Asean’s Tortoise-like Progress to Unity

The only thing to come out of the cancelled Association of Southeast Asian Nations summit that was to have been held in Cebu City in the Philippines this week was a black eye for President Gloria Macapagal Arroyo. Her abrupt cancellation of the parlay was blamed on a typhoon that eventually bypassed Cebu while officials privately conceded that a threat of a terror attack was behind the cancellation.

Meanwhile the roof on a brand new convention center built for the occasion was leaking water on metal detectors as delegates rushed to get out of town. The meeting has been rescheduled for January but maybe Asean should just forget this mess altogether and skip these meetings. After all, Asean is so oriented towards non-intervention and being polite that the slightest suggestion of change is enough to cause a diplomatic uproar.

Consequently, in the four decades since it came into being in 1967, it has accomplished very little indeed.

In 2004, it was not without some boldness that Malaysian Prime Minister Abdullah Ahmad Badawi spoke openly of the need to recalibrate” the organization, giving it some common symbols and meaning. Among others, he suggested an Asean common time zone, a travel document or more ambitiously a common currency.

The goal was to engender a sense of unity. More importantly, it was meant to make the body more people-centered, especially in light of Asean's long-running quest to create an economic, political and security community by 2020. All of these were agreed three years ago at the Bali Concord II in November 2003. These ideas, while rich in symbolic content, are not likely to take root any time soon At the Asean summit in Kuala Lumpur in 2005, they were left out altogether. One can expect them to be left out again when the 10-nation conclave resumes in the Philippines in January, assuming rainy season is finally over and no bombs explode.

Of course the same ideas mentioned by Abdullah were proposed before but, as with many things in Asean, were subsequently neglected. With fewer than 50 people serving in its secretariat, half of whom are purely administrative staff, there is a limit to what it can achieve. Indeed, the secretariat has not been strengthened since 1992.

But if Asean, and by extension the secretariat, has not pursued common symbols, it is because for the greater part of the last five years, the regional organization has focused mainly on issues such as trade, tariffs, terrorism and transnational problems such as haze.

However, regional integration can only succeed when there is a parallel attempt to foster a common vision. If regional integration is purely functional and technical, then the process of region-building risks an outright revolt; as marked by many European citizens' hostile attitude towards the bureaucrats at Brussels.

But Asean’s leaders ought to be held accountable for slowing Southeast Asia’s regional integration, not the bureaucrats at the secretariat. The Asean Common Time (ACT), for instance, was proposed as early as 1995 by the body’s leaders. Yet the idea did not gain traction since efforts were concentrated on firming up an Asean free trade economic zone first. Towards the end of the tenure of Secretary General Ajit Singh in 1997, the idea of a common passport was also proposed to a tepid reception. The idea was shot down for being impractical.

At the Asean Economic Ministers meeting in Cambodia, in May 2001, there was an agreement to create an Asean e-passport. Again nothing came of it as later that year the organization turned its attention to confronting the forces of globalization and terrorism. Such a rejection is all the more ironic because this year member states of the European Union have begun turning to E-passports to combat terrorism, especially in close collaboration with the United States.

As for the common currency, it is a good and practical idea. Businessmen and traders certainly prefer it now that the free trade economic zone will include China. But in the discourse of Asean, the word 'currency' is usually seen as the last and final phase of economic integration. Therefore, once again, the idea is held back, even though the currency would not lead to such a prospect since intra-regional trade in Southeast Asia remains concentrated in Singapore, Malaysia and Thailand. For what it is worth, the major benefit of a common currency is that it facilitates trade (in both goods and services) and investment among the countries of the union (and hence increases income growth within the region).

This is because a common currency can reduce transaction costs in cross-border business, and remove volatility in exchange rates. Indeed, since the intra-regional trade is only at 25 percent, a common currency merely marks the attempt to start the process of region-building from a low threshold.

According to Srinivisa Madhur, a principal economist with the Asian Development Bank in Manila: "At close to 25 percent, the share of intraregional trade in Asean total trade, although much lower than in the European Union (70 percent), is significant and rising. It is much higher than in some of the other currency unions such as the Eastern Caribbean Currency Union (about 10 percent), the Western Africa Economic and Monetary Union (about 10 percent), and the Central African Economic and Monetary Community (about 3 percent)."

Be that as it may, ASEAN will not move toward currency integration anytime soon because its ten member states are trapped in the concern that a common currency would necessarily mean the outright surrender of sovereignty. In fact, some countries, such as Laos and Cambodia, that have not been able to shape any viable macroeconomic policy, according to Madhur, literally "have nothing to give away".

Thus, while businessmen, academics and some politicians like PM Abdullah favor a common currency and time zone, integration talks tend to peter out due to an overt focus on trade, tariff and terror purely. As such, positive feedback about the future of Asean is constrained by the lack of a common political will, a fact acknowledged by Ong Keng Kong, the current Secretary General as a “perennial problem.”

There is also the fear of taking a leap of faith in the dark, granted that the economies in Asean are so unevenly developed —Singapore’s per capita income is over US $24,000 while in Cambodia it is US$260 and in Laos US$290.

Analysts say that such differences make it difficult for Asean to move towards its goals in 2020. But the true difficulty lies in the leaders' lack of common understanding on how regional unity is fostered.

Furthermore, while Asean likes to talk about trade and tariffs, the mechanism for integration is in fact nonexistent. In the European Union, poorer member nations are subsidized when they face economic difficulties that result from integration. In Asean, no such mechanism exists nor has it even been discussed.

That Asean is in need of a revamp is obvious. There are signs that the organization is trying to stem a sense of drift. The formation of the eminent persons group on the charter, for instance, which has to come up with a menu of options to consolidate Asean by 2007, is a step in the right direction. But will it always refrain from taking that leap?