Asean Integration

ASEAN is changing the regional landscape as it works towards an economic, political and cultural community by 2015, yet many remain skeptical about the region’s future. ASEAN is also engaged in reaching out to other countries in the region, but the notion of ASEAN centrality and ASEAN as a hub is also questioned by critics. The SIIA actively evaluates ASEAN’s progress and gaps, through research and events such as our annual flagship conference, the ASEAN and Asia Forum. The three main pillars of the ASEAN Community are the ASEAN Economic Community (AEC), ASEAN Political-Security Community and the ASEAN Socio-Cultural Community. Currently, efforts are focused on establishing the AEC. The AEC Blueprint, adopted by ASEAN leaders in 2007, provides a roadmap and targets to be achieved for the establishment of the AEC by 2015. The AEC envisages the following: (a) a single market and production base, (b) a highly competitive economic region, (c) a region of equitable economic development, and (d) a region fully integrated into the global economy. However, there are key challenges for ASEAN to overcome. For newer ASEAN members such as Cambodia, Laos, Myanmar and Vietnam, challenges faced include a lack of technical capacity and funding required for implementing AEC measures. Other ASEAN members such as Indonesia, Malaysia, Philippines, Singapore and Thailand face challenges in terms of liberalization and policy reform. Alongside the AEC, ASEAN is placing emphasis on infrastructure via the Master Plan on ASEAN Connectivity and energy cooperation via plans such as the Trans-ASEAN Gas Pipeline and the ASEAN Power Grid. SIIA aims to deepen research and understanding into ASEAN 2015 goals and progress, and key issues and challenges which remain. ASEAN Reinvented, a book co-authored by experts from around the region is due to be published in early 2013, looking at key questions regarding the future of ASEAN. Beyond ASEAN's integration as a grouping, ASEAN reaches out to other countries in the region, for instance as the host of multilateral meetings such as the ASEAN Regional Forum and the East Asia Summit. ASEAN is also the hub for groupings such as ASEAN+3 (including China, Japan and South Korea) and ASEAN+6 (with India, Australia and New Zealand). Recent years have also seen a rise in new regional architecture centered around ASEAN, such as the Chiang Mai Initiative, an ASEAN+3 multilateral currency swap arrangement, and the proposed Regional Comprehensive Economic Partnership, a free trade agreement at the ASEAN+6 level. The SIIA is actively watching these developments and the implications for Asia. ASEAN centrality in regional institutions is due in large part to its perceived neutrality. Many countries in the region, such as China and Japan, might not trust each other as the driver of a regional institution, but ASEAN is neutral and non-threatening, able to take into account interests and preferences of all parties. But in July 2012, the ASEAN Ministers Meeting in Phnom Penh failed to issue the traditional joint communiqué due to differences over the South China Sea territorial disputes, the first time the grouping had failed to issue a statement. This demonstrates that ASEAN's neutrality cannot be taken for granted, and that the grouping's centrality in the region is still under challenge. For outsiders, the AEC is the culmination of the massive integrationist leaps made by ASEAN since the early 2000s, suggesting new momentum in the integration process of this gigantic market of 600 million people. But size matters not, and from a pragmatic perspective, the entry into force of the AEC is reminiscent of Shakespeare’s Much Ado About Nothing: Given ASEAN’s extremely weak institutional base, reliant on a skeleton secretariat of no more than 400 staff sustained by an annual budget of barely $17 million, there is much uncertainty as to whether ASEAN can deliver on its ambitious targets. With the A.E.C, the 48-year-old ASEAN finds itself at a critical juncture, yet sobriety should drive any analysis. The agreement on the creation of an ASEAN Economic Community signed on November 22 in Kuala Lumpur by the leading nations of Southeast Asia finally entered into force with much fanfare on December 31, heralding the “awakening” of what could be defined as a new Asian power bloc. Almost echoing the European Union’s Common Market of the 1950s, ASEAN seeks to allow for the free movement of goods, services and skilled labor, a major departure from what has been considered since the earliest days of its existence as a political project for peaceful regional integration. The Association of Southeast Asian (ASEAN) leaders adopted the ASEAN Vision 2020 hoping to strengthen the foundation for a prosperous and peaceful community of Southeast Asian nations while creating a community that lived in shared stability and prosperity. The purpose of establishing an integrated economic community is to accelerate economic growth, enhance trade development in the region, and allow the free movement of goods, services, skilled labor, and capital. There are approximately 600 million people across the ten ASEAN member countries (Brunei Darussalam, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand, and Vietnam) that will be affected by this regional partnership. Thus, it is critical to highlight some high level opportunities as well as challenges surrounding the impending economic integration.