IN_FOCUS_2020_02_ASEAN_web by Antall József Tudásközpont

IN FOCUS

2020. 2nd Issue ISSN 2677-111X

The Role of Southeast Asia in the Emerging Indo-Pacific

All rights reserved. Articles found in this publication are the intellectual property of the Antall Jรณzsef Knowledge Centre. No part of this publication may be reproduced or transmitted in any form or by any means, including photocopying, recording, or other electronic or mechanical methods, without the prior written permission of the publisher. The views and opinions expressed in this issue are those of the authors and do not necessarily reflect the official policy or position of AJKC.

TABLE OF CONTENTS

1 Welcoming Words

2 Introduction 6 ASEAN—An Overview in Figures 8 The Great Divider/Connecter—Southeast Asia’s Future: A Shatterbelt or a Gateway Region? 13 Decolonisation and the Changing Political Geography of Southeast Asia 20 Transforming Higher Education to Meet Future Challenges: The Experiences of NUS— Interview with Professor Tan Eng Chye, President of NUS 28

3 ASEAN Perspectives Interview with HE Ng Shin Ein, Ambassador of the Republic of Singapore to Hungary Sustainable Development Towards an Integrated ASEAN Economic Community—Lessons from the Fight Against Covid-19 in Vietnam Southeast Asian Regional Processes from Indonesia’s Perspective Great Power Competition from a Singaporean Perspective The Singaporean Growth Model Philippine Foreign Policy in the Context of the Southeast Asian Great Power Competition Southeast Asia at the Crossroads of Power Rivalry: A Vietnamese Perspective

34 36

40 45 53 59 65 71

93 99 105 113

5 Regional Issues ASEAN–Australia Relations: Location, Position, and Timing Maritime Competition in the Indo-Pacific— The Role of ASEAN Nations The Indo-Pacific Strategy and ASEAN ASEAN–EU Cooperation: Present and Future Indonesia and the South–South Cooperation from Bandung until Today Regional Economic Integration for Global Access?—The Case of ASEAN

118 120 126 133 140 150 157

6 Antall József Knowledge Centre AJKC Book Review

162 164

7 Authors 166 Guest of Authors 166 Authors of AJKC 169

Partners and Influences India’s Act East Engagement: From Southeast Asia to the Indo-Pacific Australia’s Role in the Indo-Pacific’s Shifting Power Dynamics

Good Neighbour, Bad Neighbour— The Developing Relations between China and ASEAN A View on Regionalism through Japan– ASEAN Economic Relations The Republic of Korea and ASEAN— Striving to Be the Best Partner EU–ASEAN Trade Relations: Beyond the Impasse

TABLE OF CONTENTS

76 78 85

References of Pictures and Used Data

170

9 Next Issue

174

WELCOMING WORDS

Dear Readers,

Editor’s Note

The second half of the last century was marked by globalisation and regional integration. Here in Europe, living in one of the prime examples of the latter—and enjoying the benefits of the former— we often tend to forget that there are a few other successful integration processes in the world. ASEAN, which is only a decade younger and comprises one and a half times more people than the EU, is a noteworthy case in point. Its already considerable importance appears to be growing in a century labelled “Asian” mostly because of its central position among the old and the up-andcoming great powers along the coasts of the Indo-Pacific region. The successes it has so far achieved and the hurdles it might face in the future are, thus, crucial to unravel what our century will look like, and, at the same time, they could also be edifying examples of what other ways of effective integration can emerge. Therefore, we dedicated our latest issue to some of the key challenges of the Indo-Pacific in general and ASEAN in particular, hoping that we can provide our readers with the most relevant regional processes to look at. Although attempting to be as overarching as possible, we could not cover every essential aspect; thus, however much we wanted to include a deeper analysis of society and culture, we chose to drop it this time because of its overly complex nature. Yet, thanking all our colleagues and partners for their invaluable contributions, we hope this issue will make an instructive reading and help in understanding the Asian future.

The Holy Grail of foreign policy analysis is predicting which region or country will present the most opportunities and/or threats in the future, and we at the Knowledge Centre constantly look for the next strategic area which may come into play. However, Southeast Asia and the Indo-Pacific are not in this ephemeral category, it is a “bet” as sure as it gets. The countries of the region have already formed an economic and demographic giant when considered combined. They serve as a pivotal region in global security and stability. Global and regional powers are already deeply invested in the ASEAN countries, including the European Union. With this magazine, we aim to contribute to the Hungarian and European efforts to understand and deepen the interdependent relationship between the two ends of Eurasia. We believe that not only the great powers, but we in Central Europe may also provide benefits to ASEAN countries, and vice versa. We are grateful to the Hungarian and foreign authors of this volume without whom this issue would not have been possible. The insightful contributions of our partners in Southeast Asia and Australia also illustrate that there is an interest to work with a Hungarian think tank on moving relations forward. This humbles and honours us and motivates our team to continue these joint efforts in the future to serve our audience. Zsolt Csepregi—Editor

Zsombor Szabolcs Pál—Editor-in-Chief WELCOMING WORDS

INTRODUCTION

NEPAL

BHUTAN CHINA INDIA BANGLADESH Hanoi

MYANMAR (BURMA) Naypyidaw

LAOS Vientiane

THAILAND Bangkok

VIETNAM

CAMBODIA Phnom Penh

MALAYSIA Kuala Lumpur

SINGAPORE

Jakarta

ASEAN countries

ASEANâ&#x20AC;&#x201D;AN OVERVIEW IN FIGURES

PHILIPPINES Manila

Bandar Seri Begawan BRUNEI

INDONESIA

EAST TIMOR

HUMAN DEVELOPMENT INDEX (UNDP)

TERRITORY (KM2)

China

9,596,961

USA

9,147,590

ASEAN

4,522,518

4,233,262

Indonesia

1,904,569

Myanmar (Burma)

676,578

Thailand

513,120

Vietnam

331,212

Malaysia

330,803

Philippines

300,000

Laos

236,800

Cambodia

181,035

Brunei

0.845

Cambodia

0.581

Indonesia

0.707

Laos

0.604

Malaysia

0.804

Myanmar (Burma)

0.584

Philippines

0.712

Singapore

0.935

Thailand

0.765

Vietnam

0.693

ASEAN

0.723

0.900

USA

0.920

China

0.758

5,765

Brunei

726

Singapore

1400

POPULATION (MILLION)*

661

448 328

270

na hi C

N EA AS

SA U

sia do In

pi ilip Ph

m na et Vi

nd ai Th

ur (B ar nm

ya M

a) m

sia al M

bo C

a di

os La

e ng

ei Si

un Br

7.2

5.7

0.451

110

GDP (PPP) IN BILLION USD*

ASEAN 9,608

USA 22,321

EU 20,366

China 29,471

ASEAN

Brunei 38

Cambodia 84

Indonesia 4,000

Laos 63

Malaysia 1,100

Myanmar (Burma) 385

Philippines 1,100

Singapore 602

Thailand 1,400

Vietnam 836

GDP PER CAPITA IN USD*

105,689

85,011

67,426

45,541 34,567 20,984

21,360

na hi C

SA U

na et Vi

8,677

ap ng

pi ilip

(B ar

sia ay al nm ya M

*IMF

10,094

7,219

ne do In

sia

a bo

ei un

am C

8,683

5,004

14,000

14,840

LEAD EXPORT MARKET

LEAD IMPORT MARKET

ASEAN Indonesia Myanmar (Burma)

ASEAN China

Singapore

Cambodia Indonesia Malaysia Myanmar (Burma)

Cambodia USA

Philippines

China

Singapore Thailand Vietnam

Thailand Vietnam EU

EU USA

USA

China

Brunei Philippines

Laos

Malaysia

Japan

China

Thailand

Brunei

Malaysia

Laos

Thailand

Singapore

THE GREAT DIVIDER/CONNECTER—SOUTHEAST ASIA’S FUTURE: A SHATTERBELT OR A GATEWAY REGION? Zsolt Csepregi On our planet, every place is unique in its own way, but, if we could identify “degrees of uniqueness,” an obvious candidate for the most outstanding and complex region would be Southeast Asia, without doubt. There is no other place on Earth which has such duality as this grand geographic stripe that combines a mainland territory and a chain of islands spanning more than 6,000 kilometres in length from Myanmar to the Eastern edge of Indonesia. It both separates the surrounding oceans and landmasses and connects them in the maritime realm through its navigable straits. This region is also home to hundreds of millions of people from all major religions, thousands of ethnicities and languages. Arguably, no region on the globe is more diverse than Southeast Asia. As I shall later elaborate, many experts remind us in complacent Europe that this area is poised to be the pivot of the 21st century, the century of the Indo-Pacific, a region divided and connected by Southeast Asia that largely defines the coming decades in terms of great power war or lasting peace. A UNIQUE PLACE ON EARTH Southeast Asia is situated at the crossroads of three geostrategic realms: the East Asian, the Asia-Pacific, and the emerging South Asian realm. These realms constitute the Indo-Pacific, which, according to geopolitical thinker Robert D. Kaplan, will become the new global demographic heartland by 2050 with its more than seven billion inhabitants—vast in riches, but also significantly contested between great powers.1 In fact, Southeast Asia not only divides but is also divided between these realms as they are the ones that constitute the surrounding Indo-Pacific. The Indochinese states belong to the East Asian realm, Myanmar partly belongs to

South Asia, while the rest are firmly positioned in the Asia-Pacific. Naturally, these geostrategic units do not solely signify geographic location but certain political alignments, as well. East Asia is dominated politically and economically by the People’s Republic of China, itself being torn between its continental and maritime characteristics. The Asia-Pacific is led by the United States—although the Asian pivot of Obama did not go as planned—and is home to major regional powers such as Japan, the Republic of Korea, and Australia. South Asia is dominated by India, a rising power, with an emphasis on the “rising” nature of the colossal country. Southeast Asia is, therefore, a location where the ambitions of the three largest and, arguably, most powerful states merge and clash, while many more medium-sized powers are influencing the region. The most important takeaway is that Southeast Asia does not constitute a geostrategic realm itself, not even a coherent geopolitical unit, but a unique pivotal region standing at crossroads. Certain similarities can be found with Europe, as both are adjunct, densely populated territories attached to, and located on, the Rimland of the dominating geographic structure of the globe, the Eurasian supercontinent. Nonetheless, digging deeper, we uncover that differences between them are more important to highlight than any similarities, as their positions and influencing geopolitical forces differ greatly. Europe, while fractured by mountains, rivers, and shaped into peninsulas, has to contend with one strong and another semi-dormant neighbouring geostrategic realm (the Eurasian Heartland, dominated by Russia, and Africa, dominated by none). On the other hand, Southeast Asia, as stated above, has to face three strong powers or a coalition of states. For INTRODUCTION

Europe, the Atlantic Ocean and the polar region serve as great barriers to the west and to the north, respectively. These are geopolitical boons Southeast Asia does not have: the “stopping power” of the surrounding Indo-Pacific is matched by its strategic value as a global highway of trade and armed conquest.2 Even though Europe’s geography favoured the consolidation of multiple political entities and the emergence of distinct cultures, communication between them was not hindered as much as to prevent the formation of a single yet diverse, dominant geopolitical unit, the European Union. Southeast Asia, due to its fractured geographic nature, favoured the survival of thousands of distinct languages, while the true consolidation of nation states is still an ongoing process (think, for example, of Indonesia divided into a wealth of islands), and, therefore, the current regional cooperation framework, ASEAN is much more flexible than the EU. Consequently, unlike Europe, which has to contend with a relative simplicity in its geopolitical outlook, Southeast

Asia is a zone of convergence for three realms surrounded by much stronger powers than any of its countries, while it has much larger geographic segmentation than Europe, lacking any kind of geographic shields. Considering the above, Southeast Asia is in grave danger of reverting to a geopolitical shatterbelt, a geopolitical entity torn by internal disunity, strife, and the meddling of outside powers, similar to the Middle East, the archexample of shatterbelts. Yet, with all the geopolitical factors stacked against it, the region today is not a shatterbelt, unlike during the first half of the Cold War, as it has become a booming trading conglomerate of states.3 Southeast Asia did have its fair share of civil wars (communist, Islamist, and separatist insurgence in most countries), interstate clashes, and full-scale invasions (Cambodia– Vietnam, Thailand–Cambodia) but also interventions of outside powers (PRC in the South China Sea and mainland Vietnam, the US during the Vietnam War). Yet, after the Cold War

Most of the ethnic minority people in Sapa (Vietnam) work their land on sloping terraces. 14

INTRODUCTION

ended, the previously hostile countries converged into an intergovernmental organisation, ASEAN, founded in 1967 and based in Jakarta, Indonesia, now encompassing ten member states. This group exemplifies the quest of Southeast Asian states for defying their geopolitics and continues peaceful development against all odds. SOUTHEAST ASIA IN THE TIDE OF THE “GREAT DECOUPLING” The context of the aforementioned unique geopolitical role is the “changing world order,” an oft-quoted concept of international relations at the highest level. It usually marks three interconnected issues which all greatly affect Southeast Asia. The first is the rise of the People’s Republic of China and its potential to surpass the United States of America.4 The second is multipolarity in the world order and the future of middle power relations.5 And the third one is the future of globalisation, or the lack thereof, and the rules-based world order as we know it. Naturally, all three issues are interrelated, but, for this argument, we will use great power relations as a basis for the scenarios ASEAN states have to face in the unfolding new world order. In recent years, we have seen the US matching China’s rise with expanding its trade war against the emerging power. Questions whether China’s eventual challenge to the US as the global hegemon will be peaceful or will lead to a war among great powers are relevant, but we are not there yet, even though this is reportedly the primary threat according to ASEAN state leaders.6 For now, we are experiencing that two technological and economic systems started to take shape, a phenomenon only vaguely resembling the Cold War competition between the Washington- and Moscow-led blocs. In our globalised world economy, no country belongs to only one bloc. The great powers, Washington and Beijing, together with other capitals, are engaged in a highly complex tug-of-war for power, profit, and influence when conducting business on a global scale. Actions by great and middle powers can

An economic pioneer of the region: Singapore

only aid or hinder these flows yet cannot stop them but at a great price (as we have seen with the debate over 5G technology). This price can hardly be paid by middle powers engulfed in cooperation and competition between great powers. What they can do is to insist on a rulesbased order, challenged selectively by each great power in security, business, and intellectual property. Members of ASEAN are even more interested in avoiding an escalating breakdown in the rules-based international order and great power competition. This competition is threatening not only because the current leader, the US, might be replaced, but also because we may be facing a “great decoupling” between the politico–economic– technological regimes in the international area and a leaderless world.7 The COVID crisis has led to mutual diplomatic attacks and scapegoating between Beijing and Washington, and the erosion of international bodies like WHO, as well, while it has also increased discussion on how to make supply chains more “resilient.” It is no surprise that highly mercantile ASEAN states are alarmed by this process and need to provide alternative solutions for these systemic challenges. As the change in the world order is reshaping old structures, some of these are breaking down, while new ones are emerging, but the question remains whether the INTRODUCTION

latter are more resilient and provide more opportunities for the ASEAN countries’ citizens or they are semi-optimal solutions. For now, ASEAN, as a community of states, seems to be constantly forming into a more optimal state; therefore, we, in Europe, should study their way to find solutions for the challenges which are to be met all around the world.. THIS IS THE ASEAN WAY So what constitutes the secret of ASEAN countries? Can the organisation and its underlying philosophy endure the storm of great power competition? In their above-cited book titled The ASEAN Miracle, the academic Kishore Mahbubani and the veteran Singaporean diplomat Jeffery Sng explain that the intergovernmental organisation’s success is based on the distinct culture and the set of values according to which it operates. These values also provide ground for constructive diplomatic discussions between leaders and officials. According to this view, facilitating cooperation between countries as distinct as ASEAN members in a highly contested geopolitical region can only be based on consensus, and a culture of community and unity.8 Quiet, backdoor diplomacy managed to bridge the gaps between the members looking for consensus, compromise, and progress on issues of common interest, and, on the other hand, avoiding topics where agreement is distant or nearly impossible.9 ASEAN looks for the greatest common divisor solution and always makes sure to have an opportunity to save face in a disagreement. This approach is very different from the one preferred by the European Union, which prides itself on being always very principled and having a “frank” and “transparent” discussion (of course, based on the preferences of each political side). ASEAN instead opts for being pragmatic and effective and forgoes the theatrics of conflicting diplomacy. In East Asia, sovereignty and non-intervention (concepts challenged by Western academia and civil organisations) are key concepts which have to be preserved and respected, but this conservative diplomatic conduct also has an 16

INTRODUCTION

implicit military threat looming over the cordial relations.10 Unlike Europe, Southeast Asia does not have the luxury of a favourable geopolitical environment, and its geopolitical pressures necessitate a flexible approach to, and conduct of cooperation on, issues of common interests— and there is no interest more crucial than peace and stability in the Indo-Pacific. It is remarkable that, in spite of the differences, in virtually all aspects that define a state (geography, ethnicity, religion, political system, economic development), ASEAN countries have a solid and aligned view on the world and a vision for the role of the Southeast Asian region in the Indo-Pacific. Unlike many official “vision documents,” the ASEAN Outlook on the IndoPacific is a short and effective strategic base to understand how the region’s capitals envision their joint role: “Southeast Asia lies in the center of these dynamic regions and is a very important conduit and portal to the same. Therefore, it is in the interest of ASEAN to lead the shaping of their economic and security architecture and ensure that such dynamics will continue to bring about peace, security, stability and prosperity for the peoples in the Southeast Asia as well as in the wider Asia-Pacific and Indian Ocean regions or the Indo-Pacific. . . . Against this backdrop, ASEAN Leaders have agreed to further discuss an initiative that reinforces the ASEAN-centered regional architecture, namely, ASEAN Outlook on the Indo-Pacific.”11 Southeast Asians see themselves in a central position in the coming Indo-Pacific–oriented world order. The keyword is “central” because this is the root for all the opportunities and challenges stemming from their unique position. The opportunities lie in the economic field, as Southeast Asia evaluates complementary neighbouring regions in terms of economic output. The Indo-Pacific has virtually every element of a matching economic megaunit: raw materials coming from the upstart, booming economies in (East) Africa, energy sources in the Middle East, large markets and industrial regions in China and India, technology and capital in South Korea and Japan, and the more distant but ever-present US. Challenges come

The ancient Khmer city of Angkor in Cambodia is one of the most visited places in Southeast Asia.

from the aforementioned clash of interests in Southeast Asia, primarily in and around the South China Sea, which is the pivot of security in the region and potentially in the wider IndoPacific. The South China Sea is the key to China as an ascending power just as the Aegean Sea was for Ancient Greece, the Mediterranean Sea for the Roman Empire, or the Caribbean Sea for the US.12 The country cannot become a secure great power without controlling the sea and attaining free access through the so-called first island chain that prevents China from reaching the open oceans and becoming a mature, global maritime power. Apart from the South China Sea, the straits of Southeast Asia are also potential nodes of conflict, as they are the blood veins of a significant part of the global economy and also have pivotal importance to the IndoPacific statesâ&#x20AC;&#x2122; economic well-being and, thus, their security. Southeast Asia has the potential to become the most armed maritime region, as Dr HĂĄda so eloquently demonstrates in his

article in the present issue of In Focus. According to classic geopolitics, Southeast Asia should be a shatterbelt, and China should move to dominate it, while other great powers should aggressively try to seek a balance in it. ASEAN has a different vision for itself, being a node of connection instead of a shatterbelt, and it has every chance to succeed. TACKLING THE CHALLENGE, BECOMING A STABLE GATEWAY Despite its convoluted geopolitical position, Southeast Asia has a lot of advantages. Its massive, young, and an ever more educated and productive population of more than 700 million people embracing a sweeping digitalisation is made even more dynamic by the complementary nature of capital, manpower, and raw materials that abound in regional subunits, which all make it a go-to place for anyone interested in making a profit from the global market.13 Therefore, ASEAN, while building on INTRODUCTION

its inherent strengths, also aims to defy its fate as a shatterbelt and transform itself into a massive gateway between the three geostrategic realms. Becoming a stable gateway requires internal robustness (so that the incoming forces do not “bring down” the gates themselves) and connectivity infrastructure in all domains. The exact concept of the Indo-Pacific varies according to each global player, primarily as to whether any political, economic, or security framework built on it should serve as a platform for balancing China. Although these differing approaches will become a major issue if the present developments go forward, all parties agree that everyone would benefit from enhanced connectivity opportunities in Southeast Asia. It is worthwhile to look at Japanese views on ASEAN, as it is a major (but not a great) power geographically close to China and Southeast Asia, as well. It would gain from the successes of ASEAN and lose with more competition and deterioration of international transportation and economic environment. Japanese experts, therefore, highlight the importance of hard and soft infrastructure development in Southeast Asia, identifying it as the number-one positive factor contributing to a true win-win solution for the Indo-Pacific.14 Hard infrastructure would entail ports, train and highway systems, while soft infrastructure is closely related to the underlying digital networks in the region. Connectivity is the key to realise the opportunities inherent in the Southeast Asian region, which would bring all major players together and provide transportation corridors for their economic interactions through the challenging terrain. The goal is to create in, and through, ASEAN countries enough value for all involved parties that going into a zero-sum competition be a much-feared scenario by all sides. This balancing act relies not only on ASEAN states but also on great and middlesized powers which provide capital, technology, investment, and business opportunities. Economic interdependence is, of course, a required but not a sufficient factor because, without substantial hard power, balancing 18

INTRODUCTION

against any non-status quo power is impossible.15 Southeast Asia would still need US involvement but, arguably, only an indirect one, which does not threaten China as much to motivate it to sacrifice the above-mentioned economic opportunities.16 The future of the Indo-Pacific, and that of ASEAN itself, is not pre-written, as both alarming factors and promising opportunities spring from its geopolitical nature. The Southeast Asian region will draw competition, but it possesses the internal capabilities, position, and guiding vision to continue to manoeuvre successfully among the giants of the adjunct geostrategic realms. It proves that geography does not determine a country’s fate, it only provides a canvas which will be completed with the paint of competing and cooperating collective actions, guided by well-intentioned or toxic human will. WHAT WE CAN LEARN IN CEE Many experts have claimed that the Indo-Pacific is the new grand theatre of mankind’s future and Southeast Asia will be a pivotal region in the 21st century. Understanding it, therefore, is a must, but I claim, furthermore, that for Central Eastern Europe there are additional motives for developing a greater understanding of ASEAN’s modus operandi. While I have pointed out that Europe’s geopolitical situation differs greatly

Southeast Asia is home to more than 240 million Muslims—about 42% of Southeast Asians, and about 25% of the world’s 1.6 billion Muslims. (In the picture: The Sultan Salahuddin Abdul Aziz Shah Mosque in Malaysia)

from Southeast Asia’s, the CEE region has much more in common with it, as it is (albeit on a smaller scale) locked in a similar three-way bind between Western Europe, the Eurasian Heartland dominated by Russia, and the Eastern Mediterranean hosting the slumbering great power Turkey. The two takeaways for CEE countries should be ASEAN’s emphasis on respecting sovereignty and its search for areas of cooperation where there is mutual interest, a value also reflected in the Visegrad Cooperation. Besides, connectivity must be developed in CEE, by making a denser and more capable network (in speed and volume), and also by balancing and diversifying from the one-sided Western European (mainly German) supply chain through strengthening North–South connectivity. Soft infrastructure is also an important area to develop, and CEE will not avoid controversies, as we have seen with the introduction of 5G networks. To sum up, we have to turn around the old logic of trying to export European solutions to the “rest” of the world and realise that, in many fields, Asia has already surpassed us. We must learn the lessons, both positive and negative, which stem from the geopolitical foundry of the Indo-Pacific, the Southeast Asian region, and the emerging, successful, and rightly proud ASEAN member states.

6 Michael J. Green: Geopolitical Scenarios for Asia after COVID-19. Center for Strategic and International Studies. 31 March 2020. <https://bit.ly/35Zr8Xs > 7 Ian Bremmer–Cliff Kupchan: Top Risks 2020: Coronavirus Edition. Eurasia Group. 9 March 2020. <https://bit. ly/3fSQQld > 8 Kishore Mahbubani–Jeffery Sng: The ASEAN Miracle: A Catalyst for Peace. Ridge Books, Singapore, 2017. 179–184. 9 Lee Kuan Yew: From Third World to First. Singapore and the Asian Economic Boom. Harper Business, New York, 2011. 331. 10 Henry Kissinger: World Order. Reflections on the Character of Nations and the Course of History. Penguin Books, London, 2014. 178–179. 11 ASEAN Outlook on the Indo-Pacific. Association of Southeast Asian Nations. 23 June 2019. <https://bit.ly/2WZoyfX > 1. 12 Robert D. Kaplan: Revenge of Geography. What the Map Tells Us about Coming Conflicts and the Battle Against Fate. Random House, New York, 2013. 220. 13 Parag Khanna: South-east Asia rides fourth wave of regional growth. Financial Times. 11 May 2020. <https://on.ft. com/361Sdcu > 14 Kei Koga [et al.]: U.S.–Japan Cooperation on Indo-Pacific Regional Architecture. Asia Strategy Initiative, Policy Memorandum #3. September 2019. Sasakawa Peace Foundation. 6. <https://bit.ly/2WVk8qw > 15 John J. Mearsheimer: The Tragedy of Great Power Politics. W. W. Norton & Company Ltd., New York, 2014. 407–411. 16 Kaplan, 225–227.

ENDNOTES 1 Robert D. Kaplan: Asia’s Cauldron. The South China Sea and the End of a Stable Pacific. Random House, New York, 2014. 181. 2 Parag Khanna: Connectography. Mapping the Future of Global Civilization. Random House, New York, 2016. 237–241. 3 Saul B. Cohen: Geopolitics. The Geography of International Relations. Rowman & Littlefield Publishers, Lanham, 2009. 300–303. 4 Wu Baiyi: Rethinking the Driving Forces and Conditions Affecting the Evolution of the International Order. China–CEE Institute, Working Paper. 2020/17. 30 April 2020. <https://bit. ly/2zIAOK8 > 5 Laura von Daniels: Repercussions of the US–China Conflict on the Multilateral Order. SWP Research Paper 2020/RP 04. April 2020. 43–46. <10.18449/2020RP04 > INTRODUCTION

DECOLONISATION AND THE CHANGING POLITICAL GEOGRAPHY OF SOUTHEAST ASIA Bence Kocsev CONCEPTUALISING SOUTHEAST ASIA In his comprehensive book, Daniel George Edward Hall, a distinguished expert of Southeast Asia, described the region as a “chaos of races and languages,” and it is true that this part of the world is exceptionally diverse in many regards (ethnically, culturally, linguistically, politically, religiously, geographically, and even ecologically) and has a complex and multilayered history.1 Despite this diversity, in the (so far) only monograph written in Hungarian on the history of Southeast Asia, András Balogh managed to identify certain historical, political, and economic factors that could be considered as the common heritage of the region. Among others, their traditional economies featured similar structures, and, later they all became part of the global colonial trading networks. From very early on, they possessed a certain degree of statehood; they developed characteristic cultural traditions that synthesised Buddhist, Hindu, Chinese, and Muslim elements; with the Mongol–Chinese and, later, European conquests, they share the common historical experience of colonial subjugation; and the humiliating defeat of the traditional colonial powers by Japan in World War II galvanised irreversible processes throughout the area, which led to the independence of these territories.2 One of the things that become evident from these similarities is how entangled the history of the region is with other world regions. Interestingly enough, despite the common features and its various global entanglements, the region was not regarded as an independent entity for a very long time. In fact, up until World War II, it was almost unable to develop an identity on its own, and only a few scholars and geopoliticians conceptualised it as a separate region with its own characteristics. Although a 20

INTRODUCTION

few attempts had been made to conceptualise Southeast Asia as a separate region since the 19th century, based on its distinct social and cultural character,3 it was not until the establishment of the so-called South East Asia Command under the leadership of Admiral Lord Louis Mountbatten in 1943 that the term “Southeast Asia” gained widespread recognition.4 The new international geopolitical architecture that emerged in the direct aftermath of the war (and the admission of Southeast Asia into it) facilitated the foundation of a mushrooming number of new institutes and scientific boards embarking on research projects intended to transform the image of the region into a separate spatial–political–economic entity. Obviously, this newly found interest in the region was substantially stimulated by the new constellations that emerged at the moment of widespread decolonisation in the 1940s and 1950s, and— most importantly in this regard—by the fact that Southeast Asia was perceived to be an area where the communist threat emerging either from the Soviet Union or China should be contained. THE PROCESSES OF DECOLONISATION IN THE REGION To be sure, the region has played an important geopolitical role long before the Cold War. The water passages between the Indian and Pacific Oceans (most notably the Strait of Malacca and the Sunda Strait) and the continental crossroads were vital for shaping global commerce. Thus, Europeans have shown great interest in Southeast Asia where their enterprises engaged in commerce, such as the Dutch East Indies Company or its French and English counterparts, could quickly transform into global players. Therefore, possessions in Southeast Asia served

The European colonisation and dates of independence in Southeast Asia NEPAL BHUTAN CHINA INDIA BANGLADESH MYANMAR (BURMA) 1948

LAOS 1954 THAILAND CAMBODIA 1954

PHILIPPINES 1946 VIETNAM 1954

MALAYSIA 1957

BRUNEI 1984

SINGAPORE INDONESIA 1965 1949 Asia The European colonisation and dates of independence in Southeast France (French Indochina) Netherlands (Dutch East Indies) Portugal (Portuguese Timor)

EAST TIMOR 1975/2002

Spain (Spanish East Indies) / US from 1898 United Kingdom (British Burma, Malaya and Borneo) Continuously independent

as strategic bridgeheads (both militarily and commercially) for various global colonial projects ever since Afonso de Albuquerque had conquered Malacca in 1511. While, initially, European expansion focussed on ports to maintain a broad web of international commercial relations, by the turn of the 20th century, the great majority of Southeast Asia had been under direct or indirect colonial rule, with Siam (from 1939, Thailand) being the only exception that has never been (formally) colonised by any European country.5 World War II and the short Japanese occupation (1942â&#x20AC;&#x201C;1945) that served as a catalyst to Southeast Asian nationalist movements were arguably a watershed in this regard, which commenced the gradual collapse of the imperial order in the region.6 It is nonetheless difficult to exactly determine the date of independence in many of these

countries. Although the declaration of independence took place almost everywhere during the last days of the war, this was not always accepted by the European colonial powers and the local political forces allied to them. As colonial powers sought to maintain a slightly modified status quo ante bellum in the territories they possessed, the de facto independence was usually delayed until national liberation struggles had managed to sweep the reluctant Europeans out of the region. For instance, while Sukarno (the leader of the Indonesian independence movement and the first president of Indonesia) unilaterally proclaimed the independence of Indonesia already in the morning of 17 August 1945, it took four years, many interim agreements (the Linggadjati, the Renville, and the Roemâ&#x20AC;&#x201C;Van Roijen Agreements), and a bloody conflict until INTRODUCTION

the Dutch government agreed to transfer sovereignty to Indonesia as a result of the Dutchâ&#x20AC;&#x201C;Indonesian Round Table Conference in 1949. Regardless of the four-year-long hostilities, the country celebrates its Independence Day in August to commemorate the Proklamasi of 1945. In the Philippines, on the other hand, independence is generally indicated even with three different dates. One is the independence they received from the Japanese, and the other is the day when the US, keeping its previous promise, awarded independence to the country in 1946. Nevertheless, currently, the country celebrates its Independence Day on 12 June, which marks the nationâ&#x20AC;&#x2122;s independence from Spain in 1898.7 The successes of the independence movements in the region were closely tied to global changes like the rise of the US, the victory of communism in China, or to processes of decolonisation elsewhere. Domestic political

changes in France, England, Portugal, or the Netherlands substantially affected these struggles, as well. Therefore, whilst some of the countries such as the Philippines or Malaysia gained independence without any or minimal military efforts, others such as Indonesia or the French colonies in Indochina had to wage a war of liberation against their colonisers. Eventually, the first country that gained independence in the region was the Philippines which separated from the US and became an independent nation in 1946. Burma (present-day Myanmar), which was part of the British Raj for decades before becoming a colonial unit on its own, was next in line to achieve independence in 1948. The former Dutch East Indies, which comprised four main islands (Java, Sumatra, Borneo, and Celebes) and thousands of small ones, gained independence like Indonesia in 1949. The French possessions, Cambodia and Laos, became independent kingdoms in 1953, while

Member states of MAPHILINDO created in 1963 NEPAL BHUTAN CHINA INDIA BANGLADESH MYANMAR (BURMA)

LAOS

PHILIPPINES

THAILAND

VIETNAM

CAMBODIA

BRUNEI MALAYSIA SINGAPORE

INDONESIA

Member states Non-acceding countries

INTRODUCTION

EAST TIMOR

Vietnam fought a ten-year war and achieved independence after the decisive victory on the French in Ðiê.n Biên Phu and as a result of the following Geneva Conference in 1954. The resolutions of the settlement conference, especially the one that divided the country roughly along the 17th parallel into North Vietnam and South Vietnam, had, however, wide repercussions. The former British Malaya pursued a negotiated independence in 1957, and, with the incorporation of North Borneo, Sarawak, and Singapore, it formed the Malay Federation in 1963. (Due to political and economic differences, Singapore left the federation two years later and became a separate republic.) Brunei, which had also been invited to join the Malay Federation, chose a different path and remained a British protectorate for many decades and was granted independence as late as in 1984. Portuguese Timor (current East Timor) had remained under colonial rule until the Carnation Revolution and had a brief independent period before it was invaded by the neighbouring Indonesia in 1975 under the slogan of eliminating the communist threat in the newly independent country. Indonesia eventually relinquished East Timor at the end of the 1990s and its independence was fully restored in 2002. THE SHIFTING POLITICAL GEOGRAPHY OF SOUTHEAST ASIA DURING AND AFTER THE COLD WAR After independence was achieved, tensions were rife in many of the newly established countries. Within the new postcolonial political framework, a number of problems emerged and, for decades, intraregional conflicts, civil and proxy wars, religious and political insurgencies seem to have been the defining features of the region. Being results of a combination of factors, including traditional disputes and previous (colonial) political agreements, the borders of the new states led to particular disagreements, rivalries, and conflicts. In the 1960s, Sukarno, for example, tried to jeopardise the merger of the Federation of Malaya with North Borneo, Sarawak, and Singapore and, thus, the formation

of the Malay Federation, which he considered a neocolonial conspiracy, with his aggressive confrontation policy (Konfrontasi).8 This Malay– Indonesian conflict was further complicated by territorial disputes between Malaysia and the Philippines, which led to the breakdown of diplomatic relations between the two countries. At the peak of the confrontation, Sukarno, for his part, took another diplomatic step and even threatened to withdraw Indonesia from the United Nations if Malaysia would take a seat in the Security Council. Declaring that he was going to crush Malaysia, the Indonesian president announced his Ganyang Malaysia campaign which went beyond diplomatic and propaganda actions and escalated in smallscale cross-border raids in Borneo. Eventually, the tensions between the two countries came to a settlement with the removal of Sukarno by General Suharto whose New Order (Orde Baru) sought to maintain a friendlier policy towards neighbouring countries and was committed to restore good relations with Western powers. Apparently, the normalisation of Indonesian– Malaysian relations played a major role in the integration of the region and paved the way for the Association of Southeast Asian Nations. Neighbourly relations in certain parts of the region were, for a long time, far from friendly, but, in addition to border disputes, other issues also continued to be sources of regional instability. Among others, governments of the newly independent countries had to face internal political challenges posed by ethnic or religious separatism, too. The distinct ethnic and religious identities that were constructed during the colonial times (and the political borders that sometimes separated them) proved to be particularly problematic after the state had gained independence and speeded up certain centrifugal tendencies. Consequently, during the first years of independence, the most difficult problem was to regulate interethnic relations in many of the countries. In this regard, the application of the uti possidetis principle (according to which newly found sovereign states should retain the internal borders that their preceding dependent area had before their INTRODUCTION

independence) provided fertile grounds for ethno-religious conflicts and led to the formation of a variety of secessionist movements or conflicts. With repercussion still apparent today, the Rohingya conflict, among others, is one of the long-lasting consequences of the application of this principle. On the other hand, the Indonesian claim to incorporate Western New Guinea (Irina Jaya) that remained under Dutch control until 1962 was based on the same principle. The fragile unity of the new states was fractured in many other ways. On the one hand, the proliferation of the various Islamic radical movements, having their roots in the colonial era and gaining momentum in the aftermath of the newly attained independence, substantially affected the stability of the new countries. (Besides, they also provided reinforcement for international terrorist networks.) In order to maintain the unity of the state, governments have been coping with Islamic insurgencies of varying intensity in southern Thailand, in the Moro region of the Philippines, or in various parts of Indonesia (most notably in Aceh) since their countries gained independence. On the other hand, secessionist movements, other than religious separatism, also emerged in the aftermath of the colonial era. Interestingly, in a way, the early Moluccan secessionists, who claimed sovereignty on the island of Ambon and on some neighbouring islands in the Banda Sea, even affected the internal politics of the former (Dutch) colonial power for decades. Obviously, the dynamics of the Cold War further exacerbated the fragile situation and substantially shaped the events in the region, as many of the conflicts escalated against the background of this global rivalry. In this respect, Southeast Asia, which has a long history of being a space for contesting imperial projects, yet again became a region where these conflicts would unfold. The rise of Mao’s China and its growing influence in the region, the massive Soviet aid for newly independent countries and for independence movements seeking to gain control in various countries shifted the foreign policy of the US more and more towards the 24

INTRODUCTION

region.9 Henceforth, the Americans did not only support the French efforts to reconquer Indochina but backed the British in Malaya and, initially, the Dutch to regain control over the Indonesian archipelago. As Southeast Asia was declared an important area for the containment of communism after the communist victory in China, the US concluded security treaties with the countries of the region either on a bilateral or on a multilateral basis (for the latter, the Southeast Asian Treaty Organization is a case in point).10 Being played out in the framework of the Cold War rivalry, the events in Indochina attracted close global attention. Besides the decadeslong military conflict in Vietnam (but also closely related to it), the civil wars in Cambodia and Laos also gained worldwide notoriety. Most notably, the seizure of power by Pol Pot and the Khmer Rouge, their extremely brutal and radical regime, shocked the international public in particular. As part of the general communist victory in the region, the Lao People’s Revolutionary Party (emerged from the communist movement, Pathet Lao) assumed political power and declared a people’s republic in Laos in the same year, 1975, when North Vietnamese forces occupied Saigon and the Khmer Rouge seized Phom Penh. Whereas communist movements were also active in other parts of the region and joined forces with other political parties to achieve independence, they could never acquire enough popular support to seize power.11 Here, it is also worthy to note that, within the communist “hemisphere,” and this holds especially true in the wake of the ideological rivalry between the Soviets and Chinese, Southeast Asian communists tended to side with China. From very early on, however, the circumstances of the intensifying global Cold War and its impact on the struggles for decolonisation prompted many anticolonial leaders to rethink the terms of their engagement with the international system. While positioning themselves within the framework of the global Cold War, most of the newborn states were rather reluctant to join the military or economic alliances of any of the

Southeast Asia Treaty Organization (SEATO)

■ Member states ■ Colonies of member states ■ Protocol states

superpowers. Convened by Burma, Ceylon, Indonesia, India, and Pakistan, in 1955, leaders from almost thirty newly independent states, along with observers from national liberation movements throughout the colonial world, gathered for a conference in Bandung, Indonesia. This was the grand opening event of a postcolonial movement that sought to create a separate international space free from any hegemonic pressures and upholding the principle of this ideological neutrality and cooperation—and it also influenced the way the later Southeast Asian cooperation, the Association of South East Asian Nations, functions and positions itself within the international system. In addition to deciding on the political system and, thus, on the international orientation, the new states of Southeast Asia also had to choose the economic course they would follow. The economy of the region, profoundly damaged in the Great Depression, in World War II, and, in many cases, during the consecutive liberation struggles, was in a dreary condition. While, in the early period, the colonial model was pursued, i.e., national economies mainly focussed on increasing the export of agricultural products and raw materials, based on the various experiences deriving from the different loyalties,

under the condition of the Cold War, countries of the region started to follow different paths to modernise their economies. In this regard, it is important to note that Southeast Asian nations did have a certain amount of agency, and, thus, they neither directly followed the Soviet or Chinese course nor the western capitalist path. In fact, they developed their modus vivendi to put either the planned economic or the free trade capitalist principles into practice. While in certain parts of the region greater social and political stability contributed to greater economic growth, other countries produced rather modest results. Since the late 1970s/1980s, some countries of this latter group have managed to overcome their political and social instability, which, in turn, have enhanced their economic performance. A few years later, political changes began to take shape in “communist Indochina,” and countries pursuing autarkic policies or suffering from various forms of embargoes started to open up their economies. In 1986, Laos introduced its “new economic management” programme; in the same year, Vietnam initiated reforms (the policy of Đô i Mó’i) to introduce socialist-oriented market economy, and, towards the end of the decade, Myanmar, which had pursued a strict isolationist policy, announced its modest “open-door policy.”12 INTRODUCTION

Although, with the demise of the Cold War, Southeast Asia essentially vanished from defence maps, given its rapid economic growth and a relatively great social and political stability, it soon became a focus of various businessmen and investors. At some point, the economic growth of a number of countries, their increasingly expanding relations with the world economy, and the recognition of the common interests required the establishment of an integrative organisation that would improve regional performance. From the early 1960s, the recognition of shared values and history led to some limited convergence in certain parts of the region. The foundation of the Association of Southeast Asia (ASA) in 1961 and that of the MAPHILINDO (the cooperation of Malaysia, the Philippines, and Indonesia) in 1963 were both rather unsuccessful examples of efforts to establish common organisations that would serve regional security goals and would strengthen intraregional economic, scientific, and cultural relations. A few years later, with the easing of tensions, confrontations, and hostilities, the way for the foundation of a more successful regional integration was finally cleared. In addition to the reconciliation between Malaysia and Indonesia, yet another unexpected partnership was forged between Malaysia and Singapore. Their leaders found creative ways to overcome their previous mutual distrust in order to focus on common interests. The formation of the Association of Southeast Asian Nations (ASEAN) in 1967 was driven by the uncertainties of the Cold War and was in this regard a response from the non-communist Southeast Asia; however, it was also a product of regional conflict resolution, which successfully created the prerequisites and conditions of regional prosperity and peace. In the coming decades, ASEAN became the most successful regional organisation in the non-Western world, and, by now, it is one of the largest trading bloc globally that has expanded even within and beyond the Southeast Asian region (just think of ASEAN Plus Three and the ASEAN Plus Six partnerships).13

INTRODUCTION

CONCLUDING REMARKS As it was showcased in this article, the countries of Southeast Asia have undergone a remarkable transformation as well as radical and substantial political and economic changes since the end of World War II. They reacted differently to the intensifying Cold War, and changes in the external geopolitical conditions forced the leaders of these nations to continuously rethink the terms of their engagement with the global system. Despite the severe human and social disasters of the previous decades and albeit at different paces, the societies of the region have become increasingly involved in the modern world economy and now are able to provide better living conditions for their citizens than ever before. The ever-changing international political and economic context seems to have attracted the states to the reality of regional networks and eventually focussed their attention on cooperation. Hence, political leaders of the region started to shepherd their countries away from the previous conflicts and oriented their economic policies towards further integration. In this regard, the development of the region in the decades after World War II and the foundation of ASEAN and its enlargement in particular are the best indications that the region is not only existing in the strategic considerations of great powers or in the imagination of geopoliticians and geographers but is able to show unity of vision, direction, and purpose.

ENDNOTES 1 Daniel George Edward Hall: A History of South-East Asia. Macmillan, London, 1968. 5. 2 András Balogh: Délkelet-Ázsia történelme 1945-től napjainkig. Eötvös Kiadó, Budapest, 2016. 11–13. 3 The term “Southeast Asia” (or its variants) started to appear sporadically in English sources during the mid-19 th century while, in a similar fashion, German-speaking academics started to describe the region as Südostasien. Moreover, the theorists of the Japanese geopolitical efforts in the interwar period treated the region (Tōnan Ajia) as a separate unit and as a resource area within the Greater East Asia Co-Prosperity Sphere (Dai tōa Kyōeiken) that was supposed to serve the needs of the Japan

economy. For more, see Donald K. Emmerson: Southeast Asia:

against Malaysia. Ragna Boden: Die Grenzen der Weltmacht.

what’s in a name? Journal of Southeast Asian Studies. 1984/1.

Sowjetische Indonesienpolitik von Stalin bis Brežnev. Franz

1–21.

Steiner Verlag, Stuttgart, 2006.

4 It has, however, never been an undisputed term and a num-

10 Sara Lorenzini: Global Development. A Cold War History.

ber of scholars still underline its problematic nature. As early

Princeton University Press, Princeton–Oxford, 1990. 50.

as in the 1950s, the British colonial servant and historian Victor

11 From the late 1940s, the military wing of the Malaysian

Purcell suggested the usage of “Indosinesia” to overcome the

Communist Party fought a ten-year-long guerilla war against

shortcomings of the already established but for him unaccept-

the British, but eventually they were unable to gain power. In

able term “Southeast Asia.” In his view, his neologism would

Thailand, communists ignited a guerrilla war against the Thai

not only acknowledge the Indian and Chinese influences, but,

government in the mid-1960s. In Indonesia, the Communist

with the suffix “nesia,” which derives from the Greek word for

Party formed a united front (NASAKOM) with nationalists and

island (nesos), it would also embrace the insular part of the

religious parties to support Sukarno’s policies. In spite of their

region in its name.

positions in the previous establishment, after Sukarno’s fall

5 Indirect rule was a mode of governance to control certain

from power, Suharto banned the Partai Komunis.

territories of the colonial empire and their inhabitants through

12 P. P. Karan–W. A. Bladen: The Changing Political Geography

the use of traditional rulers and traditional political institutions.

of Southeast Asia. In: Southeast Asia: A Ten Nation Region,

The line between direct and indirect rule was, however, often

vol. 34., edited by Ashok K. Dutt. Springer, Dordrecht, 1993.

blurred and colonial rulers sometimes exercised both forms

13 The founding treaty was signed by the foreign ministers of

within one colonial unit. While, e.g., Java was governed direct-

Indonesia (Adam Malik), the Philippines (Narciso R. Ramos),

ly, other principalities in Borneo, Celebes, and elsewhere in the

Malaysia (Tun Abdul Razak), Singapore (Sinnathamby

Dutch East Indies were under indirect rule. The same could be

Rajaratnam), and Thailand (Thanat Khoman) in Bangkok.

observed in Indochina, where the French imposed direct rule

Currently, the ASEAN also includes Cambodia, Laos, Vietnam

on Cochinchina (the southern part of the current day Vietnam),

and Brunei. For a brief history of the organization, see ASEAN

whilst Tonkin or Amman were set under indirect governance.

at 30. Association of Southeast Asian Nations. 9 July 2012.

For more, see Carl Trocki: Political Structures in the Nineteenth

<https://bit.ly/31TAIeo >

and Early Twentieth Centuries. In: The Cambridge History of Southeast Asia, edited by Nicholas Tarling. Cambridge University Press, Cambridge, 1993. 79–130. 6 For a detailed overview, see, e.g., Anthony Stockwell: Southeast Asia in War and Peace: The End of European Colonial Empires. In: The Cambridge History of Southeast Asia, vol. 2., edited by Nicholas Tarling. Cambridge University Press, Cambridge, 1993. 325–386. 7 Balogh, 20. 8 For more about the neighbourly relations on Borneo and the Konfrontasi in particular, see Gregory Poulgrain: The Genesis of Konfrontasi. Malaysia, Brunei, Indonesia 1945–1965. C. Hurst & Co., London, 1998. 9 Among others, in Indonesia, both the Chinese and the Soviets sought to exert their influence and supported the newly independent country with large quantities of aid. As Ragna Boden demonstrates, Indonesia was one of the first developing countries benefitting from Soviet support and, for many years, was second after Egypt to receive Soviet aid. Under the framework of economic and technical assistance, the Soviets even financed many of the military projects of Sukarno, such as the campaigns in Irian Jaya (West New Guinea) and the actions

INTRODUCTION

TRANSFORMING HIGHER EDUCATION TO MEET FUTURE CHALLENGES: THE EXPERIENCES OF NUS— INTERVIEW WITH PROFESSOR TAN ENG CHYE, PRESIDENT OF NUS Zsolt Csepregi, August 2020, Budapest

Professor Tan Eng Chye Elected as president of the National University of Singapore in 2018, Professor Tan Eng Chye is the 23rd leader to head the institution. He obtained his BA in Mathematics and did his PhD at Yale University. He joined NUS in 1985 and has held visiting positions at various universities overseas. His work as an educator and scientist earned him numerous awards and honorary titles. He is also a member of several councils, e.g., in the International Advisory Council of the Southern University of Science and Technology in China; Singapore’s Future Economy Council; the Agency for Science, Technology and Research; and the National Research Foundation.

INTRODUCTION

Singapore’s local universities are highly regarded globally. The National University of Singapore (NUS) and, particularly, the Nanyang Technological University (NTU) have done very well on the global ranking of universities. What are the main factors in the case of NUS that have made this impressive accomplishment possible? Allow me to preface my responses by first highlighting the ongoing impact of the COVID-19 pandemic. As a small country globally connected to the world, Singapore has been greatly impacted by the pandemic—our GDP is expected to contract by up to 7% this year, an unprecedented figure. Universities, not just in Singapore but across the world, have also been affected. For NUS, our core activities lie in three spheres: education, research, and enterprise. Each of these has global dimensions, such as international student exchange, overseas startup nodes, research with partners, and many other connections, and all these have been impacted to a certain degree, in some instances drastically. In the long term, it is not yet clear how the higher education landscape would be permanently affected by COVID-19. However, the tentative

picture emerging suggests an employment and labour market that will be much changed, with old jobs disappearing, and new ones, requiring new skills or a new blend of skillsets, rising in demand. Universities will have to cater for this changing environment and to reconfigure themselves quickly if they are to remain both relevant and dynamic. However, returning to your question, perhaps let me start by saying that universities in Singapore do not have as long or distinguished a history as those in the US or Europe. NUS is Singapore’s oldest university; still, we are only 115 years old. So, in university terms, we are a relative youngster! The development of NUS and other local universities has actually been in tandem with Singapore’s development as a nation. NUS started as a small medical college supported by the local community when we were still part of the Straits Settlements, under British rule. Our first intake was a modest twentythree students. When Singapore first gained independence, and for many years afterwards, our priority was to train and educate young cohorts of students for a rapidly developing nation. During this period, NUS

focussed on being a university with a strong educational emphasis. As Singapore became an advanced and then a First World economy, it was no longer sufficient to model ourselves against other countries; to go further, we had to innovate and come up with our own unique ideas and solutions. As the nation’s flagship university, we had to do the same. This approach was behind some of our pioneering initiatives during the period, including U Town, Duke–NUS, Yale–NUS, the Yong Siew Toh Conservatory of Music, and the Lee Kuan Yew School of Public Policy, among others. These ground-breaking efforts brought us global prominence and recognition. The Singapore Government has also played a crucial role and has been far-sighted in making higher education a key pillar of global competitiveness. For example, the government set up the framework for publicly funded Autonomous Universities in 2005, which allowed each university to pursue individualised strategies as corporatised, not-for-profit entities. In the case of NUS we aimed to become a broad-based comprehensive university, with complementary strengths in education, research, and enterprise excellence. In terms of research, a significant factor propelling NUS’s ascendant trajectory has been Singapore’s strong commitment to funding R&D. Our first National Technology Plan (1991–1995) had a budget of USD 2 billion; for the current Research, Innovation and Enterprise (RIE) plan from 2016 to 2020, the funding commitment was SGD 19 billion. On a concomitant basis, innovation and entrepreneurship (I&E) were stepped up as core University endeavours. I&E links up to our research and education activities by seeding an entrepreneurial culture, creating start-up opportunities for our students, faculties, and researchers, and by bringing our most promising breakthroughs and technologies to market. It bears emphasising that, although education, research, and I&E are distinctively separate activities, synergy is critical to expanding and maximising opportunities, and to amplify the impact of our research advances and innovations.

