The Intrique of Achieving an ASEAN Community: The Middle Countries

Dr. Surin Pitsuwan, the current ASEAN Secretary General once said that it is countries in the middle that impede the progress towards building an ASEAN community. Why did he make such a remark?

Countries at the top are more than willing to take part in the establishment of community, in particular economic community because they are already highly competitive. A community will allow them better access to the neighboring market and they are certainly not worried that they will lose out in terms of efficiency if they open their borders to freer trade among ASEAN member economies.

Similarly, countries at the bottom are also more than willing to take part in this endeavor because after having been isolated for periods of time, they want to plug themselves into the globalized world and joining the ASEAN community is certainly a good starting point for doing so.

Countries in the middle view things rather differently. Opening their markets to freer trade is bound to benefit some groups but at the same time, is going to hurt some groups and these are not weak groups. Having been protected by their governments, they have grown into strong interest groups capable of influencing government policies. They would definitely prefer to maintain the status quo so as to maintain their current level of wealth and benefits.

Education and Employment in the UK

It does not come as a surprise that one of the thriving industries in times of economic crisis is tertiary education. Enrollments double if not triple as young adults decide to go back to schools and prime themselves in anticipation of recovery. The issue seldom mentioned is the fact that not all young adults have the means or rather the luxury to obtain those additional degrees. This puts them in a rather disadvantage position when it comes to job search as they are of less value than their school-returning peers. In other words, they can never break away from the vicious cycle of no education-no employment. This is indeed the plight of approximately 22 percent of the young adults in the UK whose future hangs in the balance, not to mention the implications that it may have on the nation’s future as a whole.

While critics may argue that tackling this issue will bring no significant improvements in their employment prospects since there just isn’t enough aggregate demand in the economy fundamentally, it is also sensible to argue that the different starting points of these two groups of young adults has already put those with less education in a weaker position regardless of whether times are good or bad.

It is thus justifiable for the relevant authorities to correct this failure either by providing training opportunities to boost their competitiveness or providing support for them to return to school and gain that extra knowledge. Austerity is necessary but should we jeopardize the future of the next generation in its pursuit?

The Two Camps of ASEAN Cooperation Efforts

In my opinion, an inter-governmental organization needs to accomplish two things to be well respected: 1) the ability to convince the various stakeholders, each with their own interests and goals, to come to a consensus and put it in writing as agreements, frameworks, etc and 2) the strength to enforce them even if they may result in displeasure among some of the stakeholders.

ASEAN as an organization has certainly come a long way. While its founding was barely reported in the media and many were rather skeptical in its ability to achieve something noteworthy, ASEAN now has its own charter and can claim credits for numerous initiatives & mechanisms such as the Enhanced Dispute Settlement Mechanism (ESDM) and ASEAN Intergovernmental Commission on Human Rights (AICHR). These are definitely no mean feat, taking into consideration the diversity of the Member States that constitute ASEAN. Hence, the natural step would have been to ask the question on whether they are enforceable or whether they are binding at all.

A closer look at these initiatives & mechanisms would give the impression that they are “toothless”. At this point, optimists like to argue that although they are symbolic in nature, they nonetheless inform us of the inspirations or the goals of the signatories. In other words, we should applaud them for having the courage to put their signatures on something that clearly contradict their domestic environments. Pessimists, on the other hand, argue that precisely because signatories know very well that there will be no consequences for deviation that they have no qualms in putting down their signatures. Both arguments are plausible and you choose a side depending on your inclination. 

The Case for ASEAN Trade & Investment Centre

While the worst is over and the global economy is slowly recovering, there is an ongoing perception among the export economies that they can no longer rely on the traditional markets such as US and Europe to sustain their long-term growth. Consequently, the focus of many policy-makers has been on increasing domestic consumption and looking for alternative markets for their exports.

ASEAN economies take this view seriously considering that 600 million people call the region home. The dynamism of the region where each economy complements one another provide another valid reason as to why ASEAN should not only look outward in sustaining its economic growth. Among the many proposals that are circulating around is one on the establishment of a one-stop trade & investment centre (TIC) in each economy who will liaise with its counterpart in the other economies. While the idea is good in theory and should definitely be assessed critically, it may encounter several roadblocks in the immediate short-run and this is ironically due to the region’s dynamism.

