The Urgent Case for ASEAN Integration – Part One

This is the first of three posts that seeks to make the case for urgent action into ASEAN integration. This first post will elaborate on the pressing need for regional action.

It is a recent trend for the nations of the world to be aligning themselves according to regional economic blocs. The Arab states and Europe took the lead with the formations of the Arab League and the European Union (EU) in 1945 and 1952 respectively. Other regional blocs followed, including the Association of South East Asian Nations (ASEAN), the Caribbean Community, the African Union and the Union of South American Nations. While the stated motives are usually to ensure regional integration and promotion and protection of the common social and cultural backgrounds, it is probably safe to assume that the economic interest of medium and small nations, and even some larger nations has also been a key consideration especially with the growth of the five continent-sized developing nations of Brazil, Russia, Indonesia, India and China (BRIIC), as evidenced by such trans-regional trade blocs such as the Asia-Pacific Economic Cooperation, North American Free Trade Agreement.

The phenomenal economic growth of the BRIIC and other major developing nations has localized global competition. What was once something that happened to “people in some country” has now almost struck every country. A whole plethora of international firms have moved their sweat-shops and service-providers to these nations. It is not unusual for the products on the shelf of a Timberland shop to have been designed in New Hampshire, but produced in Hubei. Most service oriented companies, such as Internet providers and Banks have their helpdesk in India, and even religion has caught on by “outsourcing” prayer.

This “business blitzkrieg” has affected peoples to such an extent that most of them have come to view these nations and their peoples with suspicion; Barack Obama’s successful election was certainly aided as much by his considerably protectionist promises to “keep jobs in America”, as by his charisma.

The fears are probably justified. Even if one applies a cornucopian theory to the human’s material needs, which believes that advances in technology can support the extraordinary population explosion, the amount of jobs available is exhaustible, depending on the size of the present economy. Growth in one region will essentially result in contraction in another region.

The need for the 10 nations of ASEAN to achieve greater regional integration cannot be overstated. The coolness of the general population belies this urgency. South East Asia is so at risk because the economies of South East Asia closely parallel those of China and India and the region borders these two major powers. South East Asian economies are mostly low-level agricultural in nature, each nation (except Singapore) has a wide spread of cash crop farmers, white collar professionals as well as subsistence, shift crop farmers. This is relatively similar to the Chinese economy and the Indian economy. While the growth of China does equate to a growth in the trade with the region, it also means that industry will have a greater tendency to shift their Asian offices and operations centres from the region to either of its mega-neighbours. The fact that the 0.5 billion people in this region are divided into 10 different economies is a major drawback when decisive action is required to insulate itself from two single economies both over a billion strong.

The irony is that this region has the ablility to compete successfully. South East Asian has some half a billion people, of which only the 5 million Singaporeans are classified as belonging to a developed nation. The rest of the region is an eclectic mix of developing, emerging and newly industrialized nations. Even more numerous are the numbers that live below the poverty line. The region is however blessed with incredible natural resources, such as rubber, spices, oil, wood etc… It is a scandalous travesty that the people of this region live amongst an oasis of plenty yet simultaneously live in abject poverty.

As mentioned above, the competition for lower-leveled jobs has been proceeding at a frantic pace with the ascendancy of India and China, and the rapid development of nations such as Brazil, Nigeria etc… While the larger South East Asian countries such as Vietnam and Indonesia may be able to do battle on such a competitive scale, the other nations obviously cannot compete on low cost labour intensive jobs. Equally disturbing is the movement of knowledge-intensive businesses to these major players. In 2006, China surpassed Japan to become the second highest national spender in Research and Technology. Even if the region could compete in the labour-intensive industries, it must be admitted that not even Singapore can pose a challenge to Mumbai or Shanghai in terms of being financial cities, without a larger hinterland.

The only solution, to quantity-quality conundrum is to increase first ones quantity and then quality, the only way to increase quantity, is to increase the size of a nation’s population; but even the combined effects of growing birthrates and immigration has its limits. The only possible way to increase the size of a talent pool to the proper levels required in the short time available is to pool together the human capital of the region, thereby forming a strong regional community.

A strong regional community is a supranational organization that coordinates the combined economic efforts of the region, increases regional security and cooperation, promotes the social development of its people, empowers the amplification of a louder global voice (so that each nation can determine its own course) and in so doing, advances the conditions of its people.

A strong regional community can be extremely beneficial to any country, and is probably the only way forward for any nation in the modern world.

Next Post: 5 Reasons for an ASEAN Community