View From Abroad: Getting excited about Asean (Originally published 28/02/2015 at dawn.com)

As China’s economy slows and Indian growth remains uncertain, global attention has switched to the end-year creation of a tariff-free 10-nation Southeast Asian “single market” as the newest and most exciting facet of rising Asia.The excitement is justified. Taken together, members of the Association of Southeast Asian Nations (Asean) have a population of 620 million, a growth rate of five per cent and a combined gross domestic product of almost $2.5 trillion. A growing middle class across the region has emerged as an avid consumer of foreign and domestic goods and services. Not surprisingly, global business is enthusiastic. Trade is booming and foreign investments into the region are rising.Significantly, even as they strive to get elements of the Asean Economic Community (AEC) in place by year-end, countries in the region are already crafting an even more ambitious “post-2015 vision” for further integration. The ambition is to move beyond trade and economics to focus on still largely incomplete plans for building a political and security community and preparing the groundwork for stronger social and cultural integration. One visionary goal is to create a common Asean time zone — as opposed to the current three spanning the Asean region — to facilitate cross-border business and finance.The AEC roadmap includes four pillars: a single market and production base (including the free flow of goods, services, skilled labour, capital and investment), a competitive economic region, equitable economic development and integration into the global economy.But challenges remain. First, don’t expect the AEC to enter into force with a “big bang” on Jan 1, 2016. Not all elements of the single market will or can be in place on schedule and while progress is being made to reduce trade barriers and ease investment, as well as ensure the free flow of goods, services, investment and skilled labour, the devil is in the detail — and in enforcement and implementation. An Asean Scorecard which keeps countries up to date on progress on the AEC says about 80pc of the work on completing the AEC has been done. But Asean experts acknowledge that the remaining 20pc covers “the most difficult” tasks.Malaysian Trade Minister Mustapa Mohamed, whose country holds the rotating presidency of the Southeast Asian bloc this year, has said the full impact of integration may not be felt until perhaps 2020, recognising that there are border issues, customs, immigration and different regulations, which still need to be tackled. Businesses must still navigate a complex landscape of different product standards and regulations that make it hard to sell across the region and hamper the ability of new companies to enter the market.Surprisingly, many Asean businesses appear to know little of the AEC’s pros and cons. Vietnamese officials said recently that 60pc of their country’s business community “had no idea what the AEC is”. A survey by the Singapore Business Federation in January found two out of five firms were completely unaware of it. Yet establishing the AEC will impact positively on many industries, including electronics, car parts and components, as well as chemicals, textiles, and clothing. Once completed, the hope is that the AEC will boost intra-Asean trade which currently stands at a modest 24pc of the region’s overall trade flows.Second, Asean still has much to do to connect with citizens. Increasingly vocal civil society representatives are adamant that Asean must live up to its goal of becoming “people-centred” and less elitist. In contrast to earlier years and outdated conventional wisdom, Asean civil society is proactive and striving to become deeply involved in efforts to ensure stronger human rights protection and promotion across the region. In a recent statement, the Asean People’s Forum (APF) — Asean’s largest civil society group — listed a number of problems in the region, among them grave human rights violations, corruption and poor governance. Intimidation of human rights defenders was also raised.There are signs that governments are paying heed. As current Asean chair Malaysia has indicated that one of its main priorities will be to engage Asean citizens and to promote greater understanding of Asean initiatives and projects. “We also hope to steer Asean closer to the people of Southeast Asia: to make this institution part of people’s daily lives, by creating a truly people-centred Asean,” says Malaysian Prime Minister Najib Razak. The rhetoric has to be turned into action, however.Third, for all the hype, Asean still has to deal with obstacles created by economic nationalism, protectionism and resistance to foreign-owned industries which persists in many member countries. Malaysia’s trade minister Mohamed has said he will not avoid the politically sensitive task of tackling protectionism in Asean such as local content requirements, mandatory product standards and import restrictions.More generally, maritime disputes in the South China Sea as well as incidents of religious sectarianism, rising intolerance, human trafficking and corruption are further challenges to surmount as are differences in levels of development and political and economic models among Asean states. Additionally, there is concern that Indonesia under President Jokowi may be too focused on the country’s domestic questions to play its traditional leadership role in Asean. Meanwhile Indonesian business continues to be wary of opening up the country’s markets to Asean competitors.Looking aheadThe Nay Pi Taw declaration on Asean’s post-2015 vision adopted last November sets out an impressive agenda for the region’s future. While deepening economic integration and connectivity remains on the agenda, Asean leaders have identified external relations and the building of political/security and socio-cultural communities as a priority.There is no shortage of interesting ideas: leaders of Indonesia and Malaysia in recent weeks have been pushing for a common time zone arguing that this would help businesses and allow for coordinated opening times for banks and stock markets. An Asean Open Skies Agreement is designed to create a single aviation market and allow for more flights, which will increase trade, investment and tourism. There are suggestions to set up an Asean regional infrastructure fund. Plans for strengthening the Asean Secretariat and improving coordination among member governments are being studied by a high-level task force. East Timor’s Asean membership is under internal discussion.Asean is a business opportunity for the West but also for other Asian countries — a fact that India, China and Japan are more than aware of.

