Business / The Association of Southeast Asian Nations (ASEAN)
The Association of Southeast Asian Nations (ASEAN)
Introduction
What is now known worldwide as the ASEAN, or the Association of Southeast Asian Nations, is an organization of countries in the region, sworn to promote common interests (Albert, 2017; NTI, 2017). Five original member countries banded together on August 8, 1967 in Bangkok to form the political, security and economic bloc they named the ASEAN. These founding members were Indonesia, Malaysia, the Philippines, Singapore and Thailand. Brunei Darussalam became the sixth member country in January 1984. They were later joined by Vietnam on July 28, 1995; Laos and Myanmar on July 23, 1997; and Cambodia on April 30, 1999 (NTI, 2017). This brought the organization membership to 10, with a regional total population of close to 640 million as of last year and a combined GDP of $2.57 trillion (Albert, 2017). The rationale of the coming together of the five original countries was to attempt to control conflicts in the region and to ward off a then imminent threat of communist insurgencies at the peak of the Vietnam War. These original members sought to establish political and social stability in the face of these threats. In the pursuit of regional peace, cooperation and friendship, these founding members signed the Treaty of Amity and Cooperation in 1976 (Albert, 2017).
Membership, Objectives, Fundamental Principles
Regional Forum Membership (ARF)
In addition to its 10 regular members, the ASEAN lists Papua New Guinea as observer and 27 ARF members (NTI, 2017). These ARF members are Australia, Bangladesh, Brunei Darussalam, Cambodia, Canada, China, European Union, India, Indonesia, Japan, Democratic Peoples’ Republic of Korea, Republic of Korea, Laos, Malaysia, Myanmar, Mongolia, New Zealand, Pakistan, Papua New Guinea, Philippines, Russian Federation, Singapore, Sri Lanka, Thailand, Timor Leste, United States, and Vietnam (NTI, 2017).
Aims, Purposes and Objectives
The first of two objectives is to accelerate regional economic, social and cultural growth and development by means of joint measures motivated by equality and partnership (NTI, 2017). These measures or initiatives shall aim at strengthening peace and prosperity in the regional community. The second objective is to promote peace and stability in the region in the spirit of justice and obedience to the law in interrelating among members. It also pledges itself to the principles of the United Nations Charter. Through their heads of State, the member countries affirmed their commitment once more in 1995 to the organization’s fundamental goals of cooperative peace and common progress and prosperity (NTI, 2017). The third is to collaborate and extend mutual assistance to fellow members in economic, social, cultural, technical, scientific and administrative matters (ASEAN, 2018). The fourth is to provide training and make available research facilities for educational, professional, technical and administrative purposes. The fourth is to collaborate in the more effective use of member countries’ agriculture and other industries; trade expansion, specifically in addressing issues involved in international commodity trade; improvement of communications and transportation facilities; and raising living standards. The fifth is to promote Southeast Asian studies. And the last is to maintain close ties with current international and regional organizations, which share the same ends, and to seek out ways of deepening that cooperation with them (ASEAN, 2018).
Fundamental Principles
The 1976 Treaty of Amity and Cooperation or TAC, which the member countries signed during their first summit on February 24, 1976, set forth these fundamental principles (NTI, 2017). Henceforth, these were to guide the High Contracting Parties in their interrelations with one another.
The first is mutual respect for one another’s separate sovereignty, independence from other member countries, their equality, separate territorial integrity, and individual national identity as nations. The second is their right to separate national existence and their freedom from any form of intrusion, coercion or overthrow. The third fundamental principle binds all member countries to keep off the internal affair of one another. The fourth commits them to settling disputes and differences only by peaceful means. The fifth fundamental principle renounces force and the threat of force. And the sixth and last fundamental principle is to effectively cooperate with one another (NTI, 2017).
First Initiatives
After attaining a membership of 10, the ASEAN embarked in steps to enhance regionalism (NTI, 2017). In 1995, it signed a nuclear-free zone in the region, which committed itself to the non-use of nuclear weapons in the air, land and sea (NTI, 2017). It signed six free-trade agreements with other regional blocs for the purpose of economic integration (Albert, 2017).
Organizational Thrust
A president is selected from among the member country heads every year on a rotation basis (Albert, 2017). A secretariat performs the administrative functions of the organization at its official headquarters in Jakarta, Indonesia. The member countries convene to consult and form consensus on the matters in the agenda. Their decisions are guided by their solemnly sworn principles of non-interference into one another’s internal affairs and only a peaceful approach to disputes. Experts perceive this non-interference slant and focus on consensus and voluntarism as attempts to prevent a loss of face among them. These experts also view this mechanism as a form of politics that thrives on the lowest common denominator. This mechanism deals with difficult problems by avoiding them rather than confronting them. Other observers commented that ASEAN had helped enhance regional stability by establishing needed standards and a neutral stance in managing common but grave major issues (Albert, 2017; NTI, 2017). In response to the 1967 Asian Financial crisis, the ASEAN integrated their individual economies in order to reduce the economic adversity. As an example, the members formed and implemented the Chiang Mai Initiative with China, Japan and South Korea for a currency swap as a form of support during the crisis. The organization also signed a joint action declaration to oppose terrorism after the 9/11 World Trade Center attacks in New York City. It was intended to provide support for national and regional mechanisms and contribute to information sharing activities (Albert, 2017; NTI, 2017).
