asean

You don’t have to be an expert in Asian affairs/global economic development to be aware of the Association of Southeast Asian Nations (ASEAN). US non-government and research groups alike have acknowledged the importance of this geopolitical bloc today and in years to come. There are even breakfasts being held on Capitol Hill by the US-Asia Institute and US-ASEAN Business Council on “The Role of Southeast Asia in the US Recovery and US Investments in ASEAN.” More than that, the Obama Cabinet has addressed a foreign policy pivot to Asia.

It may seem like ASEAN has formed in recent years due to the media buzz, but in actuality it was first established in 1967. Obviously the association has evolved tremendously since. Underpinning ASEAN is the slogan “one vision, one identity, one community.”

But what is the deal with the AEC? More like, what is it? Even though I work surrounded by people with advanced knowledge on ASEAN advancement, I am still just a farang confused by some concepts. I know it’s something like the EU–but not. Truthfully, I fear making the comparison now that the EU carries a more negative connotation (in light of the economic downturn).

I first turned to a coworker for some insight on the AEC. My coworker is Thai, but also German educated. Already holding a masters degree, she will soon head back to school for a PhD. She’s an expert in issues related to trade and services.

In any case, she explained how the ASEAN Community is broken down into three pillars: political-security community (APSC), economic community (AEC) and Sociocultural community (ASCC). These three pillars were first laid out in 2003. However, the idea behind a “concert of Southeast Asian nations, outward looking, living in peace, stability and prosperity” was envisioned in 1997.

But in 2003 there was an agreement to form an ASEAN Community by 2020. To reach this goal, the three pillars above would be carried out. The first of these pillars to be reached is the AEC, expected by 2015. According to my coworker, they chose this first because it is the easiest to accomplish. By and large, ASEAN leaders can agree on lower trade barriers because they all benefit. On the other hand, negotiating for a more integrated political and sociocultural community brings more difference of opinion. Thus harder to come to an agreement.

The AEC aims to transform ASEAN into a single market and production base by 2015 by establishing free flows of goods, services and foreign direct investment, as well as freer skilled labor and cross-border capital flows.

I asked my coworker about a single currency. According to her it had been introduced at one point, but is not a part of any formal plans. Last year people from the EU came into TDRI (where I work) to talk about financial crisis, the whole time pointing to their economic model initially employed. Maybe they were brought in as an example of what not to follow. Or perhaps warn of what could go wrong if certain steps are not taken; if routine checks are not made.

It will be fascinating to see how events unfold with ASEAN coming together into one “community” despite cultural, religious and political difference. To think of how diverse two countries like Myanmar and Singapore are is mind-blowing, where Myanmar has been isolated from outside influence over the last few decades and Singapore obtained economic prowess almost entirely through foreign direct investment. Also, comparing Brunei to Laos– where Brunei has a Sultanate and Laos identifies as Communist– is jaw-dropping. How can nations so different merge?

Will economic integration by 2015 be successful? And will all three pillars be reached by 2020? I cannot say if and how integration will turn out. But I do think the ASEAN bloc will be quite different from the EU example.

 

Image Credit – Published by the ASEAN-Japan Center

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