OUR ALUMNI, WHICH NOW NUMBER ALMOST 300,000, CAN BE FOUND ACROSS THE WORLD AND PLAY AN ACTIVE ROLE IN SHAPING THE UNIVERSITY’S EVOLVING ROLE IN MEETING THE CHALLENGES OF THE FUTURE. A final factor behind NUS’s continued ability to adapt and innovate has been the unwavering support of our university community, past and present. In particular, our alumni, which now number almost 300,000, can be found across the world and play an active role in shaping the university’s evolving role in meeting the challenges of the future. What do you see some of the most pressing short- and long-term challenges that NUS and universities across the world need to address are? Much like other universities, our immediate priority during the onset of the COVID-19 pandemic was the safety and well-being of our community. We instituted measures such as temperature scanning, safe distancing, and staggered work schedules to reduce the risk of transmission within the campus. Meanwhile, we also took the opportunity to innovate and enhance our services by introducing, for instance, a mobile app, uNivUS, which allows for real-time INTRODUCTION

updates and notifications, along with forms to submit health declarations, amongst other features. This helps to keep our community informed and assured of the latest developments and measures. Our second concern was the impact of the pandemic on our graduating cohort. We recognised that the employment market would be much more challenging for them this year. Our response was the NUS Resilience and Growth Initiative 2020, which includes employment assistance, enhanced financial aid for students, and funding support for start-ups with community impact. We aim to provide 200 jobs within NUS to our new alumni, with another 800 apprenticeship positions with partner enterprises. Although unexpected, COVID-19 demonstrated the power of disruptive forces to impact individuals and communities. By scanning our environment, we can try and anticipate other disruptive forces with equal or even greater power to impact the future. Universities can then play a positive role by alleviating negative impacts, providing solutions, or helping the community to respond or adapt to change. One clear emerging theme today is sustainability. This comprises a whole range of major issues, such as climate change, energy and food security, and sustainable development. Successful sustainability solutions will also need to incorporate the notion of equitable access and the promotion of broad community benefits. Another major disruptive force at work is digitalisation and the ongoing waves of technology advancement. Working from home (WFH) became the norm during this COVID-19 period, and this may be the start of a decisive shift towards new ways of living and working in the future. COVID-19 also gave a significant push towards online learning. While not yet fully replacing inclass learning, blended classrooms, particularly for universities, may become more widely practised. This has major implications on how we develop, deliver, and assess the learning of our students. Digitalisation, as well as other technologies of the Fourth Industrial Revolution, are gaining tremendous momentum in reshaping the world of work. Industries and jobs will be 30

INTRODUCTION

disrupted and subjected to constant rapid change. Therefore, we need to prepare not only our young students but our existing workforce and to keep learning and adapting to changing conditions. For universities, this means that if we are to play an important role in such a future scenario, we will have to change our traditional focus, embrace teaching and learning as a lifelong endeavour, and reach out to many more diverse groups of learners. NUS has been innovating at a rapid pace to meet the challenges of future employment. What are some of your key considerations, and how do you envision lifelong learning, a strategy that Singapore has deemed essential for its global success? We are evolving quickly because the world around us is changing so rapidly. The overriding concern is to prepare students to be future ready. This means not just accumulating knowledge but using it in creative and imaginative ways to solve problems. We also seek to enhance long-term employability, and this means cultivating traits such as resilience, adaptability, and embracing a constant spirit of learning. We seek to foster these qualities through innovative, integrated, and experiential learning programmes. Our core approach includes our General Education (GE) framework, which offers a broad range of topics distinctively separate from each studentâ&#x20AC;&#x2122;s disciplinary interest. We also strongly encourage interdisciplinary and crossdisciplinary learning and knowledge application to broaden intellectual frameworks. In June this year, we announced that we would be piloting ten Cross-disciplinary Degree Programmes (CDPs), and we are planning to do more. Extended internships and apprenticeships will also become a more distinctive feature of our student programmes. For us, a small nation without any natural resources, our people are the primary and most valuable asset. Singaporeâ&#x20AC;&#x2122;s national movement for lifelong learning is known as SkillsFuture. Lifelong learning is the key to increased productivity, economic resilience, and global

competitiveness. It has not been easy to shift mindsets to embrace continuous learning, but the message has steadily gained broader acceptance. To be successful, extensive coordination between the government, industry, and education providers such as universities is needed. On NUSâ&#x20AC;&#x2122;s part, we made a major shift with the launch of NUS Lifelong Learners or NUS LÂł programme, wherein every NUS student enrolment will be valid for twenty years from the point of undergraduate admission. This opens the avenue for our 300 thousand alumni to access a wide variety of courses, ranging from short modules to full postgraduate programmes. These courses are nationally certified and emphasise skills-based learning and industry relevance. On the other hand, adult learning is different from undergraduate learning. Learners have different needs and priorities. I think there is great scope for innovation and adaptation in adult learning, and this is a field which will show rapid growth and development in the decades ahead. Where do you see the opportunities and areas where universities in Europe and Asia can collaborate further? Singapore is known for its alliance between the government, the industry, and its universities. How was this synergy achieved? We continue to see many opportunities in research, education, and enterprise that universities in Asia and Europe can partner with and collaborate on. In research, a strong starting point would be the recognition that many of the challenges the world faces today are common in nature, complex, and closely interrelated. For example, no country is likely to be able to mitigate climate change by implementing measures solely on its home territory. Another area would be resource management, which would require extensive innovation and adjustments across the complex chain of consumption, production, and logistics. This is certainly beyond the range of expertise and capabilities of any one nation. Collaboration and partnership will be crucial if we are to achieve a new era of sustainability.

INDUSTRIES AND JOBS WILL BE DISRUPTED AND SUBJECTED TO CONSTANT RAPID CHANGE. THEREFORE, WE NEED TO PREPARE NOT ONLY OUR YOUNG STUDENTS BUT OUR EXISTING WORKFORCE AND TO KEEP LEARNING AND ADAPTING TO CHANGING CONDITIONS. Powerful technologies such as AI and bioengineering are beginning to reshape societies. We need to better understand their ongoing and potential impact across diverse communities and learn to tailor solutions that are a better fit. As Asia is growing in economic strength and depth, there is an increasing need for the East and West for greater mutual understanding to bridge perspectives and to align approaches. Interactions, exchanges, and exposure programmes, at professional, academic, and student levels can be immensely beneficial for improving communications and building strong bonds and networks. NUS has many strong ties with universities across Europe, and we look forward to growing our relationships in the years ahead. Concerning the synergy you asked, in Singapore, we have a unique arrangement, known as the tripartite arrangement which brings together the INTRODUCTION

government industry, and the labour force. Through extensive discussions, broad directions for various sectors of the economy are mapped out, including manufacturing, lifestyle industries and services, and the built environment. These discussions are framed in key platforms such as the Future Economy Council and the Research, Innovation and Enterprise Plan. Industries and higher education leaders, for example, at NUS, are then encouraged to explore areas of cooperation and partnership that align with these broad directions. For NUS, we believe in public-private partnerships that are long-term and synergise and align efforts in our key areas of research, education and training, and enterprise. NUS has also established Corporate Labs, in partnership with leading companies. Corporate Labs are funded by the National Research Foundation in key research themes such as offshore marine engineering, cybersecurity, and applied materials. Besides research-related projects, our labs aim to develop talent and manpower as well as to offer training and apprenticeship opportunities. Projects with the most promising prospects may be offered market or commercialisation opportunities, with strong support by NUSâ&#x20AC;&#x2122;s vibrant entrepreneurial ecosystem, which includes access to VC funding, IP support, and access to global markets. Our research activities are not undertaken in isolation but are embedded as parts of wider, integrated, thematic research clusters such as sustainability, maritime issues, and Smart Nation (that is to say, data sciences, artificial intelligence, cybersecurity, optimisation research, and analytics). This encourages the efficient diffusion of new ideas and knowledge within the cluster and speeds up the cycle of application and innovation within a broader space. So synergy is a key approach that allows NUS to focus its efforts and resources in an integrated manner and to maximise benefits and outcomes across the interlinked domains of research, education, and enterprise. Singapore is a very diverse country that has various communities with different mother 32

INTRODUCTION

AS ASIA IS GROWING IN ECONOMIC STRENGTH AND DEPTH, THERE IS A GROWING NEED FOR THE EAST AND WEST FOR GREATER MUTUAL UNDERSTANDING TO BRIDGE PERSPECTIVES AND TO ALIGN APPROACHES. tongues, including Mandarin, Malay, and Tamil. However, education is conducted in English. What are some of the highlights and challenges of this practice? We were a former British colony, so the language of administration, law, and international trade was naturally English. After gaining independence, English was retained as the working language, which served two essential functions: the efficient understanding among our diverse communities and the bridge that facilitates our connection to the world. Singaporeâ&#x20AC;&#x2122;s livelihood, then as now, depends on our connectedness, and English has played a major role in enabling our seamless and rapid communications with the world. We have retained and indeed promoted mother-tongue education in our schools because we see the language as a key transmitter of culture and heritage. Through such an approach,

we try to blend the best of both worlds: English for modern knowledge and global ease of communications and mother tongues to preserve diversity and identity. Here, credit should go to our comprehensive and rigorous preuniversity education system for instilling this deep-seated appreciation for English as a common language and mother tongues as cultural transmitters. Our connectedness with both East and West has since become one of the distinctive features of Singapore as a global city. And our comfort and familiarity with diversity has proved invaluable in building linkages and networks across Asia, including China, India, and Southeast Asia. Singapore sits at the crossroads of the Asia-Pacific and the Indian Ocean and at the heart of ASEAN. How does NUS see its role and explore possibilities within these regional and geographic frameworks? Singapore is indeed fortunate to be strategically located at the crossroads of East and West and the heart of ASEAN. There have been many projections that the weight of economic growth will shift towards Asia and the Pacific Rim sometime during the 21st century and that this will dramatically expand opportunities for growth and development. As a trade-dependent nation, Singapore has always committed to supporting an open, rulesbased trading system. Our consistent position has been that a relatively free flow of goods, services, and ideas offers the best path forward for nations and communities at different levels of development to tap into diverse opportunities and to attain growth and prosperity. As such, if the world, or a region, should take a decided shift towards reducing access, or tightening the flow of trade and exchanges, it would significantly impact Singapore, and by extension, NUS. We are observing the rising USâ&#x20AC;&#x201C;China trade tensions with close concern, and we hope that differences can be resolved with goodwill and mutually beneficial arrangements. A university is an organisation with a unique mission, as it is charged with advancing knowledge and uplifting society through innovation, ideas, and new technologies. One of

the most powerful ways to do so is through partnerships, sharing, and exchanges. As a university, we are globally oriented. We have many partners and collaborations both within Asia and globally. For example, we offer double and joint degree programmes with other leading universities, and our students enjoy overseas exchange and internship programmes that range across the world. Another example would be our overseas start-up nodes where our globally recognised brand, Block 71, often partners with established entities such as major corporations and government enterprises to tap into local and regional markets and opportunities. In 2019, we number some 350 partner universities in the Americas, Australia, Asia and Europe. Many of our programmes and initiatives would not be possible without an international component or partnership. NUS is also an active member of several leading global university alliances, such as the International Alliance of Research Universities, the Association of Pacific Rim Universities, and the ASEAN University Network. ASEAN is our home region and the one we are most familiar with. With the regionâ&#x20AC;&#x2122;s projected dynamic growth, we see entrepreneurship and entrepreneurial education as powerful tools to deliver innovation, create new markets, and expand opportunities for individuals and communities. I have already mentioned the startup nodes we had established in various ASEAN nations; we are also actively encouraging our NUS students to explore and immerse themselves in the region through internships, exposure programmes, and exchanges. In summary, we see international linkages and collaborations as essential to raise the relevancy, impact and dynamism of NUS.

INTRODUCTION

ASEAN PERSPECTIVES

INTERVIEW WITH HE NG SHIN EIN, AMBASSADOR OF THE REPUBLIC OF SINGAPORE TO HUNGARY Zsolt Csepregi, August 2020, Budapest

HE Ng Shin Ein Serving as Singapore’s Non-Resident Ambassador to Hungary since 2016, Ms Ng Shin Ein has strengthened connections between Singapore and Hungary through bilateral exchanges, bidirectional visits of business delegations and facilitated the establishment of people-to-people connections. She is also active in the private sector as a board member of various companies, e.g., Starhub Ltd, a leading homegrown telecommunications company, former director of Fairprice, Singapore’s largest supermarket operator, or advisor to Grab Holdings Inc, South east Asia’s largest mobile technology company.

Starting with the overall context of our interview on economic relations between Singapore and Hungary, how do you see Singapore’s economic development in the coming years, what are the main challenges, opportunities, and tasks? Singapore has been a beneficiary of the rules-based international order, free trade, and the flow of investments. However, even prior to COVID-19, there were worrying trends that posed challenges to the global system. These include escalating US–China tensions, a pushback against globalisation and free trade, and the increasing bifurcation of technology and supply chains. Structural changes such as the fragmentation of global supply chains and technological disruptions were already in motion. There were also signs of a slowdown in international trade and investments. COVID-19 has accelerated these pre-existing trends, amplified them, and broadened the areas of impact. Looking beyond the pandemic, the global economy will not be returning so soon to the levels of openness and connectivity that we have been accustomed to. We will have to constantly adapt, restructure, and transform to emerge stronger. There are certainly opportunities that come with these challenges.

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In particular, we now see real opportunities to further accelerate the digitalisation of Singapore’s economy, an effort that was in progress before the advent of COVID-19. Out of necessity, businesses have had to innovate and adapt to digital solutions that would have been alien to them a year ago. In this regard, Singapore’s efforts to digitalise in the past few years have paid off immensely, and we are in a good position to help businesses and citizens adapt. We have seen the equivalent of five years of consumer and business digital adaption in just eight weeks when COVID-19 began. There is no going back, and we will have to continue to accelerate digital transformation across all sectors and prepare ourselves for the postCOVID-19 world. One silver lining of the pandemic has been the opportunity to deepen existing relationships and forge new ones. The pandemic has underlined the importance of international cooperation in the face of global challenges. In the past few months, Singapore has worked closely with friends in Europe and other global partners on issues of common interest, ranging from supporting multilateralism and keeping supply chains open to repatriating stranded travellers. This has reaffirmed the trust and strengthened the friendship between us. Even in this pandemic,

we can take comfort in being dependable partners to each other as we work together to tackle global challenges. Could you describe Singapore’s economic relationship with its main regional partners in ASEAN? Is Singapore interested in further economic integration in ASEAN? ASEAN was established fifty-three years ago with peace and prosperity as its founding principles. At the time, the region was mired in hostilities and confrontation, but ASEAN offered countries a platform to build trust and cooperation, thus bringing peace and stability to the region. This has been serving as the key pillar for the economic growth of Singapore and Southeast Asia. ASEAN has transformed the economic development of each of its member states, but it is our combined economic heft that is particularly salient. The establishment of the ASEAN Economic Community (AEC) in 2015 has made ASEAN more integrated and united. With a combined GDP of about USD 3 trillion in 2018 and a population of about 650 million, 60% of whom are under 35 years old, ASEAN represents a young, vibrant workforce and an attractive consumer market. By 2030, ASEAN is forecast to become the fourth-largest economy in the world. To realise this potential, we will have to press on with our regional economic integration efforts. This includes pushing for the full implementation of the AEC Blueprint 2025, as well as working with like-minded countries to forge closer economic linkages. To date, ASEAN has concluded six Free Trade Agreements (FTAs) with key economic partners. The Regional Comprehensive Economic Partnership will be the world’s largest trading bloc when it is signed later this year. The EU is a key Dialogue Partner with whom ASEAN is keen to deepen linkages. Singapore, as the ASEAN–EU Country Coordinator, is working actively to facilitate this. As two of the world’s leading regional organisations, ASEAN and the EU share much in common, including a belief in the importance of effective multilateralism, a rules-based international

order, and a commitment to free trade and economic integration. We commemorated the 40th anniversary of dialogue relations in 2017 and are working to upgrade ASEAN–EU relations to a Strategic Partnership. On the economic front, the EU has concluded several bilateral FTAs with ASEAN member states such as Singapore and Vietnam, and we should work towards an ASEAN–EU FTA. Negotiations are currently ongoing for an ASEAN–EU Comprehensive Air Transport Agreement which would be the firstever bloc-to-bloc agreement to enhance air connectivity between the two regions. Taken together, these efforts will increase opportunities for exchanges and interaction among our people and further strengthen the links between ASEAN and the EU. How does the US–China trade war affect Singapore, and how can you mitigate the great powers’ contest in your region when you have deep relations with both of them? Asia depends on stable ties between the US and China to have a secure and predictable environment for prospering. Sharpening US– China tensions will impact not just Singapore but also the rest of Asia and the world. This is especially so for small, open economies that are highly dependent on trade. The US–China trade tensions have created uncertainty and volatility in global markets. The tit-for-tat tariffs have farreaching implications, given the integrated nature of today’s global supply chains. Should they be sustained, global business and consumer confidence will be reduced, exacerbating the damage COVID-19 has already done to our economies. The world looks at the major powers to overcome their differences, build mutual trust, and work constructively to uphold a stable and peaceful international order. Much will depend on the strategic choices that the US and China are making. What we can do is to continue to remain open to all partners, be it the US, China, or Europe. Singapore will continue to work with like-minded partners to uphold an open and rules-based international trading system and support for multilateralism. ASEAN PERSPECTIVES

Zooming in on Central Europe and, especially, Hungary, what role does the region play in Singapore’s foreign economic relations and where could these relations develop? Is there a specific Singaporean approach or strategy towards Central Europe? Singapore and Hungary have a cooperative and long-running relationship. In fact, this year marks the 50th anniversary of diplomatic relations between Singapore and Hungary. Over this time, Singaporeans have come to deeply appreciate the hardworking and innovative nature of the Hungarian people and their rich culture. One lesson that we have learnt through the course of this long relationship is that, despite the geographical distance that separates us, many of the challenges we face are remarkably similar. Underlying this is the fact that no country or city is immune to the global changes brought about by emerging technologies, shifting economies, urban challenges, and, now, COVID-19. It is important for cities to come together to share good ideas and best practices, explore collaborations, and test people-centric smart solutions. Singapore and Hungary have worked together to overcome these challenges on numerous occasions, aided by the strong links between businesses, as well as in research and development. Recent examples include HungaroControl’s contribution to the Smart Digital Tower in Changi Airport and the Memorandum of Understanding between the Ministry of Foreign Affairs and Trade of Hungary and the Singapore Space & Technology Association to cooperate on space activities. To commemorate the 50th anniversary of diplomatic relations, Hungary Post and SingPost have also collaborated on a joint stamp that will be unveiled soon. Singapore welcomes opportunities where we could work with Hungary to increase food imports from Europe as part of our broader efforts to diversify our food supply sources and markets. We import more than 90% of our food from 170 countries and regions, and I believe there are opportunities for agri-food trade cooperation between Hungary and Singapore. In fact, both 38

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THE PANDEMIC HAS UNDERLINED THE IMPORTANCE OF INTERNATIONAL COOPERATION IN THE FACE OF GLOBAL CHALLENGES. countries have been exploring the importation of agricultural products from Hungary, and I hope this will bear fruit in the near future. Which kind of investments would you suggest for Singaporean partners in Hungary, and which sectors should Hungarian capital consider for investment in Singapore? The EU–Singapore Free Trade Agreement, which entered into force on 21 November 2019, affords investors in both countries new opportunities for investments in both ways. Tech-based start-ups are likely to see significant growth given the rapid pace of digitalisation and, in some industries, the boost provided by COVID-19. As a matter of fact, Hungary is one partner country in the current EUREKA GlobalStars-Singapore Call where companies from Hungary and Singapore are encouraged to cooperate on joint technology development and innovation. We also see great potential in Hungary’s automotive and aviation sectors where Singapore companies can benefit from your proximity to European customers and from good manufacturing capabilities. Furthermore, being located at the crossroads of three TransEuropean Transport Network Corridors, which grant access to 500 million EU consumers, Hungary is an attractive place for logistics activities by Singapore partners. Singapore is also looking to grow its expertise in the agri-tech sector. Areas such as precision agriculture, sustainable farming, and value chain

design could be of interest to Hungarian food producers. Singapore is the top investment destination in ASEAN for agri-food tech startups, drawing in a total of USD 177 million in 2019. We would be pleased to have Hungarian start-ups, accelerators, and financiers join this growing ecosystem in Singapore. Singapore is considered in the world as one of the best examples of successfully adapting to its environment, utilising technology and synergies between business, government, and academia. What would be the most important advice we, in Hungary could take from Singapore’s success? Singapore has gone through various phases in its development, with each phase presenting new challenges that we had to find solutions to in order to progress. Our economy has undergone numerous transformations since 1965 when we became independent. To cope with the high unemployment back then, we focussed our energies on labour-intensive industries to create employment. We have since moved on to capital-intensive industries, embraced the knowledge economy and are busy laying the foundations for entering the digital economy. To survive, small countries like Singapore have to continue to adapt to new circumstances and learn from our friends, including Hungary. We recognise that, in an interconnected world, Singapore can only thrive if all our friends and partners flourish. Hence, we are always happy to share our experience and best practices. To do so, we established the Singapore Cooperation Programme to curate courses, seminars, workshops, and study visits on a range of topics of interests to our friends in the developing world. However, we are cognisant that every country has its unique circumstances and development stage, and we do not presume to have all the answers. Much of what we have learnt from others has been adapted to our circumstances and needs. We encourage our friends to look at our experiences critically and to similarly adapt what is feasible. While it is very soon to see the effects of the COVID crisis, generally, if it is true that

supply chains will shorten, how will this affect Singapore’s economy? What can it do to mitigate the difficulties? Are there any opportunities in this tragic crisis for Hungarian–Singaporean cooperation? In the wake of the COVID-19 pandemic, Singapore redoubled its efforts to maintain its connectivity and openness to the world. To this end, we also worked closely with like-minded partners. For example, Singapore and New Zealand initiated a Joint Ministerial Statement on ensuring supply chain connectivity amidst the COVID-19 pandemic to affirm our shared commitment to maintaining open supply chains. Ten other countries have since joined this collective response. This underscores our joint commitment to open trade links and seamless connectivity. Singapore also worked closely with ASEAN member states to issue the Hanoi Plan of Action on Strengthening ASEAN Economic Cooperation and Supply Chain Connectivity in Response to the COVID-19 Pandemic. Singapore welcomes more like-minded partners to join its continued efforts to keep trade lines open and refrain from imposing restrictions that hinder trade so that we can rebuild our economies and emerge stronger from this crisis. The sharp falls in international trade and travel have exacerbated economic challenges. Amidst the disruptions brought about by the pandemic, we must work together to strengthen international trade and increase trade flows. This will be important for a strong, sustainable, and resilient recovery in our economies. In this regard, our EU–Singapore Free Trade Agreement has been useful in cushioning the impact of COVID-19. EU imports from Singapore actually increased by 12% in the first six months (between December 2019 and May 2020) after the Agreement had come into force. We should continue to encourage our businesses to seek out new opportunities, be it in terms of diversification of food sources and exports, digital economy, research & development, or innovative start-ups. Against this backdrop, I am confident that there are ample opportunities to deepen and strengthen cooperation between Singapore and Hungary. Thank you. ASEAN PERSPECTIVES

SUSTAINABLE DEVELOPMENT TOWARDS AN INTEGRATED ASEAN ECONOMIC COMMUNITY—LESSONS FROM THE FIGHT AGAINST COVID-19 IN VIETNAM Tran Dinh Lam and Hung Dat Hung This paper analyses the advantages and limitations of Vietnam in terms of technology, capital, human resources, and environment during its economic development process. It also recognises some achievements helping Vietnam to overcome poverty and become a middle-income country and especially points out some positive aspects in the fight against the COVID-19 outbreak. The study found that transparency and responsiveness in information dissemination are essential to increase awareness of the current social and economic situation, and there is a sense of duty and responsibility that is to be followed to protect the community’s welfare and mitigate the consequences. The first part of this paper mentions some successes and limitations of Vietnam’s economic development between 2000 and 2015 and their impact on sustainable development. The second part discusses the opportunities and challenges during Vietnam’s economic integration process. The third part points out some factors contributing to Vietnam’s success in the fight against the COVID-19 outbreak. The last part is a general conclusion and offers some lessons necessary for promoting sustainable development en route to the integration of the ASEAN Economic Community. SUCCESSES AND LIMITATIONS DURING THE 2000–2015 ECONOMIC DEVELOPMENT AND THEIR IMPACT ON SUSTAINABLE DEVELOPMENT On technology and capital The policy on reforming the country’s growth model was passed at the 10th and 11th National Congress of the Communist Party of Vietnam, at which a shift towards technology-driven growth was emphasised. Currently, growth continues to be 40

ASEAN PERSPECTIVES

oriented towards an increase in private and foreign investment. Total-factor productivity contributing to growth increased from 4.5% during the 2006–2010 period to 29% during the 2011–2015 period; on the other hand, capital investment fell from 78.2% to 51.3%. However, economic growth during this period is mainly attributed to an increase in foreign investment, making the economy unsustainable.1 It is a short-term challenge to continuously improve the status of domestic private businesses, since industrial growth will not last if the main contribution is from the FDI sector.2 It should also be noted that most of the FDI is currently focussed on the real estate area and other labour-intensive sectors, which does not exert many positive impacts on domestic sectors due to the many privileges this sector enjoys.3 Vietnam should pay more attention to the quality of FDI rather than its sheer amount and encourage FDI to flow into the areas of domestic private businesses.4 On human resources According to the Human Development Report 2019 issued by the United Nations Development Programme, Vietnam has achieved good progress in human development with its HDI index reaching 0.63 (so the country ranks 118 out of 189)5 and approximating the ceiling threshold of the medium human development group. The rate of labour productivity during the period between 2011 and 2015 was 4.3% on average, 3.4% higher than during the period between 2006 and 2013,6 as labour allocation towards the industrial and building sector increased. Those efforts prove that the economy is transforming at a deeper level than before. Nevertheless, labour in agriculture, forestry, and fishery still accounts for 44% of the total national labour force—while high-skilled labour with

a vocational degree for 18.1%.7 The lack of skilled labour and good infrastructure still poses a general problem. This problem is worse in rapid-growing regions such as Ho Chi Minh City and some peripheral areas. Another drawback to economic progress is the slow rate of technology transfer, as most of it happens in assembling and processing technologies.8 According to the General Statistics Office of Vietnam, labour productivity during the period between 1994 and 2013 increased at the average annual rate of 4.87%. Albeit relatively high, this figure is still low compared to that of other regional countries, as seen in Chart 1. On society The new rural building programme, which is currently implemented in all rural areas throughout the country, has brought about many positive changes—such as expanded infrastructure, better supply of electricity, clean water—in the lives of many people and better social services, such as education, market, credit institutions, etc. Regarding information accessibility, almost all citizens are well-connected thanks to the promotion

Chart 1: Comparison between labour productivity of Vietnam and other regional countries (Vietnam = 1) 30 29.2

20 18.0

10.6 10 6.6 4.6

2.7 0

Singapore Malaysia

3.1 1.8

2.9

1.8

Thailand Philippines Indonesia

■ 1994 ■ 2013

of the internet and mobile phones. Overall, the programme helped to improve the living standards of local people, raising their income, and, ultimately, contributed to the improvement of Vietnam in the middle-income group in 2008.9 On the environment Environmental achievements are eclipsed by pressure from the increasing pollution, as growth came at the expense of the environment for the past few decades. Exhausting natural resources and pollution from industrial waste pose significant health risks, especially to places around Hanoi and Ho Chi Minh City.10 Vietnam is also one of the many countries susceptible to climate change primarily because of the highly vulnerable Mekong Delta. This risk becomes more and more severe due to the increasing energy consumption and heavy reliance on coal power plants.11 Water pollution from industrial activities, urbanisation, and the rapid pace of construction are even worse in the industrial centres in the lower basin of Đồng Nai, Cầu, and Nhue rivers.12 One of the most widely known cases is the environmental disaster at the Formosa Ha Tinh Steel Corporation, which caused mass fish death, spreading across several coastal provinces including Quảng Bình, Quảng Trị, and Thừa Thiên Huế. This incident caused a great loss in both eco-social and environmental areas, making an impact on local business, tourism, and the livelihood of fishermen.13 It is safe to say that economic development in Vietnam is not sustainable, despite the achievements in poverty alleviation and social stability during the past three decades. That is evident from the country’s reliance on FDI, the low application of technology in production, the small improvement in its labour’s skills, not to mention the many environmental disasters and the threatening climate change in the future. SUCCESS IN THE FIGHT AGAINST COVID-19 The newspaper Ouest-France cited three reasons leading to Vietnam’s success in its fight against COVID-19. The first reason is that Vietnam had “an active and swift response,” the second is the identification of the “correct target,” meaning an absolute quarantine for both the infected and the ASEAN PERSPECTIVES

Chart 2: Contribution of production to growth, 2011–2015 (%) 110 100

26.4 21.4

19.8

90 80 66.7

78.2

51.3

70 60 50 40 30

28.9

20 10

11.9

0 –10

–4.5 2001–2005

2006–2010

2011–2015

■ Labour ■ Capital ■ Total-factor productivity

suspected cases, and the third is “an expanded quarantine of areas” that means not only individual but also peripheral areas are locked down. National social distancing took effect from 1 April 2020, and wearing a face mask became compulsory for all outdoor activities while social gatherings were prohibited.14 The success, brought about by the citizens’ attitude to strictly follow government orders, also came from the contribution of the community to share difficulties due to the suspension of many economic activities, which is evident in the invention of the “Rice ATM” and “zero price supermarket.” First appearing in Tân Phú District, Ho Chi Minh City, the “Rice ATM” offered free rice for poor people and then spread throughout the country.15 The morning of 21 April also witnessed the first “zero price supermarket” in Ho Chi Minh City offering a variety of free products to alleviate the pressure from the COVID-19 outbreak. Until now, eighteen “zero price supermarkets” have been established, drawing enthusiastic support from the community and donors.16 42

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OPPORTUNITIES AND CHALLENGES IN ECONOMIC INTEGRATION Nowadays, as the economic system is restructured towards deeper integration, Vietnam needs to cement its own domestic values to continue to grow and avoid the middle-income trap.17 Efforts made during the reform process brought about a remarkable achievement—Vietnam became the seventh member of the ASEAN in 1995. This event is considered to be a milestone and the most important result of Vietnam’s new foreign policy as part of the reform.18 During the integration process, although many agreements were implemented within the framework of ASEAN and appeared to be more official, they tended to focus on the sectors of industry, tourism, high-tech, and material processing with low transparency and degree of authorisation.19 The ASEAN Economic Community is a valuable platform; however, it does not automatically bring about positive results on its own but rather requires multilateral efforts from several regional countries. Indeed, multilateral efforts and commitment from all members are essential to its credibility and ability to provide an interactive platform between East Asia and the rest of the world. The ASEAN Framework Agreement on Services (AFAS) is helping the trading process of each member state. It is important for each country to have a proper legal framework which allows competition so that, when foreign companies join the market, they should not enjoy the same AFAS privilege domestic businesses do.20 Besides, foreign intervention should be reserved while conflicts should be resolved peacefully based on the spirit of mutual respect for sovereignty, equality, and national identity.21 In addition, the establishment of the Treaty of Amity and Cooperation in Southeast Asia (TAC) is necessary if ASEAN members want to improve their conflict-resolving framework. Information and communication technology facilitated international transactions, and commerce has become easier than before, prompting the signing of the EU–ASEAN Framework Agreement that offers many advantages for ASEAN members to promote their competition capacity and economic development. It also encourages the free trade of information technology products and services to further boost the economic integration of each member.22

On the matter of global integration, WTO and the Vietnam Chamber of Commerce and Industry recognised that “Vietnam’s integration process and free trade has been rapid, starting with joining WTO and followed by signing several Free Trade Agreements (FTAs). Until now, Vietnam has negotiated, signed, or implemented sixteen FTAs, among which are the Trans-Pacific Partnership (TPP) and the Vietnam–EU FTA.”23 With regard to the matter of regional integration, Vo Tri Thanh remarked that: “Vietnam economy can benefit a lot from the many efforts of furthering the integration. These benefits come with the reform of national policies, especially active responses from economic organizations, state-owned enterprises, and public investment.”24 Thus, it can be said that the integration towards the ASEAN Economic Community not only opens up opportunities for free trade but also presents us with many challenges in terms of science, technology, and labour’s skills. Only by overcoming these challenges and making use of these chances can Vietnam enter the path of sustainable development. CONCLUSION AND LESSONS FOR VIETNAM Since the 1986 reform, Vietnam’s economic development has achieved significant successes in terms of technology, shifting labour from agriculture to industry, commerce, and services, gradually improving human resources. However, there are still many challenges to overcome to set Vietnam on the path of sustainable development. First, the

Chart 3: Total-factor productivity growth, 2008–2013 4.5 4 3.5 3 2.5 2 1.5 1 0.5 0

2.2 1.8 0.7 China

India

Indonesia

Vietnam

contribution of technology to the production chain is still low and technology transfer is limited. Second, heavy reliance on FDI is inefficiently allocated. Third, most of the labour force is low skilled compared to other countries in the region. Fourth, environmental pollution is exerting pressure on both social and economic development. From these achievements and limitations, and especially from the success in its fight against COVID-19, several lessons can be drawn for Vietnam on the promotion of sustainable development and the integration of the ASEAN economic community. First, the improvement of information accessibility for all citizens. This is the chance for all people to voice their opinions, thus, in turn, improve the government’s accountability. Second, the implementation of punishment for disinformation activities to improve the quality of information, thus enabling the media sector to be more constructive.

ASEAN PERSPECTIVES

2018

2017

2016

2015

2014

2013

2012

2011

2010

2009

2008

2007

2006

2005

2004

2003

2002

2001

16 15 14 13 12 11 10 9 8 7 6 5 4 3 2 1 0

2000

Billion USD

Chart 4: Foreign direct investment in Vietnam, 2000–2018 (net inflows, BoP, current US$)

Third, holding all government officials accountable for wrongdoings to limit losses. Fourth, providing database and information for small and medium-sized businesses. This will help them, and especially the farmers, to catch up with news on weather, environment, and soil condition for the better use of natural resources, avoiding waste that can potentially damage the environment. Besides, it can also help connect domestic and overseas markets to enlarge the choices of farmers. Fifth, encouraging private investment in rural areas, especially in the processing and preserving of agricultural products, which will help shift from producing raw materials to manufacturing highend products. Sixth, creating dynamism within the domestic private sector by improving policies, granting small privileges to encourage investment into technology to gradually improve the product’s quality. Seventh, adjusting the FDI policy, encouraging investment in high-end technology, and reducing the reliance on FDI. Lastly, strengthening education, tightening cooperation with other regional countries in areas such as business, culture, information technology, naval security, etc.

Planning and Investment of Vietnam. 19 May 2016. <https://bit. ly/38VdNRF > 9 Báo cáo Phát triển Việt Nam 2016. Chuyển đổi Nông nghiệp Việt

Nam: tăng giá trị, giảm đầu vào. Nhà Xuất Bản Hồng Đức, Hanoi, 2016. 10 Việt Nam 2035: Hướng tới thịnh vượng, sáng tạo, công bằng

và dân chủ. The World Bank. 23 February 2016. <https://bit. ly/2V9MAoE > 11 Climate Change Impact and Adaptation Study in the Mekong Delta. Kien Giang Atlas. Institute of Meteorology, Hydrology and Environment–Kien Giang Peoples Committee, Hanoi, 2011. 12 Ketels. 13 Formosa đứng đầu các vụ gây ô nhiễm năm 2016. Tuổi Trẻ Online. 13 July 2017. <https://bit.ly/3eto8Ge > 14 Chu Văn: Truyền thông Pháp: Việt Nam là ‚trường hợp ngoại lệ’

trong đại dịch Covid-19, khó nước nào ‚có thể làm tốt hơn’. Thế giới & Việt Nam. 25 April 2020. <https://bit.ly/2NoLotm >

15 Lan tỏa mô hình “ATM gạo” cho người nghèo. Báo điện tử – Đảng cộng sản Việt Nam. 19 April 2020. <https://bit.ly/2BusgHF >

16 Duyên Phan: ‚Tôi đã bật khóc ở siêu thị 0 đồng’ của người Sài Gòn. Tuổi Trẻ Online. 21 April 2020. <https://bit.ly/3hWOmD4 >

17 Kenichi Ohno: Avoiding the Middle-Income Trap. Renovating Industrial Policy Formulation in Vietnam. ASEAN Economic Bulletin. 2009/April. 25–43. 18 Jörn Dosch: Vietnam’s ASEAN Membership Revisited: Golden Opportunity or Golden Cage? Contemporary Southeast Asia. 2006/August. 234–258. 19 Geoffrey B. Cockerham: Regional Integration in ASEAN: Institutional Design and the ASEAN Way. East Asia. 2010/June.

ENDNOTES

165–185.

1 Phan Minh Ngoc: The roles of capital and technological progress

20 Philippa Dee: Monitoring the Implementation of Services Trade

in Vietnam’s economic growth. Journal of Economic Studies. 2008/2.

Reform towards an ASEAN Economic Community. Economic

200–219. <https://doi.org/10.1108 /01443580810870173 >

Research Institute for ASEAN and East Asia Working Paper, ERIA-No

2 Vu Thanh Tu Anh [et al.]: Institutional Reform: From Vision to Reality.

DP-2015-44. <https://bit.ly/318eZ2b >

Harvard Kennedy School, 13-17/4/2015. <https://bit.ly/3dq5b5U >

21 Elaine Lawrence–Gordana Culjak–John Lawrence: E-Technology

3 Vũ Quang Việt: Có cần ‚vơ bèo vạt tép’ với vốn nước ngoài?

V E-Law: Legal Challenges to the Information Society. In: Proceedings

Saigon Times. 7 May 2020. <https://bit.ly/2AYuwH6 >

of the IADIS International Conference WWW/Internet 2003, Algarve,

4 Trần Văn Thọ: FDI, Trung Quốc và kinh tế Việt Nam. The Leader.

Portugal, 5–8 November 2003, edited by Pedro Isaías–Nitya

21 May 2020. <https://bit.ly/2AWV1fW >

Karmakar. Vol. I–II. International Association for Development of the

5 Thảo Miên: Việt Nam đạt được nhiều tiến bộ trong phát triển con

Information Society, Algarve, 2003. 971–976.

người. Tài chính Việt Nam. 9 December 2019. <https://bit.

22 Xiudian Dai: e-ASEAN and Regional Integration in South East Asia.

ly/3fJKOT1 >

In: Electronic Government. Concepts, Methodologies, Tools, and

6 Niên giám thống kê, 2016. Statistical Publishing House, Hanoi,

Applications, edited by Ari-Veikko Anttiroiko. IGI Global, Hershey,

2017.

2008. 2131–2138.

7 Báo cáo kinh tế vĩ mô quý IV và cả năm 2017. Central Institute for

23 Tóm lược Cộng đồng Kinhtế ASEAN. WTO Center VCCI. 29 July

Economic Management of the The Ministry of Planning and

2016. <https://bit.ly/2VhXbxH >

Investment of Vietnam. 2017. <https://bit.ly/2OwRQPb >

24 Vo Tri Thanh: Vietnam’s Perspectives on Regional Economic

8 Christian Ketels [et al.]: Báo cáo Năng lực Cạnh tranh Việt Nam

Integration. Journal of Southeast Asian Economies. 2015/April.

2010. Central Institute for Economic Management of the Ministry of

106–124.

ASEAN PERSPECTIVES

SOUTHEAST ASIAN REGIONAL PROCESSES FROM INDONESIA’S PERSPECTIVE Judit Pach SOUTHEAST ASIA AND THE INDONESIAN FOREIGN POLICY Indonesia has an independent foreign policy, traditionally based on a diversified system of relations with the Association of Southeast Asian Nations (ASEAN) in its centre1 as it is the main player shaping Southeast Asian regional processes. Indonesia’s regional focus—which is on the Southeast Asian region—has not changed in general for decades, but, in recent years, the country has become increasingly active in the Indo-Pacific region, and in global affairs, too. A new element in Indonesia’s classical geopolitical approach is the growing importance of economic diplomacy. It has been gaining ground in the country’s foreign policy since 2014, during the presidency of Joko Widodo, and even more since October 2019, the second term of the president. Indonesia is considered today as the world’s third-largest democracy and the most populous Muslim-majority state that has successfully built

up its democratic institutions and has undergone a comprehensive modernisation process in the past twenty-two years. In its foreign affairs, Indonesia is positioning itself as a stabilising force in the region while emphasising that it aims to protect the country’s territorial sovereignty. Although not directly involved in the South China Sea dispute, Indonesia plays a stabilising role in settling the differences between some ASEAN members and China. Jakarta also actively tries to settle its border disputes with some of the neighbouring ASEAN countries such as Malaysia and Singapore, and increasingly protects the interests of the large numbers of its citizens working abroad, among others, in the two above ASEAN countries. THE SOUTHEAST ASIAN REGIONAL ARCHITECTURE: INDONESIA AND ASEAN In the dynamics of global power relations, the importance of Asia in world politics has grown dramatically. The economies of the Asia-Pacific

PHILIPPINES

INDIA

MICRONESIA

RIAU ISLANDS

PALAU

INDONESIA

PAPUA NEW GUINEA

EAST TIMOR

The borders of Indonesia

COCOS CHRISTMAS ISLAND (KEELING) ISLANDS

AUSTRALIA

ASEAN PERSPECTIVES

region, including Southeast Asia, have also been reaching very high growth rates this decade (however, the COVID situation will significantly slow down this process, but only in 2020). The constant economic growth in Southeast Asia contributed to the emergence of a huge market. ASEAN, with a population of 650 million,2 is currently one of the most dynamically developing regions in the world. Indonesia is a leading state of ASEAN (with the ASEAN Secretariat based in Jakarta). After the fall of Soeharto in 1998, Indonesia built up and consolidated its democratic institutions while growing into the third most populous country in the world (with a population around 270 million) after India and China. International institutions predict that, by 2030, Indonesia will be the sixth- or seventh-largest economy in the world, with a consumer class of 135 million.3 Due to its democracy-based multiparty political system, growing regional influence, and robust business opportunities, Indonesia is an unavoidable player in the Southeast Asian region. In addition, it is worthwhile to note that Indonesia’s confidence in ASEAN and beyond has increased since its participation in the G20 group. Starting from the era of President Yudhoyono’s administration, Jakarta considers the G20 as an appropriate international instrument for assessing the global economy and for preventing future financial and monetary crises. As the only G20 member country from the ASEAN region, Indonesia uses the opportunity to represent the interests of Southeast Asia and, simultaneously, act as a spokesperson for ASEAN countries.4 Since 2014, during the years of the Joko Widodo administration, the country has increased its engagement in the Southeast Asian and IndoPacific regions and beyond, as well as with various international organisations. A leading ASEAN and an emerging G20 member, Indonesia shows its growing influence both in regional and global politics. Indonesia has considerably contributed to the stability and security of Southeast Asia and to its economic integration so that the 53-yearold ASEAN remain to be able to maintain peace and stability in the region. 46

ASEAN PERSPECTIVES

Currently, Indonesia is also promoting synergy between the regional organisation and the United Nations as a non-permanent member of the UN Security Council in 2019–2020.5 One of Indonesia’s main roles in the region has always been to preserve peace. In the past, the country took part in the peace process during the conflicts in Cambodia and Vietnam, where ASEAN appointed Indonesia as an intermediary. Indonesia also had a hand in solving the conflict between the Philippine Government and the Moro National Liberation Front (MNLF). Jakarta actively participated in the formation of ASEAN’s security community.6 This security community also defends the organisation from non-military threats, such as terrorism, separatism, and transnational crime, and reflects one of ASEAN’s principles, namely, the rejection of aggression, use of force, or any other actions contrary to international law. Indonesia continues to encourage the strengthening of maritime security cooperation in the region to tackle illegal, unreported, and unregulated fishing. Besides, the country is also the driving force in the implementation of the East Asia Summit’s (EAS) Statement on Enhancing Regional Maritime Cooperation which was initiated by Indonesia and was accepted in 2015. To ensure the centrality of ASEAN, Indonesia also initiated the issuance of the Joint Statement of the Foreign Ministers of ASEAN Member States on the Maintenance of Peace, Security, and Stability in the Region in July 2016. To solve the issue of its migrant workers, Indonesia contributed to the Vientiane Declaration on Transition from Informal Employment to Formal Employment in 2016 which mostly guaranteed protection to informal workers. Indonesia also became the initiator of the establishment of the ASEAN Seaport Interdiction Task Force (ASITF) to combat illegal narcotics trade through seaports. Jakarta is aware that there are still a number of internal ASEAN problems related to the conflict of the Rohingyas, security instability in the Southern Philippines, terrorist threats, the conflict in the South China Sea, and various other border issues requiring long-term solution. However, in general, the successful evolution of ASEAN is recognised both inside and outside the region. ASEAN’s main achievement

ASEAN PERSPECTIVES

secretariat seat of Asia-Pacific Economic Cooperation (APEC)

secretariat seat of Pacific Islands Forum (PIF)

secretariat seat of Shanghai Cooperation Organisation (SCO)

for Regional Cooperation (SAARC)

secretariat seat of South Asian Association

ASEAN Regional Forum (ARF)

secretariat seat of ASEAN/+3/East Asia Summit (EAS)/

India

Bangladesh Pakistan Sri Lanka

security

economic

cultural

political

technology

energy and the environment

Legend:

WHAT DOES ASEAN CENTRALITY MEAN?

Afghanistan Bhutan Maldives Nepal2

SAARC

Lower Mekong Initiative (LMI)

Cambodia Laos

Thailand Vietnam

Brunei Indonesia1 Malaysia Philippines Singapore4

China3

New Zealand Australia

South Korea Japan

ARF

Myanmar (Burma)

ASEAN

ASEAN +3

EAS

North Korea Mongolia EU East Timor

Russia

Papua New Guinea

Nauru Tonga Niue Samoa

Canada Chile Hong Kong, China Taiwan (Chinese Taipei) Mexico Peru

APEC

Kazakhstan Kyrgyzstan Tajikistan Uzbekistan

Kiribati Palau Micronesia Fiji5 Marshall Islands New Caledonia Vanuatu Tuvalu Solomon Islands Cook Islands French Polinesia

PIF

SCO

has undoubtedly been the maintenance of peace and stability in the region for more than five decades. The role of ASEAN, however, can still be increased both internally and externally. Internally, the acceleration of the achievement of the ASEAN Community Vision 2025 has to be maintained. Externally, collaboration with dialogue partners can still be increased in various issues and programmes to achieve a more prosperous region focussing on deepening economic cooperation and free trade agreements. Based on these various developments, ASEAN must move forward with playing a broader and more real role on both regional and global levels. ASEAN can achieve this through further contribution to solve the above-mentioned problems. REGIONAL CONFLICTS AND INDONESIA One of the most pressing issues requiring solution is the dispute between some ASEAN member states and China in the South China Sea. At the ASEAN Summit in June 2019, Indonesian President Joko Widodo reaffirmed his country’s commitment to continue negotiations between ASEAN and China to establish a code of conduct in the South China Sea. According to Indonesia, all parties must preserve the stability and peace of the South China Sea, the right to free passage and guarantee free overflight. The parties must exercise restraint and must refrain from steps to increase tensions, and the dispute must be resolved through negotiations in accordance with international law, namely, the 1982 United Nations Convention on the Law of Sea. Thus, Jakarta strongly rejects China’s claim to the maritime areas of Indonesia’s exclusive economic zone (EEZ) near the Natuna Islands.7 Generally, ASEAN distrusts China, fearing that Beijing is undermining ASEAN centrality and is trying to challenge both its unity in handling the South China Sea conflict and, recently, its COVID-19 response. ASEAN and Indonesia most probably will continue with their balancing strategies to utilise the opportunities offered by China (in trade, investment, and connectivity) while avoiding becoming overly dependent on it, both politically and economically. Since its own initiative at the ASEAN Summit in June 2019, Indonesia has been pursuing the 48

ASEAN PERSPECTIVES

institutional framework of the South East Asia Security Policy architecture8 (for example, the East Asia Summit, EAS; ASEAN Regional Forum, ARF; ASEAN Defense Minister Meeting, ADMMPlus) to extend its stabilising effect to its wider environment. As the world’s most populous Muslim-majority country, Indonesia plays an active role in matters affecting Muslims in the region, human rights and humanitarian issues affecting Muslim minority groups in particular (as seen during the Rohingya crisis). It aims at taking the lead in shaping ASEAN’s internal affairs (as, again, in the Rohingya crisis) and external relations (as with the South China Sea dispute or the Korean Peninsula). Indonesia is a major emitting state of labour migration, with nearly eight million nationals working abroad today (mostly in Malaysia, Singapore, South Korea, Hong Kong, Taiwan, and in the Gulf countries), but not of asylum seekers. Indonesia actively supported the creation of the Global Compact for Migration and the Global Compact on Refugees, primarily to protect its citizens working abroad as migrant workers. Indonesia is not a destination country for migration, it does not support the settlement of migrants arriving in the country as a transit point for migration to Australia and considers their repatriation or placement in a third country as a solution.9 AN INDONESIAN PERSPECTIVE ON REGIONAL PROCESSES Foreign Minister Retno Marsudi has systematically outlined Indonesia’s perspective on regional policy and beyond in her speech in January 2020.10 According to her, major world powers continue their efforts to increase their spheres of influence in Southeast Asia. Amid Chinese–US rivalry, distrust hinders the creation of a conducive environment. In this situation, Indonesia proposed the Indo-Pacific Concept last year, as collaboration would create opportunities, develop new centres of economic growth, and offer solutions to the challenges. Indonesia and ASEAN aim that this principle shine through the ASEAN Outlook on the Indo-Pacific. This Outlook is inclusive and open for cooperation with all interested parties.

