U.S. President Barack Obama says America’s commitment to Asia’s biggest economic bloc will endure long after he leaves the White House. One wonders if the Association of Southeast Asian Nations itself will endure in its current form.
Trouble is brewing in the ranks as ASEAN, whose 10 members comprise the closest thing this region has to a European Union, approaches its 50th year. That’s not what you saw in Vientiane this past week as Obama, China’s Li Keqiang, Shinzo Abe, India’s Narendra Modi and South Korea’s Park Geun-hye joined the festivities. The photo ops, meticulous protocol and hopeful communique in the Laotian capital suggest Asia is joining hands, slashing barriers and boldly forging forward.
Look below the surface, though, and you find two gaping cracks in that sunny narrative. One, domestic fissures among several members. Two, denial about China’s role as spoiler.
Just like the much maligned EU, Asian leaders agree that if ASEAN didn’t exist, they’d probably be scrambling to create one. And the potential speaks for itself: roughly 625 million people who all want to get richer, travel, consume and invest in economies growing at rates three or four times faster than the West. If the eurozone taught Asia anything, it’s that economic groupings are only as strong as their weakest links, and Southeast Asia has a bull market in them.
Take Thailand, long one of the region’s success stories. The latest military junta to grab power there — in May 2014 — is setting the stage for semi-permanent rule, with no elections in sight. As transparency and policy clarity in Bangkok fall by the wayside, multinational companies are rethinking Thailand’s role as a key manufacturing hub. A series of terrorist attacks, meanwhile, threaten the all-important tourism industry.
In Malaysia, scandal-plagued Prime Minister Najib Razak cares more about staying in power than his nation’s global credibility. Media blackout attempts in Putrajaya haven’t stopped the international press and investigators from Washington to Singapore from linking Najib’s inner circle to billions of dollars of missing funds. The Wall Street Journal’s latest expose exploring how $1 billion allegedly made its way into Najib’s accounts is a case in point.
In the Philippines, President Rodrigo Duterte is taking a page from strongmen of the past — including Thailand’s Thaksin Shinawatra — in flouting democratic principles with summary executions of citizens allegedly tied to the drug business. His shoot-from-the-hip style also threatens one of ASEAN’s growth stars. Just as Duterte threatens to pull out of the United Nations and impugns Obama’s late mother, he may junk ASEAN at the slightest provocation. An Asian Brexit, anyone?
Indonesia isn’t winning many friends with the periodic haze it exports to neighbors like Singapore, a result of illegal forest fires Jakarta refuses to halt. Brunei in 2014 became the first East Asian nation to embrace Shariah law. Communist Laos won’t speak of the fate of civil society leader Sombath Somphone, who disappeared in 2012. Myanmar’s crackdown on its Rohingya Muslim minority mars Aung San Suu Kyi’s standing as a human rights hero. Cambodia’s slavish devotion to China means ASEAN can’t be a united front against Beijing’s territorial and military ambitions.
That gets us to ASEAN’s China problem. While President Xi Jinping denies it, Beijing’s divide-and-conquer strategy is proceeding apace. China’s modus operandi is the bilateralization of all pressing issues in Asia. ASEAN should be pushing back, taking China to task for its bullying tactics. Fearing Beijing’s wrath, ASEAN demurs.
That’s unfortunate. A July international ruling at The Hague, for example, devastated China’s claims to virtually all of the South China Sea, a verdict Xi refuses to honor. Rather than act as one to support members the Philippines, Vietnam and others in challenging Beijing, ASEAN looks the other way. Even tough-guy Duterte shies away from provoking the dragon. ASEAN’s weakness ensures China will continue thumbing its nose at multilateral overtures.
Beijing’s newish Asian Infrastructure Investment Bank, meanwhile, will buy lots of loyalty among ASEAN members, less so the broader grouping. Over the last dozen years, China Development Bank, known as “Superbank,” curried favor around the developing world. In exchange for cheap energy, market access and loyalty to the motherland, Beijing lavishes billions on projects from Sudan to Venezuela. That the AIIB boasts members from Australia to Germany douses charges of economic colonialism. Still, ASEAN’s priorities are no match for Beijing’s deep pockets and penchant for playing one nation off another.
Again, if ASEAN didn’t exist the region might be devising something like it. But unless its members get their domestic acts together, the bigger whole has little chance of bringing Asia together linking markets, harmonizing tax and customs standards, pooling resources and plotting growth strategies. And it has even less chance of keeping Southeast Asia from becoming little more than a subsidiary of China Inc.
Based in Tokyo, William Pesek is executive editor of Barron’s Asia and writes on Asian economics. www.barronsasia.com
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