ASEAN celebrates 50th anniversary

As a kick-off for the 50th anniversary of ASEAN (Association of Southeast Asian Nations), the organizations´ Foreign Ministers´ Retreat has been held on Boracay Island in the Philippines.

Since its foundation in 1967, ASEAN´s scope has developed way beyond the initial goal of economic collaboration within the region. Today, ASEAN fosters the development of its members and represents a strong and well-embedded international community. Its members have a total GDP of US$ 2.5 trillion, which makes it the 7th largest economy in the world.

In the Retreat, the ministers discussed about current threats for ASEAN, the future strategy, regional and international issues and the community building project “ASEAN Community Vision 2025”.

Evolving threats in a changing geopolitical environment

ASEAN´s success is built on the concept of multilateralism. Open markets and international collaboration are crucial for further growth. Thus, the ministers uttered concern about the current developments in international politics. The trend of major economies isolating themselves in a new form of nationalism rather than fostering multilateralism provides a challenging environment for communities such as ASEAN. The new US President Trump´s denial of the Trans-Pacific Partnership (TPP) or the UK´s Brexit attempt are the main precursors of this development.

The ministers are awaiting a statement from the US government regarding their future relation with ASEAN. So far, America´s future strategy in terms of Trans-Pacific relationships remains unclear as Trump has not made any official statement yet. However, in this relation ASEAN has a rather strong position. Its strategic importance for the US has developed as it has become USA´s 5th largest trading partner. ASEAN is the most important Asian destination for US foreign direct investments (FDI), significantly ahead of China and India.

According to the US Ministry of Commerce, exports to ASEAN countries support about 470,000 jobs in the country. An average ASEAN customer purchases 1.75 times as many US products as a Chinese and 9 times as many as an Indian.

As the strategic importance of this relationship does not only affect the US, but also ASEAN, the ministers expressed their hope for Trump to unveil his foreign strategy with ASEAN in the next few months. “We all recognize the fact that the American policy under the Trump administration is still evolving. We are however hopeful, that the policy that would come out will be positive. And we would hope that within the next few months we would see a more concrete and clearer picture”, the Philippine Foreign Secretary Perfecto Yasay told a news conference during the Retreat.

Such a clear picture is not only important for ASEAN in terms of economics. The ongoing territorial arguments in the South China Sea and the increasing military build-up of China and the US might lead to an unwanted military conflict between those two superpowers on ASEAN´s doorstep. An escalating conflict would not only be a threat for the region´s overall security, but also include the risk of tearing ASEAN apart between its cultural and geographical proximity to China and its economical proximity to the US.

Thus, the recent situation in the South China Sea is a major threat for ASEAN. The Foreign Ministers put a solution by conducting deescalating dialogues on top of their agenda. They are confident to reach an agreement and implementing a maritime code of conduct combined with a demilitarisation between the parties by June.

Besides those geopolitical threats, another challenge is the lack of equability within the community. Singapore has an income per capita of US$54,000 per year, whereas Laos, Myanmar and Cambodia combined have an average of less than US$2,000. This will be a major obstacle for a deeper ASEAN integration as the inequality is ubiquitous in all areas of the countries´ economies, politics and societies.

Annual strategy 2017 discussed

Besides those challenges and threats, the ministers discussed the annual ASEAN strategy for 2017. They identified six top priorities:

  1. People-orientation in ASEAN;
  2. Peace and stability;
  3. Maritime security;
  4. Inclusive and innovation-led growth;
  5. ASEAN´s resiliency; and
  6. ASEAN as a Global Player.

Furthermore, the intra-regional trade should be increased. The current numbers show only 25% of the total trade being conducted between ASEAN member countries and 75% with external partners.

Other topics under discussion were sustainable development, security challenges such as terrorism, piracy, or cyber security, natural disasters, climate change, irregular migration, trafficking of people and drugs, and improving cooperation with neighbouring countries and regions such as Korea, India and the Middle East.

A big portion of ASEAN future success depends on the success of the ASEAN Economic Community for cross-boarder trade and free movement of labour. According to a report of the Asian Development Bank, in cooperation with the International Labour Organization, this market integration could generate 14 million additional jobs by 2025.

BDG Insights

The current geopolitical developments are a threat for ASEAN. However, the organization has become well-established and integrated into international relations. Thus, we expect the region to overcome the current challenges without major negative economic impact. ASEAN is already an important strategic partner for the major global economies and too important to be excluded from the new US government´s international scope. However, it is not a question that the times have become rougher for every player including ASEAN.

An escalation of the conflict in the South China Sea would be a worst-case scenario for ASEAN, but cannot be in the interest of any one of the involved parties. The current security in the region has been a great achievement in the last decades and must not be undermined. China and the USA are two of the most important partners for ASEAN and a healthy relationship between the two is of utmost importance for the whole Southeast Asian region. ASEAN will take a leading role in the implementation of a code of conduct in this matter. 

Sources: 1, 2, 3, 4, 5, 6