Toward Leadership

This article is taken from World Energy (WE) number 43, "The Challenge". Read the magazine.

The Association of Southeast Asia Nations was founded 52 years ago with purely political aims. The field of participants was subsequently enlarged to ten states, also extending its competencies. Integration continued unabated, until the current situation, where the traditional neutrality is no longer likely to be sufficient and profitable. The signing of the founding document in Bangkok, on August 8, 1967, confirmed an indisputable, decisive choice.

The five acceding states—Indonesia, Malaysia, Singapore, the Philippines and Thailand—were all allies of the United States and the United Kingdom. Their allegiance was very strong, their alignment Manichean. They were all committed to defeating internal enemies, Communist uprisings and radical anticolonial aspirations. Twenty years after the end of World War II, the war in the eastern Pacific had not become as cold as in Europe. On the contrary, it remained a very hot war. Memories are vivid of the carnage of the Korean civil war, of the tensions for the sovereignty of Taiwan taken over by Chiang Kai-shek’s Nationalists, of the trans-Himalayan war between India, China and Pakistan, and of the endless border skirmishes affecting all the countries.

The situation in the five Southeast Asian countries was certainly not stable. Its enemies formed part of the socialist camp led by the Soviet Union, then by China, with their victorious example of rural guerrilla warfare. This was the bane of the Philippines, Malaysia and Thailand. Indonesia had recently deposed the President who gained independence (Sukarno, the leader of the Third World, an ally of the Indonesian Communists), through mass killings of the antagonists. Singapore had just acquired its independence in turn, starting on a path where adherence to the free market economy appears to be the most valid choice, while powerful Muslim neighbors threaten their existence. When they decided to establish a regional association, the leaders of the five countries faced these dramatic scenarios. They also had to heed the contagion from Vietnam and throughout Indochina, at that time living through a war that would have an opposite outcome to that advocated by ASEAN. To unite, the five countries put mutual tensions behind them. A line was drawn under the “Konfrontasi” (the short war in Borneo between Malaysia and Indonesia), the skirmishes for the maritime borders between Manila and Kuala Lumpur, and the pain of the separation of Singapore. Internal disputes that left no room for opposition and democracy were also silenced. Since its inception, ASEAN has shown extreme plurality. No place in the world offers such a wide range of languages, religions, ethnicities and political systems. Very often, these diversities have not enriched but instead have destabilized the different countries, up to the brink of civil war. On the whole, a secular threat looms: persistent underdevelopment. ASEAN is a poor, rural region, with little monetization in its economy. Endemic diseases have not been defeated, illiteracy is a plague, access to drinking water is problematic. Singapore—a city state with a strategic position, a trade hub and a nascent industrial base—remains a luminous exception. When the member states signed the agreement establishing ASEAN, they faced two strategic goals: overcoming poverty and containing the expansion of Moscow and Beijing. They were well aware that the two objectives were mutually inclusive: one was instrumental to the other, in the generous alliance with the United States. If with maybe a little too much synthesis, it can be said that the countries were being called on not to declare war and to support the reasons for development. Under the circumstances, these were not easily achievable ambitions. Years later, it is not unreasonable to say that these goals have been reached.

This success has been consolidated by the disappearance of the antagonists. With the fall of the Soviet Union, the collapse of the Berlin Wall and China’s conversion to a capitalist system, ideological divisions have been unexpectedly sidelined. The dangers of antagonistic socio-political systems are over. After winning its war in 1975 and unifying the country under Moscow's wing, Vietnam took a spectacular turn in economic policy in 1986. The Doi Moi [“renewal”, Ed.] reforms echoed the Chinese experiment and juxtaposed values of entrepreneurial individualism with central government guidelines. Hanoi discovered that producing value is essential for the country to grow and that the military junta previously in power could not get it going. With dramatic urgency, it found a better solution in delegating economic governance to the private sector, simultaneously opening the country to foreign relations. These are no longer a dangerous influence, but a tool for growth.

After ten years of reconstruction, Vietnam prefers development to identity and now—albeit driven by the same party, as in China—values its neighbors rather than considering them a threat.

In 1995, when the former opponent ASEAN welcomed Vietnam into its ranks, it was more the beginning of a path than the end of an era. The country can finally build peace after living through and winning the war. The accession of Laos and Myanmar in 1997 and Cambodia two years later (the Sultanate of Brunei had joined when it became independent in 1984) made ASEAN complete. The current landscape is definitely more potent and organic than at its inception.

After thirty years of consolidation and enlargement, the Association appeared ready for a relaunch. Above all, it was thought mature enough to achieve new goals, beyond the peace and defense of its borders. The states were still young, formed by anticolonial movements, but were now structured and governed by a leadership that was no longer inexperienced. Most of all, there was no political threat. The old bastions of the Cold War now appeared to be an obstacle to development, once having acted as pillars of security. Struck by their own inadequacy and strangers to the new perspectives, one authoritarian leader has fallen after another: Marcos in the Philippines, Suharto in Indonesia, the generals in Thailand. The commanders return to their barracks, there is less harassment of the Chinese diaspora and private entrepreneurs are better protected. The ten governments have privileged economic relations with less confrontation and definitely more mutual advantages. A long period of consistent and widespread growth thus began, with no questioning of ASEAN’s key principles. The first of these remains non-interference in the internal affairs of each country, interpreted very strictly. There are no limits to national sovereignty. Each country has its own currency, economic policy, border controls and army. They take action without constraints and most of all with no proxies. The picture is clearly different from in the European Union. The concepts of a “common home,” shared destiny and universality of rights are unwelcome. Instead, a specific realism prevails, the cogent choice not to raise unsolvable arguments, even at the cost of appearing disinterested in issues on a global level.

