Entries by akmal.muhammad.f

ASEAN Agreement on E-Commerce: What It Tries to Tackle

By Robbaita Zahra

The OECD defines e-commerce as “the sale or purchase of goods or services, conducted over computer networks by methods specifically designed for the purpose of receiving or placing orders. The goods and services are ordered by those methods, but the payment and ultimate delivery of the goods or services do not have to be conducted online”. It is no doubt that this area serves as a strong interest in ASEAN as it holds much economic promise. Through technology, the costs of production can be reduced, which later encourages the growth of new business and advances communication. ASEAN has been a platform for Southeast Asia countries to integrate efforts and efficiency in terms of economic cooperation as embodied in one of the three pillars of ASEAN which is ASEAN Economic Community. To reach its vision of a regionally integrated economy, electronic commerce can be viewed as one of an instrumental component in this matter. With the rapid growth of technology and industry, e-commerce in ASEAN countries has grown rapidly and significantly within these past few years. In Indonesia, Malaysia, the Philippines, Singapore, Thailand and Vietnam, retail e-commerce has a total market size of US$7 billion. Countries in the ASEAN region also are the fastest-growing internet markets, with approximately 330 million internet users.According to research conducted by Google and Temasek, the size of the Internet-based economy of ASEAN could reach a size of $240 billion by 2025.

In line with this development, the ASEAN Agreement on Electronic Commerce was signed on 12 November 2018, on the sidelines of the 33rd ASEAN Summit and Related Meetings, making ASEAN as the first region in the world to have an e-commerce agreement. This agreement is part of the implementation of the ASEAN Work Programme on Electronic Commerce 2017-2025. The objectives of this agreement are to facilitate cross-border e-commerce transactions, contribute to creating an environment of trust and confidence in the use of e-commerce, and deepen cooperation among ASEAN member states to further develop and intensify the use of e-commerce to drive economic growth and social development in the region.

 Why Is It Necessary?

This agreement comprises of member states’ commitment to cooperate and collaborate with regards to electronic commerce, so that businesses–especially small and medium-sized enterprises–in the ASEAN countries can be enhanced more efficiently. Each country shall have the commitment to maintain or adopt as soon as practicable, laws and regulations governing electronic transactions. Relevant measures in each countries which contribute to the increase of trust and certainty for business operating in the region are also required to be published as promptly as possible. Moreover, ASEAN members acknowledge the importance of efficient cross-border logistic. Therefore, through this Agreement, lower costs and improvement of speed and reliability of supply chains in cross-border e-commerce are essential to be implemented. With this, it is expected to improve the accessibility of rural areas to online marketplaces.

With regards to facilitating cross-border e-commerce, it provides several mechanisms which shall be implemented, such as paperless trading between businesses and authorities which are encouraged to be used, the acknowledgment of legal validity of electronic authentication and electronic signatures, and the recognition of cross-border transfer of information by electronic means.

Further, another area of this agreement that needs to be highlighted is in terms of consumer protection. It is true, that with e-commerce, consumers are able to have more options and variety of products and services. However, engaging in a transaction in electronic commerce provides several inherent risks, such as unsecured online payments, product unsafety, and inaccessible dispute settlement. Lack of trust in online transaction are also usually become one of the problems faced with regards to consumers in e-commerce. Therefore, under this agreement, consumers engaging in electronic commerce are supposedly be given the same protection as given to consumers of other forms of commerce under each respective countries. Transaction security, cyber security and personal data protection shall be accorded to the consumers to ensure consumer protection. Dispute settlement mechanism is also regulated in this Agreement, giving more certainty and a degree of trust for the consumers.

However, despite the existence of this Agreement, each member states have to give common efforts to support the development of regional e-commerce, including but not limited to enacting the necessary laws and regulations on electronic commerce. The ASEAN Agreement on E-Commerce provides a starting point which can be seen as a common reference framework guiding the enactment of domestic laws and regulations in the respective ASEAN jurisdictions. Not only enacting the needed legal frameworks, enforcement of those legal frameworks are also critical in enhancing the implementation of e-commerce.

