THE CICAK.com

Fragmented ASEAN relations won’t help to beat success of China and India

By STEFANIE KHAW

The leaders of Malaysia and Singapore have raised concerns over how rising giants India and China have undermined foreign investors’ interest in other developing economies, particularly in South East Asia. These two economic superpowers have quickly dominated the manufacturing and electronics market with their skilled and abundant workforce. Both countries boast a rapidly growing middle-class amidst a vast population of 1.3 billion and 1.1 billion people respectively.

Meeting on the sidelines of the recent Europe-Asia (ASEM) conference in Finland, the Malaysian and Singaporean powers agreed that one solution would be for ASEAN member countries to be seen as a single entity instead of ten separate nations. Together, these countries form a market of 530 million people, making it larger than the European Union and the United States.

Easier said than done, I say. ASEAN is fragmented. Apart from our buckets-of-sweat-inducing climate, we have little in common with each other.

One reason why it’s hard to see ourselves as a single entity lies in the fact that each member country is marching to an entirely different tune when it comes to our style of government. We are a cacophony of democratically elected leaders, socialists, communists, monarchs and military junta.
Compare this to the European Union. It’s probably the most successful regional alliance so far because all its 25 member countries have democratically elected governments.

Don’t get me wrong. I’m not expounding the virtues of democracy. “Socialism� and “communism� may be dirty words to a lot of people but this has not stopped China from becoming the latest investment hotspot.

My point is this: I don’t think it’s possible to even dream about ASEAN being taken seriously if we’re still so different politically.

Am I saying all 10 countries should conform to one style of ruling, i.e. democracy/military rule all around? That would help. But how soon can this happen, and will it be too late by then for our economies to catch up with China and India?

Even if all member countries did adopt similar modes of governance, our problems wouldn’t be over yet. That is only the first hurdle.

Greater intraregional co-operation is the sine qua non if this goal is to be achieved. Members of ASEAN aren’t exactly the best of friends with each other. Antagonistic relations between some of us need to be resolved.

For example, take the recent media frenzy following some controversial remarks from Singapore’s Minister Mentor. Lee Kuan Yew attracted international attention when he said Malaysia and Indonesia “had problems with their Chinese,” and that the success of the Chinese led to them being “systematically marginalised.”

This has enraged Malaysian politicians, particularly Malaysia’s former Prime Minister Tun Dr. Mahathir Mohamad, who has retaliated by accusing Lee of marginalising Malays in Singapore.

Disregarding the truth or the atrocity of both their remarks, a more important observation is the damage it has done to bilateral ties.

As United Malays National Organisation (UMNO) vice-president Tan Sri Muhyiddin Yassin said to The Star, Lee Kuan Yew was among those who had founded the concept of ASEAN co-operation to foster greater understanding in the region, and should therefore know that such remarks would not benefit the region.

We also need to make an effort to help each other more. The majority of Thailand’s small Muslim population live in southern Thailand. Muslim separatists there have been responsible for bomb blasts which have claimed more than 1500 lives since 2004. As Thailand’s immediate neighbour - and furthermore as the head of the Organisation of Islamic Countries (OIC) - Malaysia should do more to intervene in this situation.

We need to learn to give and take. It’s important that we move towards an “all boats rise� way of thinking rather than trying to compete between ourselves. Malaysia and Thailand have got to resolve issues concerning the Common Effective Preferential Tariff (CEPT) .

Under the CEPT, Thailand is required to lower tariffs for car imports from Malaysia from 20 percent to five percent. Thailand is ASEAN’s largest automaker and exporter and has refused to comply unless Malaysia removes the Approved Permit system. These Approved Permits act as a non-tariff barrier to the import of Thai vehicles by requiring buyers of imported cars to get a limited number of these permits from the Malaysian government.

And finally, we need to figure out what we’re good at. Lots of American companies have outsourced massive call-centre operations to India thanks to the latter’s large English-speaking population. There are apparently more English-speakers in India than there are in the U.S. The Indian province of Bangalore has also become Asia’s Silicon Valley and Indian software experts are currently among the best in the world.

Clearly not everyone in South East Asia speaks fluent English. In Malaysia, we’ve already got a problem with graduates who are unemployed due to their inability to converse in fluent English. Our IT sector isn’t doing too well either. All the funds invested to develop our Multimedia Super Corridor have yet to yield proportionate returns.

China’s industrial sector is thriving as a result of low costs of labour. Vietnam and Myanmar are able to offer low-skilled labour costs which are competitive to that of China. At the other end of the spectrum, Singapore is able to fulfill the void for the highly skilled workers required by the IT and semiconductor industry.

But other ASEAN members are caught between these two extremes. We’re neither here nor there – on an overall basis ASEAN has nothing to offer in terms of skilled or unskilled labour.

In the long term, cohesiveness among ASEAN countries is necessary for the region to acquire a competitive edge over rising giants China and India. But if we don’t find something that makes us all tick soon, we won’t really achieve much in spite of having closer and cozier relations.

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STEFANIE KHAW is a contributing writer for theCICAK.

She is a recent math and economics graduate from the London School of Economics. Having spent many hours in the Bangsar public pool, she still does not know how to do the freestyle. The haze makes her eyes water, as do thoughts of holidaying in Penang. Visit her site.