This cautious, measured, low-profile choice has yielded good results. Having escaped the Asian financial crisis early, in 1997, ASEAN and all its member states—despite their diversity—have achieved a number of enviable successes. They have combined two crucial aspects: growth and stability. Both business and treasuries are happy. These concepts have been put into practice in everyday life through increases in GDP, government spending being kept under control, the emergence of a sizable middle class and a lack of out-of-control frictions. ASEAN is proud of its role as a patient mediator, preferable to the clamor of unilateral decisions. It takes credit for the management of Burmese isolation, where non-interference has resulted in elections and the return of a civilian government, contrary to the outcomes of other methods in Syria and Libya. Decades of development have thus strengthened the Association. In a climate of increasing admiration, analysis often began with a hypothetical conjunction.

If ASEAN were a single entity, it would—with its population of 650 million—be the third most populous country in the world, the fourth largest exporter and economy by 2030 and the leading recipient of foreign investment. If this were true, the opposite could not be proven. Would such a major success be possible if there had been greater integration? In fact, the differences between the various countries are so marked that any attempt at monetary, military and immigration unification would be unimaginable. Probably the most important result was achieved in 2015, with the creation of a free trade area between the ten countries, with no tariffs on the redistribution of goods imported from third countries. For other issues, despite a common focus on social issues, each government has retained its own prerogatives.

Will the newly emerging frameworks in east Asia allow this substantially divergent position to be maintained? Is a low profile compatible with the emergence of conflicts close to its shores? The response is broadly negative. Will ASEAN maintain its unity despite divergent internal interests? This is the main issue, which cannot be disregarded by its executives. So far, a division of responsibility has gradually strengthened, as if part of the natural order: China provides economic leadership, the United States offering security. This situation has taken the weight off the shoulders of ASEAN, which has only had to exercise diplomatic skill to extricate itself. The old system now finds itself in question. The Pax Americana resulting from the surrender of Japan more than 70 years ago is under major threat from Chinese maritime expansionism. Beijing is claiming an immense space in the seas lapping the coasts of many ASEAN countries, building lighthouses, moorings and airstrip on unpopulated islets. They pull out ancient maps showing how these reefs are unquestionably Chinese, connected by ‘nine-dash’ lines that move China’s inland waters thousands of kilometers south. Tensions are more evident in territorial disputes with Vietnam and the Philippines, although these are of concern to all the countries of Southeast Asia. Of course, a conflict arises with the seventh U.S. fleet patrolling these seas to ensure freedom of navigation. This ensures supplies to Korea and Japan, because half of the world’s oil crosses the Straits of Malacca, Makassar and Lombok. It is unthinkable that Washington could renounce its hegemony, that the never-ending postwar in the Pacific could have such resounding results. Yet the ASEAN governments, if concerned, do not have the strength and unity to oppose the ambitions of Beijing. China is the most important trading partner for the whole Association and its most frequent investor, which is especially useful for building infrastructure. Especially for smaller countries or those nearby—such as Laos, Cambodia or Myanmar—it is impractical to resist the strength of Beijing in bilateral negotiations. The caution of Indonesia, the biggest and most important country, highlights the paradox of history: Singapore—where three quarters of the population is Chinese—is strong enough to distance itself from Beijing to maintain its friendship with the United States, while Vietnam, leaving the war of 50 years ago behind, allies itself to Washington against China. Territorial disputes are indicative of deeper tensions between China and the United States. These tensions unravel in trading with a Customs war, in the Chinese expansionism of the Belt & Road Initiative, in its maritime aspect affecting ASEAN and in their technological supremacy in strategic sectors. Disputes are very likely to increase and encroach on trickier territory. Their origin is in fact deep-rooted and complex and can certainly not be managed with extemporization and propaganda.

Since the end of the Cold War, ASEAN has been expected to make another historic breakthrough, if now even more challenging. In essence, it must cease to be an immense buffer between U.S. and Chinese interests. The stakes exceed the usual balances and their respective advantages. ASEAN must therefore take courageous initiatives, given it has now declared its global dimensions and the demands of its population are ever greater. Development in society can no longer be sacrificed to political equilibrium. If its weakness was in fact power in disguise, if it neglected an international role to favor internal development, these are now relevant binding positions. To act on these, the institutional architecture of ASEAN may prove insufficient. Much social imbalance and differences in income and volumes of GDP still remain. Never dormant, instinctual identities, ethnic pride, secessionist claims and religious intolerance are re-emerging. The immense Asian superstructure is taking its own position and the traditional pillars of ASEAN—most of all, non-interference—will prove inadequate. Having brought about development in ten different countries, a change in principles would seem consistent with globalization. The power of strong and unitary states, such as China and the United States, requires different solutions because rigid fragmentation—despite its many results—would reveal its fragility at every negotiating table.

Romeo Orlandi is Vice-President of the Italy-ASEAN Association, economist and sinologist, he teaches Globalization and the Far East at the University of Bologna, and leads courses on the economy of East Asia on various postgraduate Masters degrees. A director of the Osservatorio Asia think tank,  he contributes to daily newspapers and specialist magazines.