Last but not least, aside from adopting the legal framework, it is also needed to keep developing the technology as the basis of e-commerce itself; such as telecommunication infrastructure, user-friendly online payment systems, and efficient distribution networks. For without the advancement and innovation of technology, the region’s economic condition might not be as progressive as it is right now.

Robbaita Zahra is currently a Program-Intern in ASEAN Studies Center Universitas Gadjah Mada

Reforming North Korea’s economy: What role for ASEAN?

Shah Suraj Bharat/Jakarta

Photo by Uri Tours (Wikipedia)

The peace process between the two Koreas is exactly– a peace process – something that has eluded the peninsula after 70 years of hostility. Investors, policymakers and the international community will have to be patient on the potential for market reform in North Korea. Yet, there is reason for quiet optimism, judging by the actions and statements of North Korean leader Kim Jong-un.

After becoming leader in 2012, Kim signaled a change in economic strategy to a focus on development, saying North Koreans would no longer have to “tighten their belts twice”, a subtle acknowledgment of the shortcomings of the command economy. In March 2013, Kim called for byungjin (parallel advance) on developing nuclear capabilities while building the economy. This contrasted to his father Kim Jong-il’s focus on defense, implicitly survival, as the paramount concern of the state.

State and regime survival is, of course, of paramount concern for the younger Kim. But the emphasis has shifted, from a stance of defensive (and sometimes offensive) neorealism through promoting nuclear capabilities, to deriving legitimacy and strength from economic growth. Confirming this strategic shift in April 2018 prior to meeting South Korean President Moon Jae-in, Kim declared that his signature policy of byungjin was to be retired and replaced with “all-out socialist economic reconstruction”.

After Kim’s summit in Singapore with the United States President Donald Trump in June 2018, war-like rhetoric markedly decreased. The economy has taken center stage in state propaganda and media coverage has shown Kim visiting farms, factories and tourist resorts. Going beyond rhetoric, the seeds of  market-oriented policies are quietly flourishing. Black markets have long been a vital means of acquiring daily necessities for ordinary Koreans, but they have been given more freedom to operate in recent years. Kim has also softly decentralized some economic controls, giving greater freedom to farmers selling crops and factory managers over wages and production.

Kim’s unprecedented steps of lifting economic controls are underpinned by the notion that economic openness does not necessarily pose a threat to the regime. This is underlined by the experience of reform and opening up in China and doimoi reforms in Vietnam, which led to phenomenal growth but cemented rather than eroded the power of the communist parties.

Moreover, such a reform strategy is something of an enigma for supposedly socialist economies. University of North Korean Studies professor Yang Moon-soo sees Kim’s strategy as mimicking China’s early period of opening up and reform, which itself was based on Soviet Union leader Vladimir Lenin’s New Economic Policy, characterized as capitalism subject to state control. Indeed such a reform strategy would suit Kim’s economic ideology, as state-led development will be imperative given the absence of an indigenous industrial class.

The question remains on whether North Korea will give up its nuclear weapons as demanded chiefly by the US. It would, however, be naive to assume that North Korea will completely denuclearize. This is a regime paranoid about its survival with an ingrained neorealist worldview of an anarchical international system, which views maintaining a balance of power through nuclear power as the key to survival.

It is worth noting that in 2003, Muammar Gaddafi and the Libyan regime decommissioned its weapons of mass destruction, winning favor from Western powers. Yet in 2011 during the First Libyan Civil War, NATO enforced a no-fly zone over Libya, which turned into a bombing campaign against government and loyalist forces, leaving Gaddafi feeling betrayed by the West. When Gaddafi  was apprehended in a culvert, he was subsequently tortured, sodomized with a bayonet and shot several times as he pleaded for his life. North Korea will certainly take note of this episode.

In this scenario, a quantum of utilitarianism may be necessary: An isolated, under pressure, nuclear armed and offensive neorealist North Korea with a hemorrhaging economy is more dangerous than a defensive neorealist, nuclear armed North Korea that is enjoying the fruits of economic growth and trading internationally as a result of market reform. The message needs to be sold to North Korea that being a member of international society, which is empathetic to North Korea’s worldview of the anarchic order but recognizes areas for mutual cooperation – in the spirit of raison de systeme (it pays to make the system work) – will give the regime a survival and power advantage as opposed to isolation.

