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ASEAN amid a new world order

This world order of economic liberalism and relative peace and stability responsible for decades of unprecedented global economic growth was led and secured by Pax Americana. Well, this state of bliss in certainty is no longer with us. We now live in a world ripe with uncertainties. Although years in the making, what happened in quick succession in 2017 was simply breathtaking in speed and unpredictability. At its root is the growing number of people who have come to the conclusion that integration and globalization is not what it was cut out to be.

In short order Brexit happened…………..It was, however, the election of President Trump on an “America first……never mind the rest” platform that had more impact to creating the current environment of geopolitical and economic uncertainty gripping the world.

As one commentator puts it, “America’s historical leadership role in the world has been replaced by a narrow and cramped ideology ….. Foreign policy has become a partisan game….. The shift we are witnessing around the world is not so much about the rise of China, but rather the decline of America.”

The withdrawal from the Trans Pacific Partnership (TPP), the renegotiation of NAFTA, the curbing of MNC flexibility to locate and outsource wherever most efficient, and the tepid support for multilateral organizations like the UN and the WTO, have had the effect of multilateralism taking a back seat to bilateral deals.

The retreat from the US traditional role as leader of the “free world” has opened the door for other powers to fill the vacuum. It coincides with China’s rise as an economic powerhouse. And this economic clout has translated into the geopolitical sphere. President Xi Jin Ping is now carrying the torch on globalization and climate change – unthinkable just a few years earlier. The world has moved on from a unipolar center of power to one where multipolar centers of geopolitical and economic powers compete for allegiance.

These developments threaten and undermine the very foundation on which ASEAN built its prosperity and enabled it to keep peace and stability in the region. The interplay between geopolitics and economics is a particularly worrisome threat to ASEAN’s unity and centrality as China becomes more adept at employing the “carrot and stick” tactic. You will recall how they banned the importation of bananas from the Philippines and halted tourist traffic to the country in retaliation to our filing an arbitration case on the legitimacy of China’s claim on the entire South China Sea. Now we are seeing the reverse as we downplay our winning the case. You can see how conflicted we are between choosing practical benefits and safeguarding our sovereignty.  

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What would it take for ASEAN to overcome these bumps on the road to full regional integration?

It must start from the top. Our political leaders must affirm their commitment to the realization of the ASEAN Community through the decisive implementation of its various work streams. Sadly, there is a leadership vacuum in ASEAN. Leaders are pre-occupied with their own domestic issues. There is no strong, elder statesman among the current crop of leaders to will the integration process forward. As a result, members have placed primacy on bilateral relations – like with China or the USA – over the concept of ASEAN centrality. This, of course, makes them vulnerable to political pressure.

Political leaders respond to popular will. If there is widespread support from their publics for closer ASEAN integration, they will become more decisive and committed in promoting ASEAN centrality. To do that, ASEAN must do a better job in communicating its vision, strategies, action plans, while delivering practical benefits to their respective domestic constituencies. ASEAN is so diverse ethnically, culturally, historically, and politically that the motivation for its people to become a community must start by providing an answer to “what’s in it for me”?

The governance structure of ASEAN must also be reviewed, particularly its charter and its consensus-driven decision making. The ASEAN Charter lacks teeth on non-compliance. The ASEAN way must give way to a more rules-based framework and the application of an “ASEAN minus x” mode, particularly on economic issues.

There is another challenge looming on the horizon and I have to mention this as an ICT person. The advent of the digital/internet economy, also referred to as the fourth industrial revolution, will have a transformative impact on production and consumption and can serve as a tool for promoting inclusion. The challenge is whether countries are equipped to adapt to these profound changes and utilize its benefits. I am referring to the quality of the infrastructure and the human resource to utilize the new technology. Absent this, the digital divide will only be exacerbated, even within ASEAN itself.

What does this all mean for the Philippines? The dismantling of the old world order has placed the onus on country competitiveness as the best antidote to whatever adverse consequences that the new world disorder will bring. Those who are competitive will reap the benefits and will be better able to cope with competition. The fourth industrial revolution and the dominance of disaggregated production or value chains as a business model will put a premium on connectivity – physical and digital – as a key element of competitiveness. China’s Belt and Road Initiative aimed at reviving the ancient trade route between Asia and Europe, will provide a significant boost to the process of economic integration in Asia. The Duterte administration’s aggressive program to build physical infrastructure is a step in the right direction, but the Philippines will have a lot of catching up to do. The digital highway, on the other hand, poses a significant challenge for the Philippines. In this context, Jack Ma’s comment about the Philippines having the slowest Internet connection in ASEAN suggests how much further we still have to go to be at par with our neighbors.

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