Let’s start with the more developed economies. It is unlikely that these economies will shoot down the idea due to ideological clash. Afterall, economies such as Singapore pride itself as an open economy. It is open to more foreign investments and concurrently, does not spare any efforts in getting their homegrown companies to internationalize. The issue is that having stayed true to this belief for a long time, Singapore already has well-established institutions with the same responsibilities as TIC albeit under different roofs. It may thus reject this idea on the ground of redundancy. We can of course argue that instead of establishing a new centre altogether, Singapore can try to re-structure its existing institutions so that it resembles the proposed TIC but why should it do so if it has done well based on the existing model. In other words, convincing these economies will not be an easy task if we want them to buy this idea beyond solidarity.

Moving on to the less developed economies, there is no disagreement that market access is a good thing for their homegrown companies but market access is based on reciprocity. The issue with these economies is that although they want to “take” (in terms of gaining more market access), they are less willing to “give” (in terms of opening their own market) for fear that their companies are unable to compete with others. The trick is then on how we can convince them that the long-term gains far outweighs the short-term losses.

Behind the Protest on Camar Bulan and Tanjung Datu

Being countries that share borders which span for thousands of miles, Indonesia and Malaysia have had their fair share of neighborly argument. The last one involves the area of Camar Bulan and Tanjung Datu in West Kalimantan which Indonesians claim to have been “snatched” by the Malaysians. To show their displeasure, several social organizations staged a protest in front of the Malaysian High Commission in Jakarta. As the protest went on, emotions ran high and physical scuffles began.

For those that are against the protest, such acts are an embarrassment to the Indonesian Government who pledged to settle any disagreements on the negotiating tables. To make matters worse, the protesters are not people from the affected area, whom by argument have the right to show their unhappiness. The point is if the affected people do not protest, why should these people protest? Others are more critical, saying that these people are just politicizing the entire issue for their own benefits.

However, one can also look at this entire episode from another angle. Although these protesters are not from the affected area, they are Indonesians by birth and hence have the rights to fight for lands that they believe should belong to Indonesia regardless of whether they are from the area or not. To put it simply, it is a case of by Indonesians for Indonesia.

Additionally, one can also argue from the perspective that these people are simply taking over the role of the Indonesian Government, both central and regional, who have the authority and right to make their displeasure known to their neighbour. These people are effectively replacing the Government whom they feel is not firm enough on acts that breach the sovereignty of the nation.

Reclamation of the Gulf of Jakarta

The reclamation of the Gulf of Jakarta is expected to affect the livelihoods of many fishermen living nearby. Why is it that a country that is not land-scarce needs to reclaim land? Is this going to be another white elephant project with no direct benefits to the people? Have anyone done a proper cost-benefit analysis of this project?

Isn’t it better to invest in improving the transport infrastructure? Isn’t it better to invest in improving the drainage system?

The Case of Bookstores in Indonesia

In a fast-changing world where the viability of certain industries are being questioned and their demise are taken in stride, I was surprised to find an article in an Indonesian newspaper whose purpose was to sustain bookstores operating in small cities and towns via policies that I believe to be against the spirit of fair competition. Don’t get me wrong. I am not against small bookstores or under the payroll of big publishers. I just think that it is wrong to sustain industries whose viability is dependent on unfair policies.

The story of these bookstores is a common story among many industries, particularly those that used to sell their products via middlemen. In the past, lack of efficient infrastructure and local knowledge meant that producers had to rely on middlemen to get better market access. With improvements in infrastructure, it became more efficient to access these markets personally and so producers began to bypass the middlemen. In this specific article, the story goes that publishers used to sell their books to schools via these bookstores but now do so themselves. Unhappy with the turn of events, the owners of these bookstores said that the government should enforce the policy which states that publishers have to sell their books via these bookstores, instead of bypassing them. They also stated that since schools are getting more resources, they should be willing to pay more for books (which is likely to be the case if they obtain their books from the bookstores instead of the publishers).

These just do not make sense because logically, agents will choose the most efficient outcome for themselves. Publishers will choose to bypass the bookstores and deal directly with the schools because they will obtain higher profits. Similarly, schools will choose to deal directly with the publishers because they presumably will get better price for the books. It doesn’t matter whether they have more resources or not because the idea is to make the most efficient use of available resources. In fact if we argue the case from the perspective that schools need resources to cater to the concept of well-rounded learning, the additional resources that they obtain may not be sufficient even if they purchase books directly from publishers.

Instead of delaying the inevitable from happening, I think it is better if these bookstores start to explore other options. These can include diversifying its business, looking at services that publishers cannot provide to the schools or exiting altogether.