In 2023, Indonesia will become the Chair of ASEAN. ASEAN will continue to be the cornerstone of Indonesia’s foreign policy. ASEAN has adopted the ASEAN Outlook, and in the next five years Indonesia wants to ensure that the implementation of the Indo-Pacific cooperation will happen. Indonesia plans to host the ASEAN Indo-Pacific Infrastructure and Connectivity Forum11 (probably in 2021 because of the current pandemic) to foster this process. In the field of trade, ASEAN sees that protectionism has given birth to new trade barriers that ultimately put pressure on global trade. Because of the slowdown, global economic growth continues to be revised downwards. In the midst of the increasingly difficult situation, the Indonesian economy is predicted to grow 5% (and—because of COVID-19—even below 2.1% in 2020).12 Amid protectionism, Indonesia defends itself with its large and growing domestic market. A large domestic market makes the Indonesian economy indispensable in any future regional economic development, as many parties predict that, based on purchasing power parity, Indonesia will be among the top ten largest economies by 2030. On the grounds of this objective condition, Indonesia wants to establish profitable cooperation with countries in the region and beyond. Meeting geopolitical interests can give birth to cooperation but can also lead to conflict. Related to the geopolitical dynamics of the region, there are several implications that ASEAN needs to anticipate. These dynamics could have negative implications for Indonesia and the regional stability if not managed properly. Today, besides trade, leading issues in the region are maritime security, energy security, and territorial disputes. Indonesia is directly involved in all three matters. If the country does not have a high bargaining power from the aspect of military, and especially navy capacities, the country’s sovereignty can come under threat in disputed sea border territories. The economic implications of the regional dynamics can be simultaneously both positive and negative. The positive implication involves more open opportunities for cooperation between countries in responding to threats and challenges related

to maritime security and energy security, such as threats from piracy and terrorism. To respond to this threat, the key is enhanced cooperation between countries in the region. On the other hand, the negative implication is the possibility of using naval forces to secure marine resources in disputed waters, mainly fisheries, and oil and gas fields. This is obvious in the dispute over the South China Sea and the Sulawesi Sea, where countries used military power to seize the natural resources claimed by Indonesia as its EEZ. The arms race in Asia will harm Indonesia if Jakarta does not respond proportionally. According to Joko Widodo’s cabinet and the country’s Ministry of Defence, Indonesia has to develop its military force taking into consideration the minimum essential level so that the gap of power between Indonesia and other countries in the region do not widen.13 Developing the Indonasian Navy’s combat power aims not only to protect and secure the integrity of Indonesia but also to safeguard the country’s economic interests. With the Indonesian economy’s increasing interaction with East Asian countries and other regions of the world, its armed forces have to be able to secure the country’s EEZ.14 ASEAN’S INDO-PACIFIC CONCEPT An important regional development in 2019 was that, mainly on an Indonesian initiative, ASEAN adopted its own Indo-Pacific strategy.15 It aimed to support the stability of the entire region through inclusive dialogue and increased economic cooperation. The Indo-Pacific Concept was included in ASEAN’s external relations strategy on Indonesia’s initiative at the June 2019 ASEAN Summit. The document declares strong commitment to multilateralism, the aim of further strengthening international organisations and enforcing international law. The Concept also sees unilateral and deliberate violations of international law as a threat to global stability. It also reflects Indonesia’s non-permanent membership goals in the UN Security Council, namely: (1) safeguarding stability through peaceful conflict resolution, (2) strengthening cooperation between the UN and ASEAN, (3) combating terrorism, (4) achieving sustainable development goals. ASEAN PERSPECTIVES

Table 1: The top 20 countries employing Indonesian migrant workers, 2011–2014 (in person)

Malaysia Taiwan (if considered separate) Saudi Arabia Hong Kong Singapore United Arab Emirates Oman South Korea Brunei United States Qatar Bahrain Japan Kuwait Turkey Italy China (without Taiwan) Fiji Islands Canada Spain

2011

2012

2013

2014*

134,120 78,865 137,835 50,301 47,786 39,917 7,306 11,392 10,804 13,749 16,616 4,379 2,508 2,723 1,016 3,408 1,072 556 – 1,484

134,023 81,071 40,655 45,478 41,556 35,571 8,836 13,593 13,146 15,353 20,380 6,328 3,293 2,518 1,209 3,691 1,967 970 – 1,746

150,236 83,544 45,394 41,769 34,655 44,505 10,719 15,374 11,269 15,021 16,237 5,384 3,042 2,534 1,518 3,746 2,055 848 – 1,417

107,085 68,874 38,104 30,208 25,601 15,276 15,035 9,623 9,298 7,839 6,872 4,535 2,093 1,530 1,155 1,075 812 809 805 754

* to 31 October

Through the Indo-Pacific Concept, Indonesia has been widening its geostrategic outlook from the Asia-Pacific to the Indo-Pacific in line with President Joko Widodo’s intent to turn the country into a Global Maritime Fulcrum.16 The growing rivalry between the US and China and the emergence of other Indo-Pacific initiatives from different nations strengthened Indonesia’s view that ASEAN must try to maintain its centrality. As a result, the draft of perspective for an ASEAN Outlook on the Indo-Pacific was handed over for consideration, and, after eighteen months of intensive lobbying by Indonesia, the Concept was finally adopted at the ASEAN Summit in June 2019. The ASEAN Outlook promotes the principles of openness, inclusiveness, transparency, respect for international law, and ASEAN’s centrality in the Indo-Pacific region. The Concept proposes a systematic approach and builds on the existing regional initiatives in which 50

ASEAN PERSPECTIVES

the ASEAN-led mechanisms will act as a central power for further cooperation. The Concept is not changing the existing regional architecture and the EAS is the proposed platform for advancing the Indo-Pacific cooperation. Indonesia’s ASEAN Outlook on the Indo-Pacific further underlines the importance that Indonesia attaches to ASEAN as the cornerstone of its foreign policy, emphasising ASEAN’s centrality in managing ties with the major powers in the Indo-Pacific region. The Concept focusses, among others, on three areas of cooperation—maritime security, connectivity, and sustainable development—as suitable tools for gaining international recognition for Indonesia as a significant regional power alongside other extraregional powers like the United States, China, Japan, and India. From a regional point of view, drafting the Indo-Pacific Concept was a signal from Jakarta that it was ready to lead ASEAN again, especially after five

years of lower-profile involvement in regional affairs, compared to President Susilo Bambang Yudhoyono’s government before 2014. The adoption of the ASEAN strategy is particularly noteworthy because it has succeeded in creating a document that is partly an alternative to the FOIP (Free and Open Indo-Pacific, FOIP), represented by the US and its partners,17 and, at the same time, one China appears to be able to live with (otherwise China-friendly ASEAN members would have vetoed it). The new ASEAN Indo-Pacific Strategy is in line with the alliance’s geostrategic priority, and the organisation was able to articulate its position while avoiding the trap of compulsion to choose between the US and China. The main characteristic feature of the ASEAN strategy is that, instead of rivalry, it emphasises cooperation and opening up opportunities out of the emerging challenges and stresses, focussing on economic cooperation instead of security aspects. Based on the Concept, ASEAN seeks to act as a mediator between the two superpowers and sees China as a partner. The US, India, Japan, and Australia support this interpretation of ASEAN’s role because the ASEAN Concept reflects the key principles of the FOIP strategies and rejects the unilateral enforcement of Chinese territorial needs in the South China Sea. Therefore, the organisation did not take a purely middle ground, but a position closer to that of the United States. THE ECONOMIC DIPLOMACY OF ASEAN AND INDONESIA Due to the uncertainties and transformations in the world economy (global economic recession, US–China trade war, and, recently, the consequences of the COVID-19 pandemic), enforcing economic interests is gaining more weight in ASEAN’s foreign relations and Indonesian foreign policy. ASEAN has sought to intensify its system of foreign economic relations in recent years while maintaining traditional relations (Free Trade Agreements with China, India, Japan, South Korea, Australia, and New Zealand).18 Similarly to other ASEAN members, Indonesia’s main—actually, the number-one

foreign trade and the third-largest investment— partner is China, with which it has maintained a strategic partnership since 2013. As China is also the number-one source of infrastructure development projects that are critical to some ASEAN members including Indonesia, the government participates in the Belt and Road Initiative which would build a regional economic corridor involving maritime, road, rail, and water projects across Indonesia. The Indonesian government proposed projects worth USD 91 billion19 to Beijing last year. During the Obama administration, mutual interest between the US and ASEAN countries grew. On 21 November 2015, at the third ASEAN– US Summit, the parties announced a strategic partnership for a peaceful, prosperous AsiaPacific region.20 ASEAN, and, thus, Indonesia, is important to the US because of its economic and political significance, large population, growing purchasing power, and, last but not least, because of the Association’s geostrategic location. There was a wait-and-see attitude on behalf of ASEAN when the Trump administration took office, as the new government’s isolation-based campaign promises have created uncertainty over the US foreign policy in Southeast Asia. Vice President Mike Pence visited Jakarta in April 2017, during which he assured President Widodo that his country would continue to see ASEAN and Indonesia as a strategic partner in both the security policy architecture of the Southeast Asian region and the fight against terrorism. In the trade war between the US and China in 2019, similarly to other ASEAN members, Indonesia is not taking a stand between its two major partners—rather it tries to maintain its foreign economic positions by adapting to the situation. The economic dimension of the relationship with Japan remains important for ASEAN. For example, after signing the Economic Partnership Agreement in 2008, Japan consolidated itself as a key trade and investment partner for Indonesia. Japan and China are competing to dominate the Southeast Asian market, either as an investor or as a foreign trade partner. For a long time, ASEAN has been considering the EU as an important source of investment and ASEAN PERSPECTIVES

a trading partner. In November 2009, Indonesia was the first country to have signed the PCA with the EU from the ASEAN region. Indonesia remains committed to establishing a Comprehensive Economic Partnership Agreement with the EU, but organisational and coordination barriers and, recently, the palm oil issue make it difficult to move forward. The palm oil issue (mainly arising between Malaysia and Indonesia) also hinders the EU–ASEAN negotiations on a strategic partnership from being concluded.

6 Asean Security Community Plan of Action. Assotiation of Southeast Asian Nations. Feburary 2015. <https://bit. ly/36nymET > 7 Indonesia rejects China’s claims over South China Sea. Reuters. 1 January 2020. <https://reut.rs/2WQPPmc > 8 Sarah Teo: Strengthening the ASEAN-centric multilateral security architecture. 7 January 2020. East Asia Forum. <https:// bit.ly/2zlpio3 > 9 Graeme Hugo–George Tan–Caven Jonathan Napitupulu: Indonesia as a Transit Country in Irregular Migration to Australia. Australian Government, Department of Immigration and Border Protection, Irregular Migration Research Programme, Occasional

WHAT DOES THE FUTURE HOLD FOR ASEAN? ASEAN will seek to continue its efforts to build cooperation in Southeast Asia and the IndoPacific region, expanding political, economic, and technological ties. In this process, ASEAN will be used as a central power to the fullest extent possible. In Indonesian foreign policy, the Indo-Pacific region is the present and future engine of sustainable global growth. Therefore, the collaborative Strategic Outlook can boost higher economic growth. ASEAN hopes that stability, dialogue, collaboration, and respect for international law will be upheld in the region. According to ASEAN, power rivalry should be converted into cooperation. ASEAN must continue to come up with innovations to step away from its comfort zone and stay relevant in responding to future challenges.

Paper Series. 2014/September. <https://bit.ly/3nePdkz > 10 Pernyataan Pers Tahunan Menteri Luar Negeri RI Tahun 2020. Kementerian Luar Negeri Republik Indonesia. 8 January 2020. <https://bit.ly/3g8haYx > 11 Dian Septiari: Indonesia offers to host new Indo-Pacific forum. The Jakarta Post. 31 October 2019. <https://bit.ly/2zZTwg5 > 12 Adrian Wail Akhlas: COVID-19 to slash Indonesia’s growth to 2.1% as millions may slip into poverty: World Bank. The Jakarta Post. 31 March 2020. <https://bit.ly/2zThWYX > 13 Dr Natasha Hamilton-Hart–Dr Dave McRae: Indonesia: Balancing the United States and China, Aiming for Independence. The United States Studies Centre at the University of Sydney. November 2015. <https://bit.ly/3bSNifg > 14 Indonesia makes largest-ever deployment of troops, equipment to South China Sea island. Janes. 6 January 2020. <https://bit.ly/2WQ6o1t > 15 “ASEAN Outlook on the Indo-Pacific.” Association of Southeast Asian Nations. 22 June 2019. <https://bit. ly/3eac8Jp > 16 Rendi A. Witular: Jokowi launches maritime doctrine to the world. The Jakarta Post. 13 November 2014. <https://bit.

ENDNOTES

ly/2ZB6oo3 >

1 Prashanth Parameswaran: Assessing Southeast Asia in the

17 A Free and Open Indo-Pacific. Advancing a Shared Vision.

2010s: 5 Big Strategic Trends and How They May Shape the

U.S. Department of State. 4 November 2019. <https://bit.

2020s. The Diplomat. 1 January 2020. <https://bit.ly/2ybKRGX >

ly/2z9U5Ep >

2 Investing in ASEAN, 2019/2020. Association of East Asian

18 Free Trade Agreements with Dialogue Partners. Association

Nations. October 2019. <https://bit.ly/2X6jE0V >

of Southeast Asian Nations. <https://bit.ly/3e9Vz0e >

3 Raoul Oberman [et al.]: The archipelago economy: Unleashing

19 Indonesia to propose projects worth US$91 billion for China’s

Indonesia’s potential. McKinsey & Company. 1 September 2012.

Belt and Road. The Straits Times. 20 March 2019. <https://bit.

<https://mck.co/2AGGkNB >

ly/2zYUlFY >

4 Indonesia’s bargaining position on ASEAN, G20 forums.

20 Joint Statement on the ASEAN-U.S. Strategic Partnership.

ANTARA News. 6 July 2019. <https://bit.ly/3ga97us >

The White House, President Barack Obama. 21 November 2015.

5 United Nations Cooperation with South-East Asian Nations

<https://bit.ly/2WNB8jA >

Association Vital for Fight against Climate Change, Terrorism, Organizations’ Chiefs Tells Security Council. United Nations. 30 January 2020. <https://bit.ly/2WO5ySY > 52

ASEAN PERSPECTIVES

GREAT POWER COMPETITION FROM A SINGAPOREAN PERSPECTIVE Nicholas Fang The global environment today is complex and complicated and is becoming increasingly so. Even before the coronavirus pandemic hit, there had been forces at play that threatened to reshape the global geostrategic pecking order. Among these, there was a move away from multilateralism and globalisation towards a more inward-looking, nationalistic view of the world on the part of major powers and smaller nations alike. The trade war between the US and China, China’s growing assertiveness in East Asia and around the world, and the constant spectre of Russian influence, coupled with an unpredictable nuclear threat from North Korea, were high on the list of global geopolitical risks. The impact of the COVID-19 outbreak seemed to cast some of these issues aside, but some have already been making a comeback, partly thanks to the American president’s actions as he grapples with his own domestic challenges and his campaign for the upcoming presidential election in November 2020. These global trends have a significant impact on a nation state like Singapore. This republic is a small and open economy, and its relations with the rest of the world are an important aspect of its survival and growth strategy. As such, the growing uncertainty the global community is facing is likely to pose particular challenges to Singapore in the months and years ahead. A HISTORY OF CENTRALITY AND VULNERABILITY To paraphrase Macbeth, history can be a bloody business, and Singapore’s past is illustrative of its need to manage and adapt to competition between great powers in order to succeed in the world. When the British landed on Singapore in 1819 and set up a trading outpost in what was then viewed as the “Far East,” the major maritime

and trading powers of the world certainly saw things clearly through the lens of self-interest and competition. Sir Stamford Raffles, credited with founding modern Singapore and British Malaya, was focussing on securing critical advantage for British traders. This was juxtaposed against the Dutch interest in ensuring freedom of the seas for their own benefit. Even in those early days, it is interesting to note that Singapore leveraged this competitive dynamic to succeed. Experts have pointed out that Britain’s arrival led to the displacement of the Dutch in the region, just as the Dutch had displaced the Portuguese before them. They also emphasise that Singapore has always survived in a contested geopolitical space. The city state was once a naval base of Melaka in Malaysia, a gatekeeper to towns along the Johor River. It was also a rendezvous point for Portuguese and Spanish armadas in the 1500s and 1600s. Since Singapore gained

Chart 1: Ethnic groups in Singapore (2018 est.) 3.3% 9.0%

13.4%

74.3%

■ Chinese ■ Malay ■ Indian ■ Other

ASEAN PERSPECTIVES

Chart 2: Singapore’s major export and import partners in 2017 Export

Indonesia 5.8%

South Korea 4.6%

Japan 4.7%

Thailand 4.0%

independence in 1965, the focus of the government—largely stable with a single party in power throughout its history—has been on ensuring that a small country with no natural resources to speak of, and surrounded by larger neighbours with whom it has had shifting relationships, would be able to survive and grow. Due to geographical proximity, Singapore considers its relations with Malaysia and Indonesia as being of high priority. Historical baggage, including the traumatic separation from Malaysia and the Konfrontasi conflict with Indonesia, has meant that these ties dominate the attention of government leaders in Singapore. Looking at Singapore today, it is hard to imagine that, approximately fifty-five years ago, the country was struggling for recognition and legitimacy on the global stage. The city state’s geostrategic location, as it is on the maritime trade routes linking the West with China and the rest of North Asia, meant that it could build on its status as a leading entrepôt port despite not having a significant hinterland of its own to drive trade. Over the years, this seaborne significance was broadened to include air travel, and Singapore is now largely recognised as a global transport hub with world-class air and seaports, as well as technological and physical infrastructure that attracts partners and 54

ASEAN PERSPECTIVES

US % .7 10

a in Ch .9% 13

sia lay Ma 2.0% 1

Hong Kong 12.6%

US 6.6%

Ja p 6.3 an %

orea th K Sou .0% 5

Malaysia 10.8%

China 14.7%

Import

stakeholders from all over the world. It has also become an economic and financial hub, with an efficiently operating system that has come to be known for its transparency and governance. This has enabled Singapore to be seen as an attractive place for global companies and organisations to do business and to base their regional and international headquarters there. In just five short decades, the country has transformed itself from Third World to First, to borrow a phrase from the founding Prime Minister Lee Kuan Yew. A key aspect of this remarkable growth has been Singapore’s ability to maintain good relations with all stakeholders around the world. Singapore maintains diplomatic relations with 189 countries, although it does not necessarily have a high commission or embassy in all of them. It is a member of multilateral institutions like the United Nations, the Commonwealth, the Association of Southeast Asian Nations (ASEAN), and the Non-Aligned Movement. Singapore supports the concept of Southeast Asian regionalism and plays an active role in ASEAN of which it is a founding member. Singapore is also a member of the Asia-Pacific Economic Cooperation forum, which has its secretariat in Singapore. As part of its role in the United Nations, Singapore held a rotational seat on the UN Security Council from 2001 to 2002. It

has participated in UN peacekeeping and observer missions in Kuwait, Angola, Kenya, Cambodia, and Timor Leste. The country also bears good relations with the United Kingdom which shares ties in the Five Power Defence Arrangements (FPDA) along with Malaysia, Australia, and New Zealand. These multilateral and bilateral ties in diverse fields ranging from economic, security, and diplomatic relations are critical in allowing a small nation like Singapore to remain relevant to the world and to have a share of voice in international conversations. Singapore is cognisant that the philosophy of “might is right,” or the proverbial law of the jungle means that it will be constantly at a disadvantage. While some countries still choose to hold that world view, Singapore has been working to ensure that it does not become a victim of its size. THE US—AN OLD FRIEND Among the key relationships that Singapore has with other countries, its ties with the United States stand out as being significant for a number

of reasons. The US first opened a consulate in Singapore in 1836, some years after the island became part of the Straits Settlements of the British Empire. Singapore and the US have maintained formal diplomatic relations since the former gained independence. For more than half a century, the US and Singapore have forged an expansive and enduring relationship based on mutual economic interests, robust security and defence cooperation, and enduring people-topeople ties. The two countries have worked as close partners in support of a rules-based economic and security order in the Asia-Pacific and have consistently partnered up to address global threats and challenges including terrorism, transnational crime, and the proliferation of weapons of mass destruction. A free trade agreement between the US and Singapore entered into force in 2004 and supports 215,000 American jobs. The US enjoys a USD 20 billion trade surplus in goods and services annually and is Singapore’s largest foreign investor. On the security front, the US and Singapore work together in various aspects, including

Table 1: The top 15 foreign direct investors in Singapore, 2014–2018 (in billion USD)

United States Cayman Islands British Virgin Islands Netherlands Japan

2014

2015

2016

2017

2018

192.31

243.06

279.67

336.51

289.03

80.91

98.39

106.90

145.20

214.07

105.90

109.94

117.26

125.04

128.83

70.06

99.82

102.18

115.22

122.06

110.10

115.24

91.70

97.74

114.91

Luxembourg

42.59

48.71

65.53

68.68

104.57

United Kingdom

62.18

60.14

66.85

84.89

95.57

Bermuda

40.51

51.42

56.78

65.09

77.11

Switzerland

44.34

48.40

40.07

38.68

60.66

Hong Kong

50.21

48.71

56.01

61.28

60.57

Mainland China

16.00

22.68

23.80

39.69

40.91

Malaysia

32.51

32.39

35.16

37.62

39.46

India

25.75

23.90

18.45

22.18

26.65

Mauritius

19.48

22.06

25.12

24.47

25.54

Germany

17.75

18.59

17.43

21.60

23.42

Singapore’s major export and import partners in 2017 ASEAN PERSPECTIVES

traditional military security cooperation involving training exchanges and the mutual use of facilities, as well as joint efforts to address nontraditional security threats such as cyberattacks and terrorism. Despite some bumps along the way and the fact that the position of US ambassador to Singapore has been vacant following the 2016 American presidential elections, the two countries continue to enjoy a close relationship. Singapore’s efforts to maintain economic growth and political stability and its support for regional cooperation harmonise with the US policy in the region and form a solid basis for amicable relations between the two countries. Strategic advantages persist for both sides as the US–Singapore relationship today allows the US to maintain a presence in Asia, which could become increasingly important considering the rise of China. CHINA—A ROLLER-COASTER RELATIONSHIP China–Singapore relations officially started in 1990, and diplomatic missions were established in the early 1990s. This initial relationship was marked by a focus on trade and the warming of ties between ASEAN as a whole and mainland China. Singapore and China have since maintained a long-standing and close relationship, partly due to the latter’s growth and rising influence in the Asia-Pacific region; and the Singaporean leadership said that the country’s common interest with China was far greater than any differences. Economically, Singapore is the largest foreign investor in China, and Singapore is China’s largest investment destination in Asia. This symbiotic relationship has done much to strengthen ties between the two countries. Singapore, having a majority ethnic Chinese population, has been viewed with a certain degree of familiarity and warmth by China. However, this can also be a source of tension when it transitions to expectations of alignment and support for all positions and policies taken by Beijing. Regardless, Singapore has positioned itself as a strong supporter of what it hopes will be China’s constructive engagement and peaceful development in the region. It has 56

ASEAN PERSPECTIVES

encouraged cooperation with other ASEAN members and China to strengthen regional security and to fight terrorism, while recently participating in the organisation’s first maritime exercise with the latter. Although a strong relationship between Singapore and China has endured over the years, there have been ups and downs. Differences were experienced during numerous high-profile events, among others, on Singapore’s position on territorial disputes in the South China Sea, on its support for the US military presence and its alliance system in Asia, and on the seizing of Singapore Armed Forces vehicles by Hong Kong authorities in November 2016. These disputes were often spurred by unhappiness from Beijing over a perceived lack of support from Singapore and a binary view that “if you are not with me, you must be against me.” Despite the disagreements, Singapore and Beijing have consistently affirmed their unwavering close relations and bilateral ties, deepening their cooperation in numerous areas, including defence, economy, culture, and education, as well as on China’s Belt and Road Initiative. The relationship is smooth at the time of this writing, but there is no guarantee that it will always be so. Singaporean leaders have learned to be ready for any situation coming up. US VERSUS CHINA—WHEN ELEPHANTS FIGHT Under the Trump presidency, the US has taken China to task in a manner that has been more direct and aggressive than in previous administrations. Rhetoric and sanctions have been deployed more freely than before, and observers have pointed out that the narrative, which has gotten ever more strident under the Trump administration, is that China is seeking to overturn the global order and even displace the US. The outbreak of the novel coronavirus and the ensuing global pandemic somewhat quelled the rhetoric, but, as Trump seeks to make his toughness on China a cornerstone of his reelection campaign, we can expect a resurgence in US–China animosity in the months leading up to November 2020. As such, it has become commonplace for leaders in the Indo-Pacific

Singapore has always been an important transportation hub throughout history—and it continues to do so

region to voice anxiety as the US and China appear to spiral towards open-ended economic and strategic confrontation. Speaking from the perspective of a small state caught between the two powers, both geographically and strategically, Singapore Prime Minister Lee Hsien Loong said previously that “when the elephants fight, the grass gets trampled.” PM Lee maintained in the past that Singapore would strive to maintain a neutral position, along with the rest of ASEAN, when it comes to competition between the great powers. However, he also admits that there may come a day when sides will have to be chosen and that that day may not be too far off on the horizon. Former leading Singaporean diplomat Bilahari Kausikan pointed out that there was no assured “sweet spot” for Singapore, although it had assiduously sought to navigate a profitable path between the US and China. Similar anxieties are voiced elsewhere in Southeast Asia on an almost daily basis. Smaller countries are bemoaning their constricted room for manoeuvre as US–China tensions ramp up. And there is concern that the open and inclusive regional architecture that has so far prevailed in Asia will start to look more like rival encampments. However, there is a view amongst some experts that, while that angst is genuine, those smaller states are not as helpless as they may seem at first. China’s strategic revisionism and America’s desire to disrupt the economic status quo under Trump have certainly undermined accepted norms and certitudes. Still, smaller nations may

have some options available to them. For example, while they are unable to directly influence the strategic decisions of major powers, they may be able to band together to increase their joint influence at a multilateral level. Singapore has long been championing multilateral fora as an avenue to encourage a rules-based international order where all sovereign states enjoy largely equal rights and share of voice. However, this can be undermined if some members seek to sell their loyalty to the highest or most influential bidder. There are also states seeking to benefit from the competition between the US and China by maximising their own gains as long as the jostling does not boil over into armed conflict to actually delineate along economic enclosures according to the sides picked. Many are actively petitioning both sides for economic and security benefits, and it should come as no surprise to observers of geopolitics that smaller states would seek to exploit their transactional value in the marketplace of international relations. For example, Vietnam is experiencing a significant economic upside from the competition between Washington and Beijing and is reaping the benefits as international commerce seeks to circumvent US tariffs targeting China. Ironically, this phenomenon could create confusion among the major powers, as they deal not only with each other but other stakeholders and partners who may be playing a side game to ensure their own interests are taken care of. ASEAN PERSPECTIVES

WHAT THE FUTURE HOLDS Given what we know now, regional fears of collateral damage from great power competition could indeed be well-founded. However, the situation may not be adequately reflected by publicly expressed concerns, which do not always capture the complex push-pull interplay among the US, China, and smaller states. Simply put, there is an opportunity, as well as there are also threats, for countries caught up in the intensifying regional great power rivalry. Singapore has so far been lauded for being able to adapt to and position itself in a changing world and to reap the benefits. There are a number of factors which can affect a country’s attempt to achieve that outcome, especially given the increasing complexity in global geopolitics in general, and the US–China relationship in particular. Firstly, there is a need to ensure a deep understanding of international relations, geopolitics, and diplomacy on the part of policymakers, civil servants, and diplomats. This is even more essential given the fast-paced environment we face today, the increasing complexity of the web of relations between global powers, and the use of technology (such as social media) by leaders like Trump to conduct foreign policy and other efforts. These trends have influenced and continue to influence the world, and it is in the best interest of any country to be flexible and to understand what is truly going on when it comes to developing a coherent strategy. Secondly, to achieve that first outcome, it is important to constantly engage stakeholders just like partners in the region and around the world in order to maintain past relations and develop necessary new ones. The trend towards a more insular, nationalistic world should be resisted as much as possible, especially by small and open economies like Singapore, which are heavily dependent on freedom of trade and a globalised international system. This will not be easy to achieve, given the tendency among politicians to play on the emotive and rallying psychological effects of nationalism in a bid to garner support from their electorates. However, it is not an option for Singapore to abandon the fight for a more 58

ASEAN PERSPECTIVES

open and interlinked world, as this is essential for its survival and success. Instead, it will continue to invest heavily in building ties and urging for stronger and closer relations among all the nations of the world, just as it has thus far done. This will be done bilaterally, but also through multilateral platforms such as ASEAN. Despite having been criticised as ineffective or just a “talk shop,” ASEAN has a critical role to play for countries in Southeast Asia. Since its formation in 1967, in which Singapore was a key player, the grouping has been recognised as a way for a diverse region to be able to develop in order to adopt a neutral approach to great power competition and to find a way to prosper when the world is demanding that sides be taken. Thirdly, in order to remain relevant without compromising what it stands for, Singapore should always remain true to its principles. On the international stage, its leaders have been recognised for being honest brokers, saying what they mean and meaning what they say. This reputation has allowed the country to play outsized roles in the past, hosting significant international meetings such as the historic summit between US and North Korean leaders, and to act as an intermediary to facilitate deeper understanding between major powers like the US and China. This is a small way in which a country like Singapore can contribute to the smooth running of the international system, but it creates an important niche role to go along with its economic and geostrategic attributes. Looking back on its short history as an independent sovereign state, and the longer one as a strategically located port and transportation hub, it is clear that Singapore may have started out as a small settlement but has undergone a series of reinventions and reincarnations that have allowed it to play different key roles and functions on the global stage. Given what we know about the uncertain and complicated future likely facing the world in the years ahead, it seems clear that Singapore will need to continue that process of reinvention, driven by a coherent and strategic world view, to survive and thrive.

THE SINGAPOREAN GROWTH MODEL 1 Lee Poh Onn The Singaporean growth trajectory is one that is spectacular and has captivated the interest of economists and policymakers alike. Superficially, Singapore appears to be completely governed by free-market forces, yet there has always been an underlying current of a strongly interventionist government that has understood market forces and worked with them to develop essential conditions that have been conducive to bringing investments in the country. Singaporean leaders were and continue to be proactive, adopting far-sighted methods of planning that employ pragmatism, transparency, an outward-looking mentality, and the priority of developing businessfriendly conditions for investments. Free and open trade, zero tariffs, an exportled development strategy (high trade-to-GDP ratio as shown in Table 1), attracting foreign direct investments, relying on science- and technology-led development, and the existence of a highly skilled labour force, combined with the proactive and extensive role of the government in overseeing the development of the country, remain the hallmarks of the Singaporean growth model. Coupled with this was the need to always be prepared for any external crisis that may arise. Singaporean policymakers did not work against international market forces, on the contrary, they prioritised exactly such forces to attract industries. SINGAPORE: THEN AND NOW Singapore in the 1960s was very different from what it is today. In 1965, real GDP per capita was USD 4,212. In 2019, a fourteen-fold increase to USD 60,612 was achieved (in chained 2015 dollars as shown in Table 1). Singapore is among the countries with the highest GDP per capita, a position that is enviable but was only achieved through much foresight and economic pragmatism. Average real growth rates have also been impressive over the decades, bearing

in mind that, as an economy matures, it rarely achieves real growth rates greater than 3% per year. Around the same period, in terms of socioeconomic indicators, the proportion of individuals living in public housing increased from 9% in 1960 to 82 % in 2016.2 Resident unemployment rate (including citizens and permanent residents) stood as low as 3.1% in 2019. Doctors per 10,000 population increased from five in 1965 to twenty-four in 2018. Similarly, the number of nurses rose from twenty-five per 10,000 population in 1975 to seventy-five in 2018. Infant mortality fell from a high figure of 26.3 per 1,000 live births in 1965 to 1.7 in 2019, while male life expectancy increased from 62.8 in 1965 to 81.4 in 2019, and female life expectancy from 66.6 to 85.7.3 From housing slums, pig farms, polluted rivers, and unsanitary sewage systems in the 1960s, Singapore transformed into a modern and cosmopolitan city state filled with modern skyscrapers, a skilled workforce, and businesses and corporations that can rival any other place in the world. Barring periods of external shocks like the Gulf War, the global financial and economic crises of 2008, and the recent COVID-19 pandemic, which sent reverberations to global economies including Singapore’s, the country’s story has always been that of stability and one where policymakers are looking for new market opportunities to promote growth and economic development. In 1963, Singapore joined the Federation of Malaysia only to be ousted in 1965 and to be forced to become an independent and sovereign nation. Political and economic differences between the ruling parties of Singapore and Malaysia made this separation inevitable. Much of the country’s success can be attributed to Singapore’s first prime minister, Lee Kuan Yew, ASEAN PERSPECTIVES

Table 1: Economic indicators of Singapore’s development, 1965–2019 1965–1970

1971–1980

1981–1990

1991–2000

2001–2010

2011–2019

9.80

7.20

5.30

4.20

3.50

2.50

Per capita GDP in chained 2015 USD

5,417.30 a

10,563.80

18,261.20

29,836.70

41,300.30

55,918.80b

Trade-to-GDP ratio

258.0

309.00

339.00

328.00

388.00

344.00c

Goods-producing industries (% of GDP in chained 2015 USD)

27.00

29.00

37.00

32.00

27.00

Services-producing industries (% of GDP in chained 2015 USD)

56.00

55.00

57.00

60.00

62.00

65.00

Gross national savings (% of GDP)

18.00

29.00

40.00

49.00

45.00

Gross capital formation (% of GDP)

26.00

40.00

35.00

24.00

27.00

Average real growth rate per capita in chained 2015 USD (%)

1965: 4,212.00 USD,

2019: 60,612.00 USD, c 2011–2018

who was in office from 1959 to 1990. Lee Kuan Yew worked with a team of ministers and officials who understood the urgent need for growth and had an excellent foresight of economics in their planning. Singapore’s policymakers also realised that, as a small nation, their country could not influence world market prices; the only way to survive was to compete internationally by lowering business costs and increasing efficiency. This would attract multinational enterprises that would bring the know-how, techniques, expertise, and markets to Singapore in as short a time as possible.4Singaporean policymakers focussed on keeping the domestic economy cost-competitive, providing good infrastructure for transportation and factory spaces, equipping and upskilling domestic labour force, as well as remaining open to hiring locally and internationally, and attracting multinational enterprises through inviting investment and tax schemes where necessary. Corruption has also been minimised; Singapore is the least corrupt Asian country according to Transparency International’s Corruption Perceptions Index. 60

ASEAN PERSPECTIVES

LOCATIONAL ADVANTAGES One factor that worked to Singapore’s advantage was its location, being initially a historical trade entrepôt between the East and the West and, later, an operational hub for the rest of the countries in Southeast Asia. In the 1970s, Singapore also served as a link between the Atlantic, Middle Eastern, and Pacific regions, which enabled it to become a fund centre acting as a financing repository between deposit centres like Bahrain in a region of surplus funds and arranging centres like Hong Kong near ultimate borrowers. Another advantage of Singapore was that it bridges the time zone gap between the New York–London and Hong Kong– Tōkyō markets, which enabled it to emerge as a leading foreign-exchange-dealing centre for twenty-four-hour international trading. By the 1990s, Singapore was the fourth-largest foreign exchange market after London, New York, and Tōkyō.5 This was a tremendous feat, achieved by a Singaporean government that provided the right tax incentives and support for such an institution to be established.

INDUSTRIALISATION STRATEGIES AND INFRASTRUCTURE The government embarked on a labourintensive export manufacturing strategy to spur growth in the 1960s. Economies such as Hong Kong, Taiwan, and South Korea were already benefitting from developing their manufacturing sectors for growth. During that period, Singapore had a substantial domestic labour surplus but lacked indigenous manufacturing capabilities.6 This is where the Economic Development Board became pivotal, as it played an important role in attracting multinational enterprises to set up a base in the country. Eventually, this served to “integrate production facilities in Singapore into the evolving offshore supply chains of multinationals producing for their homes and global markets.”7 This represented the beginnings of globalisation. The establishment of the American company Texas Instruments in 1969 marked the birth of the electronics industry in Singapore.8 Government injections in the form of infrastructural and investment incentives and, at the same time, providing educated workforce were explaining Singapore’s large private sector investment. Public sector savings which financed infrastructure, education, and skills in Singapore attracted private sector investments into the country. Singapore’s Economic Development Board (EDB) came into play to promote and to bring investments in manufacturing and, later, in internationally tradeable services by connecting international enterprises with local partners and other government agencies in the country. 9 The EDB served as a one-stop shop to guide these enterprises to attractive government tax incentives and institutional support for foreign direct investments. The EDB, which also had overseas offices closely monitoring foreign markets, undertook initiatives to attract industries regarded desirable for long-term development. The potential of electronics was discovered during a 1966 ministerial visit to Taiwan. 10 With foreign investment and the creation of new jobs, unemployment rates gradually declined.

Towards the end of the 1970s, Singapore experienced tighter labour market conditions that were due to the improvement of these conditions and to its growing manufacturing sector. Singapore then embarked on upskilling its labour force by training and education, encouraging automation and mechanisation— all working towards building more capitalintensive value-added skills for its manpower. Responding to tighter labour conditions, and to intense competition from lower labour cost economies in the region, Singapore saw the need to promote a broader economic base by formally promoting the services sector as its second pillar of growth. In the 1980s, the EDB targeted manufacturing activities based on the value-added criteria, skill content, and capital intensity, which were likely to help Singapore come to the forefront of automated and computerised manufacturing. It was also during the 1980s that the EDB shifted its focus from attracting skill-based to knowledge-based industries and services related to manufacturing, tourism, and finance. Its goal was to remain relevant in the changing world economy. The EDB continues to promote investments and develop industrial sectors, now more varied than in the 1960s, to sustain economic growth for Singapore. 11 New industries include biotechnology, digital media, engineering, education, healthcare, logistics, communication, and clean energy. Singapore attracted almost SGD 8.1 billion in fixed-asset investment commitments during the first six months of 2019, according to figures from Singapore’s Economic Development Board.12 Between 1980 and 1992, direct foreign investment rose to as much as one quarter of Singapore’s gross fixed capital formation. W. G. Huff suggests this to be a “crowding in” effect where government investments in public infrastructure brought in private sector capital investments because such investments by the government were strongly complementary to the private sector and increased investors’ confidence in the country.13 In 2020, Singapore is continuing to strengthen its connectivity infrastructure to reinforce its position as a choice ASEAN PERSPECTIVES

hub for business, finance, trade, and data flows. Key projects such as the construction of Changi Airport’s Terminal 5, the Tuas Mega Port, and the Punggol Digital District are some of the ones worth mentioning. FINANCIAL SERVICES Was it not for an active intervention by the Singapore government, the development of the financial services sector would not have become an important engine of growth. Singapore established the Asian Dollar Market in 1968 to tap into an unmet need arising from a time zone advantage, capitalising on a timeframe when other international markets were closed for trading. The government also provided tax incentives by abolishing withholding tax on interest income earned by non-resident depositors. All Asian dollar deposits were also exempt from statutory liquidity and reserve requirements.14 Presently, Singapore also serves as the Asia-Pacific base for many global banks with project finance lending and advisory specialisation—about 60% of project finance transactions in Southeast Asia are led and managed by Singapore-based banks.15 WAGE CONTROL AND LABOUR COSTS Another important feature of the Singaporean growth model was the control of wages and

labour to ensure that business costs were kept competitive.16 The ability to control wage costs assured investors that their profits would not be drastically impacted by undue rises in wages under tighter labour conditions. During a crisis, wage costs could also be decisively cut through reductions in corporate tax and/or the employers’ Central Provident Fund(CPF)17 contribution rates.18 Wages could also be frozen and moderated through guidelines provided by the National Wage Council (NWC), which was formed in 1972. The council has kept Singapore’s wage rates internationally competitive through a tripartite body comprising representatives from employers, trade unions, and the Government. It has also acted as a stabilising force in Singapore’s economy, “greatly increasing the attractiveness of Singapore as an investment location for foreign companies.”19 Singapore’s post-independence industrialisation and globalisation were, therefore, very much directed by the state imposing some costs in terms of wage controls—however, it also delivered economic social goods to its electorate in employment generation, increased incomes, and social well-being.20 Singapore, through the provision of efficient infrastructure, investment incentives, and an increasingly highly skilled workforce, was able to attract a strong inflow of private sector investment into the country.

Chart 1: Unemployment rate in Singapore, 1980–2021 (%) 9 8 7 6 5 4 3 2

1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021

■ Singapore ■ Advanced economies

ASEAN PERSPECTIVES

HIGH RATE OF SAVINGS Another strong feature of the Singaporean economy was the high rates of public sector and private savings (see Table 1). Public sector savings came from the government’s budget surpluses and surpluses realised by its statutory boards. The high level of private savings was achieved through a compulsory social security scheme imposed by the government through the CPF.21 The CPF was seen beneficial because it operated on a provident fund principle where, on their retirement, individuals were paid funds determined by past contributions they and their employers had made.22 Contribution rates rose from 10% in 1967 to 38.5% in 1980 to peak at 50% in 1984–1985 before declining to about 40% or close to that rate for workers 55 years old and below. CPF funds partly came from the government in order to build a strong infrastructural network (rail, air, roads, ports, factories) in the country, and it was also a noninflationary source of finance for the construction of such infrastructure. A most modern airport and ports, telecommunications, roads, and an efficient public transport system in effect provided a “subsidy” for private businesses and multinational enterprises because it reduced the expense of both operating within Singapore and reaching out to markets in the region.23 FREE TRADE AGREEMENTS AND ECONOMIC SPACE Free Trade Agreements (FTAs) also formed the lifeblood of Singapore’s economy.24 Conceptualised by former Prime Minister Goh Chok Tong and former Trade Minister George Yeo, such agreements expanded Singapore’s economic space and markets beyond its borders and linked Singapore’s economy to the economies of larger countries around the world. Through FTAs, Singapore has also been able to connect intimately to global supply chains, with Singaporean exporters facing lower tariff and nontariff barriers in selling their goods and services overseas. Singapore signed thirteen bilateral and twelve regional FTAs with countries that collectively account for more than 85% of global domestic product and 90% of Singapore’s trade.25

Prime Minister Chok Tong Goh (left) and George Yeo (centre) meets Secretary of Defense Donald H. Rumsfeld in 2003.

NEW ERA OF DIGITALISATION Singaporean businesses, supported by the government, are now moving rapidly towards digitalisation, realising the untapped potential it can bring for growth. With digitalisation, businesses can easily use overseas markets for trade ventures and partnerships. Furthermore, new employment opportunities will be created from new digitalisation endeavours. It has been reported that the burgeoning digital economy is set to add as much as USD 10 billion (or about SGD 13.5 billion) to Singapore’s gross domestic product by 2021, and to increase the GDP by 0.6%.26 In early 2016, Singapore also launched the Research, Innovation and Enterprise (RIE) 2020 Plan, an SGD 19 billion investment and a five-year roadmap for the country to tap into digital economy, cell therapy manufacturing, and food security. The government then planned to invest an additional SGD 500 million under the RIE2020 Plan to strengthen digital technologies and automation expertise.27 This would include boosting Singapore’s supercomputing capability, network speed and quality, building up its National Robotics Programme and robotics technology and helping to expand existing programmes such as Artificial Intelligence Singapore (AI Singapore) while fostering new capabilities in digital trust, the social science of digital technologies, and computational law. In addition, the Singaporean government agency, the Government Technology Agency (GovTech), will boost spending on information ASEAN PERSPECTIVES

and communications technology (ICT) in the 2020 financial year to an estimated SGD 3.5 billion, up from SGD 2.7 billion in the previous 2019 financial year. Out of 102 cities around the world, Singapore was officially ranked the smartest city in 2019 by the very first edition of the IMD Smart City Index 2019.28

4 Quah, 7. 5 W. G. Huff: What is the Singapore Model of Development. Cambridge Journal of Economics. 1995/December. 751. 6 Linda Y. C. Lim–Lee Soo Ann: Globalizing State, Disappearing Nation: The Impact of Foreign Participation in the Singapore Economy. In: Management of Success: Singapore Revisited, edited by Terence Chong. ISEAS Publishing, Singapore, 2010. 140.

CONCLUSION The Singaporean growth model may not be directly relevant for every country, but important lessons can be drawn from its experience, especially for smaller economies competing in a global market. The role of the government is important, and it should be especially in tune with economic realities and the competitive setting of world markets where only the fittest and most efficient will survive. Singapore’s policymakers took international market conditions as given but worked on variables in its domestic economy that they could control to attract investments into the country. Labour costs were kept as low as possible, upskilling was encouraged to add value to its labour force, investments were carried out for constructing infrastructure that helped to facilitate business while lowering business costs and promoting connectivity within and outside the country. The financial services sector was strongly supported by the state; here, again, policymakers realised a potential for Singapore to tap into the Asian Dollar Market because of time zone differences. Looking ahead, the digital economy is seen as one of great potentials for Singapore because of the adaptability and educational capabilities of its general population and because it is expected to yield high returns to the country in the years to come.

7 Lim–Lee. 8 Sara Pek: Economic Development Board. Singapore Infopedia. 8 January 2018. <https://bit.ly/31kHaLx > 9 Linda Low: Exploring New Engines for Growth. In: Management of Success. Singapore Revisited, edited by Terence Chong. ISEAS Publishing, Singapore, 2010. 162. 10 Huff, 748. 11 Pek. 12 Tang See Kit: Singapore continues to attract investments despite global economic headwinds. CNA. 20 August 2019. <https://bit.ly/3fHS5CO > 13 Huff, 746–747. 14 Chong Koh Ping: Bridging markets in the East and West. The Straits Times. 9 August 2015. <https://bit.ly/2YpNvDb > 15 See About Us. Infrastructure Asia. <https://bit.ly/3j1YHP0 > Accessed: 20 May 2020. 16 Huff, 736. 17 The central provident fund in Singapore is a compulsory comprehensive savings and pension plan for working Singaporeans and permanent residents, primarily to fund their retirement, healthcare, and housing needs in Singapore. 18 Choy Kee Meng: Singapore’s Changing Economic Model. In: Management of Success. Singapore Revisited, edited by Terence Chong. ISEAS Publishing, Singapore, 2010, 124. 19 Lim–Lee, 141. 20 Lim–Lee, 141. 21 Huff, 744. 22 Huff, 745. 23 Huff, 746. 24 Tommy Koh: Free trade agreements and Singapore. The Straits Times. 23 November 2019. <https://bit.ly/2Z7fHdw > 25 Koh.

ENDNOTES

26 Tang See Kit: The rise of the digital economy: What is it and

1 The views in this paper do not reflect that of ISEAS–Yusof

why it matters for Singapore. CNA. 13 January 2020. <https://

Ishak Institute but are the author’s own unless otherwise stated.

bit.ly/2YqFVZa >

2 Jon S. T. Quah: Why Singapore works: five secrets of

27 Tang See Kit: Digital tech, food security among key areas to

Singapore’s success. Public Administration and Policy. 2018/1.

get more R&D funding. CNA. 27 March 2019. <https://bit.

ly/3hTQuvz >

3 Department of Statistics, Singapore. <https://bit.

28 Singapore tops new ‘citizen-centric’ global smart city index.

ly/2CqAfFU >

IMD News. October 2019. <https://bit.ly/2Vaabpk >

ASEAN PERSPECTIVES

PHILIPPINE FOREIGN POLICY IN THE CONTEXT OF THE SOUTHEAST ASIAN GREAT POWER COMPETITION Péter Klemensits After his presidential election victory in May 2016, Rodrigo Duterte started to form his new, admittedly “independent” Philippine foreign policy. In spite of his campaign promises, he totally redefined the country’s foreign and security policy strategy, the most striking aspect of which is a tendency to turn from the United States and to open towards China. Since the Philippines traditionally counts as the most important Southeast Asian ally of the US, Duterte’s political turn could have critical impacts on not only the future of the narrower region but also the American–Chinese geostrategic rivalry in the Asia-Pacific. Following the Philippines’ independence of the United States in June 1946, the country and the US remained close allies and “partners.” By virtue of the 1951 Mutual Defense Treaty, the United States guarantees the protection of the country, while the 1947 Military Base Agreement allows the United States to use facilities such as the Naval Base Subic Bay. Therefore, by the end of the Cold War, the country’s political, military, and economic relations were determined by its dependency on the USA. In 1991, however, the Philippine Senate refused to extend the American military presence and to conclude another agreement on a military base with regard to their right to pursue a sovereign foreign policy. However, this event had only minor effects on the political and economic relations between the two countries. The Philippine government began to see China’s emergence and its South China Sea expansion more and more as a threat, and, therefore, at the beginning of the 2000s, simultaneously with the global war on terror, it again became interested in strengthening the alliance. Besides Vietnam, the Philippines represented the strongest position against China in the South

China Sea conflict among all ASEAN countries, worsening the relationship with the Asian giant while also contributing to the organisation’s division over the issue. During the Presidency of Benigno Aquino (2010–2016), the country welcomed the announcement of the American concept of “rebalancing,” in exchange for military and political support; therefore, it became one of the most important pillars of the concept to Washington. The Obama administration openly supported the Philippines in its South China Sea dispute, and, in 2011, it declared that the two countries were historical allies and “strategic partners.” In April 2014, with the signing of the Enhanced Defense Cooperation Agreement, the partnership deepened further, allowing the return of the US forces on a rotational basis. Aquino began to treat the protection of the country’s South China Sea interests as a key national geostrategic issue, and, in order to protect them, he was even willing to engage in conflicts with China when he petitioned for the case at the International Court of Justice in The Hague in 2013. Taking the economic development of the country into account, he considered the deterioration of the existing political and economic relations with China acceptable; therefore, he tried to rely more on his ASEAN partners, the USA, and its allies, Japan and South Korea. Aquino committed his country to the USA even more than before in his foreign policy, and he also supported its efforts aiming to encircle China. DUTERTE’S “INDEPENDENT FOREIGN POLICY” AND HIS “OPENING TO CHINA” POLICY From the beginning, the new administration highlighted the importance of following an ASEAN PERSPECTIVES

Airbases in the Philippines

Taiwan

CHINA

Philippine Sea

Hong Kong

Hainan

PHILIPPINES South China Sea

Fort Magsaysay Basa Air Base

Manila

VIETNAM

Mactan-Benito Ebuen Air Base Antonio Bautista Air Base

Spratly Islands (Chinese-occupied islands shown)

Lumbia Air Base

Sulu Sea MALAYSIA

Airbases in the Philippines the US can use as part of the Enhanced Defence Cooperation Agreement

“independent foreign policy,” the main principles of which are sovereignty, sovereign equality, non-interference, and the peaceful settlement of disputes. The most apparent aspects of Duterte’s new approach are distancing its country from the United States and opening towards China and Russia. The court decision of 12 July 2016 on the South China Sea dispute basically favoured the Philippines and rejected the position of China. Despite this, Duterte sought compromises with China. During his visit to Beijing on 18–21 October 2016, the Philippine president confirmed the essential elements of his country’s “independent foreign policy,” which contained the maintenance of its security and economic ties with the US and, at the same time, a commitment to close economic cooperation with China. Hostility towards Beijing was no longer a strategy that paid off. China, realising after Duterte’s opening towards it that 66

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its non-cooperative conduct had achieved its goal—that is, it had made the Philippines seek cooperation by taking a firm stance—changed its strategy. Duterte was welcomed at the highest level during his visit to China in October 2016, meeting President Xi Jinping and Prime Minister Li Keqiang. He was accompanied by four hundred Filipino businessmen, demonstrating the importance of economic ties. The parties signed twenty-one agreements worth USD 24 billion, of which Chinese investments accounted for USD 15 billion, complemented by a USD 9 billion credit line. The Philippines does not wish to be left out of China’s “21st-century Silk Road” project, so the majority of investments are linked to infrastructure development. In May 2017, President Duterte visited Beijing in person again to attend the Belt and Road Forum, in which representatives of the BRI

stakeholder countries participated. Many economic and energy agreements were signed during the negotiations, while the Philippine president talked about the positive effects of Chinese investments on the island nation’s development. Over the past three years, relations between China and the Philippines took a new path, confirmed, among others, by high-level visits and signed agreements. President Xi Jinping’s visit to Manila in November 2018 can be regarded as the culmination of the cooperative strategy, as the parties signed twenty-nine contracts on that occasion, covering economic, defence, justice, and cultural fields. The agreement to jointly explore the energy sources in the South China Sea signalled that Manila was willing to adapt to Chinese political requirements for the sake of cooperation. In April 2019, at the second BRI Forum, nineteen additional investment agreements worth over USD 12 billion were signed, proving the continuation of the cooperation. To Duterte, it is important that he and the Chinese government share the same position on antidrug actions and human rights and, at the same time, both countries reject foreign criticism. From the perspective of real politics, close cooperation with the Chinese might trigger new favours from the US—if it wishes to maintain its former position—and the Philippines might finally profit from playing the two great powers off against each other. According to the Duterte government, its participation in the New Maritime Silk Road initiative of the 21st century will clearly increase the country’s international competitiveness, as infrastructure improvements will reduce the cost of trade with China, as well as with Europe, the Middle East, and Africa. What is more, new markets will open up to the Philippine industry and agriculture while millions of new jobs are created. However, despite the spectacular plans, very few projects have reached the implementation phase by 2020, which also calls into question the effectiveness of the “Opening to China” policy. Red tape, the resistance coming from

military circles, caution on the Chinese side, environmental concerns, or even fear of a debt trap have slowed down the majority of investments or, in some cases, even shut them down temporarily or definitively. Proving his determination, at the end of 2019, President Duterte commissioned the China Communications Construction Company Ltd (CCCC) to build the Sangley Point International Airport worth USD 10 billion, which, however, raised questions about the transparency of investments. Duterte is trying to promote the project in every possible way, including by cutting red tape, but this does not lessen the significance of the fact that, according to the National Economic Development Authority, only twenty-one of the seventy-five planned projects can be expected to be completed by 2022, the end of Duterte’s term. NEW DYNAMICS IN THE US–PHILIPPINES RELATIONS After the Obama administration had criticised Duterte’s antidrug campaign in late 2016, the relationship between the two heads of state deteriorated. Duterte also objected to being subject to lectures by the US on human rights issues, and, therefore, he needed new allies such as China and Russia—the more so because Washington was not willing to provide him proper weaponry any more. During his visit to Beijing on 20 October, he spoke about separation from the US, by which he, as explained later, did not mean the termination of diplomatic, defence, and economic relations but merely an independent foreign policy reorientation. In fact, Duterte did not wish to be part of the concept of “rebalancing” announced by Barack Obama and would not like to keep fighting against China—since it was not worth at all to his country. He would rather like to focus on cooperation with the US and other countries. Duterte tries to establish good relations with both major rival powers, but—at least in his rhetoric—he is ready to take actual steps to distance his country from the US. Duterte would not like to give up US investments either, but, as these have not even been able to ASEAN PERSPECTIVES

meet the country’s infrastructural needs, it is clear that there is a need to look for new partners. The Philippine political leadership eagerly awaited Donald Trump’s presidency, as, after his inauguration on 20 January 2017, the new US president spectacularly broke with the objectives and values represented by the Democrat government in his new foreign policy. Soon, it turned out that the issue of human rights was not a priority to Trump during his negotiations with the Philippine political leadership. Trump did not deny supporting the antidrug campaign of the Filipino president, let alone his other domestic and foreign political measures. Since the Trump cabinet—similarly to Obama—soon realised the strategic importance of the Philippine–US relations, it did its best to mitigate tensions and restore harmonious cooperation. One of the decisive elements of Trump’s Asia tour in November 2017 was his meeting with the Filipino president and the opportunity to reform their bilateral relations. Following the APEC Summit organised in Vietnam, President Trump arrived in the Philippines on 12 November, where his first official meeting with the Filipino president took place. Sources are contradictory on how much the two presidents talked about human rights during their negotiations in Manila; however, it is obvious that both Trump and Duterte blamed the Obama administration for the deterioration of their relations. The outcome of the negotiations suggests that the two countries’ relations were restored, and the basis of the compromise is that Duterte stops his outbursts against the USA, and, in return, Trump does not insist on the issue of human rights. The good relationship between the two presidents has much weight; nevertheless, the close political relations between the two countries that could be observed prior to Duterte are not likely to be restored in the near future. Trump is fully aware of the strategic importance of the Philippines, which is proved by the fact that he qualified the island country as the “most prime piece of real estate” in military terms and said that he had 68

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primarily negotiated with Duterte about the status of bilateral trade. Obviously, the two presidents represent a more pragmatic foreign policy approach today, focussing on the acquisition of economic benefits and the enforcement of the interests of their own countries, combined with regional security policy objectives. The new US National Security Strategy released in December confirmed Trump’s commitment to tighter bilateral relations while it stood up for respecting the principles of free navigation and overflight—as opposed to China. This document also pledged to protect the sovereignty of certain Southeast Asian countries against the increasing Chinese influence. During Duterte’s presidency, the Philippines aims to build as close economic cooperation with China as possible, while, in terms of security, the country also relies on Russia and intends to use Japan as a counterbalance against both countries. Nevertheless, the US– Philippines alliance is still of essential importance in security policy, since the USA provides a guarantee for the defence of the country. The National Defense Strategy, issued by the Pentagon in 2018, highlighted the necessity to strengthen alliances and partnerships in the Indo-Pacific region, and this is particularly true for the Philippines. At the same time, the Duterte government initiated the revision of the Mutual Defense Treaty of 1951 at the end of the year and expected the US to take a clear stand primarily on the claims about the South China Sea islands. During his visit to Manila in March 2019, US Secretary of State Mike Pompeo finally publicly confirmed the Treaty of 1951 and guaranteed to protect Filipino interests. Of course, re-evaluating and, if necessary, amending the Treaty, which is the basis of the alliance, was not removed from the agenda, but it does not seem to be possible during President Duterte’s and President Trump’s current term because of domestic political and strategic risks. (In spring 2020, Duterte attempted to terminate the 1999 Visiting Forces Agreement but was finally forced to suspend his decision for foreign and domestic policy reasons.)