Crucially, South Korea has shown that it understands and is sympathetic to North Korea’s strategic conundrum. During President Moon’s visit to Pyongyang where he addressed a crowd of 150,000 North Koreans, he pledged to “hasten a future of common prosperity”, praising North Korea’s “remarkable progress” and said he “understood what kind of country chairman Kim and his compatriots in the North want to build”.

South Korea’s stance means it is likely to continue pursuing cooperation with North Korea even if denuclearization falters, which would put it at odds with the US, although lifting international sanctions will be critical to kick-starting growth. Indeed this understanding is arguably a key reason as to why diplomatic overtures have made progress and kept North Korea at the negotiating table.

In the broader region, peace on the Korean Peninsula is certainly in everyone’s interests. The question also arises as to whether there is a role for ASEAN in contributing to peace on the peninsula and reforming North Korea’s economy.

ASEAN is certainly neutral ground in which to bring all stakeholders together, indeed Singapore was the host of the summit between Trump and Kim in June 2018 and Hanoi played host in February 2019.

Skeptics may point out that once again Southeast Asia acts as a venue instead of power broker, and ASEAN’s chief asset is its ability to organize meetings that have little tangible outcome.

On reflection, however, we must not underestimate the importance of the norms, socialization and legitimacy that ASEAN can bring in welcoming North Korea into a club of international society. The norms of the “ASEAN way” are surely attractive to North Korea as it seeks regime survival while ending its isolation. Peace and stability is often taken for granted, but in the context of development it is a mandatory precursor to growth and lifting ordinary people out of poverty. China and Vietnam are testament to this.

A dose of realism, however, for ASEAN member states is also necessary. A North Korea open to trade and investment will be another economic competitor for Southeast Asia’s developing economies. From afar, North Korea does appear to have the right conditions for takeoff growth. Similarly to South Korea before it began its journey of phenomenal growth, North Korea has the advantages a highly centralized state, high levels of elite unity, a relatively well educated but low waged labor force, a strategic geographical position and supposedly under Kim a developmental ideology.

Significantly, a reforming North Korea will capture precious value-added industries from South Korea, and all the technology, expertise and opportunities that come with it, something that ASEAN member states desperately need as they try to climb up the value-chain.

If we truly believe North Korea is on a path to market reform, then there is added urgency for ASEAN member states to upgrade economic relations with South Korea to remain competitive, and ensure that the economic benefits of a peaceful Korea can be shared by all.

The writer is an emerging markets editor and analyst. Find him on Twitter @ShahSurajBharat.

The Indo-Pacific Affairs: Between India’s Ambitions and ASEAN’s Position

Habibah H. Hermanadi – Research Associate to Institute of International Studies and Post-graduate candidate from University of Delhi

India imagined a larger role beyond its current dominance in South Asia, the Act East Policy had become a known concept subject to the discussion under foreign policy context. When India reaches Southeast Asia, it becomes clear ASEAN became one of the defining actors which shall complete the pieces of Indian Act East puzzle. Thus, in this article, writer will try to capture the demands and perceptions of India out of ASEAN, focusing on the great interception of Indo-pacific concept which was recently brought up in the 34th ASEAN summit in Bangkok, as India on their own had developed its own model of what New Delhi ought to be the groundwork of their foreign policy in comparison to ASEAN’s outlook on what they define as Indo-Pacific.

