports of commercial services, while ASEAN is a net importer of such services. However, all these expectations have come to a naught after India’s decision to postpone the inking of the agreement. The postponement has drawn concerns from the present chair of the ASEAN-Thailand. Thailand now has to seek new ratification from the parliament for any new date of signing. Nevertheless, recently, while trying to make the organization more relevant in today’s world, India’s External Affairs Minister Pranab Mukherjee has called on ASEAN member states to come forward in resolving rising terrorism in the region. Failure to do so could destroy the possibility of it forging stronger economic ties with India, feels Mukherjee.

    At present, ASEAN’s biggest problem can be found in its hesitation to move toward greater institutionalization, toward a more legalized way of doing things and resolving problems, toward a greater commitment to enforce compliance. Although initially it was hoped that the new Charter would be able to address these defects, the flaws in it have once again managed to frustrate those who wish for a more progressive and effective ASEAN.

    However, the greatest challenge facing ASEAN comes primarily from within. The internal problem became quite evident by ASEAN’s inability to hold its 14th Summit on December 13-17, 2008 as scheduled because of political turmoil in Thailand. The postponement of the Summit dealt a serious blow to the birth of a ‘new’ ASEAN marked by the launch of the ASEAN Charter. The situation worsened further with the emergence of signs of distrust among member states when they openly questioned the readiness and ability of Thailand to host the Summit. After the Pattaya mishap, it is not inconceivable that some members would be more than happy to see Thailand relinquish its right to host the Summit. If that were to happen, ASEAN would face even greater uncertainty with regard to the future of democracy in the region. Non-democratic states would use this as an example of how democracy in a member state can have negative effects on ASEAN as a whole.

    In 2009, ASEAN’s greatest challenge will probably stem from the growing assertiveness of some members, notably Laos and Myanmar, in ensuring that ASEAN does not deviate from its current conservatism. The extent to which ASEAN will be able to keep its promise of promoting and protecting human rights will remain an uncertain for ASEAN. As far as external challenges are concerned, while tackling issues like the ongoing global economic crisis, the rise of China, ASEAN will fight hard to arrest the decline in its effectiveness as a coherent regional organization.