There is no rest for the weary. That is the lesson that Southeast Asian leaders must draw after their annual summit meeting of the Association of Southeast Asian Nations, held last week in Singapore. While their economies are — for the most part — recovering from the economic crisis of 1997-98, they are still being eclipsed by those of Northeast Asia. After all, the big news from Singapore was not about ASEAN, but about “ASEAN+3,” which brings Japan, China and South Korea to the table with ASEAN. A new era is beginning in East Asia, and ASEAN governments are going to have to do more if their organization is to continue to be relevant.
The meeting produced its share of initiatives. ASEAN leaders endorsed a preliminary study to build a 5,500-km railway that would link Singapore and southern China. The $2.5 billion project would run through Malaysia, Thailand, Cambodia and Vietnam, and separate branches would connect it to Laos and Myanmar. They signed a free-trade pact called “e-ASEAN” to create high-speed Internet connections throughout the region and eliminate duties on information-technology goods and services by 2010. They also agreed to push English in their countries as a springboard for efforts to build a digital economy.
Unfortunately, they also agreed to permit exemptions from previously agreed-upon tariff reductions. The move is designed to help members cope with the adjustments forced on them by trade liberalization and to aid struggling “infant industries” trying to survive the pressure of competition. Trade officials insisted that their commitment to a regional free-trade area remains solid. Time will tell.
The big news from the summit was the decision to institutionalize the meeting between Japan, China and South Korea that occurs on the fringe of the ASEAN summit. It took remarkably little time for the informal breakfast between Northeast Asian leaders to coalesce into something more solid. Only last summer, ASEAN initiated the ASEAN+3 format that brought Southeast and Northeast Asian governments together in one place.
The expanded format paid dividends to ASEAN. Prime Minister Yoshiro Mori announced the “Mori e-action plan,” through which Japan will provide $15 billion to help ASEAN countries deal with the twin challenges of globalization and information technology. China contributed $5 million to the China-ASEAN Cooperation Fund, which will finance increased exchanges in a variety of fields. South Korean President Kim Dae Jung pledged $167 million — $150 million in loans and $17 million in grants — to build closer ties with ASEAN.
China also took the initiative by proposing a free-trade zone with ASEAN. That would create a market of 1.7 billion consumers and would transform the region’s economic environment. The call was a shrewd one. ASEAN is worried that China’s entry into the World Trade Organization, widely anticipated to take place next year, will pose stiff competition for Southeast Asian governments. This year, 60 percent of foreign investment in emerging Asian economies ended up in China. WTO membership will divert even more.
The focus on ASEAN+3 is evidence of the shifting center of gravity in East Asia. The region’s economic dynamism has moved to the northeast. While several ASEAN governments have recovered from the financial crisis of three years ago, some have not. With 10 members, ASEAN has become big and, by some indications, too unwieldy. Governments in Vietnam, Laos and Myanmar continue to be cautious about reform and liberalization. Worse, countries that might provide a counterweight to their skepticism — Indonesia, Thailand and the Philippines — have weak leaders.
In short, ASEAN’s lowest common denominator has become very low. The organization risks political irrelevance if it is capable of voicing broad declarations, but proves unable to implement more than technical initiatives. One indication of the drift is Singapore’s readiness to pursue bilateral free-trade agreements with its trading partners. These are not inconsistent with ASEAN rules, but they hint at frustration with progress and a willingness to prod the group through other measures.
If ASEAN aspires to a genuine political role on the world stage, one that reflects the aspirations of Southeast Asian leaders and its half-billion citizens, then it must change the way it operates. Its two cherished principles — noninterference in the affairs of member states and agreement by unanimity — threaten to paralyze the group. ASEAN’s choices have never been clearer.
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