ASSOCIATION of Southeast Asian Nations (Asean) leaders met a few days ago in Malaysia, and formally launched the Asean Economic Community (AEC). The formal launch was welcomed by business in Asean and around the world.
Asean has substantially raised living standards of the more than 600 million people residing within its 10 member-countries. Asean has won recognition for those achievements, and companies from Europe to North America and to Asia are taking Asean seriously and, are positioning themselves to become active players in the AEC.
Asean’s three greatest contributions since its start in 1967 are peace, prosperity and geopolitical stability for Southeast Asia. Each of these accomplishments is remarkable, given the diversity of the region. Asean includes 240 million Muslims, 125 million Christians, 150 million Buddhists, 7 million Hindus and 50 million followers of folk religions. Asean’s political systems, too, span a wide spectrum, from competitive democracies to one-party states and monarchies. The region’s cultures are even more diverse.
Asean now organizes more than 1,000 meetings a year that touch on virtually every topic, from trade to tourism and from health to the environment. As a result, business sees movement toward integration in many fields, trusting that registration and labeling of products will be harmonized; that customs procedures will become transparent throughout the region; that international quality standards will be adopted; and that a level playing field is created through competition policy, anticorruption and the elimination of subsidies.
Regarding prosperity and poverty reduction, it must be noted that from 2001 to 2013 alone, Asean’s combined GDP rose threefold, reaching $2.4 trillion. Between 2004 and 2011, Asean member-states’ trade volumes more than doubled. Foreign companies express optimism about the continued growth of Asean markets.
Despite its many achievements, Asean must press forward with reforms, and accept and address the new challenges and risks, and seize opportunities as they emerge.
Asean has to continue to compete for foreign direct investment among Asia’s emerging markets, the Philippines especially. Asean must bear the scrutiny of the global marketplace and convince potential investors, especially leading multinational companies, that the AEC is being meaningfully implemented.
As Asean fundamentally has been a top-down project, driven by the leaders of Asean and not the people of the region, it is necessary to get the by-ins of the people, at large, and not only of politicians. Businessmen especially have to get involved in the process of creating the single Asean market. It must be understood that the European Union (EU) integration was driven by the private sector, and not by politicians.
As Asean countries have become progressively more democratic and more accountable to their populations, Asean has to gradually move away from a top-down approach and toward a bottom-up approach. As the people in Asean have to deal with new social, economic and environmental threats, the involvement of the people of Asean will become even more critical. Southeast Asia is among the most vulnerable in the world to the effects of climate change. Extreme-weather events are already taking their toll, with Supertyphoon Yolanda (international code name Haiyan) killing thousands a year ago and inflicting $225 million of damage on the Philippine agricultural sector alone. That’s also the reason President Aquino will address 21st Session of the Conference of Parties this week in Paris.
Asean has demonstrated that it is the second most successful regional organization in the world after the EU, but it still has a lot of work to do to both consolidate its early successes and deal with new challenges.