Date post: | 12-Mar-2016 |
Category: |
Documents |
Upload: | cari-asean |
View: | 213 times |
Download: | 0 times |
CARICAPTURES
1
26
8
9
7
10
SOUTH CHINA SEA DISPUTES PROVES DIVISIVE
Maritime disputes with China and four
ASEAN countries — Vietnam, Brunei,
the Philippines and Malaysia — have
been a sore point in the relationship for many
years. Tensions reached another level at
the ASEAN ministerial meeting in July 2012
where the member states failed to issue a
joint statement for the first time in its history.
Two years ago, China declared the disputed
territories part of its “core interests.” The
oil-rich seas are also a vital trade route for
oil shipments into China. The Chinese claim,
known as the 9-dashed line, also includes the
Spratly and Paracel islands.
4 5
1 7 D E C E M B E R 2 0 1 2 I S S U E 1 0 6
3
At the July meeting in Phnom Penh,
consensus broke down after Cambodia, the
ASEAN chair, rejected any joint statement
that mentioned the disputed territory.
After the embarrassing failure, Indonesian
Foreign Minister Marty Natalegawa shuttled
between the countries and delivered a six-
point consensus. The document reaffirmed
ASEAN’s commitment to the Declaration on
the Conduct of Parties in the South China Sea
and that nations would exercise self-restraint
and avoid the use of violence in accordance
with the UN Convention on the Law of the
Seas.
Arm Twisting China is Cambodia’s largest investor, trade
partner, and donor. Beijing’s position on the
disputes has consistently been to negotiate
with the claimants bilaterally, bypassing any
ASEAN mechanism. Observers have indicated
that China exerted its economic influence
over Cambodia to tow its line, and ultimately
unravelled ASEAN unity.
Political-security is one of the three pillars
of the ASEAN Community. It is imperative
that ASEAN leaders address the disunity at
this level. While the Philippines and Vietnam
have begun to rely more on the United States’
firepower, ASEAN’s foreign policy calculation
should not centre on the US-China rivalry.
Smaller countries cannot entirely avoid
China’s chequebook diplomacy, but closer
cooperation among the ASEAN countries in
trade and investment through the ASEAN
Economic Community can alleviate external
influence and the dismantling of ASEAN
cohesion and maintain a productive trade and
investment relationship with the PRC.
Looking ForwardThe logic of ASEAN is to provide a regional
platform for the bloc’s interest. This requires
deeper political and economic cooperation
from the member states. Reliance on
Chinese financial gifts and American military
superiority is not a viable long-term strategy.
ASEAN governments must learn from the
events at Phnom Penh and double down
on community-building and economic
cooperation.
The most important policy change the ten
countries can take to achieve closer unity
is to empower the ASEAN Secretariat.
The institution operates on a skeletal staff
and meagre budget that must coordinate
hundreds of political, economic, and
social initiatives adopted at each Summit.
Furthermore, it must prepare ministerial and
leader meetings among the ASEAN countries
and the eight dialogue partners. Without
a strong Secretariat, ASEAN centrality will
diminish. ASEAN leaders must seriously
recalibrate their policies with a focus on a
regional vision.
2012
YEAR EN
D ED
ITION
Chayut Setboonsarng
In thIs CARI CAptuRes yeAR end edItIon, we tAke A CloseR look At the top ten developments In AseAn In 2012
2012YEAR END EDITION
She has not escaped entirely without
criticism however, with questions about
her own transparency in dealings with the
government being raised. More damaging
is her stance on the issue of the Rohingya,
particularly following the Rakhine State riots
in June. Her statements have been hazy at
best, condemning human rights violations
on both sides and appearing to suggest that
the Rohingya are not citizens of Myanmar.
Accusations of elitism and hypocrisy on her
part can already be seen in the social media
commentary.
With so many firsts and accolades having
been already accomplished this year, 2013
may necessitate more decisive action from
Suu Kyi if she is to retain her superstar
status. If, however, that perception were
to tarnish, she will still be Leader of the
Opposition in the House of Representatives,
albeit one dominated by the United
Solidarity and Development Party and the
military.
Whatever the fortunes of President Sein
and Opposition Leader Suu Kyi, Myanmar’s
progress in 2013 will determine how the
country will fare as the ASEAN Chair in 2014.
Accordingly, how the country engages with
ASEAN should also be closely watched.
Already Myanmar has become an arena for
geopolitical tussles between big powers, and
multinationals may not have the long-term
interests of the country at heart. ASEAN,
therefore, provides a natural place to
find support from neighbours with similar
interests and concerns. The unlikely pair
might find it a surprisingly fruitful place.