OLD AND NEW ALLIES After his visit to China, the Filipino President also visited Japan between 25 and 27 October 2016, which may be regarded as symbolic. Duterte assured his hosts that he had only discussed the strengthening of economic relations with China and the creation of a new military alliance was not a subject. At the same time, he naturally tried to encourage the extension of Japanese investments and business relations. During his meetings with Prime Minister Abe Shinzō, Duterte insisted on strengthening the strategic partnership between the two countries and praised Japan’s defence security and development support. The parties also agreed on the purchase of additional training aircraft. Regarding territorial disputes, they confirmed that ensuring the freedom of navigation and settling disputes in line with international law is in the interest of both countries. In May 2019, Duterte travelled to Japan for the third time. During his visit, he and his hosts agreed on an investment package worth USD 6 billion, laying the foundations of the “golden age” of Philippine– Japanese relations.

The continuation of the defence cooperation with Japan is indispensable to Duterte, who increasingly intends to rely on the Eastern Asian country instead of the US. However, he wishes to do so not to the extent and in the fashion imposed by the Americans, unlike the Aquino government. The Filipino president would not like to expose his country to Chinese interests, and he views Japan as an ally which adequately counterbalances Beijing’s power. South Korea is a less costly, geographically favourable alternative for the Philippines to modernise its military hardware; therefore, the Philippines can become a major customer of South Korea, and it is one of the guarantors of freedom of navigation in the South Chinese Sea. The possible escalation of the conflict would affect, inter alia, maritime trade in the region and, thus, in particular, South Korea. Both parties can gain from closer security cooperation: as to the Philippines, business with South Korea could mean more up-to-date assets and yet another partner beyond the United States, while, to South Korea, it means a larger market and at the same time, the country could become a

President Rodrigo Duterte with Japanese prime minister Abe Shinzō and members of the Philippine delegation during the former's visit to Japan in 2016 ASEAN PERSPECTIVES

relevant geopolitical factor in the region and contribute to the stability of the South China Sea. In the meeting of APEC country leaders in Lima in November 2016, Duterte showed a willingness to develop closer cooperation with Russia, besides China. He called Vladimir Putin his idol and gladly accepted the Russian president’s invitation to Moscow. He also confirmed his “independent” foreign policy ambitions and his wish to join the Chinese– Russian alliance. After his visit to Moscow in May 2017, Duterte travelled to Russia again in the autumn of 2019. The two parties continue to strengthen economic relations, and the Philippine government pledged to extend their defence cooperation in particular. Other factors are set aside, however, since the partnership with Russia has its limits, due to the fact that the Philippine military force is not interested in reinforcing these relations, and, therefore, its outcome is doubtful. Regarding his regional policy, Duterte stands for closer cooperation with ASEAN countries, as proven many times before. For his fight against the spread of corruption, drugs, and terrorism, Duterte won the support of his partners, and, at the same time, his moderate standpoint in the South China Sea dispute is also generally accepted. Vietnam and the Philippines even worked out a six-year action plan against transnational crime. The stimulation of bilateral trade and investments also featured on the agenda. In Malaysia, Duterte was willing to put aside the disputed issue of Sabah, and he signed agreements on the improvement of living standards and support for the Filipino communities overseas. The issues of piracy, terrorism, and more effective actions against kidnapping were also in the spotlight. In 2017, on the 50th anniversary of ASEAN, the Philippines took over its presidency, which was another great opportunity for Manila. At the 28– 29th ASEAN Summit, the Southeast Asian countries were willing to join China’s New Silk Road project and to cooperate with the Asian Infrastructure Investment Bank. Under the leadership of Duterte, China and the ASEAN 70

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countries were expected to cooperate more closely, at least on shaping of a joint Southeast Asian standpoint, which is advantageous for Beijing. THE “BALANCE SHEET” OF THE “INDEPENDENT FOREIGN POLICY” In the Asia-Pacific region, the balance of power has already started to shift towards an emerging China; therefore, it is highly likely that the US will lose positions. As a consequence of the changed international balance of power, Southeast Asian states will try to capitalise on this trend and choose the most advantageous relations among rivalling great powers. In the past, the Philippines was a major US ally in political, military, and economic terms alike, but, by now, the results of this process can be questioned. It was in this situation that Rodrigo Duterte entered, instantly realising the need for change in the Philippine foreign policy. The last four years have been hallmarked by his efforts to realise his “independent foreign policy,” and pursuing that, he has chosen the advantages of closer economic cooperation with China and of distancing from the US. We do not know yet what results the president’s new initiatives will yield and how effective his policy will be in the long term, because it will be affected by both internal and external factors. Two of the most important questions in this aspect are how long Duterte will retain the needed popularity and how much the powerful elite will support his approach to China and Russia. The army, which has been an ally of the US, and the Filipino business elite with American ancestry can guarantee that the security partnership with the US will endure, and the Philippines, just as in the past, will remain a substantial US ally in Southeast Asia. Although it is too early to talk about the failure of the “Opening to China” policy, the current administration must do everything to ensure its effectiveness. Given the long-term geopolitical consequences, Beijing cannot accept a fiasco either, as it would have a negative impact on its power relations in Asia and the Pacific.

SOUTHEAST ASIA AT THE CROSSROADS OF POWER RIVALRY: A VIETNAMESE PERSPECTIVE Dang Cam Tu* Growing contestation among big powers, particularly between the United States and the People’s Republic of China, is dominating contemporary international politics. Nowhere else is it reflected more evidently than in the Indo-Pacific region. Located at a geostrategic crossroads linking the Pacific and the Indian Ocean, Southeast Asia has, therefore, become a site for direct big power competition with multiple impacts. Common regional responses have so far been a mixture of hedging, engaging, and institutional balancing by measures of bilateral ties and multilateral mechanisms initiated and led by the Association of Southeast Asian Nations (ASEAN). The article argues that, while power rivalry creates more fragmentation within the region and lessens appetite for multilateralism, ASEAN retains its relevance for small and medium-sized countries in Southeast Asia to mitigate the negative consequences of power politics. Being an ASEAN member, Vietnam has attached greater significance and emphasis to ASEAN in its effort to delicately balance relations with competing big powers. SOUTHEAST ASIA AS A FOCAL POINT OF POWER RIVALRY The Indo-Pacific has become the main theatre for power rivalry. It is because the world’s economic and geopolitical centre of gravity is presumably shifting eastwards to the region which is home to the world’s largest and fastest-growing economies. Major economic, political, security, and strategic interests of the great powers are consolidated here. More importantly, it is also the immediate geostrategic environment wherein China seeks to defend and expand its interest and influence in its ambition to become a global * The views expressed are the author’s own and do not necessarily reflect those of the institution she works for.

power. Since the 19th National Congress of the Chinese Communist Party in 2017, China has been pursuing increasingly assertive policies in the region within the framework of its peripheral diplomacy, striving towards its proclaimed aim to establish a community of common destiny under its influence. Meanwhile, the United States—a perceived resident of the Indo-Pacific and an incumbent global superpower—finds its primacy in the establishment and management of the world order being challenged and, therefore, publicly declares China its rival. The ultranationalist foreign policy tendencies of both the United States and China, the introduction of the former’s Free and Open Indo-Pacific Strategy (FOIPS) and the latter’s Belt and Road Initiative (BRI), the mutual distrust, the trade war, and the COVID-19 are creating an environment for a chain of actions and reactions through which tensions between the two giants are accumulating and their strategic rivalry is intensifying. In addition to this, for the first time in history, Asia is witnessing three regional powers, namely, China, Japan, and India, rising concurrently and vying boldly to exert their influence. At the same time, medium and small countries in the region, including Australia, New Zealand, and ASEAN members, have shown greater activism in their foreign relations. As the relations among regional countries are largely revolving around the dynamic of competition between the United States and China, the regional strategic landscape has become increasingly competitive, and the modes of power alignment more fluid. Lying at the centre of the Indo-Pacific and at a crossroads of FOIP and BRI, Southeast Asia appears more salient in the big power rivalry. Being a community with an aggregate population of 630 million people, the fifth-largest economy in the world with a gross domestic product of ASEAN PERSPECTIVES

approximately USD 3 trillion, home to four of the world’s fastest-developing economies with young and skilled workforce and a growing middle class, Southeast Asia offers many economic opportunities for its big partners.1 It is especially true as their healthy economic growth has turned the Asia-Pacific and Indo-Pacific into key engines for global growth. Southeast Asia is also where critical sea lines of communication and transportation pass through. Major powers have increasingly competitive interests in gaining economic, security, and logistical access to Southeast Asia, particularly the South China Sea, and in preventing their rivals from obtaining advantage in these regards. Therefore, Beijing’s excessive and unfounded claims, expansive military deployment, and power projection in the South China Sea underline its escalating frictions with the United States, Japan, India, and other claimants, thus turning the South China Sea into a new theatre for power competition.2 Big power competition has both positive and negative implications. On the one hand, to force constellation in their struggle for strategic interest and influence, Washington and Beijing offer regional countries greater opportunity to promote cooperation through bilateral, mini-lateral, and multilateral arrangements that they seek to lead. This means more prospects for Southeast Asian states to gain access to markets, investment, technologies, and know-how and advance security interests through diversifying their sources of weapon systems, defence supplies, capacitybuilding, and joint exercises. On the other hand, which is perhaps more troublesome, the rivalry between the United States and China casts an atmosphere of heightened uncertainty and mistrust over the region. Uncertainties centre on the future of China’s development and power projection, the US’s commitment and credibility, the Sino-US relationship, and regional arrangements and architecture. Uncertainties come from several factors. One of them is the emerging prominence of the Indo-Pacific as a geostrategic concept in the regional architecture discourse. Contending 72

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powers uphold competing interests, values, and perceptions of how to best manage relations in the region. Accordingly, Washington and Beijing are advocating different visions about regional arrangements and architecture in keeping with their preferences. However, uncertainties also arise from the dichotomy between the region’s rising geoeconomics underlined by dynamic growth and the geopolitical and security flux, which are, in large part, a result of growing tensions between and among major powers and other countries. The unknowns and surprises related to the policymaking process in Washington, Beijing, and elsewhere tend to increase, particularly driven by various domestic developments and pressures. Last but not least, the South China Sea, the Korean Peninsula, and Taiwan continue to be regional hotspots where possible solutions are remote. Compounded by uncertainties, mistrust seems to deepen, given that the United States and China are increasingly suspicious of each other’s long-term intentions, while states in the region have different strategic perceptions about, and pursue different paths in their policies towards the big powers. Big power rivalry also limits smaller countries’ strategic choices and increases the pressures on them to take sides. REGIONAL RESPONSES The history of colonialism and the struggle for national independence maintain the long-held suspicion and concern in most Southeast Asian countries about interference and domination by the big powers. Yet the former’s development experience suggests their acceptance of the latter’s engagement in the region. As a result, the worries of Southeast Asian countries oscillate between being associated with and abandoned by major powers, being entangled with and constrained by big powers’ regional interests and competition, and becoming their proxies.3 Under the acute pressure of choosing sides, leaning towards either China or the United States does not appear to be a desirable option to most small and medium-sized countries in Southeast Asia. Instead, the common policy option by regional countries is to pursue good bilateral relations with both powers while promoting various layers

of integration among themselves and providing venues for big powers’ engagement in dialogue and cooperation on regional issues. Individually, most Southeast Asian countries are inclined towards a hedging strategy in their bilateral relations with big powers in the context of intensifying big power competition.4 One reason why they opt for such a strategy is that they are much smaller states, with close economic or security (or both) ties with the big ones but weaker bonds among themselves. Keeping equilibrium in their relations with the global big powers proves to be an optimal policy choice for smaller states that aim at attaining more resources for security and economic development, preserving national strategic autonomy and precluding the possibility of regional hegemony by any single power. Collectively, ASEAN serves as an effective instrument for regional countries to mitigate the negative impacts of power politics while preserving the positive ones. It is noteworthy that being an arena for power rivalry is not new to Southeast Asia. The region was a battlefield of the East–West confrontation when the Cold War was at its height. Indeed, ASEAN was founded as a group attempt to protect the region’s autonomy from the unwanted intrusion of major power rivalry in the Cold War context. As such, ASEAN has preferred to avoid entanglement in power competition through the principles upheld by the Association since its inception in 1967. The Bangkok Declaration— the founding document of ASEAN—reiterated the member states’ determination to ensure their stability and security from external interference in any form or manifestation in order to preserve their national identities in accordance with the ideals and aspirations of their peoples. The Declaration on the Zone of Peace, Freedom and Neutrality (ZOPFAN), signed by the foreign ministers of ASEAN member states in 1971, captured the aspiration to keep Southeast Asia free and neutral from external interference. It was a further attempt to insulate Southeast Asia from being embroiled in the geopolitics of the Cold War.5 ASEAN neutrality traditionally refers to the diplomatic practice of not taking sides with competing big powers.6 It is embedded in the notions of impartiality—understood as not taking

sides in big power dynamic—and autonomy— understood as attempting to limit external interference in regional affairs.7 In the post–Cold War era, as power rivalry manifests new features, centrality becomes a new emphasis in ASEAN’s approach to impartiality and autonomy. ASEAN centrality has internal and external dimensions. The internal dimension resides in ASEAN’s capacity for serving the national interests of its member states and promoting regional stability and prosperity. It is also indicated by the significance attached to the ASEAN Community (officially established in 2015) in the national agendas and strategic calculations of Southeast Asian countries. The external dimension is embedded in ASEAN’s central role in the construction of regional security mechanisms through inducing, mediating, and engaging major powers to resolve regional issues and prevent and manage regional conflicts. In other words, ASEAN has taken the approach of engaging all powers through a network of ASEAN-led mechanisms of dialogue and cooperation while promoting regional solidarity and resilience in order to maintain strategic autonomy and to avoid being entangled in power politics. Rising tensions between the United States and China are posing a series of challenges to ASEAN. If Sino-US rivalry further intensified, ASEAN would be divided and put at the forefront of great power competition once again, with the South China Sea as a case in point. If ASEAN’s internal cohesion cannot be maintained, ASEAN-led regional mechanisms will be jeopardised, and, as a result, ASEAN’s centrality in regional cooperation and architecture will be endangered. Concerns have already been raised about whether ASEAN can adapt and cope as major powers become more assertive and active in trying to exert their influence over the direction of the ASEAN-led multilateral mechanisms.8 Hence, ASEAN faces the challenge of how to balance divergent interests while, simultaneously, ensuring the major powers’ continued commitment to and engagement with these mechanisms. In the new context, ASEAN will remain relevant if the merits of impartiality and autonomy are recognised and nurtured. In pursuing them, ASEAN PERSPECTIVES

ASEAN put greater emphasis on developing its normative, convening, and engaging power. From a Southeast Asian perspective, it is better to have the big powers within the ASEAN-led frameworks and engage them on the basis of rules and norms set by ASEAN than have them outside these frameworks and beyond ASEAN’s ability to manage. While states in the region remain divergent in and divided by the perceptions of what laws and rules to use to govern interstate relations, at least there is a general acceptance on the shared norms set by ASEAN, with thirty-seven signatories to the Treaty of Amity and Cooperation (TAC) to date, including the United States, the EU, and China.9 The increasing number of signatories reflects the growing recognition of the TAC by non-ASEAN states and reaffirms ASEAN’s normative power in providing a core code of conduct to advance trust and cooperation among states in the Indo-Pacific. ASEAN’s convening and engaging power still has room to grow when distrust among states, especially among major powers, runs high—not only between the United States and China but also between Japan, India, and China. The inability of any of these powers to have a clear strategic advantage and take on a leading role provides them with additional incentive to deepen their engagement with the region and advocate the central role of ASEAN in regional multilateralism.10 In this connection, ASEAN, with its long-established incremental and “comfortable-to-all” approach, has much to offer for the role of a neutral convener. While initiatives for multilateral cooperation might become more exclusive because of increasing great power rivalry, the perceived ASEAN centrality rests on the inclusive nature of the institutional arrangements that ASEAN supports. Thus, ASEAN continues to provide an appropriate channel for collective response by Southeast Asian states to the pervasive uncertainty and mistrust in the current regional strategic environment heavily influenced by intensifying power rivalry. It is more so when taking into account the fact that, over more than half a decade of regional integration, ASEAN has proved to serve the interests of its members increasingly well. ASEAN members have also developed a habit of skilfully keeping a flexible balance in their relations with major 74

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powers. If history is any indication, centrifugal forces in the external environment would serve as a push factor to enhance ASEAN’s unity and role. ASEAN countries are deeply aware of how bad it was for small states to be marginalised and get trampled underfoot in the proverbial jungle of fighting elephants. THE EXPERIENCE OF VIETNAM The long history of struggling for national independence and being caught up in great power politics has been informing Vietnam’s insistence on its foreign policy posture of self-reliance, diversification, and international integration since the Doi Moi (Renovation) process was launched in 1986. In its post–Cold War foreign policy, Hanoi attaches greater priority and emphasis to its relations with neighbouring countries and major powers. Vietnam is the only member in ASEAN that is either a strategic or a comprehensive partner of all the five permanent members of the UN Security Council, all major powers in the Indo-Pacific, and all the founding members of ASEAN. As key players are increasingly shifting their attention to the Indo-Pacific and enhancing their engagement with regional countries, Vietnam’s role is becoming more salient in their strategic calculations, as seen in the policies of the United States, Japan, India, and the EU towards the region.11 In response to big power rivalry, the choice of Hanoi is to stick to its policy of independence and to delicately balance relations among all the powers, particularly the United States and China, and see these relations in positive-sum terms. In the context of escalating Sino-US tensions and China’s assertive expansion of influence in many parts of the world, including the South China Sea, there are views that any boost in Vietnam’s relations with other powers is at China’s expense. However, it is not necessarily the case. The reality is that Hanoi is simultaneously deepening its relations with both the United States and China, as well as other powers like Japan, India, and the EU. More importantly, it has historical and practical reasons for not taking sides with any single power. The independent posture of Vietnam’s Doi Moi foreign policy is well reflected by its defence policy

where it strictly follows a “three-nos principle”— namely, no military alliances, no foreign military bases on Vietnamese territory, and no alignment with a second against a third country. Continued adherence to this principle is the policy mainstream although Hanoi has been under some domestic pressure to review it.12 For Vietnam, like many other Southeast Asian states, to avoid being dragged into the power politics game and to achieve the prioritised national goals of development and security, a greater association with ASEAN stands out as a wise and instrumental policy choice. The establishment of the ASEAN Community, which rests on the three pillars of Political-Security Community, Economic Community, and Socio-Cultural Community, provides Vietnam with an effective vehicle for its strategy to enhance national resilience in terms of economic growth and strategic autonomy and to deepen international integration. Furthermore, membership in the ASEAN Community equips Vietnam with greater collective status for further integration beyond Southeast Asia. ASEAN also serves as a good mechanism for proponents of a peace- and rule-based order, especially with regards to dispute management and solution in the South China Sea. The lesson of history remains in the current context that, only when united and resilient, can ASEAN countries mitigate the negative impacts of the intrusion of power politics into the region. In that sense, it is clearly in the long-term interest of all members to keep the ASEAN Community cohesive and resilient. Therefore, Hanoi’s foreign policy priority is to support ASEAN centrality in Southeast Asia and beyond. Playing the role of ASEAN Chair in 2020, Vietnam is in a better position to contribute to the collective efforts at shoring up the Association’s cohesiveness and responsiveness in coping with traditional and nontraditional challenges, especially those posed by the growing big power rivalry.

Singapore PM Lee. Singapore Business Review. 30 August 2018. <https://bit.ly/2ULghMG > 2 The SAGE Handbook of Asian Foreign Policy, edited by Takashi Inoguchi. SAGE Publications, London–Thousand Oaks–New Delhi–Singapore, 2020. 468–476.; China, the United States, and the Future of Southeast Asia. Volume II, US–China Relations, edited by David B. H. Denoon. New York University Press, New York, 2017.; Fenna Egberink–Frans-Paul van der Putten: ASEAN and Strategic Rivalry among the Great Powers in Asia. Journal of Current Southeast Asian Affairs. 2010/3. 131–141. 3 Malcolm Cook: Southeast Asia and the Major Powers: Engagement not Entanglement. Southeast Asian Affairs. 2014. 37–52. 4 Bilahari Kausikan: Dodging and Hedging in Southeast Asia. The American Interests. 12 January 2017. <https://bit. ly/3hxYm5L > 5 John D. Ciorciari: ASEAN and the Great Powers. Contemporary Southeast Asia. 2017/August. 253.; Richard Stubbs: The ASEAN Alternative? Ideas, Institutions and the Challenges to Global Governance. The Pacific Review. 2008/December. 457. 6 Amitav Acharya: The Myths of ASEAN Centrality. Contemporary Southeast Asia. 2017/August. 227.; B. A. Hamzah: Introduction—ZOPFAN—Its Strategic Intent. In: Southeast Asia and Regional Peace, edited by B. A. Hamzah. Institute of Strategic and International Studies, Kuala Lumpur, 1992. 3. 7 Ralf Emmer: Unpacking ASEAN Neutrality: The Quest for Autonomy and Impartiality in Southeast Asia. Contemporary Southeast Asia. 2018/3. 349–370. 8 Emmer. 9 The Treaty of Amity and Cooperation (TAC) is a foundational treaty by ASEAN to establish a code of conduct to govern interstate relations in Southeast Asia, based on the adherence to such principles as non-interference, no use or threat of force, peaceful settlement of disputes, and others. It was originally signed in 1976 by the five founding members of ASEAN: Indonesia, Malaysia, the Philippines, Singapore, and Thailand. 10 Tang Siew Mun: Sino-Japanese relations and its effects on archipelagic Southeast Asia. S. Rajaratnam School of International Studies, Policy Report. 2014/December. 5–8. 11 Thuy T. Do: Vietnam’s moderate diplomacy successfully navigating difficult waters. East Asia Forum. 16 January 2015.

ENDNOTES

<https://bit.ly/2UJhOmj >

1 Dian Septiari: ASEAN world’s fifth-largest economy: Report.

12 Nguyen Vu Tung: Stronger US–Vietnam Relations Are not at

The Jakarta Post. 26 November 2019. <https://bit.ly/2YA7IoN >;

China’s Expense. The Diplomat. 11 June 2016. <https://bit.

ASEAN to become world’s fourth-largest economy by 2030:

ly/2AIKoNH > ASEAN PERSPECTIVES

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INDIA’S ACT EAST ENGAGEMENT: FROM SOUTHEAST ASIA TO THE INDO-PACIFIC Rahul Mishra The Act East Policy, launched in 2014, has been lauded as one of the most successful foreign policy initiatives of the Narendra Modi government. It has bolstered India’s eastward engagement and facilitated its comprehensive institutional engagement with the Association of Southeast Asian Nations (ASEAN) and its several multilateral mechanisms. Its contributions to strengthening India’s diplomatic footwork in the region have been numerous—both at the bilateral and multilateral levels. Over the past six years of the Modi government, India’s eastward engagement has acquired a new dimension. A critically important aspect of the expansion of the Act East Policy has been the drafting of the vision for the IndoPacific order, which places the ASEAN at its core. India’s eastward engagement is characterised by an exchange of high-level visits, the elevation of relations, the signing of agreements, engaging in dialogue on issues of mutual interest, and shared concerns with likeminded countries. The emerging Indo-Pacific construct has given an opportunity to India and its friends to cooperate in the Southeast Asian region and beyond for maintaining the strategic equilibrium and preserving a rules-based order. In this context, this paper attempts to explore the central tenets of India’s eastward engagement in the emerging Indo-Pacific order, manifested in the Act East Policy. UPGRADATION OF THE ACT EAST POLICY In 2014, the Look East Policy was revised and upgraded to become the Act East Policy. When the Modi government assumed power, the first official announcement in this regard was by former External Affairs Minister Sushma Swaraj during her visit to Vietnam in August 2014. She stated, “Now it is time to not just look but act. 78

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Under the [Narendra] Modi government, we will have an Act East policy.”1 Modi spoke of the Act East Policy during his participation in the ninth EAS held in Naypyidaw, Myanmar, in 2014. He stated, “Since entering office six months ago my government has moved with a great sense of priority and speed to turn our ‘Look East policy’ into ‘Act East policy.’”2 When Modi came to power in 2014, he announced the Neighbourhood First policy to reset ties in the neighbourhood and prioritise relations with countries in the South Asian region. The transition from the Look East to the Act East Policy was also about reinvigorating ties with the ASEAN region and beyond. The Act East Policy’s focus has certainly been on the ASEAN countries, but another important dimension has also been added. Not just the ASEAN economies but also countries in the wider Indo-Pacific region have come under the ambit of the Act East Policy. Southeast Asia, East Asia, Oceania, and the Pacific Island countries comprise the geographical canvass of the Act East Policy today, while the Indo-Pacific approach is wider in scope, including even the United States as a part of its vision. The areas of cooperation now include political, economic, defence, security, cultural, people-to-people, and other linkages. The key aspect of the Act East Policy is that India is projecting itself as a major and responsible stakeholder in shaping the Indo-Pacific regional order. Rising bonhomie with the US, Japan, and Australia is an essential element of this vision. Highlighting key aspects of the Act East Policy, India’s Ministry of External Affairs states, “[t]he key principles and objectives of ‘Act East Policy’ is [sic!] to promote economic cooperation, cultural ties and develop a strategic relationship with countries in the Asia-Pacific region through

Narendra Modi, prime minister of India (middle, in white) and ASEAN heads of state and government at the Rashtrapati Bhavan in New Delhi in 2018 (from left: Aung San Suu Kyi, state counsellor of Myanmar [Burma], Rodrigo Roa Duterte, president of the Philippines, Prayuth Chan-ocha, prime minister of Thailand, Nguyen Phuc, prime minister of Vietnam, Lee Hsien Loong, prime minister of Singapore, Hassanal Bolkiah, sultan and Yang Di-Pertuan of Brunei, Hun Sen, prime minister of Cambodia, Joko Widodo, president of Indonesia, Thongloun Sisoulith, prime minister of Laos, and Najib Razak, prime minister of Malaysia)

continuous engagement at bilateral, regional and multilateral levels thereby providing enhanced connectivity to the States of North Eastern Region with other countries in our neighbourhood.”3 The Indian Ministry of External Affairs’ description of the key objectives of the Act East Policy showcases three elements. First, strengthening and exploring different aspects of bilateral relations with the countries of the region. Second, enhancing multilateral subregional and regional cooperation efforts with ASEAN—this is not only pivotal to steer ties with ASEAN but also with other dialogue partners and participants through other ASEANdriven mechanisms and meetings. Finally, the third component has strong domestic underpinnings. Building infrastructure and connectivity within the eight North Eastern states of India and linking them with the ASEAN region is a key aspect of the Act East Policy.

In 2018, the late Sushma Swaraj, the former External Affairs Minister of India, held a meeting with the Chief Ministers of the North Eastern provinces of India to emphasise the importance of the region in the Act East Policy. She stated, “[g]reater connectivity and economic integration of India’s northeast with its eastern neighbours was considered a key focus area for growth and development of the region. … Continued development of relevant infrastructure both within the state and at international borders was also discussed with a view to enhancing trade, investment, tourism and people-topeople ties.”4 Connectivity has become an important objective of India’s regional engagement and is considered a key component of Modi’s foreign policy. This is also important in the context of the China-initiated Belt and Road Initiative (BRI) of which India is not a partner. One of the key PARTNERS AND INFLUENCES

additions in the Act East Policy was the additional emphasis on ensuring intraregional connectivity within India’s North Eastern states and linking them with the ASEAN region. Today, some of the remote state capitals in the North Eastern region of India have direct flights to the Southeast Asian capitals such as Bangkok. RELEVANCE OF THE ACT EAST POLICY The Look East/Act East Policy is one of India’s most successful foreign policy initiatives. Although India factors China in its eastward engagement, it has been cautious not to make it a policy which revolves around China. It has more to do with India’s aspirations to establish stronger ties with regional countries. Actually, India has never been far behind China in the region and occupied an important place there on its own merit. While China has ethnic affinities with some of the Southeast Asian countries, India also shares strong age-old cultural and civilisational linkages with them. Under the Act East Policy, it tried to further revive those linkages. India supports and facilitates the growth of the lesser developed countries in the region through its capacity-building programmes. It has provided lines of credit and has been involved in quick-impact projects. Capacity-building is done through its ITEC programmes, as well. INDIA AND THE EMERGING INDO-PACIFIC ORDER India’s vision of the Indo-Pacific is anchored to its Act East Policy, as it is through this policy that India has been able to reach out to countries that are part of the Indo-Pacific landscape. In 2018, Modi delivered a keynote address at the Shangri-La Dialogue—the annual flagship conference of the International Institute of Strategic Studies—where he illustrated India’s vision of the Indo-Pacific. It was the first time that India’s approach had been officially disclosed. The choice of place for the announcement is noteworthy here. Singapore has been important for both India’s Act East Policy and Indo-Pacific vision. India’s vision of the Indo-Pacific is inclusive, open, rules-based, 80

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and not directed against any country. Modi chose Singapore to articulate his government’s policy and reassure Singapore and other ASEAN countries that ASEAN is and will always remain at the core of India’s Act East Policy and its vision and actions for the realisation of the IndoPacific order. He remarked: “The ten countries of South East Asia connect the two great oceans in both the geographical and civilizational sense. Inclusiveness, openness and ASEAN centrality and unity, therefore, lie at the heart of the new Indo-Pacific. India does not see the Indo-Pacific Region as a strategy or as a club of limited members. . . . [India’s vision for the IndoPacific region] stands for a free, open, inclusive region, which embraces us all in a common pursuit of progress and prosperity. It includes all nations in this geography as also others beyond who have a stake in it. Southeast Asia is at its centre. And, ASEAN has been and will be central to its future. That is the vision that will always guide India, as we seek to cooperate for an architecture for peace and security in this region.”5 Clearly, inclusivity, openness, and adherence to a rules-based order are the key foundational pillars of India’s Indo-Pacific vision. These are points that do not only distinguish its approach from the US’ but also find support in the Southeast Asian capitals. As a major maritime neighbour, India has been mindful of the concerns that its Southeast Asian neighbours have vis-à-vis the changing dynamics of the international and regional order. It is important to mention here that, contrary to popular belief, India has more maritime Southeast Asian neighbours than territorial ones—the latter category actually comprises only Myanmar. Indonesia, which is less than ninety miles away from India’s southernmost tip, is often missed when a list of India’s neighbours is made. Likewise, Thailand and Myanmar are also India’s maritime neighbours, and, yet, they have not been able to find their due place in the official discourse on India’s immediate neighbours. The Bay of Bengal is the natural geographic space that houses India and its three Southeast Asian neighbours—Indonesia, Thailand and

Myanmar—in addition to its Southern Asian neighbours—Bangladesh, and Sri Lanka. The Bay of Bengal Initiative for Multisectoral Technical and Economic Cooperation (BIMSTEC)—a subregional initiative that includes the abovementioned countries (except Indonesia), along with Bhutan and Nepal—aims to harness the collective potential of the Bay of Bengal subregion. To ensure greater maritime connectivity for trade and commerce, India has been working with Myanmar to develop the Sittwe port in the latter country. The Kaladan multimodal project is also an important component of India’s maritime connectivity efforts. Finally, the SAGAR (Security and Growth for All in the Region) project, launched by Modi in 2015, is yet another ambitious project under which India is working with its neighbours and friends in the Indian Ocean region to create better maritime trade linkages and connectivity. INDIA AND ASEAN’S INDO-PACIFIC APPROACHES After countries such as Japan, Australia, and India had disclosed their Indo-Pacific approaches, the ten-membered ASEAN also came up with its vision by issuing its outlook on the region. With emphasis on ASEAN centrality, it mentioned: “This Outlook is not aimed at creating new mechanisms or replacing existing ones; rather, it is an Outlook intended to enhance ASEAN’s Community building process and to strengthen and give new momentum for existing ASEAN-led mechanisms to better face challenges and seize opportunities arising from the current and future regional and global environments. Moreover, the Outlook is intended to be inclusive in terms of ideas and proposals. ASEAN Outlook on the Indo-Pacific envisages ASEAN Centrality as the underlying principle for promoting cooperation in the Indo-Pacific region, with ASEAN-led mechanisms, such as the East Asia Summit (EAS), as platforms for dialogue and implementation of the Indo-Pacific cooperation, while preserving their formats. Furthermore, ASEAN may also seek to develop, where appropriate, cooperation with other

India’s maritime borders

BANGLADESH INDIA PAKISTAN

MYANMAR (BURMA)

THAILAND

SRI LANKA MALDIVES British Indian Ocean Territory

INDONESIA

International waters

regional and sub-regional mechanisms in the Asia-Pacific and Indian Ocean regions on specific areas of common interests to complement the relevant initiatives.”6 The ASEAN outlook on the Indo-Pacific has remarkable elements of commonality with India’s (and Japan’s) vision. Unlike the US, both India and ASEAN highlight the “inclusive” nature of their conceptions of the region. It is also underscored that their policies are not aimed at any third country to make sure that China do not get the impression that India and ASEAN are ganging up against it. The ASEAN document highlights it as follows: “ASEAN Outlook on the Indo-Pacific is based on the principles of strengthening ASEAN Centrality, openness, transparency, inclusivity, a rules-based framework, good governance, respect for sovereignty, non-intervention, complementarity with existing cooperation frameworks, equality, mutual respect, mutual trust, mutual benefit and respect for international law, such as UN Charter, the 1982 UN Convention on the Law of the Sea, PARTNERS AND INFLUENCES

Indian ships in the Bay of Bengal during the 2017 Malabar naval exercise

and other relevant UN treaties and conventions, the ASEAN Charter and various ASEAN treaties and agreements and the EAS Principles for Mutually Beneficial Relations (2011).”7 Both India and ASEAN have shown their inclination to include as many stakeholders as possible in ensuring a peaceful and stable IndoPacific order and that they do not want to have a coalition against any country including China. India’s attempts to convince Russia about the virtues of the Indo-Pacific construct and to motivate it to endorse the same are driven by that objective. The Indo-Pacific construct is still evolving and is making steady progress. With ASEAN’s embracing the concept, the IndoPacific will likely acquire a concrete shape sooner rather than later. However, whether China would show inclination to be an active contributor to the Indo-Pacific is still not clear. From statements coming from the Chinese Ministry of Foreign Affairs and from the Chinese media, it seems that, so far, China has been cautious about this construct and perceives it as an anti-China stratagem of the US and its allies and friends. Nevertheless, ASEAN and countries 82

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such as Japan, India, and the US have shown requisite rationality to shape the common aspects of their Indo-Pacific visions as per their own perceptions of emerging challenges and opportunities at regional and international levels. China’s rising assertiveness, especially at the South China Sea and the Seas of East Asia, is increasingly putting the regional security equilibrium in danger, leading only to the increased military presence of the US. China’s recent border stand-off with India and its growing disputes with Japan and countries of Southeast Asia have pushed these countries closer to the US to effectively deal with the China challenge. RECENT DEVELOPMENTS AND THE ROAD AHEAD Despite hampering trade, people-to-people linkages, and tourist movements, the COVID19’s impact on India’s Act East Policy has so far been positive, helping the country’s cooperation with Southeast Asia. This was particularly true in the case of India’s ties with Malaysia. In the past four months, Prime Minister Modi has spoken to

the leaders of Indonesia, Malaysia, Singapore, and Vietnam. In April, India also approved to sell hydroxychloroquine tablets to Malaysia for use in the treatment of COVID-19 patients.8 Temasek Foundation Singapore donated 30,000 COVID-19 test kits to India.9 India got its people back from Southeast Asia under the Vande Bharat Mission during which seamless connectivity between India and Southeast Asia got manifested. The sheer number of people stranded in Malaysia, Singapore, Thailand, and the Philippines tells us how strong the people-to-people linkages have become over the past three decades. In the case of Malaysia, the “Government of India has, from 9 May till date, operated 27 flights under Vande Bharat Mission from Kuala Lumpur to various destinations in India to enable stranded Indians to return to India, and 4,679 Indians have returned to India on Vande Bharat flights so far.”10 Under Phase 4 of the Vande Bharat Mission,11 a total of 1,083 flights (849 international flights and 234 feeder flights) have been scheduled so far. These flights are operated by the Air India Group, IndiGo, SpiceJet, and GoAir from twenty-nine countries to thirty-one airports in India. More than 5,878,000 Indian nationals returned until 29 July 2020. India has already announced Phase 5 of the Vande Bharat Mission which started on 1 August 2020. A total of 792 flights (692 international and 100 domestic feeders) have been scheduled to repatriate Indians from twenty-three countries, viz., the GCC countries, the USA, Canada, the UK, Germany, France, Australia, New Zealand, Malaysia, the Philippines, Singapore, Bangladesh, Myanmar, Thailand, China, Israel, Ukraine, and Kyrgyzstan. The flights would arrive at twenty-one different airports across India and repatriate an estimated 130,000 Indians stranded abroad. China has become more assertive and aggressive during the COVID-19 pandemic. This has led to further cooperation between India and the Indo-Pacific countries. The attempts to revive the Quadrilateral Security Dialogue is increasingly giving this forum a

China angle. The quadrilateral dialogue was revived amid China’s rising assertiveness. In 2017, the Doklam stand-off took place, and, at that point, India’s approach was firm enough. One of India’s first steps was to show interest in the Quad. This move caused uneasiness in China, and it agreed to launch a new bilateral mechanism—the “informal summit.” Till now, two “informal summits” have taken place. The first was the Wuhan Summit in April 2018, while the second summit was organised in Mamallapuram, India, in October 2019. India agreed to have these informal summits, and its somewhat conciliatory approach towards China shows that it wants to coexist peacefully and resolve differences. Over the years, India’s eastward engagement has also been shaped by factors such as the US rebalancing to Asia, the Indo-Pacific strategies, and China’s Belt and Road initiative. Under Xi Jinping, China has become more assertive, and India–China relations have reached their all-time low in recent years especially amidst the ongoing border stand-off between the two countries. A huge trade imbalance, China’s opposition to India’s membership of the Nuclear Supplier Group, as well as frequent border stand-offs and recent violent clashes, and, of course, China’s equation with Pakistan are major reasons for India to revive its interest in the quadrilateral mechanism. The year 2020 has been unprecedented in several ways. One of the important developments has been the recent violent face-off between Indian and Chinese soldiers. That had been the first time in forty-five years that events took a violent turn. Twenty Indian soldiers lost their lives in the conflict, which led to intensified tensions between India and China. Since a full-fledged conflict is not an option for the two countries, India is resorting to other measures. The next logical step is to ramp up ties with like-minded countries by seeking closer cooperation to tackle the China challenge. Japan, Australia, and the US are key partners in that regard. The February 2020 visit of President Donald Trump to India was also a significant move to deepen the two countries’ partnership in the Indo-Pacific PARTNERS AND INFLUENCES

region. The visit resulted in the deal that India would purchase USD 3 billion worth of military helicopters for its navy and additional Apaches from the US. India and Australia held a virtual summit on 4 June 2020. During the virtual summit, India– Australia bilateral relations were upgraded to a comprehensive strategic partnership. The two parties also issued the Joint Declaration on a Shared Vision for Maritime Cooperation in the Indo-Pacific, where they advocated for a “free, open, inclusive and rules-based Indo-Pacific region.”12 In a bid to revive the quad and form a coalition against China, India is mulling over the possibility of inviting Australia to the Malabar exercise which already has Japan and the US as core participants. Earlier, India was reluctant to include Australia in the exercise primarily to avoid turning it into an anti-China operation. Moreover, almost a decade ago, Australia had turned down India’s offer to be a part of this joint exercise. However, the 2020 stand-off in the Galwan valley has pushed India closer to the US and its allies. Australia’s inclusion should not just be seen as a move to irk China by having Australia as an important defence partner to India, for this move will further deepen the two countries’ partnership and bolster India’s IndoPacific engagement. Over the past six years, India’s Act East Policy has contributed to furthering India’s engagement with the countries of Southeast Asia and the Pacific Island countries, as well as other countries such as Taiwan, Japan, Mongolia, South Korea, and the US. A sharper focus on strategic dimensions and efforts to realise a rules-based and inclusive Indo-Pacific order has given additional impetus to the Act East Policy. That said, the Act East Policy still has a lot of scopes to improve both in terms of conceptualisation and working towards meeting short- and long-term objectives.

ENDNOTES 1 Time for ‘Act East Policy’ and Not Just ‘Look East’: Swara. Business Standard. 24 August 2014. <ht tps://bit. ly/2ELgYQP > 84

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2 Prime Minister’s Remarks at the 9 th East Asia Summit, Nay Pyi Taw, Myanmar. Ministry of External Affairs, Government of India. 13 November 2014. <https://bit.ly/30pBZch > 3 Question No. 3121 Look East and Act East Policy. Ministry of External Affairs, Government of India. 16 March 2016. <https://bit.ly/2XD0HUP > 4 Northeastern States Active Stakeholders in India’s Act East Policy, says Sushma Swaraj. The Indian Express. 5 May 2018. <https://bit.ly/31cPr2f > 5 Prime Minister’s Keynote Address at Shangri-La Dialogue (June 01, 2018). Ministry of External Affairs, Government of India. 1 June 2018. <https://bit.ly/39SDjYb > 6 “ASEAN Outlook on the Indo-Pacific.” Association of Southeast Asian Nations. 22 June 2019. <https://bit. ly/33pHMQP > 7 “ASEAN Outlook on the Indo-Pacific.” 8 Neha Arora–Krishan S. Das: Exclusive: India Agrees to Sell Hydroxychloroquine to Malaysia to Help Fight COVID-19. Reuters. 15 April 2020. <https://reut.rs/2Xlaezs > 9 Dipanjan Roy Chaudhury: Singapore, South Korea, Key Suppliers of Covid-19 Gear. The Economic Times. 1 April 2020. <https://bit.ly/2DhGj4v > 10 Deportation of Indians Held in Malaysian Immigration Detention Centres. New Strait Times. 11 July 2020. <https:// bit.ly/33rYdwd > 11 The statements of the following paragraph are based on the author’s conversation with Dr Varun Jeph, an Indian diplomat currently posted in Malaysia, and the statement of the spokesperson for India’s Ministry of External Affairs. 12 Joint Declaration on a Shared Vision for Maritime Cooperation in the Indo-Pacific Between the Republic of India and the Government of Australia. Ministry of External Affairs, Government of India. 4 June 2020. <https://bit. ly/31d3J31 >

AUSTRALIA’S ROLE IN THE INDO-PACIFIC’S SHIFTING POWER DYNAMICS David Morris Australia has become a flashpoint in the new geopolitical contest between China and the “West.” Alleged cyberattacks, political influence operations, and economic coercion by China provide salacious headlines. Australia is pushing back, banning Huawei, resisting China’s aid to the South Pacific, and adopting a more aggressive military posture. Trust in Australia’s continued economic interdependence with China is collapsing, but, at the same time, continuing to outsource its security to an increasingly erratic United States appears to be a risky bet. A new, more independent Australia may yet emerge from the current geopolitical shift, which will axiomatically require deeper partnerships with its regional neighbours to shape a more stable Indo-Pacific. Australia may not face a choice between the US and China as both major powers perceive it but may rather finally develop a grand strategy for living with Asia. This may require Australia to re-evaluate itself, as it is, rather than how it once wished to be. Australians have not traditionally given much thought to geopolitics. Despite being less than half a per cent of the world’s population, Australians have a whole continent to themselves at the end of the Southeast Asian archipelago, distant from the world’s traditional points of conflict, and are fortunate to have enjoyed almost uninterrupted peace in modern times. Australia was famously described as the “lucky country,”1 abundant in natural assets, wealth, and social capital, and generally well governed by high-quality institutions. The phrase was intended to be ironic, however, coined to reflect on Australia’s generally mediocre leadership. Despite presiding over 12% of the world’s surface, a territory rich in resources, and a remarkably successful social model based

on a blend of forward-looking egalitarianism and liberalism, Australia has never formed an independent identity or grand strategy to stake its position in the world. Initially, formed as a dominion of the British Empire, Australia waged no battle to create its nation, it evolved through democratic gradualism and continued to see itself as a cultural outpost rather than a new world. In the absence of a grand strategy to secure its good luck, Australia has consistently gone to war in support of its “great and powerful friends” to demonstrate its loyalty in the hope that such loyalty will be returned should Australia ever be directly threatened. So persistent is this loyalty that, even after the failure of the British Empire to defend Australia in World War II, loyalty was simply transferred to the US from 1941 onwards. This dependence syndrome, which has deep cultural and military roots, sustained a cultural gaze that skipped over the neighbourhood and remained firmly focussed on the United Kingdom and the US. After supporting independence for Indonesia in 1945, few Australians learned the language or did business with the fourth-largest nation in the world to its immediate northwest. After giving independence to its former colony, Papua New Guinea, in 1975, most Australians barely gave the young nation a second look despite a massive development aid relationship. From time to time in the post-war era, Australia demonstrated an appetite to play the role of “middle power,” engaging and partnering with a broader range of partners than its traditional “great and powerful friends” to pursue its interests. Australia formed coalitions that were influential in peacekeeping, arms control, trade negotiations, and in other areas that shaped its environment, with its influence, to be sure, bolstered by the US-led rules-based PARTNERS AND INFLUENCES

order. However, Australia’s motivations and priorities were inconsistent, flipping whenever governments changed between multilateralism and bilateralism, regionalism, or nostalgia for an Anglosphere. Its engagement with nations in its immediate region, the world’s most diverse range of societies and economies stretching across Southeast Asia and the South Pacific, continued to be erratic. While the composition of Australia’s population changed over the course of recent decades due to increasing immigration, and the country ended up having a remarkably cohesive multicultural society, it barely noticed and commonly misunderstood its neighbourhood. Greater attention was paid to the great economies of Northeast Asia where Australia found its prosperity in modern times by pragmatic economic interdependence, first with Japan and, more recently, China. Indeed, over recent decades, Australia has become the most economically integrated with China of all developed economies, given the strong complementarity between the two. Not only did China depend on Australian resources for its economic modernisation, but Australia was also a major destination for Chinese investment, migrants, tourists, and students. In turn, Chinese demand fuelled a remarkably strong Australian economy, at least until COVID-19. In 2017, Australia, with only twenty-five million people, generated the fifth greatest wealth in the world.2 Nonetheless, the Australia–China relationship remained largely transactional, demonstrated by its steady deterioration in recent years as anxiety about geopolitical competition engulfed Australian domestic politics and the US global strategy. In the last few years, the narrative, and indeed the power balance, changed. Despite commonly held Western expectations that China was on a path to liberalisation, China under Xi Jinping doubled down on authoritarianism at home. Abroad, it flexed its muscles at a time of apparent Western weakness after the (Atlantic) global financial crisis. China’s militarisation of disputed formations in the South China Sea, flouting the UN Convention on the Law of the Sea, led to 86

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widespread fears that China would undermine the international rules-based order. Its Belt and Road Initiative appeared to geopolitical analysts to be more than benign infrastructure connectivity projects and a likely immense play for asymmetric power through debt diplomacy and potential new military bases across a vast geography.3 Notwithstanding the normative bias of much of the narrative (the US’s flouting the Law of the Sea is rarely cited, nor the history of conquest and plunder by other rising powers), the Chinese Government failed to generate “soft power” despite clumsy efforts to do so. With its firm grip on power, the Chinese Communist Party may have underestimated how its more assertive actions would be interpreted in the West, however, because of the opaque nature of its political system, we are unlikely to ever know. Australia, with its large Chinese community, its deep economic ties, and its pool of China expertise, might have been expected to take a nuanced approach in response to develop a strategy, as advocated by others in Asia,4 to engage rather than confront China. Seasoned observers have indeed encouraged engagement over confrontation.5 There may have been such an opportunity in Xi Jinping’s posturing as a champion of globalisation and multilateralism, while the US appeared to be walking away from the institutions it had built for global governance. However, instead of pursuing nuance, Australia poked the dragon. Whether it was provoked to do so is difficult to establish from information on the public record. The intelligence community regularly fed Australia’s sensationalist media on allegations of cyberattacks, espionage, political influence operations, and military base plans. The ensuing China panic provoked a storm of sentiment directed against China.6 Australia’s China panic developed as its traditional “great and powerful friend,” the US, switched from constructive engagement with China to strategic competition, advocating for decoupling key industries, resistance to China’s Belt and Road Initiative, and for a game of chicken with the Chinese military in the South China Sea. The narrative that Australia must “choose” between China and

AIDS TO PACIFIC ISLAND COUNTRIES (IN MILLION USD)

NUMBER OF PROJECTS

6034

TOTAL AID COMMITTED

8160.00

2250.00

TOP 5 RECIPIENTS

TOP 5 RECIPIENTS Papua New Guinea

TOTAL AID SPENT

6070.00

Papua New Guinea

653.05

Oceania, regional

557.98

Oceania, regional

286.12

Solomon Islands

344.22

Fiji

241.30

Marshall Islands

197.12

Vanuatu

237.73

Micronesia

183.18

Solomon Islands

202.77

TOP 5 DONORS

TOP 5 DONORS China

4780.00

Australia

855.67

Australia

1000.00

New Zealand

221.24

Asian Development Bank

733.75

Japan

187.52

World Bank

297.31

China

171.69

New Zealand

295.60

Unites States

157.80

PARTNERS AND INFLUENCES

the US became more pronounced than in other countries that are interdependent with both major powers. In Australia, interdependence is more commonly described as “dependence.” Unlike most nations, Australians do not yearn for national independence. Australia being geographically and culturally distant from its traditional “great and powerful friends,” id’s dominant international relations narrative is “fear of abandonment.”7 This is also reflected in Australia’s formative events as a nation: its continued dependence in a federation (when six colonies became a self-governing “dominion” of the British Empire), the White Australia Policy (the founding philosophy of racial purity that set infant Australia against its neighbourhood and its original inhabitants), and the ANZAC (Australian and New Zealand Army Corps) myth (suggesting simultaneous “mateship” and loyalty to the Empire, even in unwinnable and indefensible battles). These three pillars perpetuated the fiction that Australia was part of an enduring empire and also embedded a notion—still culturally powerful—that only AngloAustralians can be truly Australian. Those who, after a century of modernisation, liberalisation, and internationalisation, still subscribe to these founding myths continue to imagine Australia as a small, dependent country, unable to make its own way in the world. Even Australia’s democracy—one of the world’s most stable and resilient one on any measure—can be imagined to be under threat. After the apparent Russian influence in the 2016 US presidential election, the narrative of “foreign influence” was seamlessly picked up in Australia when some Australian politicians were found to be soliciting foreign donations from China. Subsequent legislation to protect against foreign influence was unexceptional (and welcome). However, it was wielded to create a media storm of blame, led by the then–prime minister, Malcolm Turnbull, who, under siege from malcontents on his right wing, claimed to be “standing up” to a China threat. In fact, conservative parties had for many years resisted calls for greater transparency around political donations and greater accountability in the 88

PARTNERS AND INFLUENCES

institutions of Australian democracy, such as the creation of an independent commission against corruption. Few compelling examples of actual foreign influence have subsequently been exhibited on the public record (as opposed to clumsy Chinese public relations exercises), but the China threat narrative has proved politically valuable ever since. Notably, in the midst of an embarrassing lapse in border security that allowed a cruise ship full of COVID-19 cases to disembark in central Sydney, the Australian Government ramped up demands for an independent inquiry into the origin of the virus. The call appeared to have all the makings of a pure public relations exercise in the absence of any apparent diplomatic preparation, unlike the ultimately successful European Union efforts for a more realistic World Health Organisation inquiry into the pandemic. Meanwhile, the Australian government embarked on a redrawing of the map, reimagining Australia’s position in the world. Its 2017 Foreign Policy White Paper8 abandoned the language of the last half century, positioning Australia to benefit from the opportunities of engagement with the Asia-Pacific. That region had been envisaged as a set of relationships along a vertical axis, from Northeast Asia, through Southeast Asia, to Australasia from where most of Australia’s trade, tourists, migrants, and students flowed. In that set of relationships, China and Japan were of central economic importance, while Australia’s preferred regional architecture encompassed the US as the all-important Pacific balancer, given the uneasy coexistence of some actors in the region. Australia’s advocacy of an AsiaPacific community perhaps reached its climax with its role in creating the Leaders’ Meetings of the Asia Pacific Economic Cooperation (APEC). However, reference to the Asia-Pacific was eliminated in the 2017 White Paper and from the government’s foreign and security policy language ever since. Asia had come to signify the rise of China and, with the US shifting to a quasi-containment/quasi-confrontation policy, a new binary concept was invented that all but deleted the discussion of Asia. The name Indo-