Charter of Peace and Cooperation, US Relations
The ASEAN’s founding document, its 1967 Declaration, formally enshrined peace and cooperation as the organization’s primal commitment (BPA, 2018). But the creation of the ASEAN Charter on December 15, 2008 was what gave it legal identity in the international community. It was also the organization’s first significant step in the pursuit of its community- building objective. The coming together of the member countries was a wise decision. As an organization, ASEAN is able to assert stronger impact on controversies and issues affecting trade, political conditions, and security of the Asia Pacific region as a unified organization than if the member countries addressed these controversies or issues individually. This motivated the establishment of community building efforts within the organization (BPA, 2018).
Its official relations with the United States have been exemplary from the beginning, culminating n the US’ becoming a dialogue partner in 1977 (BPA, 2018). The US meets with the ASEAN and other dialogue partners on a regular basis to monitor regional developments among them. ASEAN’s political links with the USA grew stronger with the signing of the Treaty of Amity and Cooperation in Southeast Asia or TAC. ASEAN invites the US Secretary of State to ASEAN’s post-ministerial conference every year since the first ministerial meeting. ASEAN formed the ARF, or ASEAN Regional Forum, that meets every year at the ministerial level. The ARF currently has 27 members (BPA, 2018).
The Three Community Pillars, the ASEAN Economic System
These are the political-security community, the economic community, and the socio-cultural community (ASEAN, 2018). Each pillar is distinct with its own blueprint, which is approved during a summit event. This individual Blueprint and the Initiative for Phase II of the ASEAN Integration Strategic Framework AIAI Work Plan comprised the ASEAN community from 2009 to 2015 (ASEAN, 2018).
Political and Security Cooperation
This community aims at insuring peace and order with countries in the region as well as the world-at-large in a congenial but distinctively autonomous, just and democratic way (ASEAN, 2018). The components of this pillar are political development, forming and spreading of norms, preventing conflict, resolving conflict, peace-building after conflict resolution, and implementing peaceful solutions. The Blueprint for this pillar was adopted during the 14th Summit in Thailang on March 1, 2009 (ASEAN, 2018).
The Economic Community
AEC or ASEAN Economic Community was adopted in 2015 and is the major accomplishment and pillar of the organization (ASEAN, 2018). It is the all-important tool in attaining its regional economic objective by making available an enormous US$2.6 trillion market to more than 622 million inhabitants in the region. ASEAN boasts of being the third largest regional economy and the seventh in the world (ASEAN, 2018).
ASEAN leaders met for the 27th ASEAN Summit on Novembe 22, 2015 in Kuala Lumpur during which they adopted the AEC Blueprint 2015 (ASEAN, 2018). This Blueprint contains broad economic directions for members from 2016 to 2015. Along with the two other pillars and the ASEAN Community Vision 2025, the AEC Blueprint 2025 is part of the ASEAN 2025 Forging Ahead Together initiative. It replaced the AEC Blueprint for 2008-2015, adopted in 2007 (ASEAN, 2018).
The AEC Blueprint 2025 aims at a highly integrated, unified, competitive, dynamic and innovative initiative (ASEAN, 2018). It is envisioned to strengthen connectivity and cooperation among the member countries and to build an inclusive but resilient community that is people-oriented and centered, which is, at the same time, integrated into the world economy. It has five characteristics, which are a highly integrate and cohesive economy for the region; an organization that is competitive, dynamic and innovative; strong connectivity and cooperation in the sector; an inclusive and resilient organization that is people-oriented and centered; and an organization that is globally attuned. These characteristics support the vision of the economic community pillar as a major component of the Community Vision 2025 (ASEAN, 2018).
Strategic measures for each of the five characteristics will be thoroughly scrutinized for operationalizaton through work plans to be evolved by the different sectoral bodies of the organization. They will review and update these work plans periodically for relevance and effectiveness. Under this pillar, the organization will also enter into partnerships with the private sector, industry associations and the bigger community. This will be implemented in the regional and national levels in order to achieve inclusiveness and the widest participation as the most suitable approach to the integration process. Institutions will be tapped and strengthened with effective methods of supervision. Public outreach initiatives will also be established to further assure the effective enforcement of this Blueprint (ASEAN, 2018).
This current economic Blueprint will furthermore make ASEAN become more proactive with an adequate structure and frameworks in place to fuel and work in its economic community (ASEAN, 2018). It will not only accrue to the economic integration of the 10 member countries but will also produce the same effect and impact in the global economy. That is how it envisions the fulfillment of its shared prosperity goal. That vision consists of a committed, responsible and participating community that will benefit all the people in the ASEAN region; an inclusive community that will enjoy a high level of quality life, constant and equal access to various opportunities for all inhabitants, and will promote and safeguard human rights; a sustainable community characterized by genuine social development and ecological conservation; community resiliency and capability to adjust and appropriately respond to social, economic and environmental changes, disasters and other challenges and vulnerabilities; and a dynamic and unified community, which lives in the consciousness and pride of its identity, history and culture(ASEAN, 2018).