MYANMAR’S REFORMS AND THE LADY
Investors and democrats the world over
have been following the reforms in
Myanmar closely this year (and so have
we, through the Myanmar Monitor featured
in the weekly CARI Captures). Milestones
have included Coca-Cola re-entering the
market after six decades, approval for
the introduction of credit cards (Visa,
MasterCard and JCB will be operational in
the country in 2013) and the finalisation of
the delayed and much-amended foreign
investment law. The latest version of this
law removes the cap on foreign ownership of
joint ventures, and boosts the discretionary
powers of the Myanmar Investment
Commission to determine foreign investment
levels in sensitive sectors. Though the
passing of the law has provided more
certainty, the question remains at what rate
the country can receive investment owing to
weaknesses in basic infrastructure.
National notable barometers of the changing
landscape include the suspension of US
sanctions, the approval by the World Bank
to resume aid after 25 years, the offer by
the EU of 70 million euros of development
aid besides pledges by other governments,
including Saudi Arabia’s announced provision
of US$50 million to Myanmar’s Muslims.
Throughout this process two figures have
been prominent: President Thein Sein
and Aung San Suu Kyi. Both were jointly
awarded the top spot in Foreign Policy
magazine’s 100 Top Global Thinkers 2012, but
Aung San Suu Kyi’s celebrity status began
earlier. 2012 saw her prominence being
joined by officially recognised democratic
and institutional legitimacy within Myanmar,
having been elected as an MP in April. After
a short brouhaha regarding the wording of
the oath necessary to formally take office,
she and others from the National League for
Democracy nonetheless took the oaths, upon
which Suu Kyi also became Leader of the
Opposition.
Amongst the heads of state or government
she met in 2012 were US President Barack
Obama and British Prime Minister David
Cameron, and she was feted by many
international organisations and think tanks,
picking up numerous awards throughout
the year. Particularly high profile examples
included her acceptance speech in June for
the Nobel Peace Prize awarded to her in
1991, and receiving in September the United
States Congressional Gold Medal awarded to
her in 2008. In addition, she met with civil
society and regional business organisations,
including the ASEAN Business Club. Her
profile in popular culture has thrived
following the success of the sympathetic
Hollywood portrayal The Lady, released in
Asian countries in the first half of the year.
International commentary and diplomatic
responses to the reform process in Myanmar
continues to demand the reactions of Aung
San Suu Kyi. Her stated confidence in the
president’s sincerity for reform, her opinion
that the US should not fully lift economic
sanctions until all political prisoners are
released, and most recently her words of
caution against over-optimism on reforms in
her country are all seen as indicators of the
strength and pace of the reforms.
Tunku ‘Abidin Muhriz
2012YEAR END EDITION
ASEAN PRIVATE SECTOR
WEATHERS THE STORM
Despite the ongoing uncertainty in
the global economy, the ASEAN
private sector has remained
resolute. This past year saw Kuala
Lumpur’s IPO scene become the world’s
4th largest, raising US$6.8 billion,
surpassing that of London. Notable IPO
include the palm oil producer Felda
Global Ventures, IHH Healthcare and the
cable network, Astro. The state-owned
PTT of Thailand expects to raise US$3
billion in an IPO next year. Thai business
tycoons became Asia-Pacific’s third largest
investors’ after China and Japan. The
agribusiness, Charoen Pokhpand Group Co.
recently purchased a US$9.4 billion stake
in China’s Ping An, while ThaiBev continues
to make a play for a US$11.4 billion
takeover of Singapore’s Fraser & Neave.
CIMB Group, built on an ASEAN platform,
also made high-profile acquisitions this
year including RBS and Philippines Bank of
Commerce, expanding its operations into
the Philippines, Hong Kong and Australia.
This year also saw the launch of the
ASEAN Trading Link, a portal for investors
that enables fluidity in ASEAN investments.
Currently, the ASEAN Link connects
Bursa Malaysia, Singapore Exchange,
and the Stock Exchange of Thailand. This
creates a single gateway to over 2,200
listed companies with a combined market
capitalisation of US$1.4 trillion. In the
future, the ASEAN Exchanges project aims
to incorporate Indonesia Stock Exchange,
the Philippine Stock Exchange, and the
two exchanges in Vietnam.
Why it MattersThese developments are a reflection of
immense investor confidence, growing
consumer demand in ASEAN, and a bloc
that is advancing commercial relations
despite political disagreements and a
bearish global environment.