Pacific9 was created, in close alignment with the US and Japanese language, which described the maritime region across a semicircular arc of actors, many of which happened to be in strategic competition with China, from the US to India. The era of geoeconomics appeared to be over, and a new era of geopolitics had begun. With this new zero-sum geopolitical outlook, China’s growing economic engagement with countries in the region (no matter how the region was labelled) became framed no longer as fuelling regional growth but threatening regional influence, power, and, ultimately, dominance. Ironically, it has taken China’s rise to focus Australian eyes on the region in its immediate neighbourhood: the small, aid-dependent, and potentially unstable nations of the South Pacific. While Australia maintains defence superiority in its immediate region, its military–intelligence community has an understandable concern about any erosion of that superiority. For Australia, the gravest threat to the South Pacific would be the establishment of a Chinese strategic presence. For the Pacific island countries, the most severe threat is climate change, and, apart from four that have diplomatic relations with Taiwan, most

welcome Chinese aid and investment. Indeed, ten Pacific island countries have joined China’s Belt and Road Initiative, keen on infrastructure connectivity to the major markets of East Asia and welcoming China’s less stringent conditions for finance.10 In recent years, Australia has announced a Pacific “step-up,” an array of new initiatives for the Pacific islands region to strengthen security cooperation, although it continues to resist stronger action on the issue of major concern to its neighbours, climate change.11 A key risk in Australia’s approach is its tendency to perceive the island countries as pawns in a geopolitical game rather than to engage with the needs and perceptions of the people of the region themselves. This was graphically illustrated when a hawkish member of the Australian Government lashed out at Chinese-financed and -constructed “roads going nowhere” in the Pacific.12 The move backfired, as it was followed by a series of blunders in which Australian ministers appeared condescending or dismissive of islander concerns, since the comments were widely interpreted as attacking the decision makers of the Pacific

China’s friends and relations in the Pacific Marshall Islands Palau

Papua New Guinea

Nauru

Kiribati

Solomon Islands Tuvalu

Samoa Vanuatu

Fiji

Tonga

Niue

Cook Islands

Recognises the People’s Republic of China Recognises the Republic of China (Taiwan) China’s friends and relations in the Pacific PARTNERS AND INFLUENCES

Australian prime minister Scott Morrison and Indonesian prime minister Joko Widodo in a 2018 meeting

who had solicited the Chinese support for new infrastructure. Australia’s record of supporting infrastructure in the region has been controversial despite its massive development aid budget for governance, health, and other services, often delivered by Australian consultants. In resisting the extension of the Belt and Road Initiative to the region, therefore, Australia risks weakening its own influence rather than achieving its goal of weakening China’s. Most spectacularly counterproductive were the claims of planned Chinese military bases in the South Pacific. Australian intelligence agencies appeared to be the source of media stories in 2018 which claimed that a Chinese military base was planned for Vanuatu, a small Pacific island nation to the northeast of Australia. The claim was swiftly denied by the Vanuatu government.13 There were claims by unnamed Australian officials that China could “seize” a wharf complex and convert it into a base aligned with an emerging “debt trap” narrative, yet subsequent investigation revealed that there was no debt-to-equity clause in Vanuatu’s funding agreement for Luganville wharf14 and neither was Vanuatu at risk of debt distress,15 although the nation had suffered significant political instability. Australian fears of potential Chinese bases in the South Pacific have persisted. Based on publicly available information, the claim that China was planning a military base in non-aligned Vanuatu appears unlikely, and yet consistent with a longstanding tradition of intelligence-leaked media “revelations” in earlier decades of planned 90

PARTNERS AND INFLUENCES

Libyan or Russian bases in the South Pacific.16 Former Australian prime minister Paul Keating subsequently intervened in Australia’s 2019 election campaign to issue a veiled warning to intelligence heads not to play politics.17 There has been, as yet, no step-up in Australia’s relations with the nations of Southeast Asia. Indonesia, the fourth most populous nation in the world and the largest Muslim nation, straddles Australia’s northern approaches. Historically, Australia supported Indonesia’s struggle for independence, but mutual indifference has endured for long decades. The two have no competing geopolitical interest and could form a closer strategic relationship to contribute to the stability in the region, although Indonesia is likely to resist being drawn into a binary US–China competition. More broadly, the Association of Southeast Asian Nations (ASEAN) will seek coexistence and engagement with China rather than confrontation or conflict. Singapore’s prime minister Lee Hsien Loong, like other regional leaders, emphatically rejects being forced to choose between the US and China.18 Australia’s potential to more deeply cooperate with ASEAN will depend on whether it is perceived as contributing to, rather than unsettling, that consensus. Australia’s relationship with Japan has deepened over many decades, and further collaboration is likely with Japan’s doubling down on a strategy to maintain a “free and open IndoPacific” in alignment with well-governed partners including the Republic of Korea, Taiwan, Vietnam, Singapore, Australia, and New Zealand.19 Meanwhile, regional economic integration efforts continue, with most countries in the old Northeast Asia–Southeast Asia–Australasia vertical signing up for further trade liberalisation and new standards in key industries under the Regional Comprehensive Economic Partnership (RCEP) and the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, both of which build on open Asian regionalism of the pre-COVID-19, globalisation era. To date, circumstances have only encouraged gradualism rather than a transformation in Australia’s security (as opposed to economic)

engagement with its neighbours. Ironically, prospective future actions by its ally, the US, could change that. In a deteriorating US–China strategic contest in the Pacific, future points of conflict include unpredictable events on the Korean Peninsula, conflict over Taiwan, or scuffles in the East or South China Seas. It may not be in Australia’s interests to get involved in any of these, yet the US would expect Australia to do so—and, indeed, the joint military– intelligence facilities in Australia effectively make the country a party to any US operations in the region. This tension is unlikely to disappear. In almost any conceivable future scenario, Australia will need to diversify its relationships. It will need the option to become less interdependent with China if the geopolitical climate continues to deteriorate and will need to strengthen its trust and interdependence with others, including large powers such as India and Japan, as well as emerging powers such as Indonesia and Vietnam, and small nations located across the region. Working together with the region, Australia is more likely to bolster rules and norms for coexistence and cooperation than to neglect its neighbours. The above logic seems to appear in the way the Australian government is apparently starting to think. A recent defence update20 announcing new weapons systems and cyberwarfare capabilities was interestingly framed as strengthening Australia’s capacity for self-reliance and as a refocus on Australia’s own neighbourhood. This was a radical departure from the military–intelligence priorities of the last two decades, supporting US adventurism in the Middle East. While not eschewing the US alliance, which continues to enjoy broad support in Australia and is regarded as simply common sense, the shift does reflect a lack of confidence in the reliability of the US in the future after the experience of recent years. Whether this leads to a long-term shift towards a greater diversity of partners, including those in Australia’s neighbourhood, is yet to be seen. One great untapped asset is Australia’s multicultural population, with highly skilled and educated citizens drawn from across the region

and the world, committed to Australia’s high quality, democratic institutions, and global rulesbased order. A generational change is underway, as leaders emerge from these communities who are likely to patiently build a more modern Australian identity that no longer needs to define itself through the eyes of others. On the contrary, Australia can look at the world through uniquely Australian eyes. Rich, politically stable, and socially cohesive as it is, Australia no longer needs to fret about its distance from Europe or America. It can develop confidence as an indispensable actor in Asia—or is that the Indo-Pacific? In the short term, a powerful normative narrative dominates the Australian discourse, in which China is cast as the villain, and risks are catastrophised as threats—and that is not an encouraging nuance. Strangely, China’s mass internments in Xinjiang, hostage-taking of Canadian citizens, or its other numerous human rights abuses were not featured very much in the narrative. Rather than this, the Turnbull and Morrison Governments have made it a badge of honour to provoke China in areas where evidence is safely confidential and not open to assessment, using a language known to cause acute cultural sensitivity,21 implying blame for a virus outbreak, or assuming a telephone company cannot be trusted (Australia was the first country to ban Huawei on fears that it could theoretically engage in cyberespionage and sabotage). This is a sharp break from the evidence-based, constructive engagement of the last four decades. The discourse has become flooded with authoritative assertions that China is engaged in cyberattacks, economic

Containers in Port Vila, Vanuatu PARTNERS AND INFLUENCES

coercion, and military base planning. None of these is impossible, and, indeed, China’s actions have begun to look more like a conventional major power’s, and so it is entirely conceivable that China is acting in such a way. Indeed, the US has for decades engaged in cyberespionage, economic coercion, and military bases around the world. Australians, if told they must choose between one major power bully or another, will naturally choose the one that is more familiar and has democratic potential for checks and balances. Yet the zero-sum narrative is too simplistic, particularly, if its logic leads towards confrontation and perhaps war in the Pacific rather than coexistence based on a new balance. Australia may have long been dependent on seeing the world through the eyes of its “great and powerful” friends, but it just might be beginning to assess things from its own position on the map and the perspective of its strengths rather than its imagined weaknesses. It is manifestly not in Australia’s interests for the region to be dominated by an authoritarian China, but neither is to make itself China’s enemy. Australia’s overwhelming geopolitical imperative is to maintain a stable balance in its region. Neither the US nor China is stabilising influences at this point in their strategic competition. Australia is, therefore, compelled to both strengthen its selfreliance and to work with partners to sustain regional stability. Further policy innovation is likely in the years ahead.

6 Natasha Kassam: Lowy Institute Poll 2020. Lowy Institute. 24 June 2020. <https://bit.ly/3eOBLiw > 7 Allan Gyngell: Fear of Abandonment. Australia in the World since 1942. La Trobe University Press–Black Inc., Melbourne, 2017. 8 2017 Foreign Policy White Paper. Department of Foreign Affairs and Trade, Australian Government. <https://bit. ly/38WGJZt > 9 Rory Medcalf: Contest for the Indo-Pacific. Why China Won’t Map the Future. La Trobe University Press–Black Inc., Melbourne, 2020. 10 Ralph Regenvanu: “The China alternative” Symposium. Vanuatu Daily Post. 2 March 2019. <https://bit.ly/2DJR0Nf > 11 Erin Handley: Australia accused of putting coal before Pacific ‘family’ as region calls for climate change action. ABC News. 16 August 2019. <https://ab.co/3fzbOFe > 12 Catherine Graue–Stephen Dziedzic: Federal Minister Concetta Fierravanti-Wells accuses China of funding ‘roads that go nowhere’ in Pacific. ABC Pacific Beat. 10 January 2018. <https://ab.co/32diEMF > 13 David Wroe: China eyes Vanuatu military base in plan with global ramifications. The Sydney Morning Herald. 9 April 2019. <https://bit.ly/38ZncYf > 14 Ben Bohane: South Pacific nation shrugs off worries on China’s influence. The New York Times. 13 June 2018. <https://nyti.ms/2Wkif7j > 15 Rohan Fox–Matthew Dornan: China in the Pacific: is China engaged in “debt-trap diplomacy”? DevPolicy. 8 November 2018. <https://bit.ly/2OnILZ5 >; Daniel Kliman [et al.]: Grading China’s Belt and Road. Center for a New American Security. 8 April 2019. <https://bit.ly/308Z1m7 > 16 Gyngell, 2017. 17 David Wroe–Dana McCauley: Sack ‘nutter’ spy chiefs to fix relations with Beijing, Paul Keating urges. The Sydney Morning Herald. 5 May 2019 <https://bit.ly/3ep96AJ >

ENDNOTES

18 Hsien Loong Lee: The Endangered Asian Century.

1 Donald Horne: The Lucky Country. Angus & Robertson,

America, China, and the Perils of Confrontation. Foreign

Sydney, 1964.

Affairs. 2019/July–August. 52–54.

2 Global Wealth Report 2017. Credit Suisse. November

19 David Arase: After Covid-19, Japan recalibrates its foreign

2017. <https://bit.ly/30ylsRZ >

policy. Asia Global Online. 2 July 2020. <https://bit.

3 Bruno Maçães: Belt and Road. A Chinese World Order.

ly/2ZsbmTt >

Hurst & Company, London, 2019.

20 Defence Strategic Update and 2020 Force Structure Plan.

4 Kishore Mahbubani: Has China Won? The Chinese

Department of Defence, Australian Government. <https://bit.

Challenge to American Primacy. PublicAffairs, New York,

ly/3j3XrKV > Accessed: 15 July 2020.

2020.

21 Caitlyn Gribbin: Malcolm Turnbull declares he will ‘stand

5 Peter Varghese: What should Australia do to manage risk

up’ for Australia in response to China’s criticism. ABC News.

in its relationship with the PRC? China Matters. June 2020.

9 December 2017. <https://ab.co/3evxAbt >

<https://bit.ly/3ftwf6n > 92

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GOOD NEIGHBOUR, BAD NEIGHBOUR—THE DEVELOPING RELATIONS BETWEEN CHINA AND ASEAN Viktória Anna Papp The relationship between China and Southeast Asia dates back to over two millennia with countries sharing a remarkably rich history of cultural and economic exchanges. In the turbulent times of the first half of the 20th century and during the Cold War as the states of Southeast Asia were gaining independence, their relations were quite unpredictable and hostile in some cases. China only started to interact with ASEAN as an entity parallel to its member states as the normalisation of diplomatic ties between China and ASEAN countries progressed. In 2003, the People’s Republic of China (PRC) and ASEAN upgraded their relations to a strategic partnership; by that time, China had already committed to several different mechanisms of the Association. However, the relationship between the two parties was not always as neighbourly and developed as it has been in the past roughly three decades, as it was rather antagonistic and confrontational at the time of setting up ASEAN. Established in 1967 by the governments of Indonesia, Malaysia, Singapore, Thailand, and the Philippines, the organisation aimed at ensuring the survival of its members by promoting regional stability and limiting competition between them.1 Back then—and not only from a Chinese perspective—ASEAN was viewed as an anticommunist and anti-Chinese organisation created to counterbalance the PRC in the region. During the Cold War, Southeast Asian countries were cautious about the PRC, perceiving it as a serious threat, inter alia, because Beijing—neglecting its policy of Five Principles of Peaceful Coexistence2—supported communist insurgents in the non-communist countries of the region. The tension between them did not lessen until the 1990s,3 what is more, until the 1970s, the founding ASEAN member states had not even had diplomatic relations with the People’s

Republic of China. Thailand and the Philippines were members of the Southeast Asia Treaty Organisation (SEATO) at the time, which had been initiated by the United States under the Truman Doctrine.4 Furthermore, the Philippines had a territorial dispute with China over the Nansha/ Spratly Islands, which was settled in 2002 by a non-binding code of conduct, but, in fact, they have remained a source of concern ever since.5 Singapore and Malaysia also refused to give diplomatic recognition to the People’s Republic of China until 1974 and 1990, respectively. Although Indonesia had recognised the PRC in 1950, due to an attempted communist coup supported by China in 1965, it suspended diplomatic relations with the country until 1990.6 When the PRC took over Taiwan’s membership in the United Nations and the Security Council in 1970, it was stepping out of isolation and shifting towards more pragmatic diplomacy with its Southeast Asian neighbours, too.7 In the mid1970s, relations between China and ASEAN started to improve progressively mainly as a result of the deterioration of Sino-Soviet ties, a shift in Sino-American relations, and the Chinese reform and opening-up policy, which created more trust among Southeast Asian countries. Deng Xiaoping’s reforms also helped to ease ideological antagonism, promoted economic and trade links, and made China appear more open to cooperating with the ASEAN—the latter was expressed, for example, by then-Premier Zhou Enlai in supporting Malaysia’s proposal to establish a Zone of Peace, Freedom and Neutrality.8 Also, a huge amount of foreign direct investment arrived in mainland China from overseas Chinese living in Southeast Asia, which significantly contributed to the country’s economic development.9 It is important to note that, with different levels of density in each state, millions of ethnic Chinese people have been PARTNERS AND INFLUENCES

Southeast Asian railway routes built with China’s Belt and Road Initiative Krasnoyarsk

RUSSIA

Nur-Sultan

Ulaanbatar

MONGOLIA Urumqi

Vladivostok

Tashkent Kashgar

Beijing

CHINA Shanghai

PAKISTAN Karachi

Kunming

Kolkata

INDIA

SRI LANKA SINGAPORE Silk Road Economic Belt 21st-century Maritime Silk Road Other economic corridors Existing railroads Planned railroads

Kunming

CHINA MYANMAR (BURMA)

LAOS

Luang Prabang Vientiane

THAILAND

CAMBODIA VIETNAM

MALAYSIA Kuala Lumpur

SINGAPORE 94

PARTNERS AND INFLUENCES

China–Laos railway (planned) East Coast Rail Line (existing)

living in the Southeast Asian region for generations, and the Chinese leadership have been taking them into account in connection with its foreign policy considerations towards the region. Although relations between the Chinese minorities and the local population have not always been peaceful—to say the least—they have increasingly been seen as a “bridge” between China and their country of residence as bilateral relations improved. At the same time, Beijing’s engagement with the Chinese diaspora gave rise to the concerns of local governments that China was projecting power beyond its borders and Chinese minorities in the region may become an instrument of the country’s soft power and public diplomacy, which may not be ill-founded at all.10 In the 1990s, not only did the economic cooperation accelerate between China and ASEAN (having ten members by then),11 but their political relations also normalised. The collapse of the Soviet Union, the fall of the communist regimes in Eastern Europe, and the Yugoslav Wars made the Chinese Communist Party realise that it needed further economic and military modernisation. However, in order to achieve that,

a “stable and peaceful environment along its periphery” was crucial.12 Therefore, China initiated a new neighbourhood policy, focussing on relations with Southeast Asia and launching a new dialogue with ASEAN. The then-Chinese Foreign Minister attended the ASEAN Foreign Ministers’ Meeting for the first time in 1991, and, six years later, China and ASEAN countries held their first informal summit in Kuala Lumpur to recognise the China–ASEAN process. During the Asian Financial Crisis in 1997,13 China offered the worst-hit countries urgent assistance without any strings attached while preserving the value of the renminbi, which contributed to the recovery of the whole region. In the meantime, Japan and the United States remained somewhat apathetic. Although the crisis hit ASEAN member states really hard, the volume of Sino-ASEAN trade continued to increase while Chinese participation in ASEAN meetings was becoming more common.14 China was perceived as less of a serious threat, and Beijing proved to be a reliable partner for Southeast Asia. The country could also increase its influence in the region after the financial crisis.15

Chart 1: Trade balance, 2013–2018 (in billion USD) 300 284.45 280 255.07

260

–85.77

240 220 200

212.70

218.21

224.52 –68.55

198.20 198.68

180

–58.69 –44.83

–72.91

–80.34

186.52

160 140 120

153.38

2013

154.01

2014

145.29

114.18

2015

2016

2017

2018

■ Export ■ Import ■ Balance

PARTNERS AND INFLUENCES

Chart 2: Annual growth, 2014–2018 (%) 25.00 19.77

20.00 15.00 10.00

9.41

5.00 4.30 1.43 0.00 –5.00 2014

–0.88

2015

2016

2017

2018

Over this decade, numerous multifaceted mechanisms were created with the participation of China, such as the Asian Regional Forum (ARF), the ASEAN Plus Three (APT), and the East Asian Summit (EAS).16 The establishment of the ARF in 1994, which included ASEAN countries and China, the European Union, India, Japan, Pakistan, Russia, and the US, was meant to be a step towards broader multilateral security cooperation. The APT is a regional framework initiated by ASEAN countries, China, South Korea, and Japan, and its first Summit Conference was held in December 1997, later becoming a regular event.17 Seeing how the country was rising as a global power, it was increasingly important for ASEAN to further develop relations with China and to keep engaging it in a comprehensive and cooperative way to ensure the stability, security, and peace of the region. Moreover, with the involvement with South Korea and Japan, ASEAN’s aim was not only to share the economic costs of the financial crisis and diversify the member states’ economies but also to prevent the rise of any of the three East Asian powers to a hegemonic status in the Southeast Asian region. From an economic perspective, the year 2001 was pivotal, since, taking advantage of the improved bilateral relations, China made a formal proposal for establishing a free trade area with ASEAN. ASEAN member states had already had a free trade agreement in place among themselves since 1992 (ASEAN Free Trade Area, AFTA), and, 96

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in 2002, they signed the Framework Agreement on China–ASEAN Comprehensive Economic Cooperation with China, with the aim of establishing the China–ASEAN Free Trade Area (CAFTA) by 2010 which would comprise the world’s most dynamic and fastest-growing economies. Shortly, China became the largest external trade partner of ASEAN with the volume of total bilateral trade doubling (from USD 105.88 billion up to 231.07 billion) within just four years between 2004 and 2008 and further increasing to nearly USD 587 billion in 2018, which represented 14% of total ASEAN trade.18 In turn, ASEAN’s trade in goods with China turned from a surplus to a deficit of over USD 43 billion in 2017 after the conclusion of the initial agreement.19 From the Chinese foreign policy perspective, this engagement not only reflected the PRC’s intention of improving its relations with ASEAN countries but also highlights China’s new economic and geopolitical orientation. In this regard, the PRC’s main objectives were increasing the volume of international trade and FDI while also ensuring its neighbours that its rise would remain peaceful.20 Since then, the two parties have also entered a number of arrangements to update their investment and trade links. On the legal basis of CAFTA, the Agreement on Trade in Goods and the Agreement on Trade in Services were signed in 2004 and 2007, respectively, which further eliminated tariffs and discriminatory measures. More recently, at the China–ASEAN Leaders’ meeting in 2018, the parties launched the China–ASEAN Strategic Partnership Vision 2030, which aims to further develop their cooperation, for instance, through promoting trade and tourism, as well as facilitating the flow of investment among them.21 Since the global financial crisis in 2008, China has become even more important as an economic partner not only to its neighbours but internationally, as well. The unpredictability of the countries’ economic prospects and the disparity between China and other smaller states have since grown. In contrast, the disparity between China, the United States, and the EU has decreased. This situation created significant tension and anxiety among ASEAN states.22 While ASEAN countries have been profiting from China’s development, it

has become clear that the asymmetric economic relations with, and an excessively high level of dependency on, China can make ASEAN economies more vulnerable to geopolitical frictions, which, in turn, can also grant China more political leverage. Further cooperation with China, however, is not a choice for ASEAN: their only option is engagement—China’s geographical importance to its south-eastern neighbours is now clearly matched by economic weight. As China has developed as an international economic and geopolitical actor, its relationship with the Southeast Asian region has improved, as well. In the past decades, relations between China and ASEAN have moved away from antagonism towards cooperation and economic partnership. Southeast Asia has become a deeply integrated region, in which ASEAN and China have mutual interests. Nonetheless, China remains both an economic partner and a threat to the stability of the region, with the South China Sea disputes among Beijing and other claimants yet to be resolved. In fact, China is now considered to be the most important dialogue partner for ASEAN, with whom its relations “should be the most dynamic and

substantive in the region.”23 In this context, China’s Belt and Road Initiative (BRI), a comprehensive plan that focusses on connectivity, economic ties, and people-to-people exchanges, has been generally welcomed in the region and was expected to complement the different aspects of ASEAN connectivity while enhancing regional production networks among member states, as well. The BRI projects, however, build on bilateral agreements between China and receiving countries, and not between China and ASEAN. For ASEAN, and especially for its less-developed member states, becoming too dependent on Chinese loans that push forward domestic infrastructure and connectivity projects is alarming. In fact, after the highly publicised case of Sri Lanka, there was a firmer pushback against BRI projects, and some governments even started renegotiating them.24 Even though relations between ASEAN and China have generally been improving in the past couple of decades, China’s emergence as a global power, the increasing economic imbalance in their trade relations, and maritime territorial disputes make it ever more complex. China continues to challenge the existing regional order

Chart 3: Top reporters in 2018 (in billion USD) Vietnam

65.41

41.27 49.69 50.43

Singapore Indonesia Malaysia

43.34

34.39

Thailand

28.60

Philippines

8.70

Myanmar (Burma) Cambodia

49.50

27.13

38.19

22.58

6.22 5.53 0.86

Laos

1.75 1.55

Brunei

1.64 0.23

6.14 Total ASEAN 483.13 billion USD

41%

59%

Trade value in billion USD ■ Import ■ Export

PARTNERS AND INFLUENCES

and the rules-based system in the South China Sea. The re-occurring flare-up of tensions in the South China Sea definitely keeps ASEAN leaders concerned; however, China’s increasingly assertive stance on maritime disputes is to remain in the future, and it expressing the importance of non-militarisation and self-restraint regarding the disputed territories in a statement counts as a win for ASEAN countries.25 For Southeast Asia, the traditional comfort of having China as an economic partner and the United States as a security partner no longer seems valid. Moreover, in the context of the US–China trade conflict, ASEAN member states feel increasingly pressured to pick sides, which definitely brings back worrisome memories of proxy wars and superpower rivalry in the region during the Cold War. Given the great diversity among its members, it is not only ASEAN’s unity that could suffer a great deal as a result of its members taking sides in such rivalry, but the domestic tensions and divisions that still exist in some of the ASEAN member states could also be aggravated. Now, ASEAN is under unusual stress and will need to reassess its relations with China and the country’s rapidly changing place in the world as the second-strongest economy. Clearly, it is not an easy task to strike a balance between huge economic benefits from trade and the continuous maritime threat from its neighbour. ASEAN’s only real choice about its relations with China is engagement, but China should also calibrate its relationship with it better, building more trust and providing more benefit to the region. These two parallel propositions can only take place in the context of established and growing relations, though. It is certain that, no matter what challenges ASEAN–China relations need to face, little is to be practically gained from distancing from each other.

3 Astarita, 79. 4 Shamsul Khan–Lei Yu: Evolving China–ASEAN Relations and CAFTA: Chinese Perspectives on China’s Initiatives in Relations to ASEAN Plus 1. European Journal of East Asian Studies. 2013/January. 85–86. 5 Ivan Savic–Zachary C. Shirkey: Uncertainty, Threat, and International Security. Implications for Southeast Asia. Routledge, London–New York, 2017. 115–144. 6 Khan–Yu, 87–88. 7 Brantly Womack: Beyond win–win: rethinking China’s international relationships in an era of economic uncertainty. International Affairs. 2013/4. 914–915. 8 Khan–Yu, 89. 9 In the period of 1984–2004, these investments accounted for 15.5% of total FDI in China. See Khan–Yu, 89. 10 Liu Zhen: China ‘needs to heed overseas unease’ as it moves to global centre-stage. South China Morning Post. 13 July 2018. <https://bit.ly/2Wm3lOe > Accessed: 8 May 2020. 11 Brunei joined ASEAN in 1984, Vietnam in 1995, Laos and Myanmar in 1997, and Cambodia in 1999. Mark Beeson: Institutions of the Asia-Pacific. ASEAN, APEC and beyond. Routledge, Abingdon, 2009. 24. 12 Khan–Yu, 92. 13 After the collapse of the Thai Baht against the US dollar, the financial crisis rapidly spread to Indonesia, Hong Kong, and South Korea, as well. In fact, all ASEAN member states were affected. Astarita, 79. 14 Khan–Yu, 93. 15 Jürgen Haacke: Seeking Influence: China’s Diplomacy toward ASEAN after the Asian Crisis. Asian Perspective. 2002/4. 14. 16 Scott Blakemore: Chinese Regionalism: China’s Engagement with AESAN and SCO. Culture Mandala. The Bulletin of the Centre for East-West Cultural and Economic Studies. 2014/September– December. 23. 17 Ibid., 82–83. 18 China–ASEAN trade hits record high in 2018. Xinhua. 13 March 2019. <https://bit.ly/2YUaQO5 > Accessed: 30 April 2020. 19 Ibid. 20 Khan–Yu, 85. 21 China, ASEAN adopt Strategic Partnership Vision 2030. Xinhua. 14 November 2018. <https://bit.ly/3boTjjN > Accessed: 5 May 2020.

ENDNOTES

22 Womack, 915–916.

1 Claudia Astarita: China’s Role in the Evolution of Southeast

23 Trinh Le: ASEAN’s China Dilemma. The Diplomat. 29 October

Asian Regional Organizations. China Perspective. 2008/3. 78.

2019. <https://bit.ly/35SPO3P > Accessed: 4 May 2020.

2 The Five Principles are mutual respect for each other’s territorial

24 Tom Mitchell–Alice Woodhouse: Malaysia renegotiated China-

integrity and sovereignty, mutual non-aggression, mutual non-in-

backed rail project to avoid $5bn fee. Financial Times. 15 April

terference in each other’s internal affairs, equality and cooperation

2019. <https://on.ft.com/2xYLsvG > Accessed: 8 May 2020.

for mutual benefit, and peaceful co-existence.

25 Le.

PARTNERS AND INFLUENCES

A VIEW ON REGIONALISM THROUGH JAPAN–ASEAN ECONOMIC RELATIONS Emese Schwarcz As time passes in the so-called Asian Century and governments are trying to balance national policies in the changing power structure in the East and Southeast Asian region, many questions are raised regarding where to now. The Trump administration brought about considerable uncertainties to the East Asian strategic alignments, without making actual adjustments to them. It goes without saying, however, that the lack of maintenance or enhancement of these security alliances projects a worrying picture of ambiguities, and ambiguities are not what make a secure alliance in a region where nuclear programs are still active and are used frequently. The worries about President Trump’s United States are integral parts of the concept that seems to expand continuously: the idea of economic regionalism in the Eastern part of the globe. Being its integral part means that there are several aspects to consider while examining the reasons for Japan to team up with the Association of Southeast Asian Nations (ASEAN). In this paper, I will try to identify motivations, rationales, and opportunities on the Japanese part. A BRIEF HISTORY ASEAN was formed in 1967, and Japan endorsed it quite early on.1 Their relations were solidified by 1977 under Prime Minister Fukuda Takeo, known for his expertise in finance and economics. He was also known for advocating the Fukuda Doctrine which congealed the Japanese intent for nurturing an active, equal, and cooperative relationship with ASEAN.2 Fukuda was trained by the infamous Kishi Nobusuke, an indicted-but-released wartime economic minister, later to become a post-war prime minister who also happens to be the

grandfather of the current prime minister, Abe Shinzō.3 All three of them are known for their distinct economic policies in which Abe definitely follows the Fukuda line in interacting closely with Southeast Asian countries. The prospect of new trading partners and new markets became especially important at the end of the Shōwa Era (1926–1989) and basically during the whole Heisei Era (1989–2019). When the oil shocks of the 1970s pressured the Japanese “economic miracle” into a halt, major concerns took over the country. The 1990s introduced a long period of economic recession whereby the population started to dwindle, unemployment was on the rise, and the country’s national debt began to grow significantly. While fewer and fewer people were willing to bear children in an insecure economic environment, baby boomers were living longer and longer, which put additional pressure on the country’s finances. In parallel, China, which had been perceived as a cheap alternative for factories and plants due to cheap labour and low costs for a long time, started to develop rapidly, not needing Japan’s long-time provided Official Development Assistance anymore. In the post-war period, after reestablishing relations, China grew to be Japan’s biggest export partner, taking in as much as 20% of the country’s export products with a value of USD 136 billion per year.4 In 2010, however, China rose through the ranks and took over Japan’s place in the global economic ranking, becoming the second-biggest economy in the world. What that entail for Japan are higher costs and more expensive labour. Living standards and market preferences are changing, and, with the chronic economic malaise that Japan has, it is of utmost importance to find new markets and potential bases for assembly factories and facilities. PARTNERS AND INFLUENCES

ASEAN Plus Three countries

SOUTH KOREA JAPAN CHINA

MYANMAR (BURMA) LAOS CAMBODIA

THAILAND

PHILIPPINES

VIETNAM MALAYSIA BRUNEI

SINGAPORE

INDONESIA

ASEAN Plus Three countries

And here is where Southeast Asian countries are becoming relevant. Currently, Southeast Asia is viewed as the engine of economic development, with growing markets and opportunities. During World War II, the Empire of Japan also engaged in expansionary efforts in the Southern region and realised that these countries are rich in resources which Japan desperately needed to carry on with its military ambitions. In the postwar world, however, being rich in resources also means an expanding middle class with growing purchasing power.5 No wonder that Japan has been supporting the so-called ASEAN Way from day one but there is also underlying thinking in bolstering Asian regionalism. Japanâ&#x20AC;&#x2122;s post-war standing in the international community resembles a kind of duality: around the time Japan established relations with ASEAN, the major Western powers had already accepted back the island country as a leading economic power, and the image of a country that had lost the war faded 100

PARTNERS AND INFLUENCES

considerably. However, the other side of the coin is how immediate neighbours and East Asian regional powers viewed Japan, and that is quite different from a repented country. Part of the post-war development and reconstruction is the American sponsorship of it all: the American occupation demanded that US military bases were to be built on the soil of Japan, and the country becoming the most prominent military headquarters in the region stimulated a sense of isolation from the other neighbouring countries. Not only that but also the lack of closure regarding wartime responsibility in the case of the emperor left those countries which suffered the blow of the Japanese war hammer the most with an uncomfortable feeling. Japanâ&#x20AC;&#x2122;s leaders realised this sense of isolation around the 1970s, and soon reestablishment of diplomatic relations ensued. The emergence of ASEAN was, therefore, timely. Let us take a look at the ways Japan strengthened its regional influence.

THE NATURE OF COOPERATION Japan is considered to be the biggest investor in the Southeast Asian region. According to ASEAN data, foreign direct investment shares coming from Japan are hovering between 14% and 20%, putting the island country in the first place among countries to invest in ASEAN.6 The commitment of the current Japanese leadership manifested in two symbolic actions. First, when Abe Shinzō became prime minister in 2012 for the second time, he chose the ten ASEAN countries as his first destinations for state visits when he began his tenure, and he simultaneously became the first Japanese prime minister to visit all ASEAN countries in his first year in office. This action was meant to show his resolve in keeping close relations with the association. In the same way, when the current minister of foreign affairs, Motegi Toshimitsu—who previously served as minister of economy, trade, and industry—entered office in 2019, he went on a tour to visit Vietnam, Thailand, the Philippines, and Indonesia right away.7 There are two main multilateral platforms through which Japan and ASEAN cooperate: the ASEAN Plus Three Dialogue and the Regional Comprehensive Economic Partnership (RCEP). The ASEAN Plus Three (APT) is a format established in 1997, in which China, Japan, and the Republic of Korea (ROK) join the ten ASEAN countries. The trade shares between ASEAN and the three countries are impressive in itself: in 2017, 31.6% of ASEAN’s total trade was conducted with these countries. In line with the main ASEAN philosophy, that is, cooperation should not stop at an economic level, the APT aims to join forces in many other different areas, as well, let them be social issues, political means, or environmental efforts. There is a common understanding that the main goal is long-term community-building, something that was definitely lost in World War II. The APT scheme appears to be quite similar to the European Union in the diversity in fields of cooperation: security, transnational crime, trade and investment, finance, tourism, agriculture and forestry, energy, science, technology and

innovation, environment, rural development and poverty alleviation, culture, disaster management, and connectivity are all included in the discussions.8 The security aspect, which deals with counterterrorism, border control, human trafficking, and cybercrime, is especially interesting if we consider that the APT originally came to be for the reason of working out methods to avoid economic troubles. Among many other fields in which this liaison works, this domain also shows the intent to put real efforts into regionalism. The cooperation lists several malaises that Japan suffers from. Agriculture is especially interesting, since the country has always been known for strict protectionism when it comes to this sector. Farmers in Japan are heavily subsidised because, due to the scarceness of the lands, the food industry relies heavily upon them. The government’s stance on agriculture posed quite some problems with international partners, such as the US, notably in the case of the infamous Trans-Pacific Partnership.9 However, as society’s ageing is becoming more of a serious problem, this will probably change in the near future. Opening up the market for Southeast Asian countries is essential for the survival of the industry, but domestic politics play a major part in this discussion. The ruling Liberal Democratic Party depends heavily on the farmers’ votes, which creates a conflict of interest with the probable easing on the protectionist policies. Nevertheless, as trade relations with the US are becoming unpredictable and subsidising such a large industry is no longer affordable for the economically weakening country, the attention is increasing regarding the APT. Energy is another interesting field from the Japanese point of view. The 2011 Tōhoku triple disaster changed the country’s energy consumption for good. Before the nuclear meltdown in Fukushima, Japan was heavily dependent on nuclear energy because the country is scarce in resources and has to import fossil fuel—at a high price. Confidence in nuclear power, therefore, had always been great during the Heisei Era despite the country’s PARTNERS AND INFLUENCES

101

Chart 1: Japanese–ASEAN export and import, 2014–2019 (in billion USD) 125.00 120.16 120.00 116.88 115.00

11.22

112.86

110.00 105.00

105.86

–6.25 109.83

105.94

101.94 1.08 100.86

100.00 95.00

114.77

–6.92 108.94

116.08

–2.11

2014

2015

–9.31

96.55 2016

2017

2018

2019

■ Export ■ Import ■ Balance

high tectonic activity, reoccurring accidents, and questions around waste disposal. At the time of the Fukushima disaster, nuclear power covered 29% of Japan’s energy consumption, but the disaster reorganised the shares considerably. While, in 2010, the nuclear energy consumption in million metric tonnes of oil equivalent was 66.2, in 2018, the amount was a stark 11.1.10 Because of this drastic reduction, the country has to find new sources of energy, which is not exactly that easy considering the changing geopolitical situation in the region. With China’s military ascendancy and heightened military presence in the East and the South China Sea, countries in the region are on their toes. This is especially true for Japan because the nation’s most active territorial dispute is with China over the Senkaku (or Diaoyu) Islands which happen to house massive oil reserves. It is no wonder, either, that China is increasingly active in the South China Sea, for that region is rich in oil, natural gas, and fish—which is why it is important for Beijing to procure additional exclusive economic zones. To make up for the missing energy, Japan will need ASEAN’s help. Social issues like the ageing of society are also being discussed between the partners, which introduces an interesting question: what is more viable in this region, bilateralism or 102

PARTNERS AND INFLUENCES

multilateralism? Comparing their situation with the EU’s, researchers have asked many times: is institutional integration necessary for effective regionalism? 11 If we take a look at ASEAN’s structure, it is apparent that national sovereignty is important for Asian countries, and, while regional interdependence is discernible, the bilateral approach to cooperate is still popular in East Asia. A good example is Japan’s answer to the ageing-induced workforce scarcity; the country was to strike a deal with the Philippines and Indonesia in two bilateral economic partnership agreements. The agreements created a trainee programme for Filipino and Indonesian medical caregivers, which gave an opportunity for them to work in Japan for two to five years, thus somewhat alleviating the critical shortage in the Japanese medical sector.12 What Japan did do in cooperation with the association is establishing a best practice–exchanging forum for the member states, called Japan–ASEAN Health Initiative. 13 In this instance, for example, we can see that, while regionalism and creating an East Asian identity are priorities for Japan, bilateral deals are still attractive for pragmatic problem-solving initiatives, even if the partner country is a member state of ASEAN. The APT scheme is not the only platform for cooperation, though. I mentioned earlier the

Regional Comprehensive Economic Partnership (RCEP), which is a comprehensive, far-reaching free trade agreement proposal connecting fifteen countries: the ten ASEAN countries (Indonesia, Malaysia, Philippines, Singapore, Thailand, Brunei, Laos, Myanmar, Cambodia, and Vietnam) and five ASEAN trade partners (Australia, China, Japan, Republic of Korea, and New Zealand). India was originally part of the negotiations, but, citing concerns about e-commerce, and—lo and behold—trade imbalances in agriculture, Prime Minister Modi opted out at the end of 2019.14 The RCEP— with or without India—is a major step towards maximising the scope of economic regionalism: by reducing trade barriers and creating common rules of origin for shipping procedures, 30% of the global population will (or would) enjoy the benefits of (the almost) free trade, not to mention the lower costs for already existing supply chains.15 Almost free because the agreement would reduce only 80% of all tariff lines, prompting criticism for being unambitious. Still, however grand and beneficial the agreement will be even with this amount of commitment, the RCEP is a perfect example for how daunting a multilateral approach can be for Asian countries: with negotiations starting in 2012, the final signatures are still nowhere to be found.

COMPETITION FOR REGIONAL ROLES When discussing East Asian regionalism or economic cooperation, one cannot disregard China’s Belt and Road Initiative (BRI) and, in Japan’s case, the Free and Open Indo-Pacific (FOIP) strategy. This latter is, again, an interesting concept in the ASEAN-based milieu. The strategy itself (introduced in 2016) promises a grandiose infrastructural investment plan to enhance regional connectivity, mainly targeting Southeast Asian countries with high-quality infrastructure withstanding natural disasters, employment, and education under the flag of the rule of law, freedom of navigation, and free and open routes.16 At first glance, the strategy seems like an updated version of the BRI, but, in reality, it is an extension of the already existing investment culture in the Southeast Asian region. Companies in the Indo-Pacific already know and respect Japanese investors due to their long-term commitment to the target region or country. Therefore, the known and preferred Japanese FDI is transforming to get accustomed to the fresh trend of the 2010s and 2020s, that is, the trend of connectivity. Once again, from a holistic point of view, this plan seems to be leaning to bilateral deals, just like in the case of the BRI. In this sense, comparing the two initiatives, it is easy to see that a very pronounced competition for the graces of ASEAN countries

RCEP leaders at the partnership’s 2nd summit in 2018 PARTNERS AND INFLUENCES

103

is underway. The past ten-or-so years transformed the Southeast Asian region into an integral part of East Asian strategic thinking. Multilateralism in the name of identity- and community-building is a long-term goal for Asian countries, but the fight for resources and business partners seems to be falling on bilateral grounds—mostly because they work out speedier. There is also an underlying competition against Chinese overinfluence in the region—not only in a geopolitical way, e.g., capacity-building, provisioning patrol boats for Vietnam, or the Japanese–Filipino joint military exercises but also trade-wise. As the China–US trade war is bound to affect the whole region’s supply chains, countries are searching for alternatives. Common challenges also remain outside the economic problem cluster: most Southeast Asian countries are starting to experience the signs of ageing societies, following in the footsteps of the “big three”: China, Japan, and the ROK. Along with the devastating COVID-19 pandemic that is rapidly pushing the global community into an economic crisis, this problem will certainly urge countries to consider the ASEAN Way and strengthen not only economic cooperation but the inclination for building a community, as well.

ENDNOTES 1

Bhubhindar Singh: Japan–ASEAN Relations: Challenges,

Impact and Strategic Options. Panorama: Insights into Asian and European Affairs. 2017/1. 95–106. 2

Fukuda Takeo. Encyclopædia Britannica. <https://bit.ly/

2VzG0s4 > 3

PM Abe’s father also served under Fukuda as Chief

Cabinet Secretary. 4

Japan. The Observatory of Economic Complexity.

<https://bit.ly/3eGlygG > 5

Péter Goreczky: Lejátszott mérkőzés? Kínai–japán

gazdasági erőviszonyok Délkelet-Á zsiában (1.). KKIelemzések E-2020/20. <https://bit.ly/3eOtmgk > 6

Foreign direct investment net inflows in ASEAN from se-

lected partner countries/regions. Association of Southeast Asian Nations. 26 October 2016. <https://bit.ly/2Y3keyG > 7

Prashanth Parameswaran: Foreign Minister’s First

ASEAN Voyage Spotlights Japan–Southeast Asia Relations 104

PARTNERS AND INFLUENCES

in the Indo-Pacific. The Diplomat. 7 January 2020. <https:// bit.ly/2VyDbHF > 8

Overview of ASEAN Plus Three Cooperation. ASEAN

Secretariat Information Paper. 24 April 2020. <https://bit. ly/3aHYKtR > 9

Kent Troutman: Will Japan Bet the Farm on Agricultural

Protectionism? Peterson Institute for International Economics. 21 October 2014. <https://bit.ly/3589FvD > 10

Primary energy consumption in Japan in 2010 to 2018,

by fuel. Statista. 28 June 2019. <https://bit.ly/35agk8L > 11

Philomena Murray: Comparative regional integration in

the EU and East Asia: Moving beyond integration snobbery. International Politics. 2010/3–4. 308–323. 12

Jeff Kingston: Contemporary Japan. History, Politics,

and Social Change since the 1980s. Wiley-Blackwell, New Jersey, 2012. 13

Cooperation between Japan and ASEAN in the health-

care sector. Mission of Japan to ASEAN. January 2016. <https://bit.ly/2zxgTxr > 14

William Alan Reinsch–Jack Caporal: At Last, An RCEP

Deal. Center for Strategic and International Studies. 3 December 2019. <https://bit.ly/359SpWG > 15

Shotaro Tani: India stays away from RCEP talks in Bali.

Nikkei Asian Review. 4 February 2020. <https://s.nikkei. com/3aLoYLL > 16

Emese Schwarcz: An Unexpected Ally: Japan’s Up-

and-Coming Partnership With the EU. The Diplomat. 30 October 2020. <https://bit.ly/3cUadHY >

THE REPUBLIC OF KOREA AND ASEAN—STRIVING TO BE THE BEST PARTNER Balázs Hamar The Association of Southeast Asian Nations (ASEAN) and the Republic of Korea (ROK) first established sectoral dialogue relations in November 1989. The ROK was rendered full Dialogue Partner status by ASEAN in 1991, and the partnership was elevated to a summit level in 1997. The ROK acceded to the Treaty of Amity and Cooperation in Southeast Asia (TAC) in 2004. In 2010, at the ASEAN–ROK Summit, the parties agreed to elevate ASEAN–ROK dialogue relations from comprehensive cooperation to a strategic partnership. The leaders adopted the Joint Declaration on ASEAN–ROK Strategic Partnership for Peace and Prosperity and its plan of action for the period of 2011–2015. The new plan of action for the period 2016–2020 was adopted in 2015. In 2017, President Moon Jae-in was elected in the ROK, and he announced his New Southern Policy, which aims to substantially elevate the

partnership between ASEAN and the ROK to a higher level. The new policy is built upon the socalled “3 P” pillars (People, Prosperity, and Peace) corresponding with the three pillars of the ASEAN Community, with people being in the focus. Elevating the cooperation to a higher level is to be achieved through strengthening bilateral ties with ASEAN member states and reinforcing the ROK’s participation in ASEAN-led mechanisms. ECONOMIC COOPERATION The sectoral dialogue initially intended to concentrate on the areas of trade, investment, and tourism, with the possibility of expanding relations to include other areas such as development cooperation, transfer of technology, and human resources development.1 On the modalities of this sectoral dialogue, ASEAN and the ROK agreed to set up an ASEAN–ROK Joint Sectoral Cooperation Committee (ASEAN–ROK JSCC) consisting of

Members of the Treaty of Amity and Cooperation in Southeast Asia (TAC)

■ 1970’s ■ 1980’s ■ 1990’s ■ 2000’s ■ 2010’s

PARTNERS AND INFLUENCES

105

senior government officials from both sides. This intergovernmental consultative body facilitated the ASEAN–ROK sectoral dialogue relations in the agreed areas. Right at the beginning, being aware that the momentum and effectiveness of the sectoral dialogue also depend very much on the activities of the private sector, ASEAN and the ROK encouraged the formation of an ASEAN–ROK Business Council. The very first inaugural ceremony in 1989 was attended by illustrious members from the private sector of ASEAN and the Republic of Korea. Building upon this partnership, the ROK government launched the ASEAN–ROK Special Cooperation Fund (SCF) in 1990, aiming at enhancing people-to-people exchanges. In 1996, the ASEAN–ROK Future-Oriented Cooperation Project Fund (FOCF) was also launched to implement cooperation projects in the fields of human resource development, science and technology, governance, culture, and sports. In 2017, ASEAN and the ROK agreed to merge the SCF and FOCF into the ASEAN– ROK Cooperation Fund (AKCF) to provide funding for the implementation of cooperation projects initiated by ASEAN member states and the ROK under a programme-based approach. As part of the New Southern Policy, the ROK has doubled its contribution to the AKCF from 2019 to support more cooperation programmes and projects. An ASEAN–ROK Programme Management Team (AKPMT) was established in 2016 to manage activities under the AKCF. The mandate of the AKPMT includes: • consultation with potential partners for the formulation of quality proposals in line with the demand and priority of ASEAN and the capacity and interests of the ROK; • coordination with the ASEAN Secretariat, the Ministry of Foreign Affairs of the ROK, and partners from ASEAN and the ROK for the formulation, implementation, and reporting of programmes and projects; • the monitoring and evaluation of approved programmes and projects; • the promotion of the AKCF to relevant stakeholders and the public. 106

PARTNERS AND INFLUENCES

In 2009, the ASEAN–Korea Centre (AKC) was inaugurated as an intergovernmental organisation mandated to promote economic and sociocultural cooperation between ASEAN member states and Korea. The vision of the AKC is to be a key player in building a lasting and genuine partnership between ASEAN and the ROK.2 ASEAN member states and the ROK signed the Framework Agreement on Comprehensive Economic Cooperation in 2005. The ASEAN– ROK Trade in Goods (AKTIG) Agreement was signed in 2006. Following the Trade in Goods Agreement, the ASEAN–ROK Trade in Services Agreement was signed in 2007 and came into force on 1 May 2009. The ASEAN–ROK Investment Agreement was signed in 2009. Subsequently, the ASEAN–ROK Free Trade Agreement (AKFTA) came into effect on 1 January 2010. Now, ASEAN is South Korea’s second-largest trading partner and investment destination. From ASEAN’s perspective, the ROK is ASEAN’s fifthlargest trading and investment partner. The combined exports from South Korea to the ten ASEAN members reached USD 80 billion between January and October 2019. South Korea’s imports from ASEAN countries reached USD 47.4 billion, indicating that the country enjoyed a trade surplus of USD 32.6 billion. In 2018, South Korea’s combined exports to ASEAN members reached USD 100 billion, with a trade surplus hitting USD 40 billion. South Korea’s exports to ASEAN members reached around USD 3.9 billion in 1989, with imports standing at around USD 4.1 billion, indicating an around twentyfold jump in trade from 2017 to 2018. (South Korea’s overall exports grew around sevenfold from 1989 to 2018. By country, South Korea’s trade with Vietnam grew at the sharpest pace. While Vietnam was South Korea’ 59th-largest export partner in 1989, it became the fourth-largest in 2018.3 The ROK is aiming to further expand the ASEAN–Korea FTA (AKFTA) and strengthen cooperation in the emerging fields such as micro, small, and medium-sized enterprises and smart cities in the era of the fourth industrial revolution.4

Table 1: Flows of Inward Foreign Direct Investment to ASEAN from South Korea, 2014–2019 (in million USD) 2014

2015

2016

2017

2018

2019

Agriculture, forestry, and fishing

90.55

100.26

49.86

54.69

26.96

62.28

Mining and quarrying

58.90

6.12

43.02

–524.44

–550.22

8.92

2,917.55

2,706.88

2,847.83

2,079.04

1,890.76

3,319.11

34.27

484.42

175.56

850.63

161.49

100.50

10.09

15.70

87.20

53.22

23.24

22.63

Construction

230.30

–248.79

–468.40

–166.67

–62.72

143.63

Wholesale and retail trade; repair of motor vehicles and motor cycles

441.24

826.22

1,321.46

1,291.10

1,374.01

868.65

10.82

–27.28

196.55

62.90

-0.97

78.80

105.83

51.34

93.95

69.69

64.62

43.71

–5.86

16.47

20.09

14.60

20.26

44.89

Financial and Insurance activities

397.70

422.11

1,039.29

240.67

707.35 –3,593.34

Real estate activities

424.07

425.39

331.33

322.12

633.36

424.64

15.55

33.49

145.08

130.22

215.70

152.73

1.64

8.10

25.51

11.36

21.03

12.32

Education

11.63

4.52

9.06

11.16

8.34

5.93

Human health and social work activities

62.38

2.52

7.81

36.05

11.80

18.67

–12.45

0.46

49.35

3.59

101.26

5.69

–141.10

–23.70

68.86

31.21

12.56

37.28

582.84

66.67

111.68

0.05

–

317.90

5,257.24

5,608.82

5,444.43

2,556.55

Manufacturing Electricity, gas, steam and air conditioning supply Water supply; sewerage, waste management and remediation activities

Transportation and storage Accommodation and food service activities Information and communication

Professional, scientific and technical activities Administrative and support service activities

Arts, entertainment and recreation Other services activities Unspecified activity TOTAL activities