Naturally, when it comes to dealing with ASEAN, it has been a tricky ordeal for India. The regional organization claimed centrality has been a vague click in the realpolitik context, and this put New Delhi in a difficult position if the regional organization will instead hampers the gateway to further India’s Act East Policy, ASEAN is definitely no South Asian Association for Regional Cooperation (SAARC) where India’s dominance is inevitable and India can stretch its arms to fast-forward other member states compliance unlike the situation where New Delhi have to wait around for ASEAN and its sluggish narratives. Moreover, the abundance of normative entanglement caused India to strategically reach certain players who happened to be ASEAN member countries, for example, India’s commitment to Cambodia, Myanmar, Laos, and Vietnam (CMLV) economic development and cooperation and deepening maritime dialogue with Indonesia, Narendra Modi has made it clear of what India wanted all along. Reflecting upon India’s perception, we can see how this signified the lack of relevance of ASEAN might portray as a regional organization, thus we are moving to the next point, whether or not ASEAN’s response to Indo-Pacific put the organization closer to India’s arms.

Indo-Pacific: a case for unification or dissension? 

India has committed itself in actively promoting Indo-Pacific, constructively as an idea and as a regional model of cooperation. In addition to containing China’s Belt and Road initiative which India has strongly voiced against, the key point that differentiated the two models lie on Indo-Pacific’s freeness and cooperative nature and BRI that according to India ignored core concerns of sovereignty and territorial integrity.

On the ideational level, Indo-Pacific for India appeared as a challenge to the old notion of Asia-Pacific that excluded India, setting apart an East Asian led economic regime. However, as the term gained popularity, considering the responses from France, the United States, and Japan, ASEAN felt the need to reassess the infant concept into the best of its interest.

The Summit which took place last June answered such need by some key points that clarified ASEAN’s intention in complying to Indo-Pacific model. However, despite the so-called finalized version of the outlook is, the substance has been designed in such ASEAN manner, to which du Rocher deemed slow due to the narratives trap ASEAN has when it comes to the diplomatic mechanism.

While India pointed out the importance of Indo-Pacific as an advanced concept, its existence meant to face contemporary challenges and match up new power configuration. ASEAN is still assuring its outlook would recognize the organization’s significance, pointing out the need of ASEAN centrality both geographically and policy-wise. This kind of response is alien to New Delhi style of pragmatic foreign policy hoping for a rather concrete response, yet ASEAN member states’ concerns with their traditional allies were also one of the reasons of the ambivalent stance the organization took when it comes to Indo-Pacific.

Perhaps the great crossroad between what New Delhi wanted out of Indo-Pacific and ASEAN became clear in the “rule-based-order” clause, an option which indicated ASEAN common understanding with Beijing, in comparison to rule of law basis. The mechanism they proposed pointed out how international law is incapable to solve the regional problem, while New Delhi begs to differ with the importance of referring to the rule of law when it comes to diplomatic conducts within the Indo-Pacific model of regional cooperation. This difference can harbor future conflict of interests between New Delhi, which currently tries to contain Beijing, while at the same time needing ASEAN’s compliance to further its foreign policy objectives.


To round up the commentary, we have to refer back to what India wants out of ASEAN, and through this context, we can see that India wants the Indo-Pacific to work under India’s terms, and within that terms, ASEAN must be included. Throughout the competing concepts, models, or regional external influence from some of the major global politics players. We can see despite accepting the common idea of Indo-Pacific, ASEAN and India are not completely on the same side in the development of this idea. For ASEAN, this is subject to ASEAN’s way of diplomatic engagement among member states alongside domestic conditions which cannot be denied, and regional challenges which the organization has to overcome. For India, the open to interpretation and vast meaning of Indo-Pacific, a concept which was meant not to dictate, definitely puts New Delhi in the intricate position.

So far, New Delhi’s concern over Beijing’s next move had been matched up by deepening strategic bilateral relations with ASEAN member states, considering these strategic partnerships will result in a tangible outcome. Perhaps, despite ASEAN’s decision on the creation of its Indo-Pacific Outlook the dynamics of India to Southeast Asian countries will remain the same, when it comes to the region, New Delhi has to adjust to the region’s dynamics and diplomatic pace instead of bypassing the ambitions through ASEAN.

