GDPI WAT primer – is an Asian Union possible

This was also a WAT topic at IIM Ahmedabad. GDPI WAT.

The global importance of the Asia Pacific region is steadily rising. During the last two decades the centre of the global economy has shifted from the Atlantic to the Pacific, in stimulating greater interest in developments in Asia. One of the topics there which arouses most interest is the various movements for regional integration. ASEAN [Association of South East Asian Nations] heads the field among them as the oldest and still the most influential exemplar.

ASEAN was founded in 1967. Today the organization has ten members, the Philippines, Malaysia, Thailand, Indonesia, Singapore, Brunei, Vietnam, Laos, Myanmar, and Cambodia. ASEAN extends over a land area of 4.5 million square kilometers with a population of 600 million people. It has an important mission, both to secure peace and stability in the region and also to encourage economic development. ASEAN is not simply an organization which brings the countries of Southeast Asia together; it is coming to be the centre for all the organizations of the continent of Asia.

In the course of the annual ASEAN summit each year at which one of its members acts as host, it also organizes an East Asia summit in which 16 countries take part. The East Asia Summits make up the core of a larger Asian union with six other neighboring states participating as well as the members of ASEAN, viz. China, Japan, South Korea, India, Australia, and New Zealand.

The ASEAN Regional Forum is another regional structure in which 27 members take part including pretty well all the most important powers in the world among them non-Asian powers such as the USA, Russia, and the European Union. The purpose of this forum is to create a climate of mutual confidence on problems which concern the Asia-Pacific basin and ensure that diplomatic channels are kept open.

Apart from ASEAN and the ASEAN Regional Forum, there are two other entities which need to be mentioned. One is ASEAN Plus Three (China, Japan, and S.Korea) which brings together the countries of Southeast Asia with those of Northeast Asia. ASEAN-India Summit does the same for Southeast Asia and South Asia. Thus the three giant economies of Asia, China, Japan, and India are linked up with ASEAN. There is also a debate inside ASEAN whether these three countries should be admitted as members into ASEAN itself. Because of these links, ASEAN summits have become occasions to which the whole world pays attention. The 20th ASEAN summit was closely followed in all the important centers of the world from the USA to China and from Russia to the EU.

The 20th ASEAN Summit

ASEAN’s 20th summit took place at a time of major transition both in Asia and in the world as a whole. It took place in April 2012 in the Cambodian capital Phnom Penh and there were a number of important topics discussed: completion of the transition to a common market, the adoption of a common currency and further economic integration in Southeast Asia. The achievement of high rates of economic growth in the countries of Asia in recent years and the fact that they have shown themselves to have economies able to resist the global economic crisis and the growth of prosperity in their region have all combined to increase their self-confidence. During Asia’s financial crisis of 1997 EU officials offered advice to the members of ASEAN about how they could put their affairs in order. This time at the Phnom Penh Summit Asian leaders presented European leaders with their prescriptions for getting out of the crisis.

At this summit the Asian leaders also reaffirmed their commitment once more to achieving full economic integration by 2015. The idea of a common currency, something discussed at previous summits, was taken up once more. However, the leaders drew a lesson from the ongoing crisis under way in the euro-zone and dropped the idea of a common currency from ASEAN’s aims. If there was a move to a common currency, the stronger economies would then be obliged to underwrite the risks of the weaker economies and as a result the ASEAN members did not warm to the idea. Indeed, the notion of uniting Singapore, a strong and wealthy economy, with the developing economies like Cambodia and Laos in a currency union does not seem very realistic. At present a common market and a customs union appear to be much more attractive options for the members of ASEAN. But this too requires a reduction in the disparities in development between member countries as well as the development and harmonization of transport infrastructure and achieving a rapid increase in logistics capacity.

Will ASEAN become an Asian Union?

The project for an Asia Union or an East Asian Community closely concerns other key centers such as the USA and the EU as much as it does the world as a whole. The EU is trying to foster and develop its relations with the whole of the continent of Asia through ASEM, the Asia-Europe Meeting. The USA is concerned that though there is APEC (the Asia-Pacific Economic Cooperation) which includes countries in the Americas, it could get left behind as the Asian Union organizes itself. It is through APEC that the USA possesses its institutional link with the economies of Asia, and it does not want to be excluded from Asia by developments coming out of East Asia and lead by ASEAN. So for the USA it has become an essential strategic objective to obstruct projects like the Asian Union which do not include it or, if this is not possible, to have them watered down. The US has some very important cards to play on this. First because of its economic size and political dominance in world politics, the U.S. is still the most influential power in the whole of Asia. Under present international conditions, it would appear to be impossible for the countries of Asia, China included, to dismiss the USA either politically or economic. Furthermore, the USA is still the biggest counterbalance against rising China for many Asian countries.

Second, neither the members of ASEAN nor the other countries which would play a part in the formation of an Asian Union have been able to achieve political and economic unity in the way that the European Union did. Levels of economic development and democratic government vary sharply between them. One ASEAN member, Myanmar, is attempting to introduce democracy after 50 years of military rule, but there are other members like Indonesia and the Philippines which have gone much further down the road to democracy. And though ASEAN was set up in the 1970s, border disputes between its members have by no means all been settled. Political distrust between China and Japan, Japan and South Korea, and China and India has not been completely overcome. The existence of problems of this sort increases the number of major obstacles in the way of possible integration between the countries of Southeast Asia. To conclude: movement towards regional integration in East Asia looks likely to continue under the umbrella of ASEAN. But neither ASEN nor the newly formed East Asian Community should be expected to attain the degree of integration which the EU enjoys today. The USA looks set to prolong its existing political and economic superiority in the continent relying on a balancing act with the countries of Asia. Even if there is a reduction in American power, the US is unlikely to find it difficult to maintain its position.