The ASEAN’s corporate sector is in a
unique position to push governments
to dedicate more effort in their foreign
policies towards the ASEAN Economic
Community (AEC). The 2012 AEC
Scorecard, a report on the implementation
of policies, indicates that the governments
only achieved 67.5% of its integration
objectives. Commerce ministries and trade
agencies are not the only institutions that
are responsible for this shortcoming, but
the firms of ASEAN as well.
The policy community works to ease
regional trade and investment, creating
gains for the entire region. It will spur
innovation and ultimately benefit the
consumer by offering higher quality goods
and services at lower prices.
Going ForwardJust as the American private sector
aggressively promotes the Trans-Pacific
Partnership (TPP), corporate ASEAN should
do the same for the AEC. However, only a
handful of ASEAN companies have taken on
this responsibility.
The ASEAN Secretariat has been vocal about
including the private sector, from large
multinationals to small-medium enterprises
(SMEs). The Secretariat held an AEC
Symposium and released the AEC Handbook
for Businesses earlier this year. These
initiatives allowed firms to network, voice their
concerns, and learn about the AEC blueprint.
Complacency has never been a
characteristic of a successful company, thus,
it is incumbent on the businesses of ASEAN
to support and advocate for the acceleration
of the AEC. Business leaders should engage
in more dialogue with their commerce
and foreign affairs ministries in order to
learn, prepare, and push for further more
economic integration. The ASEAN business
community is in a geo-economic sweet spot;
this will not always be the case in the future
as competitors begin to emerge. The time is
right for the private sector to capitalise on
this advantage and realise the goals of the
ASEAN Economic Community.
Chayut Setboonsarng
It is incumbent on the businesses of ASEAN to support and advocate for the acceleration of the AEC
2012YEAR END EDITION
ASEAN IN A G-ZERO WORLD
The stalled Doha trade negotiations,
ineffective climate change
conferences, non-ratification of
the UN Conventions on the Law of the
Seas (UNCLOS) by the United States,
indicate a vacuum in global leadership. The
G-Zero is an emerging era of international
politics, described by political scientist,
Ian Bremmer. After the American financial
debacle in 2008 and ongoing debt crisis in
Europe, no single country or organisation
can drive a global agenda. Nations in the
G7 and G20 groupings have competing
ideas and are too involved with their own
politics to spend political and economic
capital on international issues. Global affairs
without a clear agenda and regulation give
way to pivot states, or countries that are
“able to build profitable relationships with
multiple other countries without becoming
over reliant.” These countries are adaptable
and can manoeuvre through the rivalries
of larger powers. This is where Bremmer’s
G-Zero world metaphor ends, because
ASEAN member states are able to persuade
friends and allies to a common cause.
The Pivot States of ASEANIndonesia is a prime example of such a
country. Its diversified economy and trade
profile combined with a growing middle
class and young population give it a
growth engine that is not dependent on a
single relationship. As the largest ASEAN
country, Indonesia has the capacity to
build consensus. Indeed, after the non-
issuance of a joint statement at the ASEAN
ministerial summit, Foreign Minister Marty
Natalegawa persuaded his counterparts
and arrived at a 6-point plan. But this is the
extent of Jakarta’s commitment. It had the
ability to form ASEAN unity on many other
occasions on the South China Sea, but did
not take action.
Domestically, the government has enacted
a series protectionist reforms to nationalise
its mining sector. It also has a significant
labour problem that must be addressed
after massive strikes enveloped the nation’s
capital. Measures taken against foreign
investors and slow action over labour issues
are alarming for the progress of the ASEAN
Economic Community. In 2012, Indonesia
was the premier investment destination
for retail, manufacturing, and industrial
production; however, it should not get too
comfortable and seize the opportunity to
take ASEAN community building forward.
Many of the same things can be said
about Malaysia. It is a country comfortably
growing, while furthering its relationship
with China and the US. Prime Minister
Najib Razak has also shown remarkable
leadership by helping broker a peace
agreement between the Moro Islamic
Liberation Front and the Philippines
government in Mindanao. Prime Minister
Najib also began the Global Movement of
Moderates to curb radicalism in the world.
However, this was the extent of Malaysian
guidance in ASEAN’s challenges. The
government has not taken further action
to assist Thailand’s southern insurgency
or the Myanmar’s Rakhine state. Even
more important, Malaysia is a claimant in
the South China Sea, but it has repeated,
in China’s favour, not to internationalise
the dispute. The Prime Minister should
use the newly institutionalised platform of
moderation to convene ASEAN and China
to find a resolution over the disputed
territories.
