If ASEAN wants economic integration by the end of 2015, it will have to do something about its internal development gap. The bloc’s 10 member states range from less-developed Myanmar to advanced city-state Singapore and emerging Indonesia. While important progress has been made, over a quarter of the ASEAN Economic Community (AEC) initiatives covering services liberalization and customs modernization, due to be implemented in 2008-2011, remain pending.
The AEC Blueprint is ASEAN’s vision for regional economic integration to transform the region with the free movement of goods, services, investment, and skilled labor, along with a freer flow of capital. Regional integration, via both market and government driven processes, will leave no ASEAN member state untouched as it drives the evolution of economic structures and policies spanning across the region.
To achieve that, ASEAN will need to overcome its greatest challenge; the one it faces from within. The development gap within ASEAN will likely emerge as the top non-traditional security issue in the coming decade. Regional policymakers need to find ways to leverage growth opportunities and strengthen competitive advantages to move their states further up the value chain, while mitigating perceptions that the AEC will create winners and losers.Enjoying this article? Click here to subscribe for full access. Just $5 a month.
As Tan Sri Dr. Zeti Akhtar Aziz, Governor of Bank Negara Malaysia, argued, “If the AEC vision was aspirational when it was first conceived, it is now clearly an imperative.” Integration represents a real chance for ASEAN to achieve economies of scale, attract further foreign investment, drive global growth, and develop the institutional and structural tools to achieve economic development goals.
But integration is not without its risks. If policies deliver an unequal distribution of opportunities, then a widening development gap and growing perceptions of unequal access to gains could undermine regional solidarity and create misguided perceptions of both political and economic opportunity costs to further ASEAN cooperation. These challenges and doubts should not be underestimated in the grand scheme of pursuing “one vision, one identity, and one community.”
To be fair, development gaps always exist, and are not always obstacles to integration. In ASEAN’s case, however, the development gap is detrimental to the adoption of a regional identity. Abdul Khalik captured the divide vividly, describing how Laotians forlornly view their inability to partake in Thailand’s prosperity from across the Mekong riverbank in Vientiane. Forming a regional identity is already difficult in Southeast Asia, because unlike other regions, it has no common religion, no common language, and not even a single land mass.
As the 1 percent vs. 99 percent debate sparked by the Occupy movement of summer 2012 in the U.S. demonstrated, these fault lines can be exacerbated when economic regional integration and growth initiatives, in their purest sense, do not take into consideration a people-centered or even pro-poor approach, leaving growth and development outcomes exclusively to the determination of the market’s “invisible hand.” As the world looks to ASEAN for a renaissance in international leadership in the Asian Century, ASEAN cannot afford fragmentation of the regional spirit.
The most important principle to minimizing the development gap is not to insist on regional redistribution policies, but instead to focus on strengthening domestic capacity to identify and harness competitive advantages for sustainable growth and development. Economic growth is not an end in itself, but rather a tool for achieving development goals.