6,284.38 4,610.48

PARTNERS AND INFLUENCES

107

Outward foreign direct investment (OFDI) statistics show that Korean investments in ASEAN rose by 17% in 2018 to USD 6.1 billion and remain concentrated in manufacturing. The number of new Korean investors in the region grew by 14% to 1,291. Both figures are the highest since 1980. Korean OFDI flows to ASEAN have exceeded those to China in all but one year since 2010. The gap between such flows to ASEAN and flows to China has been widening. The United States–China trade tensions and the South Korean government’s New Southern Policy have encouraged many Korean firms to shift investments from China to ASEAN. There were significant differences between the two investment destinations in 2018. The share of Korean firms investing in ASEAN rose by 3% to 36%, while the share of investing in China declined by 2% to 14%. The industrial distribution of Korean OFDI flows to ASEAN differs in each country. For instance, Vietnam attracted 80% of manufacturing-related investments, Singapore received 60% of FDI in finance, and Indonesia received more than 70% of OFDI in agriculture and forestry. Korean companies continued to expand their investment in the region for market-and efficiency-seeking reasons. FDI by large enterprises (Samsung, Hyundai, LG, and Lotte) accounted for the twothirds of all Korean investments in ASEAN, whereas FDI by SMEs accounted for only 26% although their share doubled between 2010 and 2018. Flows to Cambodia, Myanmar, and Thailand also rose from 2017 to 2018.5 Tourism investment between the ASEAN countries and South Korea also increased in the last years after South Koreans had boosted their direct investments in the region’s hospitality sector at a double-digit growth rate in 2017. By the end of 2017, South Korean investors had expanded their investments in hotels and restaurants in the ASEAN countries to USD 5 million, up to 92% from the USD 2.6 million recorded in 2015. They also increased their investment in leisure and sports in ASEAN to USD 2.9 million in 2017, up to 383% from a combined investment budget of USD 600,000 in 2015.6 108

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Global value chains (GVCs) characterise one of the most important aspects of ASEAN–Korea economic relations. Korean firms are establishing and expanding extensive production networks in ASEAN. These networks are not only expanding but also diversifying. This also means that ASEAN’s participation in Korea’s GVCs is also intensifying. With this, ROK is helping to achieve the three main agendas of ASEAN integration: (1) narrowing development gaps among member states, (2) fostering SME development, and (3) industrial upgrading.7 The Ministry of Foreign Affairs and Trade of the ROK established a special fund called the ASEAN–ROK Economic Cooperation (AKEC) Fund with an initial contribution of USD 531,915 in 2008 for the implementation of cooperation projects under the purview of the ASEAN–ROK Working Group on Economic Cooperation (AKWGEC) established in 2006. Since 2011, the ROK has annually contributed USD 500,000 towards the AKEC Fund. As of June 2019, seventy-five projects have been approved through AK-WGEC to support the implementation of the AKFTA. Six new projects in the areas of trade facilitation, e-commerce, environment, and emerging technologies were approved by the ASEAN–Korea FTA Implementing Committee in 2019, and these projects are being implemented by ASEAN member states and the ROK.8 POLITICAL AND SECURITY COOPERATION “In the fields of politics and security, ASEAN– ROK cooperation is equally solid. ASEAN has shown undivided support for ROK’s North Korea policy to achieve peace and stability on the Korean Peninsula,” said Kang Kyung-wha, the Foreign Minister of the ROK, at the International Conference on ASEAN–Korea Partnership held at the end of 2017.9 Several ASEAN members have good relations with North Korea, so this is very valuable support for South Korea. A good example of this support is the Joint Communique of the ASEAN Foreign Ministers’ Meeting held on the 31 July 2019, saying “We stressed the importance of continued peaceful dialogue amongst all concerned parties

in order to realise lasting peace and stability in a denuclearised Korean Peninsula. We urged all concerned parties to resume peaceful dialogue and continue working towards the realisation of lasting peace and stability in a denuclearised Korean Peninsula, including through the full and expeditious implementation of the Panmunjom Declaration, the Pyongyang Joint Declaration and the Joint Statement by the US and DPRK leaders. We reiterated our commitment to the full implementation of all relevant United Nations Security Council Resolutions and noted international efforts to bring about the complete, verifiable and irreversible denuclearisation of the Korean Peninsula. We also underscored the importance of ASEAN-led platforms such as the ARF in promoting a conducive atmosphere to peaceful dialogue amongst the concerned parties.”10 The ROK–ASEAN cooperation in the political sector has been strengthened by regular dialogue and exchange of views on regional and international issues through existing mechanisms such as summits, ministerial meetings, the ROK– ASEAN Dialogue, ASEAN Plus Three Cooperation, Post Ministerial Conference 10+1, and the ASEAN Regional Forum (ARF). In combating terrorism and transnational crimes, ASEAN has cooperated with the ROK through the ASEAN Plus Three process. ASEAN continues to support the peace process on the Korean Peninsula. The Democratic Peoples’ Republic of Korea (DPRK) has been a participant in the ARF since 2000. The ROK also acceded to the Treaty of Amity and Cooperation (TAC) in Southeast Asia in November 2004. SOCIOCULTURAL COOPERATION ASEAN and the ROK put an emphasis on people-to-people exchange with a view to deepening the friendship and understanding among their people. Various projects and activities have been undertaken to increase people-to-people exchanges between the two sides. Koreans are viewed as a leading country in the field of education in the region. The ROK provides funding through AKCF for the ASEAN–ROK

Scholarship for Korean Studies Programme coordinated by the ASEAN University Network (AUN). ASEAN and the ROK have also endorsed a cooperation project entitled Higher Education for ASEAN Talents (HEAT) which aims to provide faculty members from ASEAN member states who already hold a master’s degree with the opportunity to obtain a doctoral degree in the ROK. By doing so, ASEAN and the ROK contribute to improving the competitiveness of the ASEAN higher education sector and also foster closer ties. The launch of the HEAT Scholarship Programme for the next academic year took place through an online ceremony on 22 July 2020. The programme is valued at over USD 8 million.11 The ASEAN Culture House, a venue which intends to be a cultural bridge between Korea and the ten ASEAN countries, opened in Busan in 2017. The establishment of the ASEAN Culture House in Korea is the first of its kind among ASEAN’s dialogue partners, and it will mark a significant milestone towards a closer relationship with ASEAN, which the Korean government seeks as a priority,” said Minister Kang. “The Culture House is expected to serve as a ‘hall of culture,’ to introduce the cultures and histories of the ten ASEAN member states to South Korea, and to boost two-way and people-to-people exchanges between Korea and ASEAN.”12 The ASEAN Culture House also serves as a living promotion site for tourism. The number of tourists from ASEAN countries and South Korea has a steady rise: in 2017, the number of travellers reached 9.64 million, an increase by 8.07% from 8.92 million in 2016. Among Koreans, ASEAN has become the most popular travel destination.13 In 2019, the number of mutual visitors between the two sides surpassed 12 million. Sociocultural affiliations between the two parties have been strengthened, and, as a result, tourism, international marriages, and the international exchange of students have become more common. In 2019, approximately 650,000 ASEAN residents, including students, migrant workers, and their spouses, are now living in Korea, and their number is rising.14 This also has PARTNERS AND INFLUENCES

109

110

PARTNERS AND INFLUENCES

0.00

200.00

400.00

600.00

800.00

1000.00

1200.00

1400.00

1600.00

56.97

2010

45.03

942.40

1049.04

70.59

2011

54.16

1156.14

1242.19

76.08

82.02

2013

52.84

1254.65

1278.42

79.81

2014

51.63

1241.22

1293.89

75.15

2015

45.42

1101.13

1171.73

78.55

2016

45.92

1086.29

1153.61

98.12

2017

56.72

1246.51

1324.78

■■■ South Korea export ■■■ South Korea import ––♦–– World export ––♦–– World import

2012

55.39

1222.88

1257.71

2018

101.03 60.49

1388.87

1436.05

97.12

2019

59.36

1392.05

1423.15

Chart 1: Trade in goods between the ASEAN and South Korea compared to that between the ASEAN and the world, 2010–2019 (in billion USD)

Table 2: Visitor arrival to ASEAN member states from South Korea, 2013–2018 (in person) 2013 Brunei

2014

2015

2016

2017

2018

4,836

5,668

2,871

3,551

8,705

9,125

Cambodia

435,009

424,424

395,259

357,194

345,081

301,770

Indonesia

343,627

370,142

387,473

386,789

423,191

358,885

81,799

96,085

165,328

173,260

170,571

174,405

274,662

385,769

421,161

444,439

484,528

616,783

54,934

58,472

63,715

64,397

65,829

71,218

Philippines

1,165,789

1,175,472

1,339,678 1,475,081

1,607,821

1,587,959

Singapore

471,768

536,975

566,510

631,363

629,454

Thailand

1,292,335

1,117,449

1,372,995 1,449,617

1,709,265

1,796,596

Vietnam

748,727

847,958

1,112,978 1,543,883

2,415,245

3,485,406

4,873,486

5,018,414

5,838,540 6,464,721

7,861,599

9,031,601

Laos Malaysia Myanmar (Burma)

Total ASEAN

to do with the declining demographical trends of the ROK. In November 2019, South Korea was reporting the first-ever natural population decline as deaths outpaced births and was set on a path to register its first annual reduction.15 There are substantial cultural differences among the nations of ASEAN and South Korea. This might be one of the reasons why some companies are setting up cultural centres. For example, Hyundai Motor has set up a multicultural centre in Cần Thơ, Vietnam, to help Vietnamese women who are married to or plan to get married to Korean men while they are in Vietnam or South Korea and to support their economic independence later on.16 PARTNERSHIP IN THE COVID-19 CRISIS The ROK is proving to be a faithful partner to ASEAN in the COVID-19 crisis, as well. Deputy Foreign Minister Kim Gunn, who is responsible for political affairs, had a series of bilateral video conferences with ten delegates to the Senior Officials’ Meeting (SOM) of the ASEAN’s ten member states between 5 April and 16 June 2020. They shared information on their progress in COVID-19 response and discussed ways for cooperation, mainly in the sectors of economy and health. Deputy Minister Kim stressed that travel of essential workforce should be ensured

577,082

to maintain supply chains in the region and an open multilateral order. He extended appreciation to the ASEAN member states for their active cooperation on helping South Korean nationals return home and South Korean business people enter in exception to relevant restrictions and even amid the implementation of strict measures for disease prevention and control. The two sides discussed drawing up measures to grant entry exceptions to business people through which a balance is reached between quarantine efforts and economic interests. The ASEAN delegates recognised the importance of exchanges of essential workforce for an early economic recovery. They also recalled that, since the ASEAN Plus Three Summit in April, increasingly active discussions had been underway in each country with regard to entry exceptions for entrepreneurs, and agreed to continue relevant consultations. The deputy minister stated that the ROK government would seek health cooperation as a core element of the New Southern Policy. The videoconferences with the delegates to the ASEAN SOM carry significance in the fact that they marked the start of diplomacy towards ASEAN even amid the difficult situation due to COVID-19. It is also seen to have served as an opportunity for the ROK and ASEAN to overcome COVID-19 PARTNERS AND INFLUENCES

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together, to broaden the horizon of cooperation, and to look into ways for the New Southern Policy to make substantial achievements.17 On 17 June 2020, a project called Enhancing the Detection Capacity for COVID-19 in ASEAN Countries, initiated by the ROK, was launched at the ASEAN Secretariat. The USD 5 million initiative aims to bolster the diagnosis and contact-tracing efforts of ASEAN member states against COVID-19 through the provision of molecular testing kits and equipment, personal protective equipment, and in-country training on the use of the kit and equipment. This is yet another project which showcases the result of strong cooperation between ASEAN and the ROK in addressing the multifactorial effects of the pandemic on ASEAN communities.18 All these efforts are paying off for the Republic of Korea. Koreans are generally very well viewed and received in all ASEAN member states. Filipino foreign affairs secretary Alan Peter Cayetano stated: “ASEAN were allies of Korea yesterday, we are very good partners with you today, but we look forward to being your brothers and sisters tomorrow.”19

8 Overview of ASEAN–Republic of Korea Dialogue Relations. Association of Southeastern Asian Nations. 30 August 2019. <https://bit.ly/2BCWBE6 > 9 Kang Kyung-wha: International Conference on ASEAN–Korea Partnership, Keynote Speech. In: Partnering for Tomorrow. ASEAN–Korea Relations. ASEAN–Korea Centre, Seul, 2017. 35–39. 10 Joint Communique of the 52 nd ASEAN Foreign Ministers’ Meeting. Association of Southeastern Asian Nations. 31 July 2019. <https://bit.ly/2BIsKu1 > 11 ASEAN, ROK launch higher education for ASEAN talents scholarship programme. Association of Southeastern Asian Nations. 24 July 2020. <https://bit.ly/2P5jLpV > 12 Lee Kyoung Mi–Kim Young Shin: ASEAN Culture House opens in Busan. Korea.net. 6 September 2017. <https://bit. ly/2CPcoR5 > 13 Srimale. 14 2019 ASEAN & Korea in Figures, 2019. ASEAN–Korea Centre, Seul, 2020. 15 Yang Yeon-ho–Cho Jeehyun: S. Korea’s death tally outnumbers birth in Nov, set to record first thinning this year. Pulse News. 30 January 2020. <https://bit.ly/3jY1sBp > 16 Cho Chung-un: Hyundai Motor opens multicultural family center in Vietnam. The Korea Herald. 8 January 2018. <https://bit. ly/2X7eOkF > 17 Deputy Minister for Political Affairs Has Bilateral Video Conferences with Senior Delegates of 10 ASEAN Member States.

ENDNOTES

Ministry of Foreign Affairs, Republic of Korea. 18 June 2020.

1 Exchanged Letters Establishing Sectoral Dialogue Relations

<https://bit.ly/3ficfmp >

between ASEAN and Republic of Korea Jakarta, 2 November

18 Launched: ROK project to support ASEAN COVID-19 detec-

1989. Association of Southeast Asian Nations. 16 May 2012.

tion capacity. Association of Southeastern Asian Nations. 17 June

<https://bit.ly/2P6iONS >

2020. <https://bit.ly/2Dejgaj >

2 Introduction. ASEAN–Korea Centre. <https://bit.ly/3hP1edX >

19 Helen Flores: Asean culture house opens in Busan. The

Accessed: 15 July 2020.

Philippine Star. 8 September 2017. <https://bit.ly/3gh3b2s >

3 S. Korea’s trade with ASEAN nations up twentyfold since ’80s. Yonhap News Agency. 24 November 2019. <https://bit. ly/3f5nfDl > 4 Joel Lee: ‘ASEAN, Korea pave way for prosperous, secure future.’ The Korea Herald. 4 September 2017. <https://bit. ly/2BF8uJV > 5 ASEAN Investment Report 2019. FDI in Services: Focus on Health Care. ASEAN Secretariat, Jakarta, 2019. 6 Somluck Srimale: Tourism dollars flow between S Korean and Asean. The Nation. 7 June 2018. <https://bit.ly/31c6qBZ > 7 Oh Yoon Ah: Discussion Paper. In: Partnering for Tomorrow. ASEAN–Korea Relations. ASEAN–Korea Centre, Seul, 2017. 157–159.

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EU–ASEAN TRADE RELATIONS: BEYOND THE IMPASSE Bárbara Teixeira de Sousa Sénécaut The EU’s relations with the Association of Southeast Asian Nations (ASEAN) date back to 1977, making it one of the oldest models of interregional cooperation. These relations have since developed to cover a wide array of subjects ranging from trade to security cooperation. In 2006, the EU released its communication called Global Europe which identified, among others, ASEAN as a preferred partner thanks to its market potential and its protection level for EU exporters. In 2007, negotiations for an interregional EU–ASEAN free trade agreement (FTA) were launched. A regionto-region agreement was deemed favourable due to the complexity of establishing multiple FTAs with Southeast Asian countries that already found themselves in the midst of a complex web of trade agreements. However, the talks were halted after seven rounds of negotiations in order to allow reflection on a more appropriate format. While the originally envisaged interregional negotiations have remained suspended to date, ASEAN continues to be an important region for the EU as its third-largest trading partner after the United States and China. As for ASEAN, the EU is its secondlargest trading partner. The EU’s strategy has, therefore, changed towards conducting bilateral negotiations with the individual member states of ASEAN in the hope that they would serve as building blocks for an eventual region-to-region agreement. Up until recently, the EU–Singapore FTA (EUSFTA) and the Investment Protection Agreement (IPA) remained the sole examples of strong EU–ASEAN trade relations. The focus on Singapore was an obvious choice for the EU in its bilateral arbitrations following the breakdown of interregional negotiations, as it is the EU’s biggest trading partner in Southeast Asia.

Similarly to how the ten thousand EU companies present on Singaporean soil function as forward bases set for regional operations, the EU has drawn on Singapore as a stepping stone to further relations with nearby countries. The EUSFTA has also been playing a direct role in economically bridging both regions via the “ASEAN cumulation.” This allows other ASEAN members to enjoy tariff concessions when their materials are incorporated into Singaporean final products. The EU hoped that this would lead to the rapid establishment of other bilateral FTAs within the region, but that has proved to be a misconception. For a long time, many believed this would not be replicable in other ASEAN countries because of Singapore’s high level of liberalisation and its rapidly growing and dynamic market. The stalling and interruption of the other bilateral negotiations—because of multiple nontrade barriers—demonstrated that the EU’s expectations and demands in the negotiations with the ASEAN countries had been rather unrealistic and unattainable. After an extended lull in Europe–Asia relations, both the European Parliament (EP) and the Vietnamese National Assembly ratified the EU–Vietnam FTA and IPA. Following a dozen rounds of negotiations spanning eight years, Vietnam became the second ASEAN country to sign such agreements with the EU. This illustrates both regions’ interest in furthering ties, particularly at a time of economic crisis after months of lockdown across the globe. A rapprochement would be beneficial for both regions, but the last attempt at finding common agreement in 2019 resulted in ASEAN’s unilaterally and indefinitely postponing the signing of the Strategic Partnership, an informal prerequisite for trade negotiations. The question remains whether the successful PARTNERS AND INFLUENCES

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signing of the EVFTA will provide the muchneeded stimulus to revitalise the stagnant EU– ASEAN ties. In order to assess whether—and how—we can move beyond the current impasse, we must delve into the causes leading to it. While the EU was well aware that negotiations on a regional agreement with ASEAN would be more time consuming and complicated than an agreement with a single nation, it believed the extra effort to be worthwhile. To assess the feasibility of an interregional FTA, the Vision Group on EU– ASEAN Economic Partnership was established in 2005. One of the conclusions the group reached at the time was that, while traditional tariffs do not represent a significant barrier to trade in manufactured goods between the two regions, non-tariff barriers (NTBs) do. Non-trade issues have been included in trade negotiations following the Lisbon Treaty’s entry into force in 2009 and the EP’s subsequent acquisition of new capabilities regarding trade powers. In the EU’s attempts to distinguish itself from other international actors by operating as a promoter of norms, it established a “new generation” of comprehensive agreements with respect to labour and political rights, environmental protection, and universal human rights. However, the inclusion of such conditionalities has impeded its market power to flourish and encumbered its ability to conclude trade agreements, thus limiting the EU’s role on the international scene. As predicted by the Vision Group, non-trade issues played a key role in the breakdown of EU–ASEAN negotiations and multiple bilateral trade talks with Southeast Asian countries. A flagrant and extensive gap exists between the EU’s expectations in its pursuit of trade policy and Southeast Asia’s perceptions of the EU and its non-trade objectives. With regards to its FTAs with the EU, ASEAN aims to strengthen its market share to boost exports and attract foreign direct investment. While non-trade issues can be discussed, its priority lies in the economic benefit to be reaped. European demands for the inclusion of such clauses are widely perceived as unduly cost-raising, and 114

PARTNERS AND INFLUENCES

claims appeared that these Western standards were unattainable for the ASEAN countries’ developing economies because of the limited availability of infrastructure and expertise. These specific requirements could also hamper ASEAN’s market access and competitive edge, suggesting that the EU’s push for the inclusion of these chapters is merely a smokescreen for protectionism. The high diversity amongst the ten ASEAN member states in terms of economic development, structural approaches, and political regimes was recognised during the negotiation talks: “one difficulty . . . arose from significant structural differences within ASEAN.”1 Even excluding Singapore, disparities in the levels of liberalisation, development, and income per capita vary strongly. The diversity of priorities and perspectives was only further highlighted by the lack of a robust and sound institutional framework. ASEAN, as a regional organisation, is not nearly as integrated as the EU and is limited in budget, human resources, and competences. As the EP emphasised in its reports, there were “difficulties (on the ASEAN side) in developing a common position and a lack of political will.”2 The above, coupled with the lack of understanding of the importance ASEAN members attribute to national sovereignty and non-interference in domestic affairs, led to the breakdown of the bloc-to-bloc negotiations. It should, however, be noted that ASEAN has managed to successfully negotiate and sign several preferential trade agreements with key trade partners such as China, Japan, and India. This demonstrates the potential for an interregional EU–ASEAN FTA, the aforementioned issues being the only obstacles to overcome in pursuit of the European aim of an ambitious agreement. Currently, as the differences within ASEAN are too large to be bridged, it is unlikely for an interregional agreement to transcend the lowest common denominator. While settling for lower standards could be perceived by some as a European failure, it must be noted that ASEAN has a track record of tackling negotiations and agreements on a step-by-step basis. For

Negotiations

FTA

MYANMAR (BURMA) Investment protection agreement (IPA) negotiations (launched in 2014)

BRUNEI

INDONESIA Comprehensive Economic Partnership Agreement (CEPA) negotiations (launched in 2016)

VIETNAM FTA (concluded in 2013, signed in 2018)

SINGAPORE FTA (concluded in 2015, signed in 2018)

MALAYSIA FTA negotiations (launched in 2010, on hold)

CAMBODIA

THAILAND FTA negotiations (launched in 2013, on hold)

LAOS

CHINA

PHILIPPINES FTA negotiations (launched in 2016)

EAST TIMOR

The EUâ&#x20AC;&#x2122;s free trade agreement (FTA) and investment agreement negotiations in ASEAN

example, the ASEAN–China framework agreement was only supplemented by services and investment agreements later. Although the initial ambitions cannot be fully achieved at present, provisions would be laid down for a future “deepening” or upgrading of the agreements. In order to establish fruitful future negotiations, it is crucial that all parties’ perceptions and expectations be taken into consideration and tackle non-trade issues prior to the negotiations rather than include them into the already complex negotiation talks. It might even be more productive and effective to tackle such conditionalities in separate frameworks, rather than as a part of the process of FTA negotiations. Amongst the multiple issues impeding the improvement of relations, a notable sticking point is the issue of palm oil. Crucial for many ASEAN countries, especially Malaysia and Indonesia, the palm oil industry is a large contributor to their economies. Specifically for Malaysia, for it provides direct employment to 116

PARTNERS AND INFLUENCES

570,000 people. The point of contention lies in the EU’s Renewable Energy Directive (RED). This grants tax credits to renewable fuel sources when they meet the target of 35% less greenhouse gas (GHG) emissions than traditional fossil fuels. As the palm oil biofuel GHG emissions rate is merely 19%, it failed to qualify for the tax credits under RED, implying they cannot compete with European rapeseed oil biofuel which does qualify under these criteria.3 The EU’s directive, rendering palm oil commercially unviable, accompanied by the Malaysian government and state’s presence in the sector via equity ownership, precipitated the stalemate we find ourselves in. Such differentiated treatment infringes existing jurisprudence and Malaysia has threatened to bring the case to the World Trade Organisation (WTO). In order to avoid a time-consuming WTO dispute and to move forward, a compromise must be reached. However, given the importance of this industry, it is very unlikely that Malaysia and Indonesia will concede.

The EU needs to come up with creative solutions to find a way out of this deadlock, not only for the case of palm oil but also regarding other sticking points such as its reluctance to engage with the Duterte administration in the Philippines and the democratic backsliding in Cambodia and Myanmar. On a brighter note, Thailand, which has long struggled with illegal fishing, managed to overcome the multiple hurdles erected by the EU, and negotiation talks are slowly restarting. It is crucial for the EU to consult with ASEAN members before setting criteria in the future; otherwise, disputes will continue to preclude important cooperation agreements. Trade policy is defined and limited by domestic politics and short-term interests, whereas FTAs are tools for long-term economic relationships. The ratification of the EU–Vietnam FTA is likely to have a ripple effect, pushing various countries to move towards (re-)starting negotiations, even if it is so to simply minimise their companies’ loss of market access vis-à-vis Vietnam. If the EU wants to ride the potential wave of opportunity created by the conclusion of the EVFTA and EVIPA, it must learn from its previous mistakes. The inclusion of non-trade chapters being the biggest obstacle to negotiations, the EU needs to adapt its strategy. Considering that FTAs need to be ratified by each EU Member State, some of which, in addition, need to get approval from regional governments, it would be impossible to backtrack and give up the important inclusion of sustainability, labour, and human rights standards. These conditionalities are crucial for various lobby groups and the European industries which they represent due to a loss of competitiveness in comparison to many unregulated ASEAN goods. The EU should set up thematic working groups to deal with specific issues bilaterally prior to (re-)starting any official negotiations. Following the experiences of its own member states, the EU should allow time for ASEAN to develop its regional cooperation structures and for its members to tackle their major economic disparities. This includes greater emphasis on positive integration, institution-building, and

ensuring that trade expansion is not hindered by differences in regulations, standards, and tariffs. The EU should support the convergence of ASEAN on behind-the-border issues.4 The ratification of the EU–Vietnam FTA serves as a vehicle for furthering the economic engagement between the EU and ASEAN, allowing greater interregionalism. The principle of regionalism is not formally enshrined in the treaties but is heavily present in the EU’s rhetoric and communications. With ASEAN, an interregional agreement could only be accomplished after the conclusion of bilateral agreements with the individual member states first, allowing the EU to tailor its approach to the respective nations. As odd as it might sound, an interregional agreement with ASEAN can only be achieved through bilateralism. The EU’s approach to the negotiations must be based on realistic objectives and built on pre-existing thematic negotiations on non-trade aspects. The ultimate goals of ambitious and comprehensive agreements can eventually be achieved through gradual development. This would allow the complexity and sensitivity of the trade negotiations to be eased, and a simultaneous discussion on strategic regional interests in settings such as the ASEAN Regional Forum or the Asia Europe Meeting. All in all, an EU–ASEAN interregional FTA is possible, but only if the EU is ready to adapt and learn.

ENDNOTES 1 Jacques Pelkmans [et al.]: Trade and economic relations with ASEAN. Policy Department, Directorate-General for External Policies, Luxembourg, 2013. <doi: 10.2861/29859 > 2 Glyn Ford: Report On Trade and Economic Relations with the Association of Southeast Asian Nations. European Parliament. 14 April 2008. <https://bit.ly/3jWkS9J > 3 Ludo Cuyvers [et al.]: EU–ASEAN FTAs. Does One Size Fit All? Centre for ASEAN Studies–Centre for International Management and Development Antwerp, CAS Discussion paper No 91. April 2013. 4 Finn Laursen–Christilla Roederer-Rynning: The New EU FTAs as Contentious Market Regulation. Journal of European Integration. 2017/7. 763–779. PARTNERS AND INFLUENCES

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REGIONAL ISSUES

ASEAN–AUSTRALIA RELATIONS: LOCATION, POSITION, AND TIMING Malcolm Cook The last two years have seen the ASEAN– Australia dialogue partner relationship reach a new level of engagement. In March 2018, Sydney, Australia hosted the ASEAN–Australia Special Summit, the first ASEAN–Australia Summit to be held outside of Southeast Asia. Nine of the ten Southeast Asian political leaders made the long trip down under to Sydney. Philippine president Rodrigo Duterte sent his foreign secretary Alan Peter Cayetano. For a number of the Southeast Asian leaders, this was their first-ever official trip to Australia. The special summit delivered the Sydney Declaration, a lengthy and detailed joint statement that reflects the depth and scope of the existing engagement.1 In August 2019, the two sides followed up and released in Bangkok the fourteen-page 2020–2024 Plan of Action to Implement the ASEAN–Australia Strategic Partnership. ASEAN–Australia Dialogue Partner relations were elevated to the status of a strategic partnership at the first ever ASEAN–Australia Commemorative Summit in Naypyidaw, Myanmar, in 2014, held to celebrate the fortieth anniversary of ASEAN–Australia dialogue relations. In May 2020, Australia and ASEAN agreed that the regular ASEAN–Australia Leaders Summits, held on the sidelines of the November ASEAN Summits, which had commenced on a biennial basis in 2016, should become an annual event. Australia is the sixth of the ten ASEAN dialogue partners to be granted annual summits after Japan, China, the USA, South Korea, and India. Russia, the European Union, New Zealand, and Canada do not have regularly scheduled summits with ASEAN leaders. In June 2020, Australia became the sixth dialogue partner to hold a bilateral ministerial-level 120

REGIONAL ISSUES

meeting with ASEAN to discuss the COVID-19 pandemic and support for ASEAN’s pandemic response. China, Japan, the USA, Russia, and the European Union were the five dialogue partners to get in ahead of Australia. South Korea participated in the ASEAN+3 ministerial and leaders’ meetings addressing the pandemic. Australia, along with China, Japan, South Korea, and New Zealand, have committed to signing the ASEAN-based Regional Comprehensive Economic Partnership (RCEP) agreement by the end of 2020. India pulled out from RCEP in late 2019, while the USA, the European Union, Russia, and Canada were not invited by ASEAN to join the RCEP negotiations, as these dialogue partners do not have bilateral preferential trading agreements with ASEAN. Australia became ASEAN’s first official dialogue partner in 1974, followed a year later by New Zealand and in 1977 by Japan, the USA, the European Union, and Canada. Developments over the last two years show how strong these dialogue partner relations still are. Despite being the second-smallest ASEAN dialogue partner by population—much larger than New Zealand but much smaller than Canada—Australia is, by many counts, the fourth most engaged ASEAN dialogue partner ahead of the USA, India, Russia, the European Union, Canada, and New Zealand. Australia’s location on the southern maritime periphery of Southeast Asia and its position in the interstate system as a middle power focussed on East Asia explain Australia’s longest tenure as an ASEAN dialogue partner and Canberra’s enduring interest in supporting ASEAN and ASEAN–Australia relations. Recent regional strategic developments explain why the last two years have seen ASEAN–Australia

dialogue partner relations expand and deepen, and suggest that this trend is likely to continue for the foreseeable future. LOCATION Australia’s location as a sparsely populated, continent-spanning, Western democratic state on the southern maritime approaches to Southeast Asia has required Australian security planners to focus on countering potential threats to Australia emanating from or through Southeast Asia and the Pacific Islands. The fall of Singapore, Japan’s capture of numerous Pacific islands, and Japan’s bombing of Darwin in World War II turned these fears into reality not long after Australia had become an independent country. The 2002 terrorist bombings in Bali, Indonesia, which claimed eighty-eight Australian lives, reaffirmed the centrality of Southeast Asia, and particularly Indonesia, for Australian security as do Myanmar’s role as a major source of heroin for Australia and the transit through Indonesia of many people seeking political and economic asylum in Australia. Australia’s largest overseas mission is not in Washington, DC, or Beijing; it is the Australian embassy in Jakarta. A stable and prosperous Southeast Asia and Indonesia that have good steady relations with Australia are an enduring Australian grand strategic interest. Before the formation of ASEAN in 1967 and its dialogue partner network, Australia cooperated closely with Southeast Asian states to address common security concerns. Australia contributed troops to Malaya from 1950 to 1963 to combat the communist insurgency and counter the spread of communism. The Five Power Defence Arrangements between Australia, the United Kingdom, New Zealand, Singapore, and Malaysia followed from this effort and the withdrawal of the United Kingdom from Southeast Asia in the 1960s. Australia also contributed troops to the Vietnam War to try to prevent the communist takeover of Vietnam and the southern spread of communism to maritime Southeast Asia.

As shown by the joint statement from the 2018 ASEAN–Australia Special Summit, shared security concerns feature prominently in ASEAN–Australia relations. The joint statement’s first subsection is Our Region’s Security and covers common security interests from countering violent extremism and maritime rights disputes in the South China Sea to tensions on the Korean Peninsula and transnational crime. The final clause in this statement again underlines the importance of shared security concerns in ASEAN–Australia relations. It welcomes “initiatives arising from this Summit covering the areas of counterterrorism; counter trafficking in persons; cybersecurity and digital trade; defence; maritime; economic; urbanisation and infrastructure; connectivity; education; health; and women, peace and security.” Southeast Asia is also central to Australia’s economic security as a trading economy rich in raw resources and higher-end services that is particularly complementary with the populous, resource-poor manufacturing economies of Northeast Asia. Collectively, the economies of the ten ASEAN member states are Australia’s second-largest trading partners. Singapore, Thailand, Malaysia, and Indonesia account for over 81% of Australia’s total trade with Southeast Asia. However, as shown in Table 1, the Northeast Asian economies on the other side of Southeast Asia from Australia are much more important to Australia. Australian trade with China is roughly twice as large as Australia’s trade with Southeast Asia, and, while Australia runs a moderate trade deficit with Southeast Asia, it runs significant surpluses with China, Japan, and South Korea. Australia’s trade diplomacy has reflected this geography of trade with Asia. Australia was the second OECD member to conclude a bilateral preferential trade agreement with China (after New Zealand) and the first with Japan and has one with South Korea. Australia has bilateral trade agreements with Singapore, Thailand, Malaysia, and Indonesia in Southeast Asia. Australia is a party to the trilateral ASEAN– REGIONAL ISSUES

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Members of FPDA, CPTPP, and QSD

■ Members of the Five Power Defence Agreements (FPDA) ■ Members of the Comprehensive and Progressive

Agreement for Trans-Pacific Partnership (CPTPP) ■ Members of the Quadrlateral Security Dialogue (QSD)

Australia–New Zealand Free Trade Agreement that came into force in 2010 and is a party to the ASEAN-led RCEP negotiations. Australia, along with Japan and Singapore, also pushed hard for the conclusion of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) signed in March 2018 after the Trump administration had withdrawn the USA from these negotiations in early 2017. 122

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The CPTPP was signed by Australia, Japan, New Zealand, Singapore, Vietnam, Malaysia, Brunei Darussalam, Canada, Mexico, Peru, and Chile. So far, Australia, Japan, New Zealand, Singapore, Vietnam, Mexico, and Canada have ratified the agreement that came into force in December 2018. Closer and more predictable trade and investment relations with key Southeast Asian

economies and Northeast Asia are vital for Australia’s economic security. ASEAN, through the trilateral trade agreement with Australia and New Zealand, and RCEP have played an important role in addressing this concern and deepening Australia’s economic relations with Southeast Asia. Given the importance of trade with Northeast Asia to Australia, Australia has also used its

relations with ASEAN to promote the freedom of navigation and overflight in the South China Sea and that a future ASEAN–China Code of Conduct in the South China Sea should “be consistent with international law including UNCLOS, not prejudice the interests of third parties, and reinforce and not undermine existing, inclusive regional architecture.” Recent joint statements from ASEAN and the REGIONAL ISSUES

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Table 1: Australian trade with Southeast Asia, 2018–2019 (in million AUD) Exports

Share of SEA total (%)

Imports

Share of SEA total (%)

Balance

Brunei

107

0.2

984

1.4

−877

Cambodia

232

0.4

427

0.6

−195

8,360

15.1

9,470

13.9

−1,104

Indonesia Laos

Malaysia Myanmar (Burma)

11,545

— 20.9

24 13,574

— 19.9 —

+5 −2,029

163

0.3

Philippines

3,873

7.0

1,695

2.5

+2,178

+112

Singapore

15,951

28.9

16.735

24.6

−784

Thailand

7,375

13.3

17,336

25.4

−9,961

Vietnam

7,609

13.8

7,858

11.5

−249

55,244

—

68,154

—

SEA total

−12,910

China

153,177

—

81,777

—

+71,400

Japan

61,728

—

26,802

—

+34,926

South Korea

27,771

—

13,623

—

+14,148

USA, Japan, and Russia have included similar language on the South China Sea and the Code of Conduct. MIDDLE POWER POSITION Australia has long classified itself and been classified as a middle power in the interstate system. Not powerful enough to unilaterally shape the country’s external environment to its benefit or to achieve strategic autonomy— but powerful enough to work with others to advance both these goals. This strategic selfidentification has led Australia to have a very activist foreign and defence policy heavily focussed on developing, being active within, and maintaining global and regional interstate institutions. ASEAN is the primary interstate institution in Southeast Asia with ambitions to be the institutional centre of wider East Asian (through the ASEAN+3 process started in 1997) and Asia-Pacific (through the ASEAN Regional Forum established in 1994, the East Asia Summit established in 2005, and ASEAN Defence Ministers’ Meeting Plus process established in 2010) interstate institution-building. Australia’s middle-power activism has supported ASEAN 124

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but, at times, has been challenged by ASEAN, as well. Australia’s becoming ASEAN’s first dialogue partner reflects this convergence between Australian and Southeast Asian strategic interests. So does the role Australia played with Japan, Singapore, and Indonesia a quarter century ago in the establishment of the ASEAN Regional Forum, ASEAN’s first ASEAN+ grouping that focusses on security issues affecting Southeast Asia. As indicated in the joint statement from the 2018 Special ASEAN– Australia Summit, Australia is a strong supporter of the East Asia Summit that brings together under ASEAN the ten ASEAN member states and eight of the ten ASEAN dialogue partners: Japan, China, South Korea, Australia, New Zealand, India, Russia, and the USA. The ADMM-Plus process has the same membership. Australia, along with the USA and Japan, successfully pushed for the ADMM-Plus meetings of defence ministers to become an annual event. When the ADMM-Plus grouping was established in 2010, it was agreed that these meetings would occur only once every three years.

Before ASEAN began to use its dialogue partner network to develop ASEAN-based larger regional groupings, Australian prime minister Bob Hawke announced in South Korea the idea for an Asia-Pacific-wide economic grouping that became APEC in 1989. APEC’s formation and the inclusion of all ASEAN member states as founding members of APEC certainly contributed to ASEAN’s decision to set up its Asia-Pacific groupings for fear that APEC may reduce ASEAN’s relevance. In 2008, Australian prime minister Kevin Rudd announced, with no prior notification to ASEAN or Southeast Asian states, the idea for a new Asia-Pacific Community interstate body, arguing that the current ASEAN-centred regional architecture was lacking.2 Led by Singapore, ASEAN member states quickly mobilised against this Australian idea that was soon dropped by the Rudd government. At the same time, after successful disaster relief cooperation in the wake of the 2004 Boxing Day tsunami that hit Southeast Asia hard, Australia, India, Japan, and the United States agreed to form a quadrilateral consultation forum that became known as the Quad. The Quad, opposed by China, has become a more regularised forum since 2017. This forum often convenes on the sidelines of ASEAN Plus meetings involving Australia, Japan, India, and the USA. Despite its original purpose to aid Southeast Asia, the Quad has generated some ambivalence (and even stronger negative sentiments) among ASEAN member states and their wider strategic communities, since they fear it could develop into a more substantial format. It is obviously opposed by China, and there seems to be a general agreement that it could also threaten ASEAN centrality and relevance.3 While these concerns are overstated and tell us more about Southeast Asian fear than Quad realities, they do show how Australia’s middle-power activism is not uniformly welcome in Southeast Asia or by ASEAN. If the Quad develops into something more regular and formal, this divide between Australia and ASEAN could widen.

TIMING The last five years have seen a proliferation of defence and foreign policy strategic documents from successive Australian governments and many Southeast Asian states. All recognise that the regional security environment is becoming more complex and threatening. China is more unilateralist and aggressive under President Xi Jinping. The USA is more unilateralist and unpredictable under President Trump. The US–China superpower rivalry is deepening, broadening, and becoming more virulent. The threat of terrorism still looms large while organised crime networks expand and cybercrime and interference flourish. Australia and Southeast Asian states see all these developments as detrimental to their national interest and security. The enhancement of ASEAN–Australia relations over the last two years is a reflection of these shared concerns and an attempt to deepen cooperation to address them. As indicated clearly in the recent 2020 Australian Defence Strategic Update, Australia’s location at the southern maritime approaches to Southeast Asia and the Pacific Islands is even more important now than are closer relations with Southeast Asian states and ASEAN.4 For Southeast Asian states, strengthening ties bilaterally and through ASEAN with like-concerned dialogue partners such as Australia is of greater importance, too. The Cold War and the US–Soviet rivalry forged ASEAN and ASEAN–Australia relations. The growing rivalry between the USA and China could lead ASEAN–Australia relations to greater heights—or not.

ENDNOTES 1 Joint State prospects. Parliamentary Library Research Paper. 2009–10/13. 3 William Choong: Quad goals: wooing ASEAN. IISS. 11 July 2018. <https://bit.ly/30gq0wj > 4 2020 Defence Strategic Update. Department of Defence, Australian Government. <https://bit.ly/2WCqY4U >

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MARITIME COMPETITION IN THE INDO-PACIFIC— THE ROLE OF ASEAN NATIONS Béla Háda From an East and Southeast Asian perspective, the importance of maritime trade and security increased dramatically at the beginning of the 21st century. This phenomenon was not independent of the impressive economic development and growing great power competition in the Asia-Pacific region. Contemporary Southeast Asia is at the epicentre of these processes. The region, and primarily Malaysia, Singapore, and Indonesia, is a crossroads for key trade flows between East Asia and the Western areas (i.e., Africa, Europe, and the Middle East). Its unique geostrategic position has generated increased interest from the world’s leading powers. The uncertain sovereignty over both the Asia-Pacific and the Southeast Asian regions as well as the needs of fast-growing economies stimulate the intensive development of maritime security capabilities against not only conventional military challenges but piracy, too. Because of the extensive archipelago, the shallow sea areas, the high-level sea freight transport across the so-called maritime choke points (e.g., the Strait of Malacca1 or the Lombok Strait), and the nautical experiences of the population in the islands and coastal areas, Southeast Asia has become the primary area of activity of pirate groups. The strategic importance of maritime lines of communication resulted in the great powers’ increased presence in the region. Chinese, American, Indian, and Japanese naval exercises take place in the South China Sea and the nearby Indian Ocean regularly. In the light of the Southeast Asian nations’ historical experiences, this process seems detrimental to their security, territorial integrity, and sovereignty. The current maritime competition has been the result of these fears. This article aims to summarise the Southeast Asian nations’ answers to the great powers’ regional maritime ambitions. 126

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IN THE SHADOW OF GIANTS—A SHORT HISTORICAL BACKGROUND TO THE SOUTHEAST ASIAN MARITIME SECURITY SITUATION After decolonisation in the middle of the 20th century, the newly independent Southeast Asian countries faced the strategic environment of the Cold War world. Although colonisers had withdrawn from the region, new external powers—the Soviet Union and the United States of America—formulated their ambitions for the East Asian strategic sphere. Besides them, the proclamation of the People’s Republic of China (PRC) and the new Beijing regime’s ideological views on the processes of modern history and the future of Chinese power position raised the risk that the historical tributary system would be restored in the nearby areas, primarily in continental Southeast Asia. From a wider historical perspective, it was not an unknown situation. Different external great powers appeared in Southeast Asia’s history, and, leaning on their past experiences, the newly independent states started to create their selfdefence capabilities—primarily in partnership with a stronger actor. At the beginning of the Cold War, the naval capabilities of these potential external allies were different. Only the United States had a real blue-water navy, while the other two powers could only project their power into closed waters. In later decades, this situation gradually changed. The rapid build-up of the Soviet Fleet under the direction of Admiral Sergey Gorshkov brought a change to the maritime balance of power by the late 1970s. While the US Navy maintained its bases in Japan, South Korea, and the Philippines, the Soviet Union established a naval base in the Vietnamese Cam Ranh Bay in 1979. It was the largest Soviet naval

installation outside the Soviet Union, a vital element of the Eastern superpower’s power projection in Southeast Asia. Although regional allies on both sides got various military hardware from their superpower patrons, Southeast Asian countries’ naval power fundamentally remained weak in these decades. The only exception was Singapore which successfully built up a modern and effective maritime defence system. The end of the Cold War and the collapse of the Soviet Empire resulted in a completely new situation in the East Asian strategic sphere, as well. After the unipolar moment had passed, the weaknesses of Southeast Asian states became much more spectacular in the shadow of the massive development of Chinese naval capabilities. A logical answer to the challenges of the new era was the extension of the Association of Southeast Asian Nations. Since 1967, ASEAN has had security policy goals, and a closer alliance among the nations of the region offered the opportunity to step up as a stronger actor in the Asian strategic arena. The extension was successful: by 1999, almost every state in the region (except Timor Leste) had become a member of the organisation. However, until now, the Association could not become the foundation of a Southeast Asian security alliance against external great power ambitions. Its consensual decision-making mechanisms weaken its unity in judgement about some critical cases like China’s presence in the South China Sea. THE MARITIME BOUNDARIES AND THE SOUTH CHINA SEA CONFLICT Through long historical periods, the South China Sea was the area of sea communication between the Chinese Empire and the various Malay states in the Malay Peninsula and Nusantara.2 Maritime trade was the most important source of the richness and expansive dynamics of many historical states, like Srivijaya, the Majapahit Empire, or the Malacca Sultanate.3 After the arrival of European colonisers, the sovereignty over the sea areas became a vital question. In the 19th century, Vietnam and the Empire of China made their claims of sovereignty on the

island groups of the South China Sea. However, until the 1970s, territorial disputes that existed in principle had no serious consequences. As it is well-known, because of its potentially rich hydrocarbon reserves and important strategic location, countries have since begun to claim islands and various zones of the South China Sea. It did not, however, remain a Southeast Asian matter. Beijing stepped up as a main interested party in the territorial dispute. Nowadays, the so-called South China Sea dispute has three layers: the dispute on the sovereignty over the Paracel Islands between Vietnam and the PRC, the dispute on the sovereignty over the Spratly Islands between the PRC and four Southeast Asian nations, and the nine-dash line problem. The nine-dash line is a virtual demarcation line used by Beijing for its claims, covering 80% of the South China Sea. It includes all the contested archipelagos and naturally, provoked criticism from the Southeast Asian countries concerned. In 1974, during the last phase of the Vietnam War, China seized all the Paracel Islands from South Vietnam and has never given them back to the united Vietnamese state.4 Hanoi did not accept the Chinese territorial claims and began to defend Vietnamese interests in another disputed archipelago, the Spratly Islands. However, the situation in the Spratlys is more complicated. Overall, five nations (Brunei, the Philippines, China, Malaysia, and Vietnam) declared an overlapping claim for it. China was the last to establish its first bases in the region. In 1987, it carried out naval patrols in the archipelago; one year later, Chinese warships destroyed two Vietnamese ships in the region, and the PRC gained control over seven reefs. From 1974 to 2018, over thirty military clashes and standoffs occurred in the Spratlys.5 When China began to transform its smaller reefs into artificial islands and construct military installations on them in 2014, the South China Sea dispute arrived at a new phase. In its last Defence White Paper, the PRC admitted that it had “buil[t] infrastructure and deploy[ed] necessary defensive capabilities on the islands and reefs in the South China Sea.” According to REGIONAL ISSUES

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China’s maritime claim and UNCLOS exclusive economic zones in the South China Sea

Taiwan

China

Philippines

Vietnam Malaysia Brunei Malaysia

Malaysia Indonesia

The maximum extent of China’s island claims UNCLOS 200 neutical mile exclusive economic zone Disputed islands (separate from UNCLOS)

this 2019 strategic document, “the situation of the South China Sea is generally stable and is improving as regional countries are properly managing risks and differences.”6 Despite this message, Beijing’s power demonstration was a direct challenge to smaller Southeast Asian countries, with which their naval forces were far from sufficient to deal. Theoretically, possible answers to this challenge could be strengthening security cooperation inside ASEAN or modernising naval forces and searching for external great power supporters. As I wrote it above, the first solution seems problematic because ASEAN nations have different interests. The second option favours the United States’ 128

REGIONAL ISSUES

regional presence, but historical experiences and openness towards this idea vary among Southeast Asian countries. Self-reliance seems a very desirable option, but the economic potentials of the Southeast Asian states are too weak to compete with China. All in all, the massive development of Chinese naval capabilities became the major factor in the changing Southeast Asian maritime strategic environment. As a result, the American naval activity in the region also increased in the last decade, in the spirit of the so-called “Pivot to Asia” strategy. Parallel to this, Southeast Asian nations also formulated their own strategic visions for their maritime security.

THE MARITIME DIMENSIONS OF THE SOUTHEAST ASIAN STRATEGIC CONCEPTS AND MILITARY MODERNISATION Although there were some powerful indigenous maritime empires in the history of Nusantara and its societies have wide-ranging shipping experiences, the technical and financial bases for sea security in the region were very narrow in the second half of the 20th century. In their modern strategic documents, Vietnam, Malaysia, and Indonesia describe themselves as maritime nations. From a historical perspective, this may be a well-founded statement. Currently, however, it is rather related to growing challenges to their economic interests and security policies. Indonesia, the giant of Nusantara, has the greatest economy and the heaviest dependency on maritime security in the region, and, in the long term, it has the conditions to become the strongest regional power in Southeast Asia. Logically, this should encourage significant naval developments. However, current processes do not live up to the expectations. Until a few years ago, Indonesia’s maritime strategy seemed to be based on the concept of Global Maritime Fulcrum (GMF) by President Joko Widodo.7 He presented the GMF at the East Asia Summit in November 2014 and confirmed it in the Indonesian Defence White Paper of 2015.8 No doubt the maritime culture of the Indonesian and Malay people bolsters a grand strategy based on Nusantra’s geopolitical position which would be a great opportunity, especially for Indonesia. Originally, it prioritised the development of maritime defence forces. The primary goal was to create an effective naval power, able to reach and defend the outermost islands of the country. It is only a socalled green-water navy, so Indonesia cannot challenge the leading maritime powers with its help. Although the international reception of this idea was positive, real resources for a comprehensive Indonesian naval modernisation were lacking. The influential Army pushed the concept into the background, and its future seems uncertain today. Consequently, the

country having the highest GDP in ASEAN remains a dwarf in the East Asian maritime arena. Vietnam, on the western coast of the South China Sea, is one of the traditional regional powers in the Indochinese Peninsula, with strong historical and cultural ties to China. However, Chinese influence and hegemonic ambitions pose the strongest dilemmas for the Vietnamese elite, which have been further strengthened by the intensification of territorial disputes between the two countries. Although it has maintained its claims on the Paracel and the Spratly Islands against Beijing, Hanoi has a far weaker position regarding maritime defence capabilities. Consequently, the modernisation of its naval hardware and infrastructure is one of the country’s primary defence policy goals. Not surprisingly, the country’s capability development efforts are nowadays particularly focussed on the navy and the air force.9 The current Vietnamese National Defence White Paper was released in 2019.10 This document shows high respect (or excessive optimism) for ASEAN’s role in the Asia-Pacific security architecture.11 Parallel to this, it states that the dispute between Vietnam and the PRC regarding sovereignty in the South China Sea is of historical nature,12 and it is still an unsolved dilemma. Hanoi maintains its position in the territorial dispute and considers the Paracel and Spratly Islands its own domain. Strategic documents like this are always a sophisticated sign for the issuing country’s friends and potential rivals (or enemies). Vietnam remains cautious to balance its relations with the two major powers, the United States and the PRC. The White Paper sticks to the traditional principles of the Vietnamese security policy,13 but it is scarcely enough to protect the country’s territorial sovereignty and deter China from expanding in the South China Sea. Regarding defence acquisition, along with Singapore, Vietnam has made the most successful efforts in the region to enhance its military capabilities to defend itself against external threats.14 New Gepard-class frigates, Pohang-class corvettes, and Kilo-class submarines were put into service for this purpose. REGIONAL ISSUES

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NAVAL EQUIPMENT OF THE MAIN SOUTHEAST ASIAN NAVIES, 2020

Countries

Naval personnel

Medium aircraft carriers

Destroyers

Frigates

Indonesia

65000

Malaysia

18000

Philippines

23750

Singapore

4000

Thailand

44000

Vietnam

40000

Countries

Corvettes

Submarines

Amphibious vessels and landing ships

Other ships

Indonesia

180

Malaysia

Philippines

Singapore

Thailand

119

Vietnam

116

130

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Malaysia has a special position in the region and the South China Sea dispute, as well. Besides economic interests, there is another reason why the status of the South China Sea is so important for this country: it is constituted by two areas, the Malay Peninsula and Northern Borneo (i.e., Sarawak and Sabah). The uninterrupted contacts between these two areas are of fundamental national security interest,15 which also strongly determines the expectations related to the Malaysian Armed Forces (MAF). For example, the MAF will establish an Amphibious Force equipped with a new Multi-Role Support Ship. Parallel to this, the navy will acquire and deploy Littoral Mission Ships, Fast Interceptor Crafts, Special Force Boats, Autonomous Underwater Vehicles, and Mine Disposal Vehicles.16 The sensitive balance between various strategic interests (trade, maritime security, the role of Malaysian Chinese) makes Malaysia cautious about the US–China regional contest. From Singapore’s perspective, maritime security is essential for the smooth running of trade, which is the primary source of its richness. Therefore, though the city state is not a party of the South China Sea dispute, it has deep concerns about its potential consequences. Besides, ensuring Singaporean independence is also a central goal of its security policy, not just against an external great power but against its neighbours, as well. Thus, Singapore has the highest military spending and the most effective defence force in the region. The city state is the largest arms importer and the only country in Southeast Asia with a well-developed arms industry capable of producing some advanced weapons of its own design, albeit often with foreign help.17 For example, the most powerful surface units of the fleet, the six Formidable-class Multi-Role Frigates, are the derivatives of the French La Fayette-Class Frigates. Nowadays, the Singaporean navy seems strong enough to protect the maritime boundaries of the city state, but, not surprisingly, it cannot substantially affect the strategic balance in the Asia-Pacific. Fortunately, not just Singapore but all East

Asian actors have an interest in maintaining a smooth maritime trade. Besides Vietnam, the Philippines also faced direct Chinese pressure on its interests in the South China Sea during the last decade. Despite this, Manila has sought to maintain a balanced relationship with Beijing, particularly with economic cooperation in mind. Although, on July 2016, the Permanent Court of Arbitration ruled that China has no legal basis for claiming “historic rights” within its nine-dash line in a case brought by the Philippines, President Rodrigo Duterte’s government shows openness to dialogue with Beijing based on mutual interests. Parallel to this, the island country maintained its traditional alliance with the United States. This is not surprising, since the Philippine navy has very limited combat capabilities. In the 2012 Defence White Paper, Manila’s future goal was the so-called threetiered navy, with effective surface, subsurface, and air warfare capabilities.18 After eight years and a change of government, these objectives are yet to be fulfilled. Although the development of its armed forces is slow, the stable control on the Philippine maritime domains and Exclusive Economic Zone remains an unquestionable national security interest. ASEAN COOPERATION—WEAK COLLECTIVE SECURITY EFFORTS Although ASEAN is the primary form of integration in the region, its military dimensions are weak. That is the reason why it cannot serve as a counterbalance to Chinese expansion in the South China Sea. Countries concerned, such as Vietnam, the Philippines, and Malaysia, need effective support for their maritime security efforts, but they cannot get it from other member states which strive to secure their economic ties with China. The Chinese “divide et impera” strategy against the ASEAN is particularly effective because of the consensual decisionmaking process of the community. There are some ASEAN countries (e.g., Cambodia) which show strong dependency on Chinese bilateral trade and investments while having no territorial disputes with Beijing. Despite the weaknesses REGIONAL ISSUES

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in the defence cooperation of the member states, ASEAN has collective security efforts. An example of these is the planned ASEAN– China code of conduct on the South China Sea. The parties may reach an agreement by 2021,19 but the Chinese tactic of division remains dominant. Therefore, ASEAN countries should put aside their maritime disputes to build a new ASEAN consensus on their vital collective interests.