The Tightening Belt Around ASEAN’s Narrowing Road to Success

By Matthew LoCastro, illustration by Lommes (Wikipedia)

The Belt and Road Initiative within ASEAN

The Belt and Road Initiative (BRI), also known as One Belt One Road (OBOR), is one of the most prominent and one of the most shrouded global development initiatives in modern history. With estimated investments of about US$150 billion over the next decade with a total price tag ranging from US$1trillion to US$4 trillion, BRI still remains only a singular part of China’s larger desire to invest, connect, and craft a sphere of influence, or as President Xi describes it, “a community of common destiny,” across Asia.

As of 2018, China has funded 96projects across South East Asia. China’s projects, a variety of roads, railroads, ports, power plants, and other infrastructure projects have provided insight into China’s grand strategy. ASEAN member states will have to determine if China’s investments and influence will support or disrupt ASEAN’s commitments to resiliency and innovation within the realm of its socio-cultural, economic, and political/security pillarsoutlined in the ASEAN 2025: Forging Ahead Together. As with many investment and economic development initiatives, ASEAN members can expect tangible benefits aligned with the ASEAN development framework but should ultimately air caution to China’s advances due to long term and deeply embedded costs.

A Positive Outlook for the BRI

China’s BRI and larger foreign investment goals have the potential to bolster the ASEAN 2025 vision. China has been a leader in poverty alleviation within its own boarders, uplifting 800 million people out of poverty since the 1980’s with the goal of eliminating all domestic extreme poverty by 2020. China’s success has the potential to carry across ASEAN as investments lead to job creation and infrastructure development, and consequentially reducing spatial inequality.

The potential for successful investment impacts are further supported by a 2018 study conducted by The Brookings Institute. Brookings evaluated the national economic impacts of approximately 4,300 Chinese government financed development projects in 138 countries and found that on average, Chinese aid and investment yielded economic growth dividends. For the average host country, a doubling of Chinese official development assistance produced a 0.4% point increase in economic growth two years after the funding was approved.

Reducing inequality, ensuring equitable economic growth, and developing an interconnected ASEAN that can effectively and easily trade goods and services are accomplishments that fall within the ASEAN 2025 vision. By evaluating the benefits of China’s investments, policymakers can be convinced to welcome BRI funding with open arms. However, it is important to recognize that China’s ambitions do not remain in a silo of intentions to promote regional economic growth.  China’s larger goal is to strengthen its international influence. Such a goal will come at a cost to ASEAN’s socio-cultural, economic, and political and security pillars and negate the economic benefits incurred by these investments.

The Adversarial Nature of the BRI and ASEAN’s Three Pillars

The ASEAN socio-cultural pillar states that it is a pivotal goal for ASEAN members to promote equitable access to quality opportunities and to protect human rights. BRI financing is not beholden to these standard. Other institutions, such as the IMF and the World Bank Group, will limit financing to causes that may violate the human rights of an ASEAN member country’s citizens. The BRI allows an option to seek financing from a source that does not abide to a standard of respecting human rights. This outlet inherently undermines that drive and motivation for all member countries to strive to uphold the same obligation. It can be more cost effective or convenient to ignore universally agreed upon standards of human rights when there are limited consequences. This issue is further compounded by the appeal of the ease in structuring financing and receiving funds from China.

China’s investments have also been linked to instances of supporting local corruption, degrading the environment, and weakening trade union participation.

In a 2016 case study of Chinese investment in Africa, empirical results consistently indicated more widespread local corruption around active Chinese project sites. This corruption would linger after the project implementation period, seemingly not driven by an increase in economic activity, but rather signifying that the Chinese presence impacts norms.

Chinese investments also do not have an incentive to support the development of renewable infrastructure or low-carbon investments. As China aims to achieve its own sustainability goals, locating financing for high-carbon projects internationallyallows for China to take credit for emission reduction and environmental quality improvements when in reality the environmental damage is occurring abroad.

Among the projects that BRI supports, researchers have also found a tendency for China to maintain control over development projects throughout the entire implementation phase, using Chinese contractors for work performed in the recipient countries. These contract workers weaken the ability of trade unions to advocate for reasonable labor protections and decrease the overall economic benefits received by locals.

