ASEAN AT A CROSSROADS
As the regional grouping goes into its sixth decade, it will require better cooperation to manage the movement of people, threats
ASEAN has enjoyed a relatively successful and prosperous first 50 years. A key milestone is the establishment of the Asean Free Trade Area, which laid the foundation for the Asean Economic Community (AEC), one of the three pillars of the Asean Community.
The time is now to chart a roadmap of key issues of regional importance for the next five decades. To ensure continued success, the regional grouping needs to further consolidate economic integration, capitalise on favourable demographic factors and channel today’s tech-savvy youth to harness the digital revolution.
Against the backdrop of growing anti-globalisation and protectionist sentiments across the world and an unpredictable Trump administration in the United States, it has become imperative to maintain economic growth for continued stability and prosperity in the region.
As such, intra-Asean initiatives like the AEC as well as regional initiatives, such as the Regional Comprehensive Economic Partnership (RCEP), will be the cornerstone in making Asean the bulwark of an outward-looking Southeast Asia, championing trade liberalisation and engaging the rest of the world.
The successful completion of RCEP will link Asean, a market of 630 million people, to its six partner countries — China, Japan, South Korea, India, Australia and New Zealand — creating a bigger market of 3.5 billion people.
In recent years, Asean has been growing by around five per cent a year, ushering the rise of a huge middle class. The Asian Development Bank estimated that by 2030, nearly half a billion of Asean population will be classified as middle income. Asean can perform better, with a potential growth rate of seven per cent, if member states align their interests with the Asean community agenda. At the start of last year, Asean was the seventh largest economy in the world. At the beginning of this year, that rank improved to sixth, and by 2020 it is predicted to be fifth.
Asean enjoys a demographic sweet spot and governments of member states must take the right measures, such as restructuring the educational curriculum to ensure the youth are better prepared to take on jobs of the future, before the population starts to age by 2025. The 630 million citizens of Asean are very young (although Singapore and Thailand are ageing).
As the working-age population grows in number, it will not only boost the region’s spending, but also increase its savings and, hence, its capacity to invest. Investment should be made in human capital. To maintain dynamic growth, we cannot rely on natural resources and unskilled labour but have to aim for sustainable development and equitable growth, through increased productivity and innovation, to move up the value chain.
Asean’s rapidly growing economy and population needs to be accompanied by a strong strategy for sustainable development. The region is facing a myriad of transboundary environmental issues such as haze, water and land pollution, along with dwindling forest cover.
However, Asean’s balancing act between environmental sustainability and economic development will be made more challenging because of region-wide social inequities as member states are in varying stages of development, and the growing middle class only adds to the increasing consumption of resources and de-generation of the environment and biodiversity.
As Asean goes into its sixth decade, the world stands on the cusp of a digital revolution, driven by technologies, such as artificial intelligence, machine learning, autonomous vehicles, ubiquitous mobile Internet and accelerating progress in genetics, materials science and ultra-cheap automation. Asean has the potential to enter the top five digital economies in the world by 2025.
Moreover, implementation of a radical digital agenda could add US$1 trillion (RM4.2 trillion) to the region’s gross domestic product (GDP) over the next 10 years. With a large and youthful population increasingly equipped with smartphones, Asean has an opportunity to pioneer the development of new digital services, especially advanced mobile financial services and e-commerce.
A recent report from Google calculates that the region’s online population is expanding by 124,000 new users every day — and will continue at this pace for the next five years.
With the digital economy comes tough questions about ways to navigate the accelerating pace of technological change and digital disruption. In terms of job creation, we have to ensure that the Asean population is equipped with the right skills.
To this end, there is an urgent need to update educational curriculum, retrain teachers, bring computer and Internet not only to rural areas but also to urban lower middle class and below for more digital inclusion.
The dynamic movement of people in Asean will also attract increased drug and human trafficking, and other kinds of transnational crime will rise. Looking ahead, Asean security and police authorities will require a stronger framework of cooperation in managing the consequences of this movement of people.
What are the applicable legal regimes? We do not have them yet. Member states are still caught up with arguing about sovereignty issues. The problem is getting acute. Extremism and terrorist activities need to be checked and threats eradicated. This requires cross-border cooperation
and effective legal measures. Considering the geography of the region and the fact that we are now equipped with increasingly sophisticated technology, only a concerted Asean agenda will prevent the grouping from imploding in the next 50 years.
Apart from these internal challenges, there are the geopolitics and prevailing strategic and security circumstances as well. Asean’s diversity, culture, history and society is legendary. Going forward, how the member states manage external relations will decide its enduring qualities and effectiveness. Will it be a regionalism revolving around a risen China or harking back to the principles underlying Asean’s Zopfan (Zone of Peace, Freedom and Neutrality) initiative of the 1970s? Or could it be an orientation to preserve the international order as we know it today with Asean able to play a balancing role?
Asean is not perfect. Community-building is a learning process. There is no alternative to this inter-governmental regional grouping to enable the Southeast Asian nations to engage external powers and states beyond the immediate neighbourhood. We need to accelerate Asean’s visionary plans to realise an open, inclusive and peaceful region to secure its future.
The writer is executive deputy chairman of the S. Rajaratnam School of International Studies (RSIS), Nanyang Technological University, Singapore. He was Asean secretarygeneral from January 2003 to January 2008
However, Asean’s balancing act between environmental sustainability and economic development will be made more challenging because of regionwide social inequities as member states are in varying stages of development...
In recent years, Asean has grown by around five per cent a year, ushering the rise of a huge middle class.