At 50, Asean urged to take pride in achievements

As Asean prepares to celebrate its 50th anniversary this August, the regional organisation is deemed a “catalyst for peace” as it provides a platform for stability amid the tug of war between major world powers, says a veteran academic.

Asean faces a very challenging future as it is vulnerable to rising competition and rivalry between China and the United States, said Kishore Mahbubani, dean and professor of public policy in the Lee Kuan Yew School of Public Policy of the National University of Singapore.

Asean integration will be “torn apart” if member countries have to choose whether to side with Beijing or Washington, he said, citing how Asean foreign ministers could not agree on a joint communique over the South China Sea disputes in 2012, and the discord during the China-Asean meeting in 2016.

“My message to both the US and China is think of your long-term interest and it is in your long-term interest to see Asean hold together rather than break apart,” said Dr Mahbubani.

“It is very important for the business community of the region to understand that if you want this region to continue to grow and prosper, you have to keep Asean together.”

At its inception in 1967, there were doubts that Asean could last more than three years given the challenges prevailing at the time. They included how the five founding members — Malaysia, Singapore, Thailand, Indonesia and the Philippines — distrusted each other, “Konfrontasi” between Malaysia and Indonesia, separation of Singapore from federal Malaysia, the North Borneo dispute between Malaysia and the Philippines, and the Vietnam War.

But Asean’s success has been a combination of factors, said Dr Mahbubani. First, genuine fear is what holds the organisation together. Second, luck played a role as there were capable regional leaders in the early days such as Lee Kuan Yew, Mahathir Mohamad and Suharto. Even golf gets some credit, given the shared enthusiasm of so many political and corporate leaders in the region to hash out ideas on the links.

“It is shocking how few people in Southeast Asia appreciate the fact that one of the world’s greatest miracles is right here on our doorstep,” he said.

“You can go anywhere in the world — there is no corner of the world which is as diverse as Southeast Asia. To take the most diverse region on Planet Earth and make it peaceful is quite amazing. That is why Asean is a miracle.”

At the same time, the prospects for Asean’s future are amazing as the 10 members combined form the seventh largest economy in the world, which will become the fourth largest by 2050, said Dr Mahbubani.

Although no one can tell whether Asean will be as resilient in the future as it is now, the organisation has already developed one of its “hidden inner geniuses” through its distinctive development structure, he said. Asean’s development was slow “like a crab” in the past, he said, but progress suddenly leapfrogged, pushing forward regional economic prosperity like never before.

“The genius of Asean is that we do not try to resolve differences, [but] we live with them and we manage them on a daily basis. There is a very deep culture of pragmatism developed among the Asean countries,” said Dr Mahbubani, citing the Asean free-trade area as an example.

Asean will, however, always be an imperfect organisation as one should not expect the bloc to do something brilliant immediately, he said. “Never seek Asean’s perfection. It will be a good organisation despite its imperfections. Accept that what we have achieved so far is a miracle.”

While there is hope for more political and social harmony, optimism for improved economic growth prevails, mainly due to the export recovery among Asean countries, said John Chong, CEO of Maybank Kim Eng Group.

The Malaysia-based financial services group expects the Asean-6 economies — Malaysia, Singapore, Indonesia, the Philippines, Thailand and Vietnam — to expand by 4.8% this year, up from the estimated 4.6% in 2016, on the back of a trade rebound, higher commodity prices and improved global demand for electronic goods.

Infrastructure development is expected to be the main driver of economic growth for Asean, with tens of billions of dollars of projects to be developed over the next five years, he said.

Mr Chong believes integration among Asean economies has improved, as reflected in the increase in intra-regional foreign direct investment in recent years.

“What I would like to see more is [greater] intraragional trade. It was around 24-25% (of total trade) last year and it is about the same level [this year]. It is not just about the governments, but it also has to be about the private sector and corporates as well,” he said.

“We need to step up to be Asean multinationals in a sense that we need to do business not just in our home countries, but also in countries within Asean.”

Mr Chong has seen large corporate entities from Malaysia, Singapore, Thailand and the Philippines expanding into other regional countries and doing business with fellow Asean companies.

“We are seeing increasingly all levels of corporates, [but] I would not say the very small [companies] because they obviously still need to build their own markets. But definitely, the large corporates and midsized ones are branching out because there are obvious opportunities everywhere and, you know, in Asean every market has a different level of market development,” said Mr Chong.

Amid concerns of increasing trade protectionist policies, it is imperative that Asean continue to focus on “building bridges” and deepening integration, he continued.

In 2015, intra-Asean trade made up approximately 24% of the region’s total trade in goods and this number has remained relatively unchanged since 2007, said Mr Chong.

“We strongly believe that Asean’s resilience to geopolitical headwinds can be further bolstered by improving intra-Asean trade and strengthening connectivity within the region.”

“The genius of Asean is that we do not try to resolve differences, [but] we live with them and we manage them on a daily basis. There is a very deep culture of pragmatism” KISHORE MAHBUBANI Lee Kuan Yew School of Public Policy