6 China’s National Defense in the New Era. The State Council Information Office of the People’s Republic of China, Beijing, 2019. 7 Evan Laksmana: Indonesia as “Global Maritime Fulcrum”: A Post-Mor tem Analysis. Asia Maritime Transparency Initiative. 8 November 2019. <https://bit.ly/3dv5YTX > 8 Defence White Paper. Ministry of Defence of the Republic of Indonesia, Jakarta, 2015. 27. 9 The Military Balance 2020. IISS–Routledge, London, 2020. 224. 10 Pham Chi Thanh: 2019 Viet Nam National Defence.

CLOSING THOUGHTS In the last decade, Southeast Asia saw the fast development of conventional armed forces; however, compared with similar processes in South Asia and Northeast Asia, this armament seems very moderate. The naval capabilities of the major Southeast Asian countries have vast room for further modernisation, but the strategic landscape remains obscure for them. It is important to underscore that, despite their rapid military development, the Southeast Asian countries cannot stand the arms race with the PRC. Therefore, if ASEAN cooperation does not prove to be effective enough, its members need a great power’s support for their defence policy goals in the maritime sphere. This inevitably strengthens the regional influence of the United States. At the same time, it hardly seems possible to prevent the de facto Chinese occupation of the South China Sea, which will cause serious damages to the security and economic interests of the states in the region.

ENDNOTES 1 Today more than 30% of global seaborne trade passes through the Straits of Malacca. 2 Nusantara is the Malay/Indonesian name of the large Southeast Asian archipelago. 3 Balogh András: Délkelet-Ázsia történelme. Eötvös Kiadó, Budapest, 2018. 72–81. 4 For more, see Stein Tønnesson: The Paracels. The ‘Other’ South China Sea Dispute. International Peace Research Institute, Oslo, 2001. 5 R oya l

M a l ay s i a n

N av y.

#15to5

Tr a nsfo r m ati o n

Programme. Royal Malaysian Navy, Kuala Lumpur, 2018. 11. 132

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National Political Publishing House, Hanoi, 2019. 11 Pham, 12. 12 Pham, 16. 13 Thoi Nguyen: The Trouble With Vietnam’s Defense Strategy. The Diplomat. 17 January 2020. <https://bit. ly/2z0lqIP > 14 The Military Balance 2020, 223. 15 Defence White Paper. A Secure, Sovereign and Prosperous Malaysia. Ministry of Defence, Kuala Lumpur, 2020. 48. 16 Defence White Paper (2020), 49. 17 Siemon T. Wezeman: Arms Flows to South East Asia. Stockholm International Peace Research Institute, Solna, 2019. 37. 18 PDT White Paper. Department of National Defense. 23 July 2012. <https://bit.ly/2Y2UBfP > 10. 19 Laura Zhou: ASEAN members up the ante on South China Sea amid code of conduct talks. South China Monitoring Post. 29 December 2019. <ht tps://bit. ly/2U8qW3k >

THE INDO-PACIFIC STRATEGY AND ASEAN Thomas Daniel and Puteri Nor Ariane Yasmin INTRODUCTION This article aims to provide a compressive overview of the dynamics between the IndoPacific Strategy (IPS) and the Association of Southeast Asian Nations (ASEAN). To achieve this in a structured manner, the article will be organised into four main components. First, it will explore ASEAN’s mechanisms in engaging with external and major powers, including the evolution of ASEAN’s relations with the United States and China. Second, it will explore the various iterations of the Indo-Pacific strategies and initiatives by various stakeholders and what they could mean for ASEAN. A contextual understanding of both is important to help readers, especially those from outside the region, understand the background from which ASEAN and its member states view and employ the IPS. A key development in ASEAN’s engagement with the IPS has been the release of the ASEAN Outlook on the Indo-Pacific (AOIP). The document, which caused a stir when it came out, will be the third component to be addressed in this paper. The AOIP indicates both the thinking of ASEAN as an organisation on the IPS and, also, how ASEAN might choose to engage with it. Lastly, this article will conclude with potential opportunities and challenges for ASEAN in its engagement with the IPS. ASEAN IN THE MIDDLE OF MAJOR POWER ENGAGEMENT ASEAN’s multilateral mechanisms The founding members of ASEAN knew that, while there was no way to avoid major power influence in the region, they stood a better chance of navigating the great game of the Cold War by having a common grouping. One of the ways that ASEAN sought to retain its strategic autonomy was to draw in all regional

powers and engage them comprehensively as a regional grouping.1 Ten key external partners and stakeholders were recognised as Dialogue Partners (Australia, Canada, China, the European Union, India, Japan, South Korea, Russia, New Zealand, and the US) and four as Sectoral Dialogue Partners (Pakistan, Norway, Switzerland, and Turkey).2 ASEAN also worked to promote and grow various multilateral regional initiatives and mechanisms that were inclusive in nature and involved all major powers. The key element in all these was an ASEAN that was put at the centre, in the “driving seat.” These initiatives and mechanisms include the ASEAN Regional Forum (ARF) and the East Asia Forum (EAF). The former, established in 1994, plays a key role in convening officials, academics, think-tankers, and other security and diplomatic practitioners for frank discussions on both longstanding and emerging security issues across the Asia-Pacific.3 The latter, first convened in 2005, is one of the few leaders-led dialogues which brings top leaders and policymakers together from across the Asia-Pacific to discuss broad strategic issues, focussing on the evolving regional architecture. Other important mechanisms include the ASEAN Plus Three (ASEAN, China, Japan, and South Korea) and ASEAN Closer Economic Relations (ASEAN plus Australia and New Zealand). The ASEAN Defence Ministers’ Meeting Plus (ASEAN plus eight of its Dialogue Partners except Canada and the EU) is the only active high-level regional military multilateral mechanism. It aims to strengthen security and defence cooperation for peace, stability, and development in the wider Asia-Pacific region. In a post–Cold War Asia-Pacific, having ASEAN in the “driving seat” of such regional mechanisms was beneficial to both the US REGIONAL ISSUES

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Countries participating in the Trans-Pacific Partnership (TPP) negotiations

Canada

United States

Japan

Vietnam

Mexico Malaysia

Pacific Ocean

Brunei

Peru

Singapore

Australia Chile

New Zeland

and China. Both had much to gain from the arrangement and both were powerful enough to ensure that their interests could never be undermined by any ASEAN-led mechanism. ASEAN’S EVOLVING RELATIONSHIP WITH THE UNITED STATES ASEAN–US relations have come a long way since the establishment of regular dialogues in 1977. The US is now a Strategic Partner with multiple levels of engagement across the three pillars of the ASEAN Community.4 The US Pivot to Asia, under the Obama administration, saw the deepening and broadening of relations with established US allies and Southeast Asian states. There were multiple high-level visits, including several by the president himself. Nevertheless, questions about America’s commitment to this region resurfaced towards the end of President Obama’s second term when the US found itself drawn back to West Asia and 134

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Europe.5 The subsequent Trump administration has only seen such concerns grow and come under greater stress. Rightly or wrongly, Southeast Asian policymaking elites viewed the Trans-Pacific Partnership (TPP) as the yardstick of US commitment to Southeast Asia and the Asia-Pacific at large as an economic–security alternative to China.6 The decision of the US to pull out of the TPP severely damaged that trust and the reputation of the US. Additionally, the perception of a general lack of policy coherence from the White House when it comes to America’s commitment to the region, the increasing politicisation of the Department of State, and the language of key actors from both establishments—implying an “us or them” attitude when it comes to the criticism of China— have not gone down well in Southeast Asia. What is more, the noticeable lack of high-level representation by the US at ASEAN-led regional meetings just added a perceived insult to injury.

ASEAN’S EVOLVING RELATIONSHIP WITH CHINA More than its evolving relationship with the US, however, it is the rise of China’s economic and strategic influence that has drastically changed the equation and status quo for ASEAN. While not unanticipated, the pace at which this has happened, and the effectiveness of China’s ability to utilise its capabilities, has caught some by surprise. No one country among ASEAN’s Dialogue Partners has had such a sway on the organisation and its member states as China. It is involved in almost every major ASEAN multilateral mechanism and is a major trade partner and investor for almost all ASEAN member states. In 2018, China was ASEAN’s largest trading partner for nine consecutive years. By the first half of 2019, ASEAN overtook the US to be China’s second-largest trading partner.7 ASEAN member states are also enthusiastic partners in the Belt and Road Initiative (BRI). Many are developing economies with a need for infrastructure and development to improve connectivity within existing markets and to broaden trade relations in the region. China, through the BRI, managed to tap into an acute desire in Southeast Asia for improved road, rail, and maritime connectivity.

The scale of China’s influence also means that ASEAN and its member states will have to delicately and strategically balance their disputes with China. Issues such as the South China Sea territorial dispute and the impact of Chinese activities upstream the Mekong in its basin region are complicated ones for ASEAN member states. China controls the pace of discussion in both matters. Unlike the US, which has had a long regional presence but is an extraregional power, China is a major power that is a geographical reality for this region, and, for better or worse, Southeast Asia has had to and will have to live with it. Thus, having a relationship based on friendship, cooperation, and careful management of disputes is paramount. MULTIPLE INDO-PACIFIC STRATEGIES Analyses on the IPS and ASEAN’s role are difficult to string together without an understanding of the different concepts of the Indo-Pacific. While most observers often speak about the US IPS, others are no less important given the geographical definitions and terminology used to describe the various IPSs. The fact that there is no common understanding or authoritative definition even among its proponents further complicates the situation for ASEAN.8

Countries of the ASEAN Regional Forum (ARF)

■ ASEAN ■ Other countries

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The United States The American concept of the Indo-Pacific is simple—it views itself as part of the region. Its geographical definition of the Indo-Pacific stretches from the west coast of the US right up to the west coast of India. Its Free and Open Indo-Pacific (FOIP) strategy covers security, governance, and economics and is largely seen as containment of China alongside an axis of likeminded powers, namely, Australia, India, and Japan. Some have interpreted their quadrilateral meetings as “the quest to balance, dilute and absorb Chinese power,” as China’s rise threatens the rules-based existing order of shared (liberal) values.9 Australia While Australia’s geographical definition of the Indo-Pacific is largely similar to that of the US, its terminology differs, as it is significantly more inclusive. Australia also places a premium on commitment to multilateralism, free trade, and adherence to a rules-based international order.10 India India has spelt out its concept of the IndoPacific in similar terms. In his speech at the 2018 Shangri-La Dialogue, Prime Minister Modi noted that “inclusiveness, openness and ASEAN centrality and unity . . . lie at the heart of the new Indo-Pacific,” and that it is not to be seen as “a strategy or as a club of limited members. . . . Nor as a grouping that seeks to dominate.”11 India’s long-held maxim of strategic ambiguity and nonalignment means that, unless there is a major shift in New Delhi, it is unlikely to be part of an explicit alliance against any country. Japan Japan’s geographical definition of the IndoPacific has changed quite a few times. A map entitled Free and Open Indo-Pacific published by the Ministry of Foreign Affairs at the end of 2018 explicitly mentioned ASEAN as the “hinge of two oceans” and that Japan would focus on “strengthening connectivity in (the) ASEAN region” and expanding “ASEAN success to other

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regions such as the Middle East and Africa.”12 The map also indicated that Japan’s FOIP had now included parts of China in its connectivity to ASEAN as well as the Pacific Ocean. It is also worth mentioning that cooperation between Japan and China increased in 2018, with fiftytwo signed memorandums of cooperation at the Japan–China Summit of the same year. IMPLICATIONS TO SOUTHEAST ASIA Unlike the US, which clearly identifies a rising China as a threat to regional order, Australia and India have pushed for “inclusive” strategies, while Japan has been cautious not to exclude China entirely. Nevertheless, the implicit concern of the impact of China’s rise is clear. Cooperation among these countries— particularly on strategic–security fronts—will be likely to continue for as long as China rises and threatens the existing order. What all these strategies have in common is that the geographical scope expands throughout the Indian and Pacific oceans, although where it starts and stops in these oceans differs according to each country’s geographical definition. Southeast Asia is recognised as the epicentre of the Indo-Pacific, given its geographical location between the Indian and Pacific oceans and between India and China. One must also take into account the history of the term “Indo-Pacific” and how it entered the modern-day vocabulary of strategic terminology in this region. While it may have had beginnings in academic discourse originating from Asia itself, its subsequent utilisation and adoption by extraregional states and like-minded regional stakeholders have seen the term take on more pronounced strategic dimensions—political, economic, diplomatic, and military.13 Thus, both the IPS and the “Indo-Pacific” have unfortunately become “loaded” terms, and, although more broadly utilised, they are still met with scepticism by some quarters in Southeast Asia.14 Interpretations, and thus implications, differ from one stakeholder to the other, which has resulted in differing policy positions by ASEAN member states.

The importance of the ASEAN region is patent in the new power struggles

THE ASEAN OUTLOOK ON THE INDO-PACIFIC These narratives contributed to the formation of the AOIP. Being the largest member of ASEAN, and as a country that is straddled between both the Indian and Pacific Oceans, Indonesia took the lead in the initiative. Based on Indonesia’s concept of an “open” and “inclusive” IndoPacific, the AOIP was adopted at the 34th ASEAN Summit in June 2019. At its core, the AOIP is about ASEAN’s attempting to assert its independence in an environment of greater competition between China and the US.15 Besides the general discomfort of the tone of the various IPSs, especially the FOIP, there was also concern over the implications to ASEAN economies from the then-ongoing trade war between the US and China and wider geopolitical security anxieties. Many member states were concerned that ASEAN centrality was under threat and that, if they did not attempt to put an ASEAN stamp on this latest regional initiative by an extraregional power, tensions would further worsen. There was also a desire to take advantage of Southeast Asia’s central location in the Indo-Pacific to ensure that it could better position itself to maximise benefits from the various IPSs and the BRI at the same time. It is worth saying that the AOIP was only

adopted after some disagreement—negotiations on the final text continued to the eleventh hour. Some ASEAN member states felt it was too partisan in favour of the IPS while others felt it did not go far enough. It marks the first formal inclusion of the term Indo-Pacific in ASEAN’s discourse and has been described by ASEAN diplomats and observers alike as a guide, not a legally binding document. Hence the name “Outlook.” While some analysts have perceived the AOIP as an endorsement of the IPS, it is more nuanced than that. An examination of the text indicates a very familiar language that runs through almost all ASEAN documents and statements about matters pertaining to the regional order— the emphasis on dialogue, cooperation, and peaceful settlement of disputes. In short, the ASEAN Way.16 Inclusivity is a major reoccurring theme in the AOIP. It would, however, also be a mistake to take the AOIP as a repudiation of the IPS, or even FOIP. ASEAN has clearly recognised that the Indo-Pacific and its various strategies, no matter its iteration or name, is here to stay. The drivers of and political will for the IPS by its proponents are unlikely to wane anytime soon. In a sense, ASEAN could be hoping that a more toned down IPS would make it more palatable to its REGIONAL ISSUES

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members, and less risky in terms of offering an alternative to Chinese-driven regional initiatives. ASEAN and its member states hope to use the AOIP as a basis to bolster the regional organisation as it navigates through strategic competition in the region. Besides attempting to stay relevant amidst the multiple concepts of the Indo-Pacific, ASEAN must also work to engage all proponents of the various IPSs using existing ASEAN-led multilateral mechanisms such as the EAF and ADMM Plus. Lastly, it must also ensure that member states are not dragged into greater US–China rivalry in the region, particularly if tensions continue to escalate in the postpandemic world order. CONCLUSION: WHERE TO FOR ASEAN There are both significant challenges and opportunities for ASEAN when it comes to the Indo-Pacific and its various strategies. Southeast Asia’s position as the strategic and geographical epicentre of various IPSs and the adoption of the AOIP give ASEAN a unique opportunity to regain lost ground in the framing of narratives around the Indo-Pacific and the IPS. Besides the greater emphasis on inclusivity, ASEAN is hoping to capitalise on its longstanding position of non-alignment between major powers and a convenor of major regional mechanisms. There is some agency in this as similar sentiments have been expressed by Australia, India, and Japan. To this end, ASEAN should actively continue to pursue engagement with the IPS and ensure that their proponents remain fully engaged with Southeast Asia. However, this ultimately depends on how ASEAN manages its relations with both the US and China and how the major powers choose to engage with or ignore ASEAN. While the argument that ASEAN has to choose between major powers and their initiatives is false, the reality is that both the US and China have a huge influence on the regional organisation and its member states. Unless ASEAN cohesiveness is guaranteed, its scope of action will only go as far as it is allowed by the latter. All that is needed is just one or two member states to be influenced. ASEAN, after all, is an association of ten member 138

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states that makes decisions by consensus, often the lowest common denominator. This means even one country can have a serious impact on the collective decision taken by the group. The continuing pressure on ASEAN, or rather its member states, to bend strategically to one or the other will only keep hamstringing ASEAN. And despite some immediate gains for either the US or China, a hamstrung ASEAN will have negative impacts for the wider region and, indeed, the long-standing interests of major powers themselves in the long run. The impact of a rising and more assertive China on ASEAN is again a crucial factor. Several ASEAN member states are thought to be firmly within China’s economic “gravitational pull” given the past and current trends of economic exchange. Chinese investments, BRI or not, have made up a significant portion of their GDP growth in recent years. China’s growing dominance in the region in economic and military terms greatly expands its ability to exercise political influence over recipient countries. This factor, which shrinks possible strategic and diplomatic options, has caused ASEAN member states to diverge in their approach to dealing with China. It can also have an impact on how some of them perceive and engage with multiple IPSs. Lastly, the impact of the COVID-19 pandemic on both ASEAN and the IPS is another consideration to keep in mind. Key proponents of the IPS, namely, the US and Australia, publicly traded barbs with China over the origin, responsibility, and management of the pandemic. The US, in particular, has taken a very hard line on China and has publicly accused it of using the pandemic to expand its sphere of influence and harassment of neighbours in territorial disputes like the one over the South China Sea.17 This deterioration, and the discomfort against the rhetoric coming out of Washington could impact greater willingness to work with the US within the Indo-Pacific framework. Especially if the FOIP takes on a more anti-China tone. This is further accentuated by the calculations of most Southeast Asian policymakers that trade with China will be an important part of surviving

the post-pandemic recession and kick-starting economic growth.18 In the longer run, the capacity of ASEAN as a regional organisation, its member states, and proponents of the IPS remain to be seen in a post-pandemic world, as is their appetite for extraregional engagement.19 Given the staggering human and economic costs, still ongoing at the time of writing, priorities and resources could see a shift inward. Ultimately, though, the impact of COVID-19 on ASEAN and its engagement with the IPS would depend on how badly countries are hit and on how long the pandemic will last.

11 Prime Minister’s Keynote Address at Shangri La Dialogue. Ministry of External Affairs, Government of India. 1 June 2018. <https://bit.ly/3fBVXFn > 12 Towards Free and Open Indo-Pacific. Ministry of Foreign Affairs of Japan. November 2019. <https://bit.ly/2N6eBZT > 13 Melissa Conley Taylor: Different visions of the Indo-Pacific: China, India, the US and Australia. Lowy Institute, The Interpreter. 9 January 2014. <https://bit.ly/316inuz > 14 Mercy A. Kuo: The Origin of ‘Indo-Pacific’ as Geopolitical Construct. The Diplomat. 25 January 2018. <https://bit. ly/30SyE5V > 15 Amitav Acharya: Why ASEAN’s Indo-Pacific Outlook Matters. Australian Strategic Policy Institute, The Strategist. 12 August 2019. <https://bit.ly/3ddXr7h > 16 “ASEAN Outlook on the Indo Pacific.” Association of Southeast Asian Nations. 22 June 2019. <https://bit.

ENDNOTES

ly/2UTtAL2 >

1 About the ASEAN Defence Ministers’ Meeting Plus

17 Morgan Ortagus: PRC’s Reported Sinking of a Vietnamese

(ADMM-Plus). Association of Southeast Asian Nations

Fishing Vessel in the South China Sea. U.S. Department of

(ASEAN) Defence Ministers Meeting. 6 February 2017.

State. 6 April 2020. <https://bit.ly/30SKOf5 >

<https://bit.ly/2UUxUcU >

18 Anthony Rowley: Why China – not the US – remains key

2 ASEAN Dialogue Coordinatorship July 2015–July 2024.

to Asia’s trade and economic recovery after Covid-19. South

Association of Southeast Asian Nations. <https://bit.

China Morning Post. 27 April 2020. <https://bit.ly/2YLvqib >

ly/2YOwDFg > Accessed: 18 June 2020.

19 Patrick M. Cronin: Four Geostrategic Implications Of The

3 ASEAN Regional Forum (ARF). Australian Government,

Coronavirus In The Indo-Pacific. Hudson Institute. 17 March

Department of Foreign Affairs and Trade Australia. <https://

2020. <https://bit.ly/37D9XMm >

bit.ly/2UTVEhl > Accessed: 18 June 2020. 4 Overview of ASEAN–United States Dialogue Relations. Association of Southeast Asian Nations. 17 November 2019. <https://bit.ly/2N65t7q > 5 Premesha Saha: From ‘Pivot to Asia’ to Trump’s ARIA: What Drives the US’ Current Asia Policy? Observer Research Foundation, ORF Occasional Paper No. 236. February 2020. <https://bit.ly/2UTWniz > 6 Saxon Bryant: After TPP: Challenges for US–ASEAN Relations. Public Policy Initiative, University of Pennsylvania. 21 January 2019. <https://whr.tn/2zHEhc2 > 7 China–ASEAN trade continues to boom amid global growth slowdown, uncertainties. China Daily. 23 July 2019. <https://bit.ly/37EgAy1 > 8 Hoang Thi Ha: ASEAN Outlook on the Indo-Pacific: Old Wine in New Bottle? ISEAS Perspective. 2019/51. <https:// bit.ly/2N8Skun > 9 Jeremy Clif fe: The Rise of the Indo-Pacific. New Statesman. 3 May 2020. <https://bit.ly/2Y9LsTQ > 10 2017 Foreign Policy White Paper. Department of Foreign Affairs and Trade Australia, Barton, 2017. <https://bit. ly/2ADF8Ly > REGIONAL ISSUES

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ASEAN–EU COOPERATION: PRESENT AND FUTURE Dang Minh Duc

Looking back at the history of the Association of Southeast Asian Nations (ASEAN), we can realise that, after gaining independence, many Southeast Asian nations had an intention to found a regional organisation for accelerating economic, scientific, technical, and cultural cooperation and minimising the impacts made by world and regional powers. ASEAN has since experienced ups and downs but finally showed its great vitality. The expansion of ASEAN covering entire Southeast Asia was marked by the establishment of the ASEAN Community in 2015, demonstrating its advantage and effectiveness. At present, ASEAN is a regional organisation consisting of ten member nations and covering more than 4.5 million km², with a population of more than 649.1 million people and a GDP of almost USD 3,000 million in 2018.1 The ASEAN Community was established not only for strengthening internal cooperation within the region but also for creating a solidarity bloc to cope with external challenges. Since dialogue relations were formalised between ASEAN and the European Union in July 1977, followed by the ASEAN–EEC Cooperation Agreement signed on 7 March 1980, the cooperation between ASEAN and the European Union has been highly prized by both regional organisations. The cooperation agreement between ASEAN and the European Union was set up on three major pillars: political and security cooperation, economic cooperation, and sociocultural cooperation. For ASEAN, there were three reasons for strengthening its cooperation with the European Union. Firstly, the European Union was the second-largest market for export from ASEAN at that time. Secondly, the European Union was a counterbalance to other major partners in the world, such as Japan, China, and the 140

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United States. Finally, ASEAN was afraid that its position would be less significant if the European Union strengthened relations with other regions in the world. The European Union, for its part, paid great attention to ASEAN’s economic potential and was afraid of being excluded from Southeast Asia due to the dynamism of other powers in the region. Thus, the EU hoped the cooperation with ASEAN would “create a new dynamic in the EU–ASEAN relations” and it was “the very key point.”2 The cooperation between the two regions is run according to the following mechanism: ASEAN–EU Ministerial Meetings (AEMM) are convened biennially; ASEAN–EU Joint Cooperation Committee (JCC) Meetings are held regularly; ASEAN Post Ministerial Conferences are held annually, immediately after the ASEAN– EU Ministerial Meetings, in order to ratify the frameworks of dialogue and cooperation initiated by ASEAN; and, ASEAN–EU Senior Officials’ Meetings (SOM) are held for specialists from various sectors of the two regions. In addition, multilateral forums, such as the ASEAN Regional Forum (ARF) and Post Ministerial Conferences (PMC) 10+1 have also been held. Now, let us have a brief overview of the recent ASEAN–EU cooperation. POLITICAL COOPERATION At present, ASEAN is facing a number of challenges, both internal and external. There are still some disagreements between member nations, which may reduce the power of the bloc. One such example is Indonesia’s insistence on strengthening inclusive dialogue and dealing with regional issues within the framework of the ASEAN Defence Ministers’ Meeting (ADMM), the East Asia Summit (EAS), and the Free and

Open Indo-Pacific policy.3 The most outstanding external challenges are disputes over territorial sovereignty. Together with China’s increased trade and investment cooperation with the ASEAN region, complicated conflicts over the South China Sea and maritime transportation have also been taking place between China and some member nations of ASEAN, making tensions become higher. The challenges ASEAN faces are getting bigger with the intervention of the United States, Japan, Russia, Australia, and India in regional issues. It is, therefore, necessary for the ASEAN to be proactive in strengthening regional cooperation, completing the Declaration on the Conduct of Parties in the South China Sea (DOC) and the Code of Conduct (CoC), developing multilateral cooperation, respecting international law, and maintaining regional peace and security. Comparing the role played by the European Union with that played by China, Japan, the United States, and India in implementing strategies in the region, we can see that the European Union has not paid such special attention to ASEAN as other powers in the region, especially China. This inattention is shown by the slowness in performing action plans and the bureaucracy in setting ambitious and impractical targets, and it was demonstrated more obviously by the division within EU member countries about the cooperation with China. Italy and other member countries in Central and East Europe have eagerly been cooperating with China on the Belt and Road Initiative (BRI 17+1 Initiative). On the contrary, French President Emmanuel Macron argues that the European Union should limit its cooperation with China and Beijing has the ability to use economic instruments for political ends.4 The moderate attention paid by the European Union to ASEAN is also reflected by its documents and policies on the region. After almost a decade, in 2003, the European Union adopted a particular strategy on ASEAN titled A new partnership with Southeast Asia. The strategy was aiming for a modest goal, which was “to improve the relations and become closer to ASEAN.” Meanwhile, the European Union and

China had already started a comprehensive strategic partnership. In 2012, the European Union acceded to ASEAN’s Treaty of Amity and Cooperation (TAC) and adopted the Plan of Action to strengthen the ASEAN–EU enhanced partnership.5 On the occasion of the 40th anniversary of the establishment of ASEAN–EU relations in 2015, the European Union confirmed the adoption of a new strategy on its strategic partnership with ASEAN via a joint communiqué of The EU and ASEAN: a partnership with a strategic purpose,6 which it had done with China and India more than a decade earlier. At the ASEAN–EU Post Ministerial Conference held in August 2017, both sides agreed to adopt the ASEAN–EU Plan of Action for the period from 2018 to 2022. At the meeting of ASEAN–EU Ministers of Foreign Affairs in January 2019, both sides confirmed the goal of forming a comprehensive partnership between the two regions.7 Thus, a number of statements and joint communiqués have been issued by the European Union and ASEAN, but they are considered as a mere formality and have not resulted in clearly visible effects, especially in terms of the EU’s political and security influence in Southeast Asia. Regarding the disputes over the South China Sea, for example, the European Union considered ASEAN to play a central role in the regional security structure. However, the EU took too much time to proclaim in 2019 that it would provide full support for the processes in the region directed by ASEAN to promote a regional order according to the international principles and to strengthen multilateral cooperation and closer cooperation with third parties. In the proclamation, the European Union emphasised its commitment to a legal order over the seas and oceans, in accordance with the international law on maritime security and cooperation as well as the freedom of air and sea navigation, for the benefit of all nations.8 The ignorance, or, in other words, the fact that the European Union has not considered ASEAN a strategic priority, was just one of the reasons for the slowness in the EU–ASEAN relations. Although the European Union admits that it has strategic interests in its relations with ASEAN REGIONAL ISSUES

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because ASEAN plays a central role in building a regional security order in the Asia-Pacific and the Indian Ocean, some scholars point out that “despite the European Union’s economic weight in Asia, Europe does not enter regional countries’ strategic calculations to the same degree as the United States does” and “a long-term European strategy towards ASEAN, as a key piece in the Asian puzzle, is missing.”9 They also suggest “the European Union can and should step up its security cooperation with ASEAN, and that it needs to demonstrate political interest and solid engagement the way the US has been doing in recent years,” and “[a]n impactful and mutually beneficial way to do this is through enhanced cooperation on the non-traditional security (NTS) fronts of counter-terrorism and disaster relief.”10 ECONOMIC COOPERATION The European Union confirms its support for the central role played by ASEAN and considers ASEAN as an important partner sharing a lot of interests and strategic visions.11 At present, the European Union is the third-largest partner in ASEAN’s trade with a total two-way trade turnover of EUR 237.3 billion in 2018, an increase by 8.1% compared with figures in 2017, which accounts for 14% of the total trade turnover of ASEAN. According to trade figures in 1995, the European Union’s import from ASEAN amounted to EUR 33,355 million and its export to ASEAN totalled EUR 33,991 million.12 The European Union’s export to ASEAN mainly consists of chemicals, machinery, and means of transport. Meanwhile, ASEAN’s export to the European Union mainly includes machinery, means of transport, agricultural products, textile, and garment products. The European Union is the biggest foreign investor in ASEAN with a total FDI of EUR 337 billion in 2017, while the corresponding figure of the ASEAN’s investment in the European Union was EUR 141 billion.13 The growth rate of the entire ASEAN region has been fairly high for the period from 2010 to 2018, reaching 5.3% on average. This has made ASEAN become an active economic region, attracting investment from various countries all over the world. Based on the indices of market 142

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openness, the increased rate of commodity trade, the development of services, and the inflow of investment, ASEAN is viewed as an open economic region with a trade turnover of USD 1.3 thousand billion which makes up 57% of its GDP. ASEAN’s export turnover accounts for 7% of the global export turnover. Based on its GDP, ASEAN as a whole is predicted to rank as the fifth-largest economy in 2030 and the fourth-largest economy in 2050.14 In 2018, the European Union became ASEAN’s second-largest trade partner after China. The import from ASEAN accounts for 11% of the total import of the European Union, while its export to ASEAN accounts for 14% of its total export.15 The European Union remains the top investor in ASEAN, although the proportion of investment from the European Union to the total investment in ASEAN decreased, as investment from other ones increased (investment within ASEAN member countries increased from USD 6,000 million to USD 26,000 million over a period of three years). Bilateral trade and investment between ASEAN and the European Union have steadily been growing over the past decade. On the other hand, ASEAN as a whole represents the European Union’s third-largest trading partner outside Europe (after the US and China).16 In the past, ASEAN was only a “weak” partner of the European Union for business in raw materials. However, over time, a miraculous change was introduced in its production, making ASEAN the tenth-largest exporter in the world. Owing to its geostrategic position, a population of more than 649.1 million, and a GDP predicted to be the fourth largest in the world by 2050,17 ASEAN is considered as the most attractive region of Asia that draws the attention of the whole world. On the other hand, ASEAN has improved its own economic integration, creating an impetus for economic openness and further integration with other countries and regions in the world. Many free trade agreements have been negotiated and signed; specifically, ASEAN has signed Free Trade Agreements (FTA) and Comprehensive Economic Partnership Agreements (CEPA) with five partners, including

TRADE AND INVESTMENT WORKING TOGETHER, THE EU AND ASEAN ARE A GLOBAL ECONOMIC FORCE. EU IMPORT FROM ASEAN (2018)

EU EXPORT TO ASEAN (2018)

140.3 BILLION

96.9 BILLION

EU–ASEAN MERCHANDISE TRADE HAS ALMOST DOUBLED

EU–ASEAN TRADE IN SEVICES HAS MORE THAN DOUBLED

2008

2007

2018

THE EU REMAINS THE BIGGEST PROVIDER OF EXTERNAL FDI IN ASEAN

THE EU IS ASEAN’S 2ND LARGEST TRADING PARTNER

ASEAN member states 15.8%

Others 33.6%

1 2

88.3 BILLION

40 BILLION

237 BILLION

137 BILLION

2017

3 EU 14.2%

ASEAN IS THE EU’S 3RD LARGEST TRADING PARTNER OUTSIDE OF EUROPE

United States 5.3%

1 2

South Korea 4.2%

Japan 13.7% China 6.6% Hong Kong 6.6%

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China, South Korea, Japan, Australia, and New Zealand, while fifty free trade agreements have been signed between ASEAN member nations and non-ASEAN nations, and twenty-three multilateral agreements have also been signed, for example, the ASEAN–Australia–New Zealand Free Trade Agreement (AANZFTA), the United States–Singapore Free Trade Agreement, the South Korea–Singapore Free Trade Agreement, or the Japan–Singapore Free Trade Agreement. The above has led to a tendency that, now, many countries start to aim at building a strategic partnership with ASEAN, which shows the geopolitical shift of the world power towards Asia in general and ASEAN in particular. Since the European Union did not want to “miss the Asian train” or lose its influence in the region relative to other world powers, it had to strengthen cooperation with ASEAN with a view to making a positive change in the quality of the relations between the two blocs in the coming time. In the ASEAN–EU Plan of Action (2018– 2022),18 the development of connectivity and cooperation between ASEAN and the European Union is a key issue in which both sides are very interested. Obviously, we should not recognise the achievements of ASEAN exclusively from an economic perspective—it is also necessary to make assessments of ASEAN’s capacity for performing community commitments from political, security, and social perspectives. ASEAN has made every effort to promote peacebuilding in the region for the past two decades; the member nations of ASEAN have held and participated in forums on issues in Southeast Asia, in which ASEAN played a central role together with powers inside and outside the region. The support programmes provided by the European Union for ASEAN greatly contributed to networking, capacity-building, institutional improvement, knowledge dissemination, and the transfer of European management practices to Asia.19 ASEAN has made outstanding achievements, partly owing to the support provided by the European Union, in all areas including poverty reduction, gender equality, 144

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natural disaster prevention, environmental protection, and struggle against terrorism, smuggling, and epidemic diseases such as SARS, H5N1, and SARS-CoV-2. Based on the support programmes, ASEAN has found a common voice to negotiate and to discuss policy-related issues with the European Union for quality improvement. The programmes built by both sides have played a role as a guide in capacity-building, knowledge exchange, and information sharing between public and private sectors. This type of cooperation has been highly appreciated and recognised typically as a symbol of EU–ASEAN cooperation. PROSPECTS OF THE EU–ASEAN COOPERATION The peace within and the stability of ASEAN will positively affect the entire region and the world, as well. To achieve it, it is necessary to steadily strengthen cooperation in economic growth, investment, poverty reduction, sustainable development, peace-building, crime control, conflict prevention, civil society promotion, management transparency, and regional and international integration. Those are also criteria that the European Union has pursued in its relations with ASEAN since 1994. Recently, on 19 September 2018, the European Commission adopted a strategy entitled Connecting Europe and Asia—Building blocks for an EU Strategy.20 It was the second time in the history of relations between the two continents that a comprehensive strategy had been built by the European Union towards Asia (the first time being when the new Asia strategy21 was adopted in 1994). It also reflects the competition with other rivals in the world as the EU strives to protect its interests and influence in Asia.22 The strategy emphasises the partnership of the European Union with China, Japan, India, and the member nations of ASEAN and ASEM. Regarding ASEAN, the European Union only focusses on economic relations, aiming for a free trade agreement with the whole bloc.23 Many achievements have been made in the ASEAN–EU cooperation during recent years, especially in the economic, security, and

diplomatic spheres. What are the prospects of the relations between the two blocs in the coming period? It is clear that both blocs, especially ASEAN, have to make more efforts to harmonise common regional interests with the individual national interests in their relations with the European Union. Here is a short list of some major factors that can pose obstacles to ASEAN’s relations with the European Union in the coming period. The European Union and ASEAN are geographically far from each other with completely different conditions in terms of climate, natural environment, history, ideological foundations, economic practices, cultural identities, social characteristics, organisational models, and management mechanisms. The differences in culture and awareness between the two continents are huge, resulting from their distinct conceptions of democracy, human rights, inequality, and good governance. These are strong obstacles to building relations between the European Union and ASEAN. For the foreign policy of the European Union, an important task is to disseminate values, including democracy and the rule of law, which are seen as the quintessence of Europe, to the world. Thus, in all relations it has, the European Union always requires obligatory provisions relating to democracy, human rights, and transparent management. Meanwhile, the history and values in Asia are different, so it is really difficult to fulfil those provisions. Besides, the wide gap in economic development, as well as historical, cultural, and political differences inside ASEAN are the most important factors hindering the development of the relations between the European Union and ASEAN. In 2018, GDP per capita in Singapore, Malaysia, and Thailand was USD 64,575, USD 10,041, and USD 6,737, respectively. Meanwhile, that in Vietnam, Cambodia, and Myanmar was just USD 2,390, USD 1,402, and USD 1,249, respectively.24 This makes it hard to promote developing relations between the European Union and ASEAN, especially in economic cooperation. There are many causes for the failure of the negotiations between the

European Union and ASEAN over a regional free trade agreement, but one of the most important ones is the above-mentioned discrepancy. Although differences in development and economic capacity among the member nations of ASEAN have been recognised and taken into account by the European Union, the negotiations on the regional free trade agreement were terminated, while negotiations started over separate free trade agreements with each member nation of ASEAN. For the European Union, the influence of China with the Belt and Road Initiative’s (BRI) 17+1 format has resulted in a large number of issues of which the severest is the risk of a Europe divided into two camps, with some member states challenging the rules of the European Union. The Connecting Europe and Asia—Building blocks for an EU Strategy, promulgated by the European Commission in September 2018, is aiming at developing economic interests on the one hand and strengthening the EU’s influence in Asia on the other. In Asia, the European Union has signed its free trade agreements with Japan and South Korea and is carrying out negotiations with India, Australia, and New Zealand. In ASEAN, it has signed free trade agreements and investment protection agreements with Singapore and Vietnam. The negotiations with Thailand, Malaysia, the Philippines, and Indonesia are still ongoing. Vietnam is considered as one of the top partners of the European Union in Southeast Asia. The EU, therefore, pays special attention to promoting a comprehensive partnership in all areas with Vietnam. The particular—loose, unofficial, and “ASEAN mode”25—link between its member nations has helped ASEAN to overcome many sensitive issues and its member states to cooperate within the bloc. However, it has proved to be a weakness in promoting regional integration, in strengthening regional cohesion, and in developing the international relations of the region. Over the past few years, there have been many problems occurring in the region which demonstrate this shortcoming in the cooperation between ASEAN member nations. REGIONAL ISSUES

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Such a relation makes it difficult for the region to develop international connections and cooperation rapidly, as is the case with the European Union. The following examples point out the problem of ASEAN not becoming a region of closer bonds, which would help it make further achievements in all spheres, including its relations with the European Union. The first example is related to the free trade agreement with the European Union. The European Union wants to reach a free trade agreement with ASEAN as a whole, but this aspiration still remains unfeasible. The failure of the negotiations for an interregional free trade agreement between the European Union and ASEAN clearly shows the selfishness of ASEAN member nations. 26 When encountering difficulties in the negotiations, the member nations did not actively work together to find solutions; instead, they hastily started to arrange bilateral negotiations with the European Union so as not to miss an opportunity for paving the way for their own cooperation. The second example is related to a political issue. When China raised territorial claims over the South China Sea, violating the independence and sovereignty of some member nations of ASEAN and running the risk of armed conflicts in the region, ASEAN member nations did not gather to protect one another; instead, some member nations took actions in favour of China due to their economic interests. This episode, again, clearly shows the division within ASEAN. VIETNAM IN THE PROSPECTS OF THE EU– ASEAN COOPERATION The relations between Vietnam and the European Union were officially established in 1990. At present, there are dramatic changes in Asia Pacific and in the world, as well. China is rising rapidly with an ambition of re-establishing the world rules. It has been using the Belt and Road Initiative and other tools of “soft power” to exert influence on various countries in Asia, Europe, and Africa in the hope of making those countries more dependent on China. The world powers are inclined to set up trilateral and quadrilateral cooperations, such as the quadrilateral dialogue, 146

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also called “strategic diamond,” between the United States, Japan, India, and Australia. 27 Besides, other models of relations such as the quadrilateral relations between the United States, Japan, South Korea, and Australia, the trilateral relations between the United States, Japan, and Australia, and the trilateral relations between Russia, India, and China have also been promoted. Meanwhile, the ASEAN Community was established in 2015, and its significant position has since increasingly been proved by its relations with world powers and regional institutions. This demonstrates that the ASEAN Community has a significant role in shaping regional and world powers’ strategies.28 Since 1995, Vietnam has brought about deep and effective integration in ASEAN, playing a role as an important gateway to the association. In the second decade of the 21 st century, the relations between the European Union and Vietnam have entered a new stage. In addition to strengthening and deepening cooperation in traditional sectors, that in new fields such as the political sphere and security has also been set up, resulting in outstanding achievements. Recently, on 17 October 2019, the European Union and Vietnam signed a Framework Participation Agreement (FPA) facilitating the participation of the country in the EU’s crisis management operations, making Vietnam become the first nation of ASEAN, the fourth nation in Asia, and the 19th nation in the world to sign an agreement on defence and security cooperation with the European Union. The agreement will facilitate Vietnam’s participation in and contribution to the EU’s Common Security and Defence Policy (CSDP) missions and operations.29 As for economic cooperation, the bilateral trade turnover has increased rapidly for the past two decades. The annual average turnover amounted to EUR 45.1 billion. Since 2016, the European Union has been the secondlargest market of Vietnam’s export after the United States. Meanwhile, Vietnam has also become the second-largest trade partner of the European Union in Southeast Asia and ranked higher than Malaysia—but lower than Singapore,

THE EU AND ASEAN whose trade turnover with the European Union reached EUR 48 billion. Goods exported by Vietnam to the European Union mainly consist of textile and garment products, shoes, coffee, seafood, computers, and phone accessories. In 2018, export to the European Union accounted for 17% of the total export value of Vietnam.30 Bilateral trade between Vietnam and the EU increased 2.3 times between 2011 and 2019, from USD 24.4 billion to USD 56.44 billion.31 Vietnam always runs a trade surplus in its trade with the European Union, owing to trade incentives provided by the European Union for ASEAN, including Vietnam, and advantages created by the framework of the Partnership and Cooperation Agreement (PCA) between the European Union and Vietnam. The European Union’s investment in Vietnam has increased rapidly for the past years. From 2010 to 2017, the annual investment capital amounted to USD 800 million on average. In 2019, there were 2,244 FDI projects carried out in Vietnam by investors from the European Union with a total capital of USD 24.67 billion, excluding large projects carried out by other nations or territories as third parties. As a result, the European Union became the fifthbiggest investor in Vietnam.32 The fact that both Vietnam and the European Union have particular economic and trade advantages to supplement each other and to create opportunities for bilateral cooperation is considered as an important factor for the above-mentioned cooperation development. The bilateral relations were strengthened more after the European Union–Vietnam Free Trade Agreement (EVFTA) and the European Union–Vietnam Investment Protection Agreement (EVIPA) had been signed on 30 June 2019. Both agreements were ratified by the European Parliament on 12 February 2020. They can be seen as historic agreements that will hopefully raise the relations between the European Union and Vietnam to a new level. The implementation of the EVFTA will improve Vietnam’s competitiveness and will result in “guiding” effects, providing more opportunities for Vietnam in the ASEAN Economic Community

THE EU AND ASEAN 1972 First Ministerial Contact 1972 First Ministerial Contact 1977 Formal Dialogue 1977 Relations established Formal Dialogue Relations established 1980 Joint Cooperation Committee 1980 (JCC) established Joint Cooperation Committee (JCC) established 2007 Nuremberg Declaration 2007 on Enhanced Partnership Nuremberg Declaration on Enhanced Partnership 2012 EU Accession to Treaty of Amity 2012 and Cooperation in Southeast Asia (TAC) EU Accession to Treaty of Amity and Cooperation in Southeast Asia (TAC) Bandar Seri Begawan Plan of Action 2013–2017 Bandar Seri Begawan Plan of Action 2013–2017 2015 ASEAN Community 2015 established ASEAN Community established EU Mission to ASEAN established EU Mission to ASEAN established 2017 40 Year Anniversary 2017 40 Year Anniversary ASEAN–EU Plan of Action 2018–2022 ASEAN–EU Plan of Action 2018–2022 2019 Agreement in Principle 2019 to Establish a Strategic Partnership Agreement in Principle to Establish a Strategic Partnership REGIONAL ISSUES

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and leading to other free trade agreements in the regions of ASEAN+. Over twenty-five years, since Vietnam became a member of ASEAN in 1995, the country has contributed to the general development of ASEAN in all the political, security, economic, cultural, and social spheres. In 2020, Vietnam is undertaking the ASEAN Chairmanship and is a non-permanent member of the United Nations Security Council for the 2020–2021 terms, which will provide Vietnam with an opportunity to implement new foreign policy. Holding the ASEAN chairmanship, Vietnam has chosen the theme “ASEAN cohesion and proactive adaptation,” aiming at promoting the ASEAN power by uniting and strengthening the solidarity of all member nations, including the close link in economic development and community-building and the link of every member nation with the ASEAN community in the process of peoplecentred development. During the period when Vietnam is holding the ASEAN chairmanship, it will accelerate building relations between ASEAN and the European Union and will promote new networks of international relations. Vietnam and the European Union will share a common concern about the institutions of global administration, strengthening further cooperation in coping with global and regional challenges such as climate change, terrorism, epidemics, and promoting cooperation in peace-building, conflict resolution, economic connections, environmental protection, as well as other spheres such as energy, sciences, and technology. Vietnam, together with ASEAN and the European Union, will continue to give priority to cooperation in economic development on the principle of trade liberalisation and respect for the law. Exchanges, investment, and relations will be emphasised. Especially, the comprehensive cooperation in transportation by land, sea, and air between ASEAN and the European Union will be prioritised. Cooperation will also be addressed in the following spheres: digital communication, safe and open environment for information technology, cybersecurity, human rights, internet freedom, smart city–building, green energy, effective use of energy, support 148

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provision for the development of environmentally friendly energy, and human connection–building via the exchange of students and research works, as well as cultural exchange and tourism. Dialogues on political and security issues will be strengthened. In general, Vietnam is prepared to play an increasingly important role in promoting closer relations and in strengthening cooperation between the two blocs in all areas of mutual interest. CONCLUSIONS Up to now, the European Union and ASEAN have basically achieved equality in bilateral cooperation in all spheres and have become important partners to each other. For the past years, ASEAN has proved its reputation and reliability in economic cooperation and has increasingly been attractive to the investors all over the world. Regarding international relations, ASEAN is playing a central role in the region. The EU has also provided it with great support in various spheres through development assistance programmes and other aid-supporting ones, especially assistance in building the ASEAN community. After the global economic crisis, the European Union actively and proactively promoted relations with ASEAN. A large number of assistance and cooperation programmes were implemented, making the relations between the European Union and ASEAN unprecedentedly effective. The European Union, however, has not yet made outstanding marks, and its role was quite vague in some important situations in the region. This makes it really difficult for the European Union to compete with the United States, China, and Japan for influence on ASEAN. Hopefully, the European Union will effectively implement its strategy entitled Connecting Europe and Asia so as to heighten its position and influence in Southeast Asia and become the top partner of ASEAN and its member nations.

ENDNOTES

19 Evaluation of EC co-operation with ASEAN. June 2009.

1 ASEAN Key Figures 2019. The ASEAN Secretariat, Jakarta,

<https://bit.ly/2B7NLxH >

2019.

20 Jonathan Peel: Connecting Europe and Asia—Building

2 Nguyễn Thị Thu Hà: ASEAN’s role in the EU strategy on

blocks for an EU Strategy. Joint Communication to the European

connecting Europe and Asia. Institute for European Studies,

Parliament, the Council, the European Economic and Social

Research project. 2017.

Committee, the Committee of the Regions and the European

3 Nikola Popovic: Prospects for EU–ASEAN Security Ties.

Investment Bank. European Economic and Social Committe. 14

Global Risks Insights. 8 December 2019. <https://bit.

December 2018. <https://bit.ly/2ZKseFk >

ly/3d6VOZQ >

21 Towards a New Asia Strategy. Communication from the

4 Popovic.

Commission to the Council. EUR-Lex. 13 July 1994. <https://

5 Iris Chen Xuechen, The Role of ASEAN’s Identities in

bit.ly/2XCkIKm >

Reshaping the ASEAN–EU Relationship. Contemporary

22 Nguyễn Thị Thu Hà: Several initial remarks on the European

Southeast Asia. 222–246.

Union’s strategy titled “Connecting Europe and Asia—Building

6 EU–ASEAN relations, factsheet. European Union External

blocks for an EU Strategy.” European Studies. 2019/1. 36–45.

Action. 30 July 2019. <https://bit.ly/3c5duDw >

23 Shared Vision, Common Action: A stronger Europe. A Global

7 EU–ASEAN relations, factsheet.

Strategy for the European Union’s Foreign and Security Policy.

8 Maja Kocijancic, spokesperson for the EU Foreign Affairs and

European Union External Action. June 2016. <https://bit.

Security Policy, issued the EU’s declaration on the recent

ly/2Xuwzdk >

situation in the South China Sea on 28 September. Tuyên bố của

24 ASEAN Key Figures 2019.

EU về những diễn biến gần đây tại Biển Đông. Báo Điện Tử Của

25 Also called the “ASEAN Way” see Zsolt Csepregi: The Great

Chính Phủ Nước Cộng Hòa Xã Hội Chủ Nghĩa Việt Nam. 29

Divider/Connecter— Southeast Asia’s Future: A Shatterbelt or a

August 2019. <https://bit.ly/2zxqqov >

Gateway Region?

9 Reuben Yik Pern Wong–Scott Brown: Stepping up EU–

26 EU–ASEAN relations in 21st Century. Strategic Partnership in

ASEAN Cooperation in Non-Traditional Security. LSE IDEAS–

the Making, edited by Daniel Novotny–Clara Portela. Palgrave

Dahrendorf Forum Special Report. 2016/April. 79–85.

Macmillan, Houndsmills, 2012.

10 Reuben–Brown.

27 Ankit Panda: US, Japan, India, and Australia hold working

11 Sớm hướng tới hoàn tất Hiệp định Vận tải Hàng không toàn

level quadrilateral meeting on regional cooperation. The

diện ASEAN–EU. WTO–VCCI. 14 February 2020. <https://bit.

