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Saturday, November 17, 2007

ASEAN Charter - Slowdance

Nov 16, 2007
Half-step back, two steps forward
By Janadas Devan

EVERY country in Asean - even the most successful, even the largest - is a price-taker, not a price-maker, in the international system.
One purpose of the price-takers coming together in a group is to ensure they are not fleeced individually. Asean will not become a price-maker in the foreseeable future, but it can avoid being collectively gouged if it becomes more integrated.

Despite all the criticisms that have been made of the group on the economic front, it has done rather well on the international scene. By dint of being one of the oldest and most persistent regional organisations in Asia, it has become the pace-setter in regional diplomacy.

Asean+3 - which brings together the 10 Asean states with China, Japan and South Korea - is one of the few forums in which those three North-east Asian states meet. The East Asia Summit - which is essentially Asean+6, bringing together Asean+3 with Australia, India and New Zealand - is another rare forum.

In each case, it is Asean, not one of the major Asian powers, which forms the hub of these wider regional constellations. By such means, though it is not a price-maker, Asean has been able to influence, if not shape, the rules and practices by which even the price-makers have to abide. Not bad at all for an organisation that has often been accused of being no more than a talk shop.

Asean will be better able to secure its future once it completes its economic integration by 2015, as is currently envisaged. As Mr Ong Keng Yong, Asean's secretary-general, noted in a speech last year, a 2002 McKinsey study, commissioned by Asean economic ministers, had concluded that the grouping 'has the 'intrinsics' to be competitive on a global scale, such as its market size and growth, liberal economic policies, educated and skilled labour, natural resources and others'.

The region is currently 10 fragmented markets. McKinsey had predicted that economic integration would increase the region's GDP by at least 10 per cent and reduce its operational cost by at least 20 per cent. As Mr Ong noted, that translates into an additional GDP of US$50 billion (S$72 billion) annually - or more than a third of Singapore's current GDP in purchasing power parity terms.

Economics will drive this region. Power will flow, not only from the barrel of a gun - that reality can never be discounted - but also from GDP. Asean as a whole is now the third-largest economy in Asia, after Japan and China.

In the near future, it will probably slip into fourth place, after India. With a combined population of 500 million, there is no reason why Asean should not be able to hold its own in a region destined to be dominated by four powers - the United States, China, Japan and India. But it can hold its own only if it becomes economically and politically integrated.

Asean leaders all recognise this truth. That is why they have agreed to an Asean Charter setting out the rules and norms that all members would adhere to. Due to be approved at next week's Asean summit in Singapore, the Charter will help nudge the group towards a closer union.

Putting that Charter into practice, however, will not be easy. As it is, news agencies that have seen the text of the Charter have reported that the document does not contain some provisions that had been sought by those who had favoured faster integration.

Asean will retain its consensus decision-making process and will not abandon the principle of non-interference in fellow members' internal affairs. The former may slow the process of integration and the latter may make it difficult for the group to intervene forcefully in situations like today's Myanmar.

The Charter will also not include a proposal put forward by a group of 10 South-east Asian statesmen that would have allowed Asean to censure, suspend or expel members that flout the organisation's rules on trade issues and human rights.

A senior Asean diplomat told this newspaper: Though the existing Asean principles on these matters 'will not be changed, how they will be implemented in practice will change and in fact have already been changing for some time'.

An example was Asean's decision to establish a human rights commission despite the objections of Myanmar and, initially, of Vietnam, Cambodia and Laos. Asean survived that abandonment of consensus decision-making. Hopefully, there will be more such instances.

This example, however, reveals the difficulties the group will face as it moves towards integration: There are huge dissimilarities among the Asean states. At one end, there are enormous countries, like Indonesia, with 235 million people, almost half of Asean's population; at the other, small countries, like Brunei. At one end, there are First World economies, like Singapore; at the other, poor ones, like Cambodia. At one end, there are democracies, like Malaysia; and at the other, one-party socialist states, like Vietnam.

The European Union constellation of four more or less similarly sized large powers - Germany, France, Britain and Italy - and a collection of a number of more or less similarly sized small states does not prevail in Asean.

For that reason, for 40 years of its existence, Asean has had to alternate one half- step back for every step forward that it took.

With the Charter, it may now be able to alternate one half-step back for every two or three steps forward.

In Asean terms, that would be revolutionary.



Economics will drive this region. Power will flow, not only from the barrel of a gun - that reality can never be discounted - but also from GDP.

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