Also important is Thailand. It received
state visits from US President Obama and
outgoing Chinese Premier Wen Jiabao.
The European Union has also sent strong
signals to being FTA negotiations with
the Kingdom. Furthermore, its private
sector and industrial production has
miraculously turned around the destruction
from the 2011 floods. As a nation that has
a celebrated history of skilled diplomats,
on the surface Thailand appears to
have managed the balance of power in
Southeast Asia perfectly and can bring the
ASEAN countries together.
However, it is a political basket case. Former
Prime Minister Abhisit now faces murder
charges for the death of a taxi driver during
the 2010 military crackdown on Red Shirt
protestors, resulting in 90 civilian deaths.
Meanwhile, royalists, now rebranded as Pitak
Siam or Protect Siam, took to the streets in
December and called for the resignation of
Prime Minister Yingluck. Political gridlock
has stunted the government from investing
in foreign policy and ASEAN. The country’s
political drama is threatening the its
long-term success.
Going ForwardThe emergence of pivot states gives way for
ASEAN to exert its centrality. In 2013, these
countries will maintain a similar status, but
the G-Zero is only a transitory period. ASEAN
has shown that it has the potential to drive
a global agenda, while maintaining ASEAN
centrality. The fact that the association has
the ability to convene eight world leaders
in Phnom Penh speaks for itself. The East
Asia Summit and Regional Comprehensive
Economic Partnership have all been ASEAN
initiatives. As the centre of Asian regional
architecture, the governments of ASEAN
must resolve outstanding issues and further
commit to ASEAN integration to strengthen
the bloc and advocate for ASEAN interests in
the international community.
Chayut Setboonsarng
Nations in the G7 and G20 groupings have competing ideas and are too involved with their own politics to spend political and economic capital on international issues
- ASEAN has shown that it has the potential to drive a global agenda, while
maintaining ASEAN centrality
2012YEAR END EDITION
FAILURE TO LAUNCH: ASEAN BANKING
INTEGRATION FRAMEWORK
In November 2012, the central banks,
monetary authorities, and members of the
ASEAN Bankers Association convened at
Bank Negara Malaysia for the 19th ASEAN
Banking Conference and addressed the
role of banks in regional integration. At
the centre of the conference was the
ASEAN Banking Integration Framework
(ABIF). The goals of
the framework and
its conditions are
clear; to harmonise
regulations, build
stable financial
architecture, support
Brunei, Cambodia,
Laos, Myanmar, and Vietnam, and set the
criteria for a Qualified ASEAN Banks (QAB).
Banking integration is vital for the
realisation of the ASEAN Economic
Community. The regional expansion of
ASEAN’s investment and commercial
banks are indicative of this compulsion.
In her remarks at the conference, Bank
Negara governor, Dr. Zeti Aziz noted that
the framework was in the “final stages to
launch.” However, following the conference,
the policy community has not made it clear
what this process entailed.
Think in Generalities, Live in DetailDetails of how the central banks will
achieve the objectives outlined in the
framework are not clear. Firstly, arriving
with a set of criteria for a QAB remains
ambiguous. Answering
this question will
require not only the
vast experience and
knowledge of the
central banks, but
also involvement of
commercial banks and
financial institutions. Details of expanding
capacities and allowances and building
financial infrastructure are also currently
unavailable.
ABIF has been silent on the foreign equity
ownership, which is an important factor
in a regional integration. As banks seek to
expand operations in member countries,
the strategic method of expansion is
through mergers and acquisitions, which
would involve measures of foreign equity
ownership by the central banks. It remains
to be seen how partnership dynamics and
banking paradigms will change with the
implementation of ABIF.
Going ForwardPolicymakers should engage academics
and the private sector and bring them into
the discussion. Debates and conversations
need to happen, as this will crystallise ideas
into actionable policies. Thought leaders
and seasoned bankers could share their
opinions on how fund raising facilities
should be set up across the region.
Information sharing and the dissemination
of ideas is the first order of business for the
ASEAN Banking Integration Framework.
Stakeholder buy-in from the ASEAN
business community is fundamental for the
implementation of the ASEAN Economic
Community blueprint. This is precisely the
same case for the banking framework, thus it
is imperative that policy makers and financial
institutions work together in formulate and
designing the framework and the QAB. Only
through cooperation will banking integration
be successful.
Chayut Setboonsarng & Paul Leong
Policymakers should engage academics and the private sector and bring them into the discussion.