APPOINTMENT OF FIRST EU ENVOY TO ASEAN WILL BOOST TIES (Originally published 25/09/14)

The European Union’s decision to appoint a special ambassador accredited to the Association of Southeast Asian Nations (ASEAN) is a welcome and long-awaited step forward in the EU’s relations with one of the world’s most dynamic and rapidly-growing regions.As a statement by the European External Action Service, the EU’s “foreign ministry”, underlined, the “important decision” reflects Europe’s growing engagement with ASEAN and an ambition to upgrade the existing partnership with the Southeast Asian grouping to a strategic one.The move also underscores the hard work put in by ASEAN members in drawing EU attention to the region over the last four years. Friends of Europe has been a strong advocate of closer and stronger EU-ASEAN relations.The new EU envoy could make an important contribution to injecting some much-needed momentum into what – until four years ago – was still a lacklustre and uninspiring relationship.Good progress has been made in recent years. However, building a solid, sustainable and strategic EU-ASEAN relationship will remain a challenge, demanding a strong effort by both regions. Certainly both sides see an interest in forging closer ties. Bilateral EU-ASEAN trade and investment flows are booming. Europe and ASEAN need each other’s’ markets to grow and thrive.But in addition to the global challenges they need to tackle, Asian and European countries face difficult tasks both at home and in their respective regions. Still grappling with slowing economic growth and unacceptably-high youth unemployment rates, Europe’s urgent foreign policy priority is to thrash out a new “beyond sanctions” strategy for dealing with an increasingly volatile and assertive Russia.European countries are also under pressure to join America’s campaign to “destroy and degrade” the so-called “Islamic State” in Iraq and Syria.ASEAN states, meanwhile, are struggling to meet their goal of forging a border-free single ASEAN market by end-2015. On the foreign policy front, they are engaged in a delicate balancing act to maintain good relations with the three Asian behemoths: China, Japan and India.Still the omens are good. Coming only a few weeks before the mega Asia Europe Meeting (ASEM) in Milan on October 16, the EU announcement on the special envoy to ASEAN sends a strong and reassuring message of continuing EU engagement with Asia in the years ahead.ASEM will bring together 53 Asian (including ASEAN) and European partners for a two day summit focusing on the key security, economic and political challenges facing both regions.Significantly, Chinese Prime Minister Li Keqiang, Japan’s Shinzo Abe and key ASEAN leaders will be attending the meeting as will Italian Premier Matteo Renzi and the EU’s top officials, Herman Van Rompuy and Jose Manuel Barroso. For both men it will be the last ASEM gathering before the change of EU leadership in November.Asian and European business leaders, parliamentarians, academics and journalists as well as civil society actors will also be gathering in Milan around the same time in separate but inter-connected fora.In another sign that Europe intends to stay engaged with Asian states despite the fires burning in its neighbourhood, the incoming EU foreign policy chief, Italian Foreign Minister Federica Mogherini, has gone out of her way in recent weeks to highlight Europe’s sustained interest in Asia, including ASEAN.Mogherini’s focus on Asia is important and reassuring. Her predecessor Catherine Ashton was roundly criticised by ASEAN governments for paying only sporadic and cursory attention to their region. She managed to get relations back on track – but it was touch and go at moments.Mogherini is expected to be more attentive. And under the new structures being designed by incoming European Commission President Jean-Claude Juncker, the EU foreign policy chief will be working in close cooperation with her colleagues who deal with trade, development aid, humanitarian affairs and climate change to forge a coherent conversation with Asia. Closer coordination with EU capitals is also expected.This is good news. Both the EU and ASEAN have worked hard over the last four years - in Brussels and in the different European and Southeast Asian capitals - to make their relationship more credible and relevant.It’s often been long and laborious. Human rights issues as well as relations with the former military junta in Myanmar cast a dark, unpleasant shadow over relations even as trade and investment flows continued to expand.Political reforms in Myanmar as well as ASEAN’s economic dynamism and newfound interest in developing an impressive - albeit still modest - human rights agenda, have helped to turn the relationship around.Looking ahead, for the EU, membership of the East Asia Summit (EAS) remains an important strategic goal. The 18-member forum which discusses security and development includes ASEAN as well as the United States, Russia, India and others. ASEAN’s reaction so far to EU membership of the East Asia Summit has varied from lukewarm to hostile, however.The appointment of the new EU envoy to ASEAN could help unlock the EU membership of EAS in the coming years. ASEAN is also looking for an EU upgrade to status of “strategic partner” and the regular convening of EU-ASEAN summits.At the same time, with the end-2015 deadline approaching for establishing a border-free ASEAN Economic Community (AEC), demands for the revival of the once-abandoned effort to negotiate an EU-ASEAN free trade deal have resurfaced. The outgoing EU Trade Commissioner Karel De Gucht has said such a pact could be negotiated once the AEC is in place. It’s still not clear if his successor Cecilia Malmstrom will be equally interested in such a deal.Certainly an EU-ASEAN FTA could increase Europe’s visibility in a landscape crowded by multiple Asian free trade initiatives including the US-led Trans Pacific Partnership (TPP) and the Regional Comprehensive Economic Partnership (RCEP) linking ASEAN to all leading economies in the region.Significantly, the EU has emerged as an important partner in implementing the Master Plan on Connectivity adopted by ASEAN leaders in October. The plan, which includes the forging of physical, institutional and people-to-people links, is discussed in the EU-ASEAN Dialogue on Connectivity. The first such dialogue was held in Brussels earlier this year.A conversation on maritime security has also been initiated.These and other EU-ASEAN ventures should expand and deepen once the new – and yet to be named - EU envoy to the grouping begins working in Jakarta. Europe and ASEAN have come a long way in making their partnership more relevant in a rapidly-changing world. Both sides must maintain the momentum despite domestic and regional distractions.