Is ASEAN Useless, Useful, Meaningful?

By N Mark Castro

47 years ago today, 5 Southeast Asian countries banded together to form the Association of Southeast Asian Nations or what is now called ASEAN. It has since expanded to include other member states such as Brunei, Cambodia, Laos, Myanmar (Burma), and Vietnam.

When it was formed everyone in the Western world either thought they would go left or they would go right … no one ever thought they’d go to sleep.

Because aside from regular ministerial meetings, occasional heads-of-state meetings, no one really knew what they were up to.

It’s as if a bunch of bullies got together and said to each other: “Hey, don’t mess around in my turf, OK?” And went on to pat themselves on their backs.

I mean, really, who among the citizens of the ASEAN member states really knew?

Or know.

After all, this was the era of Mahathir Mohamad, Lee Kuan Yew, Ferdinand Marcos, Major General Soeharto, and Field Marshall Thanom Kittikachorn, when they were not busy dictating their respective countries. At the time of founding the ASEAN, these bullies were represented by their respective foreign ministers.

Depending on which side of the fence you were sitting, it was the best of times, it was the worst of times.

And by next year, ASEAN is expecting to execute their ambitious plan of integrating 4.46 million km² — which is 3% of the total land area of Earth, with approximately 600 million people, which is 8.8% of the world’s population — into one single economic community.

Ah, what a time to be alive!

Because, like it or not — ASEAN members states have had such an economic growth by sheer luck of the numbers, at times, despite their respective governments.

ECONOMIC SHIFT TO ASEAN

As of today, Japan is already shifting its foreign investments from China to ASEAN. And we all know that with the global economic downturn, Europe and the us have already established their investments in ASEAN.

The economic blueprint for ASEAN is still inviting. Thailand may have had a series of coup d’etats but, what’s new with that? They’re still the “Detroit of the East” and the 7th largest car exporter in the world. Singapore is still the financial hub. Malaysia is still a great place to do business. And the Philippines, despite being visited by typhoons at least 26 times a year, still managed to post two years of growth as reported by Bloomberg. Myanmar is the darling of the world right now while Cambodia, Laos, and Vietnam continue to be positive growth areas for investment. Brunei, as you know, is still where the richest man in the world is … except that it’s his people’s money.

So now that these countries have wizened up to band together, the question is:

“Would ASEAN be an enabler to economic growth or an impediment for foreign investments?”

Consider the five core elements of ASEAN single market:

  1. Free flow of goods
  2. Free flow of services
  3. Free flow of investment
  4. Freer flow of capital
  5. Free flow of skilled labour

In addition, the single market and production base also include two important components, namely, the priority integration sectors, and food, agriculture and forestry.

For ASEAN workers, the free flow of skilled labour basically allows for managed mobility or facilitated entry for the movement of natural persons engaged in trade in goods, services, and investments, according to the prevailing regulations of the receiving country.

ASEAN is working to:

  1. Facilitate the issuance of visas and employment passes for ASEAN professionals and skilled labour who are engaged in cross-border trade and investment related activities.

Which means an Indonesian national can easily find work in Thailand and vice versa. Essentially, Thailand doctors can swiftly collaborate with Indonesian doctors and Singaporean investors can quickly venture with Vietnamese entrepreneurs. Philippine executives can quit looking at the US and Europe to transfer talent as ASEAN can now provide the same accommodations.

Imagine working in the beaches of Bali while submitting your report?

Actually, Thailand has already started preparing the issuance of ASEAN work visas on 25 key professional fields, in line with the ASEAN Agreement on the Movement of Natural Persons (MNP).

The professional fields involved with, for example, engineering, computer, research and development, advertising, marketing research, management, agricultural, telecommunication, educational, financial, health, translation, construction, and transport services.

Recently, I reached out to a Thai friend to confirm the country’s position on the ASEAN integration and how it would impact the current political crisis there, to which he sent me this:

Prepare your team: need help in government tourism. No sex tourism.

Oh well, one can’t be too choosy.

Cultural Differences | Mode of Communication

An integral part in doing business in ASEAN territories would be its varying degrees of cultural behavior. Few are Western-oriented while most are highly traditional. While foreign investors would have to veer through a challenging route in its hiring process, ASEAN has already submitted its social-cultural community blueprint. Between ASEAN members, it would seem the countries share societal and social similarities. As in all social relationships, group consensus is important in all aspects of communication, and discussion takes place to achieve harmony in a collective manner. As a result, individuals identify themselves with groups and families, which could spell a major difference for Western countries penetrating the ASEAN market.

Since most of the member states of ASEAN have had external influences, even the most traditional societies, it wouldn’t be impossible to find a convergence of cultures between ASEAN members but would require a more expansive worldview of global markets. Sunni Islam has put down strong roots in Malaysia and Indonesia. Theravada Buddhism flourishes in Thailand, Myanmar, Cambodia and Laos. Buddhism and Confucianism are resurgent in communist Vietnam. The Philippines is the only Catholic country in ASEAN.

While foreign cultural influences have facilitated much change, the region’s own culture still shines through. The region has an indigenous culture that is alive to date. Common characteristics can still be identified due to the similar cultural origins of the various nations in the region. This is certainly an asset as they have long traditions and established contacts with these huge and fast-growing economies.

And since English has been established as the mode of communication between ASEAN member states — for public information — then a dedicated investment on linguistic skills becomes a must for companies engaging ASEAN nationals and/or markets.

Singapore, Malaysia, and the Philippines are among the English-speaking countries while Indonesia is filled with language schools including the entry of Cambridge English. Thailand is actually offering Free English Lessons for Professionals and is expected to be rolled out in the region.

For advanced education, Philippine-based John Clements has partnered with Harvard to provide a series of leadership training across the region while Yale University has partnered with NUS to deliver a complete suite of professional programs on management in its leadership academy while Cambridge has become the educational testing basis of a majority of schools in Indonesia.

IS ASEAN WORTH IT?

In a recent business intelligence briefing, ASEAN Business Outlook Survey the majority of U.S. companies operating in the ASEAN region and expect to see continued growth in their Asian operations.

After all, with 604.8 million population as of 2011, and a combined gross domestic products of US$ 2.339 trillion in 2012 and total trade worth more than $ 2.04 trillion in 2011, it is not surprising that it’s fourth biggest consumer of US goods after Canada, Mexico and China. It expects an estimated 43% exports growth in many manufacturing sectors as a result of the ASEAN Economic Community (AEC).

Imagine the companies that require professional services? Representation? Affiliation?

Who would’ve thought that what was founded exactly on this day 47 years ago would become like this?

Hedge your bets and find how 2015 shapes up for your projections, especially when the largest economy in Southeast Asia has just elected its new president.

If you need further business intelligence and executive political briefings, let us know.

About Asmartrock

N. Mark Castro is the chief political communications strategist for PT AsiaLeads, a political and communications policy-making body based in Jakarta, Indonesia. He is also the Executive Director at the Southeast Asia Consulting Group, an investment advisory company assisting clients roll out their presence for the ASEAN Economic Integration in partnership with government. The views posted here are his own and do not in any way reflect the views of the companies he represents.

Posted on August 10, 2014, in General, Politics and tagged , , , , , , , . Bookmark the permalink. Leave a comment.

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