2012YEAR END EDITION
US as the region becomes more and more
important to the US. Australia therefore
should not overly focus its efforts on
whether to support the US — Canberra’s
most important security ally, or China
— Australia’s primary trading partner;
instead, Australia should focus on ASEAN
to secure its place in the Asian century.
The UK Looks EastThe United Kingdom has also engaged
closely with ASEAN this year. In
November, Britain opened an embassy
in Laos and is thereby represented in all
ten ASEAN states. UK’s Foreign Secretary
William Hague has been quoted several
times stating that ASEAN is at the centre
of UK’s Asia policy. The United Kingdom’s
strategic shift was evident in July when
the UK acceded to the Treaty of Amity and
Cooperation in Southeast Asia (TAC).
Going ForwardASEAN should leverage on its geopolitical
position, as it becomes the centrepiece of
power of the Asia-Pacific. It is clear that
ASEAN is poised to inject its centrality
into the international community. The
pre-requisite to centrality is a strong
Secretariat and a united ASEAN
Community. This will allow the ten
countries to place its interest on the
international fora and advance regional
goals.
THE WORLD
COURTS ASEAN
07
LAOS STEPS UP
With a population of 6.5 million
people, ASEAN neighbours and
China dwarf Laos' output. The
country has taken on bold developments
to show the world that the small country
is facing its challenges and undertaking
market reforms.
In October 2012, the World Trade
Organisation (WTO) approved Laos’ bid to
become a member, a major step forward
for Laos. WTO membership helps bring
investor confidence, as Laos will begin
to implement WTO principles of non-
discrimination and transparency into law.
Already, the government has initiated
an online trade portal, which publishes
information that traders need for importing
The United States' pivot towards
the Asia-Pacific officially started
late last year when US President
Obama became the first US president
to attend the East Asia Summit, and US
Secretary of State Hillary Clinton outlined
the government’s policy in her article
America’s Pacific Century in Foreign Policy
Magazine. This year, the US has stepped up
its engagement with the region, and other
western nations are following suit.
US Defence Secretary Leon Panetta
announced mid this year at the Shangri-La
Dialogue that the US navy would move a
part of their fleet to the Pacific, as a part
of the US military rebalancing program.
Under the new Pentagon strategy, the US
will reduce its forces in the Middle East
and Europe, but will sustain and perhaps
increase its military presence in East Asia.
As well as maintaining its defence alliances
with Australia, Japan, South Korea, the
and exporting goods. Yet, Laos still has
some ways to go before it becomes a full
member and realises all the benefits that
come with a WTO accession.
As a landlocked country, connectivity is
immensely critical for development. To this
end, Laos is forging ahead in connectivity
and transportation as it develops a US$7
billion high-speed
train link. The
railway will connect
Vientiane with the
Chinese border in
the Luang Namtha
province, enabling
more trade with
China of Laos’
natural resources. The project was initially
to be undertaken in partnership with
China. Sometime later, China withdrew
its investments due to concerns over
profitability. However, the Vientiane
decided to go ahead with the project,
signalling its determination to the world.
However, Laos’ development plan is not
without its challenges. This is clear from the
recent uproar by environmental activists
over the damage Laos is inflicting with its
Xayaburi dam project. The dam, which is
located on the Mekong River, may threaten
the livelihood of riparian communities
and the ecological balance of the river.
Environmental groups have warned that
the dam could affect 23 to 100 fish species,
and lead to the extinction of the famed
giant Mekong catfish. When protests first
ensued from neighbouring countries,
Cambodia and Vietnam, Vientiane agreed
to suspend construction pending a 10-
year investigation. However, it resumed
work and faced
international
criticism. Davong
Phonekeo, Laos’
Minister of Energy
and Mines, noted
that the country’s
water resources are
part of its national
plan to become the “battery of Asia and
alleviate poverty”.
Economic liberalisation and growth in
Laos comes at a time when ASEAN is
booming. Laos should work closely with
other ASEAN member states that have
extensive experience in development and
international trade. It should be sensitive
to the environmental impact it creates
and consult with other parties to find
viable alternatives. For Laos to maximise
this regional growth wave and avoid
Chinese dominance it must look to ASEAN
governments and businesses for lessons
and partnerships.
Manissa van Geyzel
Sóley Ómarsdóttir
lAos should woRk Closely wIth otheR AseAn membeR
stAtes thAt hAve extensIve expeRIenCe In development And InteRnAtIonAl tRAde
Philippines and Thailand, the US is also
looking towards establishing partnerships
with Singapore and Vietnam.
