ASEAN needs bigger voice in US-China rivalry

By Adam Schwarz
CEO, Asia Group Advisors

As the US-China relationship has morphed from uneasy cooperation to uneasy rivalry, the leading Association of Southeast Asian Nations (ASEAN) member states, like many others around the world, have had to recalibrate their relationships with the two great world powers.

But ASEAN itself has been largely absent from the discussion, risking regional division and global irrelevance at exactly the time when it most needs to develop a united front.

The East Asia Summit (EAS) to be held in Bangkok on November 4 provides an opening for ASEAN to go beyond its EAS convening role to a more forward-leaning posture in shaping and influencing its own geopolitical fate.

The fact that both China and the US view Southeast Asia as a key arena for influence gives ASEAN some degree of leverage. Most observers don’t expect ASEAN to use it, however, which would be a missed opportunity.

Unless ASEAN’s larger member states take an active role in strengthening and articulating a cohesive ASEAN view on issues affecting its member states, the US-China rivalry could end up polarizing the regional grouping and rendering the cherished notion of “ASEAN Centrality” a mere slogan.

This need not be the case.

Precisely because Southeast Asia is seen as important to both China and the US, and because neither of the global powers sees it in their interest to weaken ASEAN as a coherent regional grouping, ASEAN has some latitude in carving out its own stance on issues ranging from maritime security to infrastructure project governance.

But a clear ASEAN perspective on these and other relevant regional issues will not come into being on its own. ASEAN’s largest member states – especially Indonesia — will need to invest more leadership time and political capital to craft common ground.

Progress will inevitably be slowed by ASEAN’s consensus-based decision-making and its not unreasonable concerns about causing rifts in relations with China and/or the US. But allowing these concerns to sacrifice ASEAN’s agency and voice in a rapidly changing and challenging geopolitical environment is the poorer alternative.

ASEAN’s weak if not absent response to the growing US-China competition has a number of root causes. Four large ASEAN members – Indonesia, Philippines, Malaysia, Thailand – have been strongly preoccupied with domestic affairs in recent years; all have gone through challenging electoral processes.

Malaysian Prime Minister Mahathir Mohamad excepted, leaders of the other three nations tend to shun the regional stage and are much more inclined to focus on issues at home.

Two, although China is an important trading partner to all ASEAN members, Chinese investment is more dominant in some members than others. This has allowed fault lines to appear between some of the smaller ASEAN members – which receive larger shares of Chinese investment in relation to their small economies – and the bigger ones.

There are also sharply different interests regarding territorial claims in the South China Sea between ASEAN’s maritime and mainland states.

Largely as a consequence of the above two issues, ASEAN has labored through many years of fairly lackluster leadership from its rotating ASEAN chairs. None of the last three – the Philippines, Singapore and Thailand – delivered any particularly notable outcomes during their chairmanship years.

Developments on the trade front have also had the unintended effect of reducing ASEAN’s role.

With both the Trans-Pacific Partnership (now called CP-TPP following the US’s withdrawal) and the not-yet-concluded Regional Comprehensive Economic Partnership (RCEP), which includes ASEAN, Australia, China, India, Japan, Korea, and New Zealand, negotiations have taken focus and resources away from ASEAN’s own integration agenda, such as the ASEAN Economic Community.

And while RCEP was initially an ASEAN-driven and ASEAN-centric initiative, it has become, in practice, a free trade agreement (FTA) among six non-ASEAN parties, especially so between India and China, essentially sidelining ASEAN.

All of the above should induce ASEAN’s leaders to develop a common and united front vis-à-vis Sino-American rivalry in the region. But what might this mean in practice?

On the security side, ASEAN could accelerate the adoption of the long-pending Code of Conduct for the South China Sea to ensure that maritime border tensions are limited, defused quickly, and managed transparently.

It could further develop the largely symbolic ASEAN Outlook on the Indo-Pacific (AOIP), adopted in June, into a stronger strategic platform with clear objectives and policy frameworks.

Increased military training and exercises among ASEAN members would build familiarity and readiness to act on issues such as counter-terrorism and disaster relief. And ASEAN could build a small but permanent secretariat to support the East Asia Summit to carry forward decisions made at the summit, while also bolstering ASEAN’s role as a content-provider to the EAS agenda in addition to convening it.

On the economic side, ASEAN could further develop its own infrastructure masterplan to both leverage and manage foreign sources of financing for infrastructure.

These could include a set of ASEAN-wide standards for project governance and a scaling up of the ASEAN Infrastructure Fund to include externally funded infrastructure initiatives, including China’s Belt and Road Initiative (BRI) and the US-Japan-Australia Trilateral Infrastructure Partnership.

There is also significant room for the Jakarta-based ASEAN Secretariat to play a bigger role. It could drive further development of an ASEAN-wide infrastructure plan to establish priorities and guide infrastructure investment decisions by non-ASEAN investors.

It could also establish a funded facility which smaller member states could draw upon to hire reputable banks and accounting firms to assess the financial terms and conditions of foreign-funded infrastructure projects.

However, any strategic ASEAN initiative to defuse great power tensions in the region will struggle to develop momentum and credibility without a key ASEAN country – with Indonesia being the obvious candidate — taking an active leadership role, and a willingness of all ASEAN countries to devolve more decision-making rights to the Secretariat or other collectively representative councils.

A failure of ASEAN’s larger-country leaders to push the grouping to develop common regional positions will aggravate the impression that ASEAN’s ability to act in the new geopolitical environment is compromised and that responses to the growing US-China rivalry will be solely determined on a bilateral basis in each ASEAN capital.

This may work out well for some ASEAN members and less well for others. But it will almost certainly undermine the ability of ASEAN as a grouping to effectively represent its constituents.

Adam Schwarz is CEO of Asia Group Advisors, a business advisory firm focused on Southeast Asia

This article originally appeared in Asia Times on 1 November 2019