Wednesday, 9 May 2012

ASEAN's Core Role in the Building of An East Asian Community

The official launching of the Regional Comprehensive Economic Partnership Negotiation (RCEP) at the sidelines of the 7th East Asia Summit on 20 November 2012 in Cambodia

ASEAN Global Dialoge on 20 November 2012 in Phnom Penh, Cambodia  

The idea of East Asian regionalism is not new. The initiative was first originated from some countries in East Asia. In the early 1990s, Malaysia under the leadership of former Prime Minister Mahathir also proposed an East Asian Economic Caucus for economic cooperation among East Asian countries. After the Asian financial crisis, regional integration began to take shape, such as ASEAN+3 Process in 1997 and the first East Asia Summit in 2005. So far, Regional integration in East Asia and the Asia-Pacific are seen through several regional mechanisms such as ASEAN+3 Summit, East Asia Summit, ASEAN Regional Forum, ADMM Plus (ASEAN Defense Ministers Meeting with its eight Dialogue Partners such as South Korea, China, Japan, India, Australia, New Zealand, Russia, and United States), and Asia Pacific Economic Cooperation (APEC).

So, what is East Asia regionalism? EA regionalism could be explained as an activity of regional grouping among countries in the Asia Pacific region to pursue deeper cooperation in area of political-security, economic, and socio-cultural, aiming for the common goal of peace, development, and shared prosperity in the region. Recently, there is a shift of power, in terms of political and economic gravity, to Asia, especially to China and ASEAN. Most scholars, and I, seem to agree that ASEAN is the hub of East Asian regionalism, which start ASEAN-initiated regional mechanisms, such as from ASEAN Summit, ASEAN+1, ASEAN+3, expanded East Asia Summit (EAS + US, and Russia), ASEAN Defence Ministers’ Meeting (ADMM), ADMM Plus, and ASEAN Regional Forum (ARF). So far, those countries are mainly interested in economic, financial, and functional cooperation, rather than political one. In general term, and perhaps by default, East Asian countries began to institutionalize their regional grouping through ASEAN-led regional mechanism in political-security, economic, and socio-cultural cooperation.  

The architectural roles of ASEAN in EA regionalism is seen through its centrality as the driving force. This is just the formal regional meeting arrangements. ASEAN assumes leadership by deciding on setting agenda, venue of meeting, membership’s expansion. By default and formal arrangement, everything comes from ASEAN first. However, ASEAN lacks of political leadership in its own regionalism since most of regional policy initiative, both economic and political, almost comes from its dialogue partners, such as Japan, China, and South Korea.

With the official launch of Regional Comprehensive Economic Partnership (RCEP) at the sidelines of the 7th East Asia Summit in Phnom Penh on 20th November 2012 and from the Chairman’s Statements of the 20th ASEAN Summit in Phnom Penh, on 3-4 April 2012, and the other two Summits in 2010 and 2011 (ASEAN+3 Summit and EAS), ASEAN+3 process has been assured as the main vehicle towards the long-term goal of building an East Asian Community with ASEAN as the driving force while EAS has been acknowledged as an important component which plays a complementary and mutually reinforcing role to ASEAN+3 process, ARF, and APEC in building an East Asian community. So, it is clear that ASEAN+3 Summit is the core of EAC with complementary support from EAS.
Recently, East Asian Community building is gaining momentum again with the doubling of the amount of original fund of CMIM to 240 billion USD as declared by ASEAN Economic Ministers’ Meeting (AEMs) in Yangon in March 2012. So, ASEAN coordinate all economic and financial initiatives, like CMIM, through its AEMs and AEM+3, and other sectoral bodies, such as ASEAN Central Banks’ Governors’ Meeting.