The US showed its engagement with
the region in November when three
ASEAN countries; Cambodia, Thailand
and Myanmar, were the first countries to
receive Barack Obama after his re-election.
Australia’s New OutlookThe Obama administration is not the
only western government with an Asian
agenda. Australia, under Prime Minister
Julia Gillard and Foreign Minister Bob
Carr, launched a policy white paper titled
Australia in the Asian Century, on 28
October. The paper makes it clear that it
does not see the Asian century as being
entirely characterised by China’s rise, but
recognises that it is rather an Asia-Pacific
century. It further identifies China, India,
Japan, Indonesia, and South Korea as
Australia’s key Asian partners.
Asialink, an Australian centre aimed
at strengthening Australia’s Asia
engagement, released a Commission
Report, which criticised the white paper
for its silence on the value of the country’s
relationship with ASEAN. The report points
out that ASEAN is the key for Australia
to engage with Asia, that a strong a
relationship with ASEAN would also
strengthen Australia’s alliance with the
2012YEAR END EDITION
DEMOCRACY FOR,
UM, ASEAN
Twelve heads or deputy heads of state
or government – including Afghan
President Hamid Karzai, Iranan
President Mahmoud Ahmadinejad, Australian
Prime Minister Julia Gillard, Turkish Prime
Minister Recep Tayyip Erdogan and South
Korean President Lee Myung-bak – attended
the fifth Bali Democracy Forum that took
place in November. Four (including the host)
were from ASEAN countries.
The event’s track record was not entirely
complimentary according to comments
within Indonesia itself. A think tank chairman
described the annual meeting as “an
international event with not much left in
terms of lessons learned after the forum was
over”. Meanwhile an academic opined that
“it is being used by some countries to show
they can be part of the democratic world”,
and activists called for it to be expanded to
include civil society rather than limited to just
governments. Indeed, news reports about the
forum itself focused on the attendees rather
than any substance – and no official website
with recent or previous communiqués seems
to exist.
A slightly more substantial barometer for
the appreciation of democratic values in
the region was provided by the signing of
the ASEAN Human Rights Declaration the
following week in Phnom Penh. This too
did not receive universal praise. The United
Nations High Commissioner for Human Rights
officially welcomed the commitment, but
expressed concern that its language was not
consistent with international standards. The
US Department of State was more forthright:
“we are deeply concerned that many of
the ASEAN Declaration’s principles and
articles could weaken and erode universal
human rights and fundamental freedoms
as contained in the Universal Declaration of
Human Rights.” While naturally governments
have been presenting their signing as a big
step forward, many civil society and lawyers’
groups within ASEAN countries are sceptical
of any substantial changes to national laws.
Elections of ASEANThe reality is that, with the unique exception
of Myanmar, democratisation in ASEAN
countries is largely dependent on domestic
dynamics.
In Malaysia, political life has been dominated
by a de facto extended campaign period for
a general election that many predicted could
happen in 2012 but now looks set to occur
in early 2013 (the latest date allowed by law
is 27 June). This period has seen continued
argument across and within the two political
coalitions dominated by issues of electoral
reform, a contested rare earths plant, subsidy
reform, the budget deficit and social freedoms
– accompanied by racial and religious tension.
2013 in the Philippines will see the midterm
elections in which half of the Senate and all of
the House of Representatives will be elected.
The new mining policy and a reproductive
health bill will be amongst key issues.
Singapore’s political elite is still adjusting to
the unprecedented results of the 2011 general
election where the ruling People’s Action
Party received its lowest share of the vote
(60%) since independence.
Indonesia’s next slate of presidential and
legislative elections will be in 2014, while
Thailand expects a general election in 2015,
which is the followed by the Philippine
presidential election in 2016.
While democratisation in ASEAN will
continue to take a backseat to economic
integration, the association has always
openly acknowledged the diversity amongst
members’ systems of government, a legacy
of history and culture. Combined with
the ASEAN Way and the non-transfer of
sovereignty to any regional bodies, it will be
difficult to foresee any explicit cross-regional
calls for democratisation by national leaders.
However, with issues such as human
trafficking and human rights gaining credence
amongst civil society in the region with
the cognisance of Western democracies,
there are at least efforts to show further
commitments though they may be mostly
lip service for now. The hope amongst
ASEAN’s genuine democrats is that these will
substantiate themselves in due course.