Diplomat. 8 June 2018. <https://bit.ly/2XyzVMb >

ly/3go2i8z >

28 Nguyễn Thị Thu Hà: Vietnam–EU relations on the threshold

12 Creating a New Dynamic in Eu–ASEAN Relations.

of the EU–Vietnam Free Trade Agreement: Opportunities and

Commission of the European Community. 3 July 1996. Annex

Challenges. European Studies. 2019/11. 62–74.

2, Table 2.1. EU trade with ASEAN. 38.

29 EU–Vietnam. Framework Participation Agreement. European

13 Association of South East Asian Nations (ASEAN). European

Union External Action. <https://bit.ly/3c5h4hb > Accessed: 21

Commission. Last updated: 5 May 2020. <https://bit.

March 2020.

ly/2X5LMm9 >

30 Guide to the EU–Vietnam Trade and Investment Agreements.

14 Vinayak HV–Thompson–Oliver Tonby: Understanding

European Union External Action. <https://bit.ly/2ZFLuE5 >

ASEAN: Seven things you need to know. McKinsey & Company.

Accessed: 21 March 2020.

<https://mck.co/2TF1Hpg > Accessed: 20 March 2020.

31 Statistics from the Vietnam General Department of Customs

15 Archive:EU trade and investment statistics with the

(2020).

Association of South East Asian Nations (ASEAN). Eurostat. April

32 Quan Hệ Việt Nam–Liên Minh Châu Âu. Bộ Ngoại Giao Việt

2015. <https://bit.ly/36xvPbo >

Nam. <https://bit.ly/2TJijfE > Accessed: 21 March 2020.

16 Association of South East Asian Nations (ASEAN). European Commission. 17 Vinayak–Thompson–Tonby. 18 ASEAN–EU Plan of Action (2018–2022). Association of Southeast Asian Nations. August 2017. <https://bit. ly/3giQVyN >

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INDONESIA AND THE SOUTH–SOUTH COOPERATION FROM BANDUNG UNTIL TODAY Bence Kocsev This article aims to focus on the role Indonesia plays in forging South–South relations. The paper will first examine the context in which the idea of South–South Cooperation was born and unfolded, then the focus will shift to Indonesia to briefly outline its historical and current engagement with other countries in the Global South. The paper ends with some brief and tentative remarks on the current situation and perspectives of South–South relations. THE ORIGINS AND THE FRAMEWORK OF SOUTH–SOUTH COOPERATION The founding myth of the South–South Cooperation (SSC)1 circles around the so-called Bandung Conference which was held sixty-five years ago when politicians, leaders of national liberation movements, and other opinion leaders from twenty-nine African and Asian countries gathered in the West Javan city for a conference that was aimed to set a new course for the postcolonial world amid the processes of decolonisation and in the emerging context of the global Cold War. With participants like Gamal Abdel Nasser, Zhou Enlai, Ho Chi Minh, Kwame Nkrumah, or Sukarno, the Afro-Asian Conference (as it was officially called) was one of the most significant events in the emergence of an independent postcolonial world. In Bandung, the new and reborn states, being increasingly dissatisfied with the perpetuated colonial subjugation that survived in many respects such as trade, politics, security, etc., attempted to create a political alternative to the bipolar world system. As Sukarno, the first president of independent Indonesia, put it in his opening speech: “We do not need to go to other continents to confer. . . . We are again masters in our house.”2 While it provided a global forum to discuss the various political problems affecting these countries and assured assistance for those still fighting for 150

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independence, by issuing the Declaration on Promotion of World Peace and Cooperation, the conference also laid the foundation for economic cooperation among developing countries in the Global South, encouraging economic cooperation and diversification, as well as cultural and technical exchange. Envisioning collaboration and solidarity within the developing world, the declaration sought to pave the way for future economic, cultural, and technical cooperation among southern countries. In this regard, Bandung was a moment when a distinct “Third Worldist” program was formulated and entered the global scene. Henceforth, the spirit of the conference kept inspiring the meetings of the developing countries in various fora (Group of 77, Non-Aligned Movement, Afro-Asian People’s Solidarity Organization, etc.) and provided a dynamically changing framework by which actors from Africa, Asia, and Latin America tried to locate themselves in the vortex of the world economy during and beyond Cold War bipolarity. In addition, to facilitate economic cooperation among developing countries in an institutionalised way, the establishment of the United Nations Conference on Trade and Development (UNCTAD) took place in 1964. For decades, the UNCTAD has been providing a unique platform for challenging the historical hegemony of the Global North and for fostering a closer South–South Cooperation. The efforts by the developing countries within and outside the UNCTAD culminated in the formulation of the so-called New International Economic Order (NIEO), a set of proposals that promoted an equitable international trade regime and a more intense SSC. In the same year, 1974, the United Nations (UN) created the Office for South–South Cooperation (UNOSSC) with the mission to promote and to coordinate intra-South and triangular cooperation.3 In 1978, the UN took a further step and convened the Conference on Technical Co-operation among

Countries attending the Bandung Conference in 1955

Developing Countries. The meeting, held in Buenos Aires, adapted a Plan of Action that served to boost technical cooperation and continues to affect South–South and North–South relations.4 What becomes evident from this bird’s eye view of the early history of the SSC, which may suffice here, is that this kind of cooperation is not a new phenomenon at all, although its intensity may have varied in certain periods. While the global political constellations of the 1960s and 1970s facilitated the emergence of these relations, the 1980s saw reduced cooperation among developing countries, due to the economic turbulence of the 1970s, the debt crisis deriving from it, and the subsequent neoliberal economic readjustment. Towards the turn of the millennium, however, the tide turned, and SSC underwent a revival. The fact that Africa’s largest trading partner for many decades, the United States, yielded its eminence to China around 2010 clearly illustrates this trend. In this respect, the frequency of meetings convened to facilitate the SSC is also quite indicative: in 2005, fifty years after the first Afro-Asian Conference in Bandung, a commemoratory summit was held in Jakarta and was followed by a number of other interregional gatherings like the meeting for China–Africa Cooperation, the first South America–Africa Summit (both in 2006), the first India–Africa summit (2008), the second South America–Africa summit (2009), to name a few.5 Lately, summits, conferences, and

other meetings between various southern parties have been taking place on a regular basis (e.g., the three yearly meetings of the Forum on China–Africa Cooperation, the commemorative summits on the anniversaries of the Bandung Conference, and the Buenos Aires Plan). Having this in mind, it is not surprising that, in the past decades, South–South investment and trade have shown a significant increase, and, according to some estimations, trade among southern countries have even expanded the North–South commerce.6 It is, moreover, apparent that, within the framework of the SSC, countries are able to pursue a more global strategy than with the North– South trade, as flows created by South–South interconnections are much more diversified than what the North–South ones (which are often based on previous colonial forms) normally reinforce. In addition, it seems that crises like the global financial one in 2008 did not just urge to intensify but also opened up many opportunities to strengthen the South–South cooperation. OUTLINING THE INDONESIAN SOUTH– SOUTH COOPERATION From a historical perspective, decolonisation and the ensuing liberation and civil wars obviously reduced the capacities of the economies in the South and, therefore, significantly determined the scope and capacity of these countries to REGIONAL ISSUES

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engage in South–South cooperation. After all, the oil crises of the 1970s, which eventually allowed oil-rich southern countries to accumulate enough capital surpluses, opened the way for an increased South–South Cooperation.7 However, many actors in the field had arrived earlier and were not even dependent on the influx of petrodollars. Since the early years of the Cold War, most of the attention has been given to China and its policies attempting to outdo capitalist and socialist “competitors” by providing aid in many developing countries. Obviously, Africa was an important place where the Sino-Soviet rivalry (or Shadow Cold War, as Jeremy Friedman called it) could unfold. For various reasons, the Chinese offensive to win the “hearts and minds” of the people eventually proved to be more successful, and this intense involvement, in turn, also laid the foundation of China’s current penetration into Africa. Besides China, the most discussed source of development assistance, emphasis was also given to Cuba that did not just mingle in a number of Cold War proxy wars but lent expertise and assistance to many southern countries, especially in Africa. Lately, in a rather multipolar setting, the efforts of the BRICS (Brazil, India, China, and South Africa) have been in the main focus of studies analysing the SSC. Despite having a long history of stimulating the SSC, Indonesia is less known for having been an eminent advocate of Southern cooperation since

the early days of the republic. To demonstrate its commitment to South–South solidarity and, perhaps more importantly, to gain international recognition, the country, officially still as part of the Dutch colonial empire, sent 500,000 tons of rice to famine-hit India in 1946 and participated in the Asian Relations Conference held in New Delhi in the following year.8 Indonesia’s engagement in the South–South cooperation became nevertheless internationally visible during the Bandung Conference. By coinitiating, hosting, and leading the conference, Indonesia’s first president between 1945–1967, Sukarno, even managed to secure a leading position within the developing world and to gain a certain international prestige. As a longlasting legacy, the Bandung conference has still been serving as a principal frame of reference for the engagement of Indonesia in the Global South. (The current president of Indonesia, Joko Widodo, for instance, still stressed the importance of the Bandung spirit in South–South relations during the ceremonies related to the 60th anniversary of the Bandung Conference.) To forge South–South cooperation, in the coming years, Indonesia joined the Non-Aligned Movement (NAM) and the Group of 77 (G-77), a forum within the UN that aimed to defend the economic interests of the Global South. As an opinion leader, Sukarno, who adhered less to the concept of the NAM, even formulated his world view into a

Members of the Non-Aligned Movement (NAM) in 2012

■ Current members ■ Observers

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distinct concept that was based on the dichotomy and confrontation of the “old established forces” (OLDEFO) and the “new emerging forces” (NEFO) which he also saw as the backbone of future South–South relations. (In this context, Indonesia even organised a counter-Olympics, the Games of New Emerging Forces (GANEFO), in 1963. Moreover, to “institutionalise” his idea, Sukarno suggested to set up the Conference of the New Emerging Forces (CONEFO). While Indonesia played an important role in forging South–South alliances with the Bandung Conference and envisioned ambitious cooperation underpinned either by the spirit of Bandung or the OLDEFO–NEFO concept, in reality, the country’s relations with other southern countries were limited and yielded rather low returns.9 Moreover, the aggressive foreign policy of Sukarno (especially his Konfrontasi policy against the neighbouring Malaysia) inevitably left certain marks on the country’s reputation and alienated many of the postcolonial countries from Indonesia. In 1966, Sukarno was overthrown and was followed by General Suharto (1968–1998), an authoritarian ruler whose New Order (Orde Baru) took many things from the Sukarno era that were considered important to demonstrate continuity and to stabilise the new system, but, at the same time, gave new interpretations to certain elements of the “Old Order.” For instance, the principle of internationalism, aimed to counterbalance certain nationalist forces and to stabilise the international positions of the country during the Sukarno Era, paved the way for Suharto to strengthen Indonesia’s ties with Western capitalist countries in general and the United States in particular.10 In this respect, the country’s position as a nonaligned, i.e., neutral country came into question, and, while Suharto managed to maintain friendlier relations with neighbouring countries, South–South cooperation was considered less important in the context of the three-decade-long Orde Baru.11 In fact, instead of pursuing an independent economic policy, Suharto turned to the International Monetary Fund (IMF) and the World Bank for advice and, consequently, became increasingly committed and entangled in the world capitalist system. Against this background, it is not surprising that

the attitude of Indonesia towards the program of the already mentioned New International Economic Order (NIEO)—aimed at reconstructing the world economy and, hence, striving for closer cooperation among Southern countries—has been ambiguous from the very beginning. Supporting certain elements of the NIEO but objecting its radical language, Indonesian spokesmen rather underlined the importance of reforming the existing order and, consequently, downplayed the feasibility of the ideas presented by the NIEO.12 In principle, the establishment of the Association of Southeast Asian Nations (ASEAN) in 1967 (in which Indonesia was a founding member) could be seen as a positive step towards a closer South– South cooperation, at least at a regional level. In fact, the principles of the SSC, such as the respect for sovereignty and diversity, non-interference, shared commitment and collective responsibility for regional peace, security, prosperity, etc. are an integral part of the ASEAN Charter.13 Yet, in the early years, the attitude of these countries towards a closer SSC has been limited, and, in general, ASEAN was rather a pro-Western organisation being barely committed to enhancing South–South cooperation.14 Despite the Suharto regime’s reservations over an enhanced South–South Cooperation, some tentative actions were taken, and, among others, Indonesia established the Indonesian Technical Cooperation Program in 1981 to provide assistance to certain developing countries.15 Moreover, twenty-five years after the establishment of the G-77, at the 1989 Belgrade Conference of the NAM, a group of developing countries (including Indonesia) established the Group of 15 (G-15). Anticipating that the world economy would be soon reconfigured, its mission was to elaborate concrete ways for South–South cooperation and to mobilise wider support for them. A few years later, shortly before the NAM meeting of 1995 in Colombo, the government of Indonesia even proposed the idea of establishing a NAM Centre for South–South Cooperation, which received endorsement from the heads of state and was built in Jakarta. A major factor behind a change in Jakarta’s priorities was the rapidly transforming economic geography of the region. From the 1980s, the growth rate in many Southeast Asian countries REGIONAL ISSUES

153

The members of the Group of 77

foretold a promising future, and, due to a number of factors, some of them, despite having been backward countries earlier, caught up very quickly. Even though the Asian financial crisis in the late 1990s—that even led to the resignation of Suharto—deteriorated this trend, once the calamity was over, these countries managed to increase their growth rates to a degree comparable only to China. In this new situation, the competition was strong, and Indonesia was forced to reposition itself, which led to a more active foreign policy.16 Changes in its foreign policy eventually turned the country more towards the SSC, and it made several efforts to improve the quality and effectiveness of development cooperation. By this time, the Asian financial crisis of 1997–1998 and the enlargement of ASEAN also shifted the agenda of the organisation (and thus of Indonesia) towards an increased South–South pattern. Apart from regional changes, as it was mentioned above, the 2000s saw a renewed interest in the cooperation among developing countries (see, e.g., the formation of the BRICS) and led to the development of cooperation policies and programmes. The growing resistance to neoliberal rearrangement and a reiterated South–South agenda urged governments to further develop their SSC policies and programmes. Since then, several big emerging economies (China, Brazil, India, Indonesia) have been competing with their 154

REGIONAL ISSUES

projects that have gradually gone beyond the traditional aid agenda and integrated a variety of cooperation modes (finance, investment, trade, and infrastructure construction).17 Changes in its foreign policy also pushed Indonesia more towards Southern cooperation and a greater political and economic presence within the Global South. Since then, the country’s role in South–South and Triangular Cooperation (SSTC) has grown rapidly, and several efforts have been made to improve the quality and effectiveness of these projects. (For promising SSTC projects see, e.g., the one with Japan in a number of African countries.) While, in general, the foreign policy of Indonesia has long been focussing on ASEAN and intra-Asian cooperation, a current (re-)emergence of the country in Africa is also increasingly visible.18 In this regard, the Bandung Conference and its spirit still provide a powerful reference that helps the country to explore new avenues in the SSC and to pursue its specific interests in trade or diplomacy. To facilitate this global opening, in 2005, Indonesia hosted the Asian–African Summit and the 50th anniversary of the Bandung Conference, and, five years later, it formed the National Coordination Team for South–South and Triangular Cooperation. The latter meeting yielded the adoption of the New Asian–African Strategic Partnership Declaration aiming at increasing cooperation between the two continents, especially in sectors such as

The members of the Group of 15

trade, industry, investment, tourism, information and communication technology, and agriculture. This conference produced a special declaration on supporting Palestine, too. This also shows Indonesia’s commitment to the Islamic world and its development. Indonesia’s support for Uganda’s finance sector, including Sharia-based microfinance, is yet another indicator of this engagement.19 Ten years later, during the celebration of the 60th anniversary of the Bandung Conference, President Joko Widodo highlighted that the meeting was a sign of increasing South–South cooperation and urged for further steps towards the realisation of an intensified cooperation. In his opening remarks, the president even called for a “new global economic order that isn’t reliant on the world’s three main multilateral lending institutions. . . . The idea that the world’s economic problems can be solved only through the World Bank, IMF and ADB is obsolete and must be abandoned.”20 What is evident from this citation is that the global financial system and its paralysis in 2008 urged the need for a different world economic setting with institutional arrangements and policies other than the ones prescribed by the neoliberal mainstream. The experience of the global economic crisis led developing countries to intensify the diversification of sources of growth and seek alternative models of economic development. Ultimately, this dissatisfaction also opened up many opportunities

to strengthen South–South cooperation, in which Indonesia is playing an eminent role. SOME CONCLUDING REMARKS IN LIGHT OF THE CURRENT PANDEMIC Recently, it has become clear that the impacts and ramifications of the current COVID-19 pandemic go far beyond the health sector and pose a particular challenge to—among others— the world economy. The expansion of the virus in the last couple of months nearly brought the world economy to a standstill. Its effects on production chains and critical infrastructures revealed how global economic interdependencies work and demonstrated the various risks they bear. Obviously, given their heavy reliance on external markets and sources of finance, developing countries are more vulnerable to this current development, which clearly manifests itself in the fact that they are unable to solve many of the problems related to the pandemic in a self-reliant way.21 Therefore, not surprisingly, the structure of the global economic order, based on the neoliberal economic principles that have often denied economic sovereignty and self-reliance, is yet again increasingly under review. In this regard, one of the possibilities to cope with the crisis is strengthening South–South cooperation that, in turn, would mitigate the impact of the virus in many aspects (it would create new regional or REGIONAL ISSUES

155

even global value chains, enhance self-reliance in terms of food, health products, etc.). This requires new rules of cooperation within the international economic system and, thus, better integration of the developing countries into it. While the previous global crisis (though it was “just” a financial one) strengthened South–South cooperation, given the great number of uncertainties, it is difficult to foresee whether, in a longer run, the same may apply for the crisis caused by the COVID-19 pandemic or rather divergent tendencies will prevail. This holds especially true for Indonesia’s future engagement in the Global South, as the coronavirus crisis has hit its economy more severely than it was previously expected.

7 Steen Folke–Niels Fold–Thyge Enevoldsen: South–South Trade and Development. Manufactures in the New International Division of Labour. St Martin’s Press, London, 1993. 8 South–south and triangular cooperation in Indonesia. UNDP Brief. 2015. <https://bit.ly/2WkE7zk > Accessed: 8 July 2020. 9 Susan Engel: South–South Cooperation Strategies in Indonesia: Domestic and International Drivers. In: African-Asian Encounters. New Cooperations New Dependencies, edited by Arndt Graf–Azirah Hashim. Amsterdam University Press, Amsterdam, 2016. 155–182. 10 Balogh András: Délkelet-Ázsia történelme. 1945-től napjainkig. Eötvös Kiadó, Budapest, 2016. 111–112. 11 Susan Engel: South–South Cooperation in Southeast Asia: From Bandung and Solidarity to Norms and Rivalry. Journal of Current Southeast Asian Affairs. 2019/2. 218–242. 12 Heinz W. Arndt: Indonesia and the NIEO. In: Asia and the New International Economic Order, edited by Jorge A. Lozoya–Anindya K. Bhattacharya. Pergamon Press, Elmsford, 1981. 189–203.

ENDNOTES

13 The ASEAN Charter. ASEAN Secretariat, Jakarta, 2008.

1 According to the official United Nations definition South–South

14 Engel (2019), 223.

Cooperation (SSC) „is a broad framework of collaboration among

15 Engel (2016), 162.

countries of the South in the political, economic, social, cultural,

16 For more about the shifts in Indonesia’s foreign policy, see, e.g.,

environmental and technical domains. Involving two or more devel-

Dewi Fortuna Anwar: The impact of domestic and Asian regional

oping countries, it can take place on a bilateral, regional, intraregion-

changes on Indonesian foreign policy. Southeast Asian Affairs.

al or interregional basis.” Within the framework of SSC “developing

2010/1. 126–141.

countries share knowledge, skills, expertise and resources to meet

17 The Rise of China and India in Africa. Challenges, Opportunities

their development goals through concerted efforts.” Cooperation

and Critical Interventions, edited by Fantu Cheru–Cyril Obi. Zed

between these countries could be realised in many forms of ex-

Books–NAI, London–New York, 2010.

changes (trade, foreign direct investment, technological and scien-

18 For more, see István Tarrósy: Indonesian Engagements with

tific transfers, etc.). See About South–South and Triangular

Africa and the Revitalised ‘Spirit of Bandung’. In: Emerging Powers

Cooperation. United Nations Office for South–South Cooperation.

in Africa. A New Wave in the Relationship?, edited by Justin Van der

<https://bit.ly/3j16Gfa > Accessed: 1 July 2020.

Merwe–Ian Taylor–Alexandra Arkhangelskaya. Palgrave Macmillan,

2 Sara Lorenzini: Global Development. A Cold War History.

London–New York, 2016. 233–247.; István Tarrósy: Bandung in an

Princeton University Press, Princeton, 2019. 40.

Interpolar Context: What ‘Common Denominators’ Can the New

3 The so-called Triangular Cooperation includes at least two devel-

Asian–African Strategic Partnership Offer? In: Bandung at 60. New

oping countries and a third party, typically a developed country (i.e.,

Insights and Emerging Forces, edited by Darwis Khudori. Pustaka

its government or an organisation), supporting South–South

Pelajar, Jakarta, 2015. 139–148.

cooperation.

19 Ida Ruwaida–Bagus Aryo: Sharia-based microfinance institution

4 Sean W. Burges: Developing from the South. South-South

building and management: an experience between Indonesia and

Cooperation in the global development game. Brazilian Journal of

Uganda. OECD–Task Team on South–South Cooperation. 2011.

Strategy & International Relations. 2012/2. 225–249.

About the stance of the Suharto regime towards Islamic countries,

5 Fantu Cheru: South–South Cooperation: What Prospects for a

see Leo Suryadinata: Islam and Suharto’s Foreign Policy. Indonesia,

New Bandung Consensus? In: South–South Cooperation. Africa on

the Middle East, and Bosnia. Asian Survey. 1995/March. 291–303.

the Center Stage, edited by Renu Modi. Palgrave Macmillan,

20 Ben Otto–I Made Sentana: Indonesian President Calls for New

London, 2012. 42.

Global Economic Order. The Wall Street Journal. 22 April 2015.

6 Thomas Bernhardt: South–South trade and South–North trade:

<https://on.wsj.com/2WirF30 >

Which contributes more to development in Asia and South America?

21 South–South Cooperation at the time of COVID-19: Building

Insights from estimating income elasticities of import demand.

Solidarity Among Developing Countries. United Nation’s Conference

CEPAL Review. 2016/April. 97–114.

on Trade and Development. May 2020. <https://bit.ly/3h2G2Rf >

156

REGIONAL ISSUES

REGIONAL ECONOMIC INTEGRATION FOR GLOBAL ACCESS?—THE CASE OF ASEAN Katalin Völgyi The Association of Southeast Asian Nations (ASEAN) was launched by Singapore, Malaysia, Thailand, Indonesia, and the Philippines in 1967. The establishment of ASEAN was primarily motivated by political and security interests. Firstly, the founding member states of ASEAN— mostly former colonies—wanted to avoid that an external power appear in the region, intending to fill the power vacuum left by decolonisation. Secondly, they hoped for a more effective enforcement of their interests on the global stage through regional cooperation. Thirdly, stepping up against the spread of communism seemed more feasible in concert. As a matter of fact, these common political and security interests held the member countries of ASEAN together until the end of the Cold War. ASEAN actually started to function only in 1976, when the first ASEAN Summit of Heads of State or Government took place and member countries established the ASEAN Secretariat to coordinate their regional cooperation. Complementary to the political and security cooperation, the first

regional economic initiatives were launched in the second half of the 1970s. The earliest regional economic initiatives aimed at realising a strategy for collective import substitution industrialisation in heavy and chemical industries. However, these early initiatives failed to deliver any significant effect. According to Yam and his colleagues, this failure can primarily be explained by the lack of supportive and efficient institutional structure, protracted bureaucratic intergovernmental negotiations, and the anticompetitive nature of the initiatives.1 However, it is also impossible to ignore that the development of their own national economies enjoyed priority for every ASEAN member country. These originally industrial and agricultural commodity–exporting countries had carried out import substitution industrialisation policies by the 1970s, so their intraregional economic relations were not significant. Their main trading partners were extraregional, developed economies; however, foreign direct investment (FDI) was restricted at the time. Nevertheless,

EARLY REGIONAL ECONOMIC INITIATIVES IN SOUTHEAST ASIA 1977

1983

ASEAN Preferential Trade Agreement (APTA)

ASEAN Industrial Joint Venture (AIJV)

1976

1981

ASEAN Industrial Projects (AIP)

ASEAN Industrial Complementation (AIC) REGIONAL ISSUES

157

the economic development strategies of ASEAN countries started to change in the mid-1980s.2 A shift from import substitution to exportoriented industrialisation took place, in which foreign direct investment was given a prominent role. This alteration in their development strategy could obviously be explained by a rapid fall in industrial and agricultural commodity prices between 1982 and 1986, a subsequent recession, and the example of those rapidly growing East Asian countries (South Korea, Taiwan, Hong Kong, Singapore) which had been carrying out export-oriented industrialisation since the 1960s. During the second half of the 1980s, ASEAN countries were carrying out significant liberalisation, deregulation, and reform. In parallel, foreign direct investment in the Southeast Asian region started to expand fast. From this point of view, the case of ASEAN was not unique, because global production chains began to evolve in the world economy, which means the evolution of production sharing between developed and developing countries. In Southeast Asia, production networks that were built with foreign direct investment by Northeast Asian (Japanese, Hong Kong, Taiwanese, South Korean), European, and American transnational corporations induced a market-led economic integration and laid the foundation for further regional economic cooperation. Due to the end of the Cold War and, consequently, the communist threat, regional economic cooperation came even more to the fore, although issues such as constraining Chinaâ&#x20AC;&#x2122;s rising military power and the integration of former communist bloc countries (such as Laos, Cambodia, Vietnam, and Myanmar) into ASEAN preserved the need for regional cooperation in the field of politics and security throughout the 1990s. Putting more emphasis on regional economic cooperation was imperative because the FDIbased, export-oriented industrialisation strategy of ASEAN countries faced several challenges in that decade. Firstly, other developing countries (e.g., China or India) stepped onto a similar development path, which created competition with ASEAN countries striving for FDI. Secondly, emerging regionalism (e.g., NAFTA, EU) was 158

REGIONAL ISSUES

REGIONAL INTEGRATION AGREEMENTS SINCE THE LATE 1980S

1987 ASEAN Investment Guarantee Agreement (IGA)

1988 Brand-to-Brand Complementation (BBC)

1992 ASEAN Free Trade Agreement (AFTA) 1995

1996 ASEAN Industrial Cooperation Scheme (AICO)

2009 ASEAN Trade in Goods Agreement (ATIGA) ASEAN Comprehensive Investment Agreement (ACIA)

ASEAN Framework Agreement on Services (AFAS)

1998 Framework Agreement on ASEAN Investment Area (AIA)

2012 ASEAN Agreement on the Movement Natural Persons (MNP)

considered by ASEAN countries as a threat diverting FDI. Thirdly, due to the Asian financial crisis in 1997 and 1998, investor confidence temporarily tumbled in the region. Since the 1990s, ASEAN countries have been promoting regional economic cooperation (through regional integration agreements) to meet these aforementioned challenges. Regional economic agreements listed in Infographic (on page 158) are aimed at integrating the market of goods and services and the factors of production in ASEAN countries. The general aim of regional integration is to abolish cross-border barriers between countries, to create a bigger market, to achieve economies of scale, and to subsequently realise gains through an increase in income. Despite this obvious motivation, state-led regional integration started to evolve slowly and cumbersomely in Southeast

Asia. Firstly, ASEAN countries, being on the same level of development, had weak intraregional economic relations at the end of the 1980s, and, due to their export-oriented industrialisation strategy, each of them strengthened its economic relations with extraregional developed countries while they were often competing with each other. Therefore, they were afraid of market liberalisation, which thus began to unfold more slowly. Secondly, ASEAN expanded with the accession of four low-income countries from Indochina (Cambodia, Laos, Myanmar, Vietnam, or the CLMV countries), which also joined the regional agreements. However, because of their underdeveloped status and in order to protect their domestic market, the CLMV countries were given preferential treatment, which decelerated and prolonged the regional integration process.

Chart 1: Intra-extra ASEAN trade, 2013–2018 90.00%

75.61%

76.01%

76.44%

76.92%

77.04%

77.01%

80.00%

2169.20

2500.00

70.00%

1500.00

60.00%

1722.08

1737.48

1915.32

1927.09

1985.29

2000.00

50.00%

40.00% 1000.-00 30.00%

0.00

2013

2014

2015

2016

22.99% 547.50

22.96%

591.51

23.08%

516.58

23.56%

535.38

23.99%

608.11

500,00

617.75

24.39%

20.00%

10.00%

2017

2018

0.00%

■■ Intra-ASEAN ■■■ Extra-ASEAN ––♦–– Share of Intra-ASEAN (%) ––♦–– Share of Extra-ASEAN (%) REGIONAL ISSUES

159

Table 1: Top ten sources of foreign direct investment inflows in ASEAN, 2013–2015 Value (in billion USD)

Share to total inflows (%)

2013

2014

2015

2013

2014

2015

ASEAN

19.562

22.134

22.232

15.7

17.0

18.4

European Union

24.511

24.989

20.127

19.6

19.2

16.7

Japan

24.750

15.705

17.559

19.8

12.1

14.5

United States

7.157

14.748

13.646

5.7

11.3

China

6.426

6.990

8.256

5.1

5.4

6.8

South Korea

4.303

5.750

5.710

3.4

4.4

4.7

Australia

2.587

6.281

5.246

2.1

4.8

4.3

Hong Kong

5.251

9.813

4.542

4.2

7.5

3.8

Taiwan (province of China)

1.381

3.253

2.807

1.1

2.5

2.3

New Zealand

0.335

0.550

2.241

0.3

0.4

1.9

Total top ten sources

96.267

110.217

102.370

77.1

84.8

84.7

Others

28.597

19.777

18.448

22.9

15.2

15.3

124.864

129.995

120.818

100.0

Total FDI inflow to ASEAN

In the case of ASEAN, the main goal of stateled regional integration is to increase foreign direct investment in the region. In the 1990s, to address the above-mentioned challenges stemming from attracting FDI to the region, ASEAN countries wanted to strengthen their national FDI-based and export-oriented development strategy on a regional level through regional economic agreements. Although stateled regional integration started to advance slowly, this process evidently accelerated during the Asian financial crisis in 1997 and 1998 and the subsequent years. At the time of the global financial crisis between 2007 and 2009, new integration agreements were also made. In sum, we can state that regional economic agreements since the end of the 1980s have aimed to establish a single market and a production base in Southeast Asia, which makes the region more attractive for foreign investors and, at the same time, promotes the more efficient operation of regional production networks. ASEAN Economic Community (AEC), created in 2015, is based on these agreements. The idea of the AEC first appeared in the declaration 160

REGIONAL ISSUES

of ASEAN Vision 2020 in Kuala Lumpur in 1997, when ASEAN Heads of State or Government envisaged an “ASEAN Economic Region in which there is a free flow of goods, services and investments, a freer flow of capital, equitable economic development and reduced poverty and socio-economic disparities.”3 1997, the year of launching ASEAN Vision 2020, was significant from two aspects. Firstly, ASEAN celebrated the 30th anniversary of its establishment, so it was high time to determine new goals for the future. Secondly, dealing with the impacts of the Asian financial crisis in 1997 and 1998 also required regional economic cooperation on a higher level. It was only in 2003 when ASEAN Heads of State or Government actually decided on the creation of the ASEAN Economic Community by 2020. However, in 2007, they changed the target year to 2015 and adopted the ASEAN Economic Community Blueprint for 2008– 2015.4 Nevertheless, it is worth emphasising that the creation of the AEC is a decades-long integration process underpinned by several regional economic agreements and is still continuing long after the target year of 2015.

In other words, the target year of 2015 rather marks an intermediate stage of development. Creating a single market and a production base is the most important pillar of the AEC. However, the Southeast Asian single market does not comply with the criteria of a single market: there is no free flow of goods, services, capital, and labour; physical borders and customs control have remained in place; the extent of the abolition of fiscal and technical barriers is also doubtful. Therefore, ASEAN countries do not have either a common market or a customs union. AEC can rather be considered as an expanded version of a free trade area. Despite all that, we can still talk about ambitious integration endeavours in the case of ASEAN. Besides the pillar of a single market and production base, ASEAN Economic Community has three other pillars which are aimed at enhancing the role of ASEAN as an FDI host region:

the region. They also cover East Asia and go even further beyond. From this point of view, we have to highlight the recent conclusion of the so-called Regional Comprehensive Economic Partnership (RCEP) which contains ASEAN Plus Five member countries (Japan, South Korea, India, Australia, and New Zealand) and can be considered as the geographical extension of the regional market and a single production base of the AEC. In sum, the creation of the AEC reinforces the outward-looking characteristics of the ASEAN region, and even intraregional integration endeavours (a single market and production base) are primarily aimed at deepening the embeddedness of Southeast Asia into the global economy through global production networks.

ENDNOTES 1 Tan Kong Yam–Toh Mun Heng–Linda Low: ASEAN and Pacific Economic Co-operation. ASEAN Economic Bulletin.

(1) Competitive economic region: this pillar elaborates common guidelines in competition policy, in consumer protection, in intellectual property rights, in the avoidance of double taxation, in the development of intraregional infrastructure, etc. (2) Equitable economic development: this pillar contains actions to support the economic catch-up of the poorest member countries which joined ASEAN in the 1990s. (3) ASEAN’s integration into the global economy: due to the export- and FDI-based development strategy, most of the ASEAN economies are outward oriented and have stronger economic relations with extraregional partners.5

1992/March. 309–332. 2 Singapore was an exception because it launched its own FDI-based and export-oriented industrialisation strategy in the 1960s. 3 ASEAN Vision 2020. Association of Southeast Asian Nations. 15 December 1997. <https://bit.ly/2Zoa1xq > 4 ASEAN Economic Community Blueprint. The ASEAN Secretariat, Jakarta, 2008. 5 80% of the FDI inflows into ASEAN are from extraregional countries, and the share of extraregional trade in total trade of ASEAN is 75%. 6 ASEAN 2030. Toward a Borderless Economic Community. Asian Development Bank Institute, Tokyo, 2014.

To develop these extraregional relations, ASEAN has concluded several free trade agreements and comprehensive economic partnerships (e.g., with Japan, China, South Korea, India, Australia, and New Zealand). This pillar also “covers adopting a coherent approach toward external economic relations and boosting participation in global supply/ production networks.”6 Regional production networks in Southeast Asia are not limited to REGIONAL ISSUES

161

ANTALL JÓZSEF KNOWLEDGE CENTRE

The Antall József Knowledge Centre (AJKC) in Hungary, during its ten years of existence, has introduced a variety of events targeting Hungarian students enrolled in higher education, as well as domestic and international professional audiences. The Knowledge Centre is named after József Antall (1932–1993), a Hungarian teacher, educator, librarian, historian, and statesman, who served as the first democratically elected Prime Minister of Hungary after the fall of communism (from 23 May 1990 to his death on 12 December 1993). The Knowledge Centre’s main objectives, in line with the Antall philosophy, include managing talent and providing students and young professionals with wide-ranging practical knowledge through various events. The Knowledge Centre is a think tank researching topics of national, regional, and international relevance, such as the Visegrad Cooperation, the future global role of the EU, the US, China, and the Middle East, security policy, sustainable development, as well as technological and social innovation. The whole of AJKC works toward strengthening institutional relations both at the national and international level, developing

scholarship and internship programmes, and boosting professional cooperation via international conferences, workshops, and event series. Our institution’s main office is located in Budapest, and it operates with three international departments—dealing with the EU and the V4, the USA, and Asia and Africa— and three thematic departments—focusing on security policy, sustainable development, and talent management. In addition, AJKC has two regional offices in Pécs and Győr, as well as an office in Brussels, which was established in 2015 to represent the Antall philosophy in the heart of the European Union and promote the values that he stood for at an international level. The publishing activities of AJKC involve releasing professional publications, scholarly works on political and social sciences (with special regard to security policy and international relations), as well as university textbooks. In our autobiographical series, prominent personalities of the Cold War period, including Ronald Reagan, George Bush, Margaret Thatcher, and Helmut Kohl, recount crucial years and decisions still affecting their lives. Reacting to events of political, social, and economic significance in the 21st

century, the professional publications series of the Knowledge Centre features works incorporating the latest results of international relations and geopolitics, the history of politics, economics, and psychology. Hungarian Memories is an original guidebook series published by AJKC that presents the common history of Hungary and the country under scrutiny in a unique way, then guides the reader through the various regions, while also recounting the story of locations with Hungarian memories accompanied by their picturesque images. think.BDPST is AJKC’s most ambitious professional event. The conference, organised in cooperation with Hungary’s Ministry of Foreign Affairs and Trade and supported by the International Visegrad Fund, focusses on regional development and the new perspectives of research, innovation, and future technologies. think.BDPST invites the most notable, creative, and innovative thinkers of the business, NGO, and political sectors to share their experiences and inspire one another to develop forward-thinking strategies that will facilitate the development of the whole Visegrad region. The event also aims to position Budapest as an ideal destination for

enterprises with a pioneering spirit seeking new horizons, new markets to enter, or a new territory and knowledge base to include in their plans for the future. The Antall József Summer School is an educational programme for MA and PhD students, as well as young professionals, that examines the Central European region, in particular, the Visegrad Cooperation, and its wider neighbourhood from various aspects through frontal and more interactive forms of education. In 2019, the Knowledge Centre organised the seventh Summer School that revolved around the role of the Visegrad Cooperation in international partnerships such as the EU, OSCE, or NATO. Each year, the Knowledge Centre organises its Foreign and Security Policy Conference, which focusses on the key diplomatic priorities of Hungary, the Central European region, and the Transatlantic Alliance as a whole, such as the future of NATO, stability in the Western Balkans, and EU defence cooperation. The conference series is organised in cooperation with the Konrad-Adenauer-Stiftung and supported by the NATO Public Diplomacy Division.

AJKC BOOK REVIEW

Kishore Mahbubani and Jeffery Sng THE ASEAN MIRACLE: A CATALYST FOR PEACE Hungarian edition

Publisher: Antall József Knowledge Centre Release date: September 2020 AJKC Price: 4,500 Ft 3,150 Ft

Realising that political and economic cooperation would bring greater stability and prosperity to Southeast Asia, representatives of Indonesia, Malaysia, the Philippines, Singapore, and Thailand signed the Bangkok Declaration in 1967, forming the Association of Southeast Asian Nations (ASEAN). Fifty-three years and five additional member states later, the organisation is regarded as one of the world’s most successful collaborations besides the EU. In their book, Kishore Mahbubani and Jeffery Sng explain how this partnership made Southeast Asia a more peaceful and prosperous region and how it benefitted the ten participating countries. They argue that ASEAN should serve as a model for other regions of the world, especially as the United States and China are engaging in a strategic rivalry while the political and economic pivot might have been shifting to Asia. In this context, the Southeast Asian region and ASEAN will have an undeniably powerful role in shaping our global systems. Mahbubani and Sng’s book presents the history, development, and principles of the Association of Southeast Asian Nations, its relations with global and regional powers (the US, China, the EU, Japan, and India), and the current situation of its member states. The authors point out that handling relations with major powers have been both ASEAN’s strengths and shortcomings, and the member states often find themselves between 164

ANTALL JÓZSEF KNOWLEDGE CENTRE

the hammer and the anvil of geopolitics. The book also demonstrates how ASEAN’s “ecosystem of peace” was created and takes a look at the factors that were fundamental to the process, such as the fear of communism, the role of strong leaders, geopolitical luck, market-oriented policies, and the ASEAN-based regional networks. The authors provide a comprehensive overview of ASEAN as an intergovernmental regional organisation and analyse the organisation’s strengths and weaknesses, making recommendations for its future development. The book explains how the exceptional diversity of Southeast Asia came about through introducing the four big waves of cultural influence (that is India, China, the Islam, and the West) that continue to shape the societies of the region even today. Although issues prevailing in the member states such as human rights abuses or stalled democratisation processes are not thoroughly covered, the authors provide an interesting and detailed account of the great experiment of countries with diverse cultures, religions, languages, and ethnic backgrounds to work together against all odds and for the benefit of all. Kishore Mahbubani is a Distinguished Fellow at the Asia Research Institute, National University of Singapore (NUS) and was a Founding Dean of the Lee Kuan Yew School of Public Policy, NUS from 2004 to 2017 and a Singaporean diplomat. Jeffery Sng is a former Singaporean diplomat.

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AUTHORS

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AUTHO ST

Cook, Malcolm Visiting Senior Fellow at the ISEAS-Yusof Ishak Institute in Singapore, Visiting Fellow at the National Security College in Canberra, and Non-

India’s Act East Engagement: From Southeast Asia to the Indo-Pacific

resident Fellow of the Lowy Institute in Sydney

Dang, Cam Tu PhD, Associate Professor, Deputy DirectorGeneral of the Institute for Foreign Policy and Strategic Studies, Diplomatic

Southeast Asia at the Crossroads of Power Rivalry: a Vietnamese Perspective

Academy of Vietnam

Dang, Minh Duc Prof. Dr, Senior Researcher, Research of Political and Law, Deputy Director of Institute for European

ASEAN–EU Cooperation: Present And Future

Studies, Vietnam Academy of Social Sciences

Daniel, Thomas Senior Analyst, Institute of Strategic and

The Indo-Pacific Strategy and ASEAN

International Studies (ISIS) Malaysia

Fang, Nicholas Director of Security and Global Affairs, Singapore Institute of International Affairs

Great Power Competition from a Singaporean Perspective

Háda, Béla Research Fellow at the National University of Public Service and its Center for Strategic and Defense Studies

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Maritime Competition in the Indo-Pacific— The Role of ASEAN Nations

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AUTH ST

AUTHO ST

Hung, Dat Hung MA, Industrial University of Ho Chi Minh City

Sustainable Development Towards an Integrated Asean Economic Community—Lessons from the Fight Against Covid-19 in Vietnam

Klemensits, Péter Ph.D., Senior Researcher at the PAGEO Geopolitical Institute, Pallas Athene Domus Meriti Foundation in Budapest, Temporary Lecturer at the Department of International Studies, Institute

Philippine Foreign Policy in the Context of the Southeast Asian Great Power Competition

of International Studies and Political Science, Pázmány Péter Catholic University, Budapest

Lee, Poh Onn Dr, Senior Fellow in the Regional Economic Studies Programme at ISEAS-Yusof Ishak Institute,

The Singaporean Growth Model

Singapore

Mishra, Rahul Senior Lecturer at the Asia-Europe Institute, University of Malaya, Co-author of India’s Eastward Engagement: From Antiquity to Act East

India’s Act East Engagement: From Southeast Asia to the Indo-Pacific

(SAGE Publications, 2019)

Morris, David Vice President of the United Nations Sustainable Business Network, Political risk Consultant, and Senior Research Fellow at Beijing Foreign Studies

Australia’s Role in the Indo-Pacific’s Shifting Power Dynamics

University

Pach, Judit Ambassador Extraordinary and Plenipotentiary, Embassy of Hungary to Jakarta

Southeast Asian Regional Processes from Indonesia’s Perspective

AUTHORS

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AUTHO ST

Puteri Nor, Ariane Yasmin Analyst, Institute of Strategic and International

The Indo-Pacific Strategy and ASEAN

Studies (ISIS) Malaysia

Teixeira de Sousa Sénécaut, Bárbara Junior Researcher at the European Institute of Asian Studies, specialising in China and ASEAN,

EU–ASEAN Trade Relations: Beyond the Impasse

and their relations with the EU

Tran, Dinh Lam Director, Center for Vietnamese and Southeast Asian Studies, Vietnam National University of Social Sciences and Humanities

Sustainable Development Towards an Integrated Asean Economic Community—Lessons from the Fight Against Covid-19 in Vietnam

Völgyi, Katalin Research Fellow, Centre for Economic and Regional Studies, Institute of World Economics

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Regional Economic Integration for Global Access?—The Case of ASEAN

T H O S

O A J

The Great Divider/Connecter—Southeast Asia’s Future: A Shatterbelt or a Gateway Region? Csepregi, Zsolt Deputy Director for International Affairs

Interview with Professor Tan Eng Chye, President of NUS Interview with HE Ng Shin Ein, Ambassador of the Republic of Singapore to Hungary

Hamar, Balázs Head of Brussels Office and Deputy Director

Kocsev, Bence Historian, Head of Győr Office

Papp, Viktória Anna International Relations Manager (China)

The Republic of Korea and ASEAN—Striving to Be the Best Partner

Decolonisation and the Changing Political Geography of Southeast Asia Indonesia and the South–South Cooperation from Bandung until Today

Good Neighbour, Bad Neighbour— The Developing Relations between China and ASEAN AJKC Book Review

Schwarcz, Emese International Relations Manager (Japan)

A View on Regionalism through Japan–ASEAN Economic Relations

AUTHORS

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Prime Minister Chok Tong Goh (left) and George Yeo (centre) meets Secretary of Defense Donald H. Rumsfeld in 2003.

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4 PARTNERS AND INFLUENCES India’s Act East Engagement: From Southeast Asia to the Indo-Pacific

Table 1: The top 15 foreign direct investors in Singapore,

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ASEAN heads of state and government at the Rashtrapati

Bhavan in New Delhi in 2018. Source: https://pcoo.gov.ph/wp-

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Table 1: Flows of Inward Foreign Direct Investment to ASEAN

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compared to that between the ASEAN and the world, 2010– Good

Neighbour,

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Neighbour—The

Developing

2019 (in billion USD). Source of data: ASEANstats, https://data.

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Southeast Asian railway routes built with China’s Belt and Road

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Initiative. Design: Péter Magyar ‘Medoks.’ Table 2: Visitor arrival to ASEAN member states from South Korea, Chart 1: Trade balance, 2013–2018 (in billion USD). Source of

2013–2018 (in person). Source of data: ASEANstats, https://data.

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5 REGIONAL ISSUES ASEAN–Australia Relations: Location, Position, and Timing Members of FPDA, CPTPP, and QSD. Sources: https://

Chart 1: Japanese–ASEAN export and import, 2014–2019

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(in billion USD). Source of data: https://data.aseanstats.org/

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author:

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Pacific_Partnership_members.svg, author: L.tak, licence: CC

BY-SA

4.0;

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File:Quadrilateral-3.jpg, author: Darouet, licence: CC BY-SA 4.0 Redesign: Péter Somos. Table 1: Australian trade with Southeast Asia, 2018–2019 (in million AUD). Source: Australian Department of Foreign Affairs’

Indonesia and the South–South Cooperation from Bandung until Today Countries attending the Bandung Conference in 1955. Source: https://commons.wikimedia.org/wiki/File:Asian-African_ Conference_Participants.svg, https://en.wikipedia.org/wiki/ File:NAM_Members.svg, authors: Ichwan Palongengi and Bugoslav, licence: CC BY-SA 3.0. Redesign: Péter Somos.

Country Fact Sheets. Design: Péter Somos. Maritime Competition in the Indo-Pacific—The Role of ASEAN Nations China’s maritime claim and UNCLOS exclusive economic zones in the South China Sea. Source: https://commons.wikimedia. org/wiki/File:South_China_Sea_vector.svg, author: Goran teken, licence: CC BY-SA 4.0. Redesign: Péter Magyar ‘Medoks.’ Naval equipment of the main Southeast Asian navies, 2020. Source of data: The Military Balance 2020. IISS–Routledge, London, 2020. 224. Design: Péter Magyar ‘Medoks.’ The Indo-Pacific Strategy and ASEAN Countries participating in the Trans-Pacific Partnership (TPP) negotiations. Source: https://commons.wikimedia.org/wiki/ File:H00030en_fig01.jpg, author: Antichik, licence: CC BY-SA 4.0. Redesign: Péter Somos. Countries of the ASEAN Regional Forum (ARF). Source: https://commons.wikimedia.org/wiki/File:ASEAN_Regional_ Forum_Map.png, author: Aris. Katsaris, licence: CC BY-SA 3.0. Redesign: Péter Somos. The importance of the ASEAN region is patent in the new power

struggles.

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File:Shipping_routes_red_black.png#/media/File:Shipping_ routes.png, author: T. Hengl, licence: CC BY-SA 3.0. Redesign: Péter Somos. ASEAN–EU Cooperation: Present and Future Trade and investment. Source: Blue Book 2020. EU–ASEAN Natural

Partners.

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uploads/2020/04/EU-ASEAN-Blue-Book-2020-eDocument. pdf > Licence: © European Union, 1995–2020, https://eeas. europa.eu/headquarters/headquarters-homepage/8157/ legal-notice_en;

https://ec.europa.eu/info/legal-notice_

en#copyright-notice. Redesign: Péter Magyar ‘Medoks.’ The EU and ASEAN. Source: Blue Book 2020. EU–ASEAN Natural

Partners.

<https://euinasean.eu/wp-content/

uploads/2020/04/EU-ASEAN-Blue-Book-2020-eDocument. pdf > Licence: © European Union, 1995–2020, https://eeas. europa.eu/headquarters/headquarters-homepage/8157/ legal-notice_en;

https://ec.europa.eu/info/legal-notice_

en#copyright-notice. Redesign: Péter Magyar ‘Medoks.’

Members of the Non-Aligned Movement (NAM) in 2012. Source: https://commons.wikimedia.org/wiki/File:Map_of_ NAM_Members_and_Observer_states.svg, Maxronneland, licence: CC BY-SA 4.0. Redesign: Péter Somos. The members of the Group of 77. Source: https://en.wikipedia. org/wiki/File:G_77.svg, author: Kyat02, licence: CC BY-SA 3.0. Redesign: Péter Somos. The members of the Group of 15. Source: https://commons. wikimedia.org/wiki/File:G15_Nations_01.png, author: Eric Lefort, licence: CC BY-SA 4.0. Redesign: Péter Somos. Regional Economic Integration for Global Access?—The Case of ASEAN Early regional economic initiatives in Southeast Asia. Data compiled by the author. Design: Péter Magyar ‘Medoks.’ Regional integration agreements since the late 1980s. Data compiled by the author. Design: Péter Magyar ‘Medoks.’ Chart 1: Intra-extra ASEAN trade, 2013–2018. Source of data: https://data.aseanstats.org/dashboard/imts.hs2, licence: https://www.aseanstats.org/terms-and-conditions-of-use/. Design: Péter Somos. Table 1: Top ten sources of foreign direct investment inflows. Sources of data: ASEAN Foreign Direct Investment Statistics Database as of 05 October 2016. Foreign Direct Investment Statistics. Association of Southeast Asian Nations. <https:// asean.org/?static_post=foreign-direct-investment-statistics > Accessed: 26 May 2020. Design: Péter Somos.

6 ANTALL JÓZSEF KNOWLEDGE CENTRE All pictures published in this chapter are possessions of the Antall József Knowledge Centre.

7 AUTHORS The portraits of our contributing authors were provided by themselves. The portraits of authors of the Antall József Knowledge Centre are possessions of the Antall József Knowledge Centre.

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IMPRINT Publisher: Antall József Knowledge Centre Publishing Director: Péter Antall, Director, AJKC Editor-in-Chief: Zsombor Szabolcs Pál Editors: Zsolt Csepregi, Emese Schwarcz Language Editor: Mónika Vajda Proof-reader: Mónika Vajda Contributors: Csilla Lichtenstein, Zita Mihály Graphic Design: Péter Magyar ‘Medoks,’ Péter Somos Pre-press Preparation: Péter Somos Cover: AJKC Printed and Bound: Printing Solutions Bt. Managing Director: Ádám Szöllősi

CONTACT INFORMATION Antall József Knowledge Centre 1093 Budapest, Czuczor utca 2. +36 20 310 8776 www.ajtk.hu www.ajtkkonyvmuhely.hu

ISSN 2677-111X HU ISSN 2677-111X

IN_FOCUS_2020_02_ASEAN_web

Articles inside

Authors of AJKC

Guest of Authors

ASEAN–EU Cooperation: Present and Future Indonesia and the South–South Cooperation

from Bandung until Today

AJKC Book Review

The Role of ASEAN Nations

EU–ASEAN Trade Relations: Beyond the Impasse

The Indo-Pacific Strategy and ASEAN

ASEAN–Australia Relations: Location, Position, and Timing

ASEAN Economic Relations The Republic of Korea and ASEAN

Philippine Foreign Policy in the Context of the Southeast Asian Great Power Competition

Australia’s Role in the Indo-Pacific’s Shifting Power Dynamics

India’s Act East Engagement: From Southeast Asia to the Indo-Pacific

Southeast Asia at the Crossroads of Power Rivalry: A Vietnamese Perspective

from a Singaporean Perspective

Southeast Asian Regional Processes from Indonesia’s Perspective

President of NUS

The Great Divider/Connecter—Southeast Asia’s Future: A Shatterbelt or a Gateway Region?

Decolonisation and the Changing Political Geography of Southeast Asia Transforming Higher Education to Meet Future Challenges: The Experiences of NUS— Interview with Professor Tan Eng Chye

Interview with HE Ng Shin Ein, Ambassador of the Republic of Singapore to Hungary