Despite promises of potential economic growth, the economic pillar of the ASEAN 2025 framework is also threatened by BRI investments. Chinese banks are worried about the safety of current lending. Since 2015, commercial banks have cut new BRI financing. Furthermore, China is finding it hard to identify profitable projects in belt-and-road countries leading to BRI being commonly referred to as “One Road, One Trap” amongst the business community.

The investment environment is further complicated by the lack of investment transparency and at times, predatory nature of investments. Chinese backed projects have a uniform contractor base. 89% are Chinese companies, 7.6% are local companies from the country of investment, and 3.4% are foreign companies, non-Chinese companies from a country other than the one where the project was taking place. Compared to multilateral development bank funded projects, 29% are Chinese, 40.8% are local, and 30.2% are foreign.China’s investment strategies also provide little room for local organizations to secure contracting opportunities. The lack of contract diversity coincides with the lack of project transparency preventing ASEAN members from understanding the investment activities occurring in the market and discouraging investment.

Several of China’s infrastructure investments, though not the majority of infrastructure investments, have also been labeled as “debt-traps.” A debt-trap occurs when China finances projects on unfair and unequal terms taking advantage of lower income countries financial needs. The trap component occurs when payment deadlines approach and the borrowing country is no longer able to pay its debts.This leads to Chinese intervention to gain control over the physical assets or gain some other distinct advantage to collect on what they are owed.

In Sri Lanka, the Hambantota Port project fell victim to this scheme. Upon striking a deal with a Chinese state-owned enterprise, Sri Lanka borrowed $307 million from the Chinese Export-Import bank, then $700 million, and finally, $1 billion. Once Sri Lanka found itself unable to pay these loans back, it ceded control and sovereignty of the port to China under a 99-year lease agreement.Similar instances of “debt-trap” financing have occurred in Malaysia, the US$20 billion East Coast Rail Link Project, and in Laos, the China-Laos railway project, among a few examples.

China’s investments abroad have become recognized as attempts to dominate smaller economies. Such actions strip ASEAN members of their economic and political sovereignty. This loss of sovereignty can expand into concerns of security and directly affect the third and final ASEAN 2025 framework pillar of promoting political and physical security.

As seen in Sri Lanka and Laos, there is the potential for vital domestic assets to be under the direct ownership of a foreign entity in the instances of defaulting on project payments or loans. Control over ports and harbors, especially in South East Asia poses a large security threat as the acquisition of these assets could bolster Chinese presence in contested areas such as the South China Sea.

Considering several BRI projects involve maritime infrastructure, China could potentially influence ASEAN member states’ ability to use maritime trade routes and block the development of comprehensive maritime cooperation. Chinese ownership of power plants and access to other supply chains, raw materials and natural resources poses a major security risk in the event of conflict and will increase Chinese soft power over the governance decisions of ASEAN due to this looming threat.

The Need for Caution When Addressing the BRI

As ASEAN member states plan to forge ahead together, it is vital that the 2025 framework for the region takes into consideration the external influences that seek to threaten the ASEAN community. Though investment opportunities from China may appear lucrative, they pose a serious threat to the leadership and success of the ASEAN community. The BRI’s goals are vast and this initiative has the potential to produce a network of infrastructure projects unlike anything the world has yet to see. However, the ambitions and intentions of the BRI must be policy maker’s first consideration. Unlike multilateral development banks and other international financial institutions, China’s intention is not focused on aid and mutual global development. It is driven by a desire to control and dominate the actions of other sovereign nations.

Matthew LoCastro attended Hunter College in New York City and is a Luce Scholar

Decoding the Indo-Pacific outlook

See original post in Bangkok Post

The 34th Asean Summit wrapped up last week in Bangkok, with the adoption of a crucial document known as the Asean Outlook on the Indo-Pacific (AOIP). Prime Minister, Gen Prayut Chan-o-cha, regarded the AOIP as a milestone as the bloc now has a unified perspective on how to deal with external partners in the region.