Socio-Cultural Community
The organization also aspires to infuse the community of tits member countries to feel good about being part of ASEAN (ASEAN, 2018). In pursuit of the Blueprint 2025, this pillar will endeavor to form a community with characteristics similar to those of the two earlier pillars in benefiting the inhabitants of ASEAN member countries (ASEAN, 2018).
ASEAN and the Global Rice Crisis
A huge portion of the global rice supply is grown, consumed and trades in the ASEAN region (IRRI, 2018). Two of the largest exporters in the world are Thailand and Vietnam, ASEAN member countries. Two of the largest importers in the world are Indonesia and the Philippines, also ASEAN member countries. Myanmar, another member country, is retrieving its former position as a major rice exporter. And prosperous Singapore is reliant on trade for the high-quality rice its people consume. ASEAN’s current stance and thrust would protect its member countries in the region from possible rice and food crises and their market consequences. The aftermath of the global food price crisis in 2007 to 2009 was a painful lesson to learn by ASEAN member countries. Since then, they multiplied efforts in assuring their food supplies by strengthening regional links for information sharing, stocks and prospects. They also cooperated to reduce fluctuating prices of rice and other foods. ASEAN’s principles of integration and shared policies of food security and nutrition may need further strengthening of regional ties to fortify and facilitate the reliable supply of rice and reserves in anticipation of crises and other emergencies (IRRI, 2018).
Conclusion: ASEAN Today
2025 Vision
The ASEAN today is surely growing even faster in coping with un-interrupted changes and various issues hounding the global economy (Schumacher, 2017). Its attention has been called and occupied by the pose of businesses and investors that clamor for wider, more radical growth prospects. It is not mere survival of copies that occupies ASEAN leaders today. Its objective is to achieve and share prosperity with other member countries (Schumacher, 2017).
In order to achieve its prosperity objective, ASEAN must fully become aware and understand diversity and then take advantage of its strength (Schumacher, 2017). At the same time, they must realize that their integration principle ironically increases competitiveness among themselves. The present regional integration mechanism at the ASEAN must give way to doing business outside in order to assess the issues as well as attractions of a single market. It must also be done to completely grasp the production base within ASEAN and compare it with an option for integration with global economy. The 2015 vision or agenda provides for new as well as current businesses that will raise economies and trade, investments and people movement even more than before. Many more and large infrastructure projects, for example, can be envisioned, like the ASEAN Connectivity Master Plan, to turn to reality. Roads, trains power and shipping are likely to integrate some more in the region (Schumacher, 2017).
As things stand, local and foreign investors feel that it would not be difficult for them to find in ASEAN those who will understand them and their business needs (Schumacher, 2017). The organization’s shining accomplishment in adeptly taking advantage of the benefits of diversity can mean to these investors that cross-cultural trade and investment to ASEAN member countries are easy. And that goes for more than 600 million inhabitants within the inclusive regional community, which is performing a valuable role in an inevitably interconnected global economy (Schumacher, 2017).
The ASEAN, thus, is shining in the global scenario for its peerless advantage in diversity (Schumacher, 2017). It makes its inhabitants open to innovations and capable of managing cultural differences without too much difficulty or conflict. As a result, several important investments are drawn to the region for this blend of swift economic growth and plentiful natural resources. The chief attraction is the region’s advantage and capacity to manage diversity within its communities and then integrate with external ideas and investments (Schumacher, 2017).
The promotion of regional integration in the ASEAN region is done through the free movement of services, skilled labor, goods, investment and the easier flow of capital (Schumacher, 2017). But this will require internal as well as external businesses in exploring both the problems and issues of a single market, ASEAN’s production base and the choice of integrating with the global economy. The European Union and the USA acknowledge this. But ASEAN cannot confine regional economic integration to mere policies of cutting tariffs, eliminating non-tariff obstacles, turning these obstacles to investment, or removing trade restrictions in services. ASEAN must also deal with infrastructure in the form of energy, communication and transportation. But because the ASEAN region has a diverse geography and the economies of its member countries have varying levels of development, integrating infrastructure is among its most arduous goals (Schumacher, 2017).
To address this challenge, ASEAN member countries must evaluate the extent of their individual national infrastructure needs for financing as well as the lacks of financing in their major sectors, such as energy, telecommunications, transportation, water and hygiene. The reality is that infrastructure development and integration are slow in the region. This can be clearly shown by the ASEAN Cooperation Project on Interconnection, which began in 1982. The goal was to link the power systems of surrounding ASEAN countries. Member countries signed the Agreement on ASEAN Energy Cooperation in 1986. It required cooperation in the efficient growth and use of energy in all of its forms – commercial or non-commercial, whether renewable or non-renewable. It is evident that, in promoting regional infrastructure development, ASEAN must make sure its member countries also target environmental conservation. And the two objectives are difficult to pursue because ASEAN countries are big contributors to the carbon emission problem in the world today (Shumacher, 2017). #
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