Tunku ‘Abidin Muhriz
We are concerned that many of the ASEAN Declaration’s principles and articles could weaken and erode universal human rights and fundamental freedoms as contained in the Universal Declaration of Human Rights
Singapore - 2016Incumbent Lee Hsien Loong (People Action Party)Low Thia Kiang (Workers Party)Goh Meng Seng (National Solidarity Party)Chee Soon Juan (Singapore Democratic Party)Kenneth Jeyaretnam (Reform Party)Chiam See Tong (Singapore People’s Party)Desomnd Lim (Singapore Democratic Alliance)
Philippines - 2016Incumbent Benigno Aquino III, Liberal Party ineligible to run due to term limitations
Jejomar Binay (PDP LABAN)
Richard Gordon (Bagumbayan VNP)
Indonesia - 2014
Laos & Vietnam(single party state)
Brunei(no elections present)
NOTE
ELECTIONS ANDWHO’S RUNNING
Incumbent Susilo Bambang
Yudhoyono is constitutionally
barred from running for a 3rd term
Aburizal Bakrie (Golkar Party)
Malaysia - 2013
Incumbent Najib Razak
(Barisan Nasional)
Anwar Ibrahim (Pakatan Rakyat)
Thailand - by 2015Incumbent Yingluck Shinawarta (Pheu Thai)
Abhisit Vejjajiva (Democrat)
Cambodia - 2013
Incumbent Hun Sen
(Cambodia People Party)
Sam Rainsy (Sam Rainsy Party)
Myanmar - 2015Incumbent Thein Sein(Union Solidarity andDevelopment Party)Aung San Suu Kyi (National League for Democracy)Sai Ai Pao (Shan Nationalities
Democratic Party)
2012YEAR END EDITION
SUGARCANE
THE FORMATION
OF ASEAN
CARTELS
ASEAN countries have stepped up
cooperation in certain production
sectors this year. Major sugar
producers, Thailand, the Philippines,
and Indonesia created the ASEAN Sugar
Alliance. Meanwhile, the top rubber
producers, Indonesia, Malaysia, and
Thailand created the International Tripartite
Rubber Council (ITRC), which agreed on
a mechanism that would stabilise prices.
Lastly, rice producers in the region are
mulling the formation of a Rice Federation.
Thailand has been the main mover behind a
proposed rice cartel between rice exporting
ASEAN nations Laos, Myanmar, Vietnam,
Cambodia, and Thailand. The countries
are planning to establish the ASEAN Rice
Federation, with the aim to increase rice
prices by 10% annually. The combined
market share of these countries is currently
about 56% of total global rice trade or 19
Sóley Ómarsdóttir
million tonnes. Thailand accounts for the
largest share, as it is the source of 28% of
worlds rice exports followed by Vietnam
which sources 24.5%.
Sugar producers in Indonesia, the
Philippines and Thailand agreed in
November to establish the ASEAN
Sugar Alliance (ASA). The purpose
of the alliance is to be a platform of
cooperation in research and technology,
logistics and business development. The
partnership aims to assist the public sector
in eliminating obstacles hindering the
development of the sugar industry and
facilitate sugar sales in the region. The
three countries produce about 15 million
tonnes of sugar annually, with the largest
share or 10 million tonnes produced in
Thailand. Indonesia is the region’s largest
sugar importer and imports 1.6 million
tonnes of sugar from Thailand each year.
Other ASEAN countries are expected to
join the ASA in the near future, according
to the ASA chairman.
Vietnam is currently considering joining
the International Tripartite Rubber Council
(ITRC), which includes Thailand, Indonesia,
and Malaysia. Together the three countries
are responsible for 70% of global rubber
supply. The council have already agreed to
cut rubber shipments by 300,000 tonnes
to push up prices. Thailand, which is the
world’s largest rubber producer, is also
supporting higher rubber prices in Thailand
with a state-buying programme. The
government has bought 170,000 tonnes
since May and is planning to buy a further
250,000 tonnes by March next year.
Good for regional integration?The proposed rice cartel could possibly
work against regional integration since
other ASEAN members excluded from the
organisation are major rice importers and
would be forced to be price-takers if the
cartel is realised. The Philippines is the
destination of 17.3% of world rice imports
and Indonesia 16.8%. Plans for the cartel
have received criticism from international
organisations and could be challenged by
the World Trade Organisation (WTO).
Despite reducing rubber supply, the
Tripartite failed to increase global prices.
The ASEAN market share in the rice
market is even smaller than that of rubber
producers and therefore unlikely to be
successful in pushing up prices. In addition,
rice importers could move closer towards
self-sufficiency. Other major producers,
such as India and Pakistan, which currently
account for 36.7% of total rice exports,
could increase production and exports.