Although East Asia economic integration with establishment of an East Asia Free Trade Area (EAFTA) is far from reality, the activation and the recent doubling of the amount of Chiang Mai Initiative Multilateralization (CMIM) is seen as significant step toward regional financial integration by activating the common currency swap facility of 240 billion USD which aims to provide financial support for ASEAN+3 countries in case of short-term liquidity need. Under the financial arrangement of the original amount of CMIM, the Plus Three countries and ASEAN contributed 80% and 20% respectively of the original total reserve fund of USD 120 billion. In ASEAN, the size of contribution varies according to the size of economies of each member states. So, Indonesia, Malaysia, Singapore and Thailand contributed USD 4.77 billion each; the Philippines contributed USD 3.68 billion while Viet Nam put USD 1 billion, Cambodia USD 120 million, Myanmar USD 60 million, Brunei Darussalam USD 30 million, and Lao PDR USD 30 million. In addition, according to the Joint Media Statement of the 12th ASEAN+3 Finance Ministers’ Meeting, Bali, Indonesia, 3 May 2009 (ASEAN Secretariat, 2009), the establishment of Credit Guarantee and Investment Mechanism with an initial capital of 500 million USD to support ASEAN Bond Market Initiatives (ABMI) would contribute to the development of regional bond markets. Furthermore, the idea of Asian currency unit is under study and discussion. However, these initiatives have been considered as market-driven approach, especially from the private sector. So far, the official initiatives of economic integration in East Asia are still under study phase and overlap with each other.

At least, in the framework of EAS membership, there are three economic integration initiatives such as Northeast Asian FTA, comprising China, South Korea and Japan; East Asia Free Trade Area (EAFTA) that unite ASEAN and the Plus Three countries, and the Comprehensive Economic Partnership for East Asia (CEPEA) or ASEAN Plus Six FTA that would include APT and India, Australia and New Zealand.

The issue of membership in EAC remains unclear and still bases on the three principles of inclusiveness, openness, and transparency. All member countries of the East Asia Summit (now already include US and Russia) are members of EAC. In membership expansion, Japan promotes open regionalism in East Asia as witnessed by the fact that India, Australia, and New Zealand have been invited by Japan to join EAS. According to Mochizuki (2007, p19), Japan wished to balance with China’s influence in the region by inviting these three countries to join EAC. However, such move may rather complicate and retard the EAC building process rather than the balance of power issue. In addition, Japan prefers openness of membership in EAC for other countries in the Asia-Pacific.

East Asian community building, as always stated in ASEAN Leaders’ Statement, has not gone on a smooth road. There are many challenges lying ahead, particularly "Asian nationalism" and regional rivalry. First, the reason why EA regionalism has been slowed down and discouraged is that we, Asian countries, are full of national pride and nationalism in mind. Nationalism can hinder regionalization process since no country want to abandon their sovereignty. That is why some scholars, like Leifer (2000), put this phenomenon as “Asian nationalism”.

Second, regional rivalry between China and Japan are the major obstacle to East Asia Community building since Japan is suspicious of China’s hegemony in the regional grouping. Recently, China and Japan are the key regional players in the region, especially in the framework of ASEAN. If the two countries make confrontation and have no trust on each other, the process of institutionalization in East Asia regional grouping can be negatively impacted and delayed.

If you wish to read my full paper on ASEAN centrality, please follow this link.

Other Articles on ASEAN:  

1. Cambodia's Chairmanship of ASEAN in 2012: A Success After All
    (5 January 2013)

2. ASEAN In Review
    (5 January 2013)

3. The Building of East Asian Community: the Role of ASEAN
    (May 2012)

4. Cambodia's Priorities for ASEAN 2012.
    (March 2012)

5. Three Critical Questions on Maintaining ASEAN Centrality.
     (4 February 2012)

6. Challenges for ASEAN
    (22 August 2011)

7. Outlook for ASEAN and East Asian Community Building (EAC)
    (25 August 2011)

8. How Can ASEAN Centrality in East Asian Community be Maintained?
    (15 August 2011)

9. ASEAN Centrality Under Pressure
    (6 September 2011)

10. What is ASEAN Centrality?
    (7 September 2011)

11. Asian Regionalism and East Asian Community Building
    (29 August 2011)

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