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The AEC Needs “More ASEAN”, Not Less

At the Singapore Global Dialogue, two of ASEAN’s eminent persons spoke on the relative strengths and weaknesses of ASEAN as an institution. Both sets of analyses perhaps are correct, but not with regard to the ASEAN Economic Community.

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Recently, at the Singapore Global Dialogue, two of ASEAN’s eminent persons spoke on the relative strengths and weaknesses of ASEAN as an institution.  Both sets of analyses perhaps are correct, but not with regard to the ASEAN Economic Community.

Jusuf Wanandi of the Center for Strategic and International Studies in Jakarta blamed the ASEAN member states for ASEAN’s relative weakness.  “The ASEAN Charter says the Secretary-General has to do this, do that, but they don’t allow him to do it, and they don’t give him the money to do it,” Bapak Jusuf is quoted in today’s Straits Times.  Frequent readers of this blog will know that I completely agree.

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“more ASEAN” is better, because a single market without consistent and effective regulation will not be attractive to investors, and that requires “more ASEAN.”

The ASEAN Charter assigns responsibilities to the Secretary-General but without authority, and the funding formula and amount for the ASEAN Secretariat is woeful.  Condominiums in Singapore are sold for amounts higher than the ASEAN Secretariat’s annual budget. However, Bapak Jusuf went on to criticize the Committee of Permanent Representatives CPR from ASEAN member states, who are based in Jakarta.

This is another feature of the ASEAN Charter.  Bapak Jusuf said that

“They make a point to deal with every issue and micromanage the Secretariat.”  On this point, I would disagree.  Without the presence of the CPR, the ASEAN members will be loathe to assign more powers to the ASEAN Secretariat.  The CPR corresponds to the role of the EU Council of Ministers, and provide a necessary oversight role much as its EU counterpart does.  In fact, increased interaction between the Secretariat and the CPR builds up the institutional capacities of both.

More ASEAN is better for ASEAN

Perhaps in politico-security matters “micromanaging” may create inaction, but in economic matters some regulatory cohesion is necessary, requiring some “micromanaging.”  Although the blame, such as it may be, for the relative weakness of ASEAN may lie at the national level, the creation of the CPR is an instance where “more ASEAN” is better for ASEAN, particularly on the daily administration of economic matters.

Kishore Mahbubani of the Lee Kuan Yew School of Public Policy a sister school of NUS Law School, where I teach countered that he thought ASEAN’s weakness allowed it to manage differences.

“ASEAN, I can assure you, has played an enormous role, and has been very strong and powerful because it is weak.  Because it is weak, everybody trusts it,”

Dr. Mahbubani is quoted in the Straits Times. Again, I agree and disagree.  Dr. Mahbubani is correct in terms of the political-security situation in Asia.

ASEAN sits between the great powers of China and America, and the medium powers of India, Japan, etc., and as such its relative weakness allows the grouping to serve a useful role in intra-Asia disputes.  Furthermore, since ASEAN reached its current membership, ASEAN members have not engaged in war against each other, the Thai-Cambodian border dispute of Preah Vihear perhaps being the limited exception that proves the rule.

However, the relative weakness of ASEAN with regard to its own institutions, e.g., the ASEAN Secretariat, hampers its efforts to create the ASEAN Economic Community.  Again, “more ASEAN” is better, because a single market without consistent  and effective regulation will not be attractive to investors, and that requires “more ASEAN.”   Now, how much “more ASEAN” is acceptable to ASEAN national leaders is a matter for ASEAN’s members to decide. Thus, like the EU, ASEAN faces a continuing debate on whether to increase the role of regional institutions.

Unlike the EU, where the question of “more Europe” has reached an existential level with regard to the Euro, ASEAN is not at a crisis point.  Bapak Jusuf and Dr. Mahbubani are right to raise these issues now, before we get to that crisis point.  However, the debate must also cover ASEAN as an economic entity, not just a political entity

Edmund Sim is a U.S. international trade lawyer at the Singapore office of Appleton Luff and adjunct associate professor of law at National University of Singapore. There, he teaches the first course developed on the law and policy of the ASEAN Economic Community (AEC). You can follow him via AEC Blog.

I am a U.S. international trade lawyer at the Singapore office of Appleton Luff and adjunct associate professor of law at National University of Singapore. There, I teach the first course developed on the law and policy of the ASEAN Economic Community (AEC). I have also advised the ASEAN Secretariat in an EU-funded assistance project on the ASEAN Trade in Goods Agreement (ATIGA), and represented companies in dealing with the ASEAN Industrial Cooperation (AICO) scheme, Common External Preferential Tariff (CEPT) program and other ASEAN economic integration

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