The approach of the sugar alliance
towards cooperation in technology and
development is more likely to be beneficial
for the region. These industries should
move away from price fixing and focus
their collective efforts to Research and
Development collaboration, information
sharing, raising standards, and improving
efficiency.
These industries should move away from price fixing and focus their collective efforts on research and development
SUGARCANE
2012YEAR END EDITION
ASEAN IN 2013:
ENTER BRUNEI
Many challenges lie ahead of ASEAN
in the next year. Security concerns
will be characterised by heightened
tensions in the South China Sea as the
dispute continues unresolved. China has
not been shy in asserting its interests in
the disputed territories with the ASEAN
countries and Japan
over the chain
of islands. Next,
uncertainty in the
global economy will
be characterised
by the rise of Asia,
slow recovery of
the US, and ongoing
Eurozone debt
crisis. Lastly, the
worsening effects of
climate change will
be more apparent as
Thailand withstood
2011’s flooding
and the Philippines is still reeling from
Typhoon Bopha. ASEAN countries stand
a greater chance of success if they face
these challenges together. What is clear
is that these forces will be testing the
region’s political economy. Only through
cooperation can the member states become
more resilient against external pressure and
shocks.
The incoming chair of ASEAN is Brunei. As
chair, Brunei will have the mandate to set the
agenda and issue the chairman’s statements
at ministerial and leader summits. This is a
powerful tool for a country with a population
Chayut Setboonsarng
of 400,000. Observers have dismissed
Brunei as diplomatic featherweight. However,
it has considerably high stakes in ASEAN’s
success. Unlike Cambodia, Brunei is a
dispute party in the South China Sea. This
compounds the issue and suggests that
Brunei may take a stronger line against
Chinese claims. How
well it can persuade
other ASEAN countries,
especially non-claimants
in Beijing’s satellite,
will hinge on the
diplomatic prowess of
its statesmen. Brunei’s
Foreign Minister Prince
Mohamed Bolkiah has
famously advocated for
“defence diplomacy,”
a doctrine that
focuses on continuous
dialogue and personal
relationships. This may
give some indication of how the Sultanate
will use its status as ASEAN Chair to
approach the dispute.
In the economic realm, ASEAN will continue
to work towards the ASEAN Economic
Community (AEC), which is severely behind
schedule. However, the AEC will be high on
the agenda of the next chairman. While it is
the responsibility of the member countries
to accelerate this AEC blueprint, Brunei
will have to be the stimulus. Economic
cooperation matches Brunei’s policy
of diversifying from its oil wealth and
developing other sectors of the economy; all
of new partnerships in the AEC can help it
achieve this objective.
Cooperation in humanitarian assistance
and disaster relief (HADR) is also pressing.
This provides a venue for ASEAN, through
Brunei’s chairmanship, to engage with
ASEAN’s dialogue partners. In addition to
the urgency, leaders consider HADR less
politically sensitive making it a good area
for collaboration. ASEAN can work with
its dialogue partners in improving HADR
such as faster response time and long-term
solutions for addressing climate change.
Lastly, the ASEAN Secretariat will also
welcome a new Secretary-General, Le Loung
Minh from Vietnam. A seasoned diplomat,
Mr Loung Minh was formerly Vietnam’s
ambassador to the United Nations in New
York City and Geneva and President of
the UN Security Council in 2008. His five
years at the Secretariat will be devoted to
increasing the efficiency of the Secretariat
and improving the monumental task of
coordinating the actions and commitment of
the ten countries.
2013 will be a critical year for ASEAN.
The challenges carried over from the
previous year will be more intense. The
ASEAN integration process is deeply
under resourced. Commitment to
ASEAN community building from people,
businesses, and political leadership from
all countries will be crucial in 2013. The
message Brunei is sending to ASEAN and
the world: thrusters on full.
The ASEAN integration process is deeply under resourced. Commitment to ASEAN community building from people, businesses, and political leadership from all countries will be crucial in 2013.
- Brunei will have the mandate to set the agenda and issue the chairman’s statements
at ministerial and leader summitry.This is a powerful tool for a country with a
population of 400,000
Editorial Team: Manissa van Geyzel, Chayut Setboonsarng, Sóley Ómarsdóttir and Paul Leong Consultant Editor: Tunku ‘Abidin Muhriz
The work in this issue of Captures are solely the opinions of the authors and do not necessarily reflect the position of the CARI or CIMB