THE PHILIP­PINES LEADS 50-YEAR- OLD ASEAN

What’s nec­es­sar­ily good for ASEAN may not be so for the Philip­pines.

Business World - - OPINION - JEMY GATDULA

Many events hap­pened or are hap­pen­ing si­mul­ta­ne­ously. The hu­man­i­tar­ian mis­sile strike in Syria, the US-China sum­mit, North Korea’s mis­sile test­ing, ISIS, China’s mil­i­ta­riza­tion of the South Pa­cific, to the re­vived Abu Sayyaf and the height­ened dru­gre­lated mur­der rate in the Philip­pines. All of which, quite in­ter­est­ingly, seem to be in­ter­sect­ing within one in­ter­na­tional group­ing’s am­bit: ASEAN (As­so­ci­a­tion of South­east Asian Na­tions).

The Philip­pines, of course, took chair­man­ship of ASEAN last Jan­uary 2017. Which is quite fit­ting as this year marks the 50th of its found­ing and the Philip­pines af­ter all is an orig­i­nal mem­ber. The 30th ASEAN Sum­mit will also be held in Bo­hol next week.

ASEAN is not with­out its up­sides: in 2000, around 14% of the ASEAN pop­u­la­tion lived be­low the poverty line. A mere lit­tle over a decade later, this num­ber was slashed down to 3%.

So eco­nomic growth is cer­tainly there. And with the rest of the world’s eco­nomic pow­ers, i.e., US, EU, China, and Ja­pan com­ing into si­mul­ta­ne­ous slumps, an ASEAN of 630 mil­lion peo­ple (and gate­way to South Asia’s 1.7 bil­lion), many from the youth de­mo­graphic, should be the most at­trac­tive place right now for busi­ness.

That is, un­til one gets a closer look: un­equal devel­op­ment and ca­pac­ity in terms of in­fra­struc­ture, fi­nan­cial reg­u­la­tion in­sti­tu­tions, un­even ad­her­ence to the rule of law and re­spect for hu­man rights make it hard for in­vest­ments to come to ASEAN as the in­te­grated uni­fied group it mar­kets it­self to be. Con­se­quently, busi­ness con­tin­ues to look at ASEAN more by its in­di­vid­ual com­po­nents.

It is also not help­ful for ASEAN mem­bers to prac­ti­cally pro­duce and of­fer al­most sim­i­lar prod­ucts and ser­vices, thus making them — in a way — nat­u­ral com­peti­tors rather than com­pli­men­tary part­ners.

One sees this in the Tran­sPa­cific Part­ner­ship, with Brunei, Malaysia, Sin­ga­pore, and Viet­nam ea­gerly em­braced in that trade agree­ment, while others — Cam­bo­dia and Myan­mar — loudly won­dered if a di­vide and rule pol­icy had just been car­ried out.

Not that Cam­bo­dia and Myan­mar are un­fa­mil­iar with the con­cept. Along with Laos, th­ese three coun­tries have been quite

un­abashedly rep­re­sen­ta­tive of China’s in­ter­ests in ASEAN. Cam­bo­dia, most no­to­ri­ously, block­ing an ini­tia­tive by the Philip­pines to have a com­mon ASEAN stance with re­gard to the West Philip­pine Sea dis­pute.

Then there are the dis­trac­tions that 2017 is ex­pected to bring: na­tional elec­tions are ex­pected in Sin­ga­pore and, per­haps, po­lit­i­cal dis­cord could sud­denly force one in Malaysia as well. Thai­land would nat­u­rally hope to fo­cus on sta­bi­liz­ing its demo­cratic sys­tem, while lo­cal elec­tions are ex­pected for Cam­bo­dia and In­done­sia. Myan­mar and Viet­nam has its own prob­lems in terms of ques­tion­able gov­er­nance.

The Philip­pines would know, of course, be­ing no stranger to dis­trac­tions. And for the cur­rent ad­min­is­tra­tion, it is prov­ing that is not lag­ging be­hind its pre­de­ces­sors in this ac­count: the con­tin­u­ing con­tro­ver­sial “war on drugs,” the in­abil­ity to solve traf­fic, an un­wieldy Cabi­net (and sub-Cabi­net) team, an un­nec­es­sary push for fed­er­al­ism and to amend the Con­sti­tu­tion, and an un­cer­tain econ­omy that clearly looks like its be­ing af­fected by all the fore­go­ing.

Pres­i­dent Duterte seems to have touched on a pos­i­tive note when he led the Philip­pine chair­man­ship launch last Jan­uary. He harped on his usual theme of “in­clu­sive­ness,” which is right as ASEAN is in­deed plagued by sub­stan­tial in­equal­ity. He also did right in point­ing out the need to de­velop gen­der equal­ity across the re­gion. Stud­ies have re­peat­edly shown that bet­ter care and ed­u­ca­tion for women re­sults in an across the board im­prove­ment for a coun­try’s health, ed­u­ca­tion, and econ­omy.

As for the former, his strat­egy hinges around de­vel­op­ing mi­cro-small-medium en­ter­prises (MSMEs), which he refers to as “the back­bone of the ASEAN’s col­lec­tive econ­omy.” His stated “ob­jec­tive is to build the ca­pac­i­ties of MSMEs to make them ac­tive and com­pet­i­tive play­ers in the na­tional, re­gional, and global economies,” which again seems right as MSMEs ac­count for around 95% of ASEAN busi­ness es­tab­lish­ments.

The prob­lem is that what’s nec­es­sar­ily good for ASEAN may not be so for the Philip­pines. One sees this in the dis­united timid­ity with which ASEAN con­fronts China. The same goes for eco­nomic and devel­op­ment mat­ters.

For gen­der equal­ity, the Philip­pines al­ways had high marks and is re­spect­fully con­sid­ered one of the top places in the world for a woman to live and work in.

As for MSMEs, all well and good. OFW in­fused cap­i­tal could cer­tainly ben­e­fit from lower taxes and bet­ter credit. But what’s nec­es­sary for the Philip­pines is the strength­en­ing of its cor­po­rate giants, giv­ing them enough fi­nan­cial and com­pet­i­tive power and lever­age to play against other multi­na­tion­als in the re­gion. This re­quires im­prov­ing our in­fra­struc­ture, youth train­ing, bet­ter tax­a­tion, rule of law, and cut­ting of red tape. As for the lat­ter, how a pro-ac­tive com­pe­ti­tion com­mis­sion fits in re­ally re­mains to be seen. In any event, again all this is in­de­pen­dent of ASEAN con­sid­er­a­tions.

Re­ally, per­haps the best out­come of Philip­pine chair­man­ship of ASEAN is sim­ply the quiet hand­ing of the reins to Sin­ga­pore in 2018.

JEMY GATDULA is the in­ter­na­tional law lec­turer at the UA&P School of Law and Gov­er­nance and a Philip­pine Ju­di­cial Academy law lec­turer for con­sti­tu­tional phi­los­o­phy and ju­rispru­dence. je­my­gat­dula@ya­hoo.com www.je­my­gat­dula. blogspot.com face­book.com/jemy.g

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