In terms of the text, the AOIP has changed from the first draft distributed by Indonesia in August 2018 during the 51st Asean Foreign Ministers Meeting in Singapore. The first draft was still very Indonesia-centric in a sense, as it weighs on connecting the Indo-Pacific vision with Indonesia’s Global Maritime Fulcrum strategy. In that draft, Asean’s role is projected to become the fulcrum of connectivity and inclusive norm-setter.

While principally the AOIP shares a similar objective with its previous draft, there are not so many strategic directions outlined that champion Asean’s role to become a central Indo-Pacific driving force. The previous draft is rather more concrete providing action proposals, such as developing a Master Plan on Indo-Pacific Connectivity, creating the Indo-Pacific Forum on Sustainable Development Goals, and establishing the Indo-Pacific Forum for Safety Navigation and Mitigating Natural Disasters.

The adopted version is instead built on traditional principles of Asean, but with similar goals of building perspective and providing narrative on how Asean should be driving the region in the midst of global uncertainty and great powers’ rivalry.

The AOIP is not a product, but a process. The instrument is non-legally binding, different from what Indonesia’s former foreign minister, Marty Natalegawa, suggested in 2014 for an Indo-Pacific Treaty, to which, in its Chairman Statement of the 24th Summit, Asean leaders “welcomed Indonesia’s efforts to propose a Treaty of Friendship and Cooperation in the wider Indo-Pacific region”.

Rather, it emphasises norm-building processes, setting up a wide range of principles, notably Asean centrality, habit of dialogue, and inclusivity.

The AOIP serves as a “learning module” for all Asean member states in dealing with external powers’ expanding influence in the Southeast Asian region and beyond through different visions of regional architecture concepts brought forward by other competing powers. What comes after the adoption for Asean is to exercise these guidelines in responding to various Indo-Pacific, or other geostrategic proposals.

While it seems like there is limited content in the AOIP, the adoption signalled Asean’s take on maintaining order in an age of uncertainty and deficit of multilateralism, primarily in the changing regional architecture influenced by the expansion of China through the Belt and Road Initiative (BRI) and the US Free and Open Indo-Pacific Strategy (FOIP), perceived as its counter balance. The AOIP does not take sides. Although, for some, picking “Indo-Pacific” as a title could be regarded as a “containment policy” against China, Asean’s proposal is claimed as the only geostrategic concept grounded on inclusive collaboration with any players in the international community and avoiding rivalry. This was seen from Indonesian President Joko Widodo expressing his keenness to invite China as a potential partner in advancing Indo-Pacific cooperation at the 21st Asean-China Summit 2018.

The AOIP adoption indeed stole some momentum as it was consensually approved in the midst of an accelerated trade war between Beijing and Washington, which has already started to bite Asean members’ economies. It still remains a challenge to reconcile these two competing powers, especially as the US report that came out recently already pointed a finger at Chinese coercion towards Southeast Asian countries being an identified threat. Nonetheless, if utilised strategically, it can play a significant role serving as a “buffer zone” towards the spread of the major powers’ influence in Southeast Asian, depending how Asean, or Indonesia as the key drafter, can better make use of this strategy.

As an Indo-Pacific vision that exerts collaboration without leaving anyone behind, credit for the AOIP goes to Jakarta for its success in extending and promoting its foreign policy; free and active principles, to Asean — fundamentals of Indonesia’s foreign policy that amplify non-alignment with any major powers. If Asean members are able to adhere to AOIP to avoid disunity, it can turn into a powerful instrument. If not, then it will remain a ceremonial document like other Asean meeting outcome documents.

The vision appears to be idealistic. Past experience shows Asean hardly maintains its centrality on issues that are sensitive in nature, such as the South China Sea dispute, despite the grouping’s stance on the region as a zone of peace, freedom and neutrality. While it is still too early to assess the future trajectory of Asean in taking the AOIP in its steps forward, assessing the success rate of all member states sticking to these principles could be a question as its members have historically aligned to a certain “patron” country.

Dio Herdiawan Tobing is a Senior Fellow with the Asean Studies Center Universitas Gadjah Mada in Indonesia and Vicky Barreto is a MA Candidate in Development Studies at Sussex University in the UK.

Internship 2019 #2

Download full poster here

[ASC UPDATE] Internship 2019 Second Term

We have good news!
ASEAN Studies Center Universitas Gadjah Mada invites students from various universities in Yogyakarta to join our Internship Program and involves in our 2019 research and program.
Internship period: August – December 2019

Required Documents:
Cover Letter
TOEFL/IELTS/TOEFL Prediction Certificate
Other supporting documents

General Requirements:
1. Must be an active university student or fresh graduate with minimum GPA of 3.25
2. Excellent written and verbal communication skill both in Bahasa and English (at least TOEFL 525/IELTS 6.0)
3. Have an interest on ASEAN Issues
4. Ability to work effectively as a team member and independently with minimum supervision
5. Ability to manage multiple priorities under pressure, and to meet short- and long-term deadlines

Interns in Research Team
1. Experiences in assisting research and publication will be an added value
2. Submitting 300 words of writing sample with a specific theme of “Advancing Partnership for Sustainability in ASEAN”
3. Disciplined to meet publication deadlines

Interns in Program Team
1. Experience in managing national and international event (conference, seminar or public lectures)
2. Knowledge of project funding procedures and guidelines
3. Demonstrated experience in the formulation of cooperation and funding proposals
Interns in Media and Publication Team
1. Able to manage social media and WordPress-based website (Facebook & Instagram, including content planning and writing)
2. Mastered basic graphic design, camera and video editing skill

– Deadline of application 13 July 2019
– Notification of Result for Interview 18 July 2019
– Interview 22-25 July 2019
– Notification of Final Result 29 July 2019

Submit your requirements to: aseansc@ugm.ac.id with subject: Internship ASC UGM Batch II_full name

Indonesia’s Journey to Reduce 70% of Marine Waste by 2025

by Carter Anne Jones*
Pictures: Forest and Kim Starr

Indonesia produces 3.2 million tons of mismanaged trash ever year with nearly 1.3 million tons ending up in the sea. This makes Indonesia the second-largest plastic polluter after China. Last year, Bali declared a trash emergency and used 700 cleaners to collect nearly 100 tons of trash on their beaches. Although, plastic waste does not only effect Indonesia’s marine life, but it can also be found in rivers throughout Indonesia. The Citarum River was declared the world’s most polluted river, yet it’s believed that over 28 million people depend on the river every day for water. Plastic pollution threatens Indonesia’s tourism industry which supplies the country with US$4.6 billion of foreign exchange income annually and employs 13 million Indonesians. It also impacts Indonesia’s overall public health as plastic has been found in 114 different aquatic species with half of those species ending up on our dinner plates. Luhut Binsar Pandjaitan, Indonesia’s coordinating minister for maritime affairs, announced during the 2017 World Oceans Summit in Nusa Dua, Bali that Indonesia pledged to contribute up to US$1 billion annually to reduce plastic waste. He proposed developing new industries using biodegradable materials such as seaweed and cassava to create plastic alternatives. Indonesia has also talked about a plastic bag tax and has already banned single use plastic in Denpasar. The ultimate goal is to reduce 70% of marine waste by 2025. Indonesia is located at the center of the Coral Triangle, which contains one of the world’s richest coral reef ecosystems. The Coral Triangle is vital for both food security and tourism within Indonesia. It is predicted that if we continue polluting at this rate we will have more plastic than biomass in the world’s oceans by 2050. Poor waste management infrastructure, lower socioeconomic communities, and lack of public understanding are a few of the problems Indonesia will face in its efforts to combat marine waste and reach the goal of reducing marine waste by 2025.  


Local Government Initiatives in Indonesia

Indonesia has been criticized for being too eager when it comes to eliminating 70% of its marine waste in seven short years. During 2016, Indonesia implementation of a plastic tax of Rp.200 (1p) per plastic bag was trialed in 23 cities across Indonesia. The results did show a decrease in plastic bag use, but the tax was met with notable resistance from retailers and has been the reason the Indonesian government is hesitant to enact a nationwide tax. The concern is that if you just impose a plastic tax on bags or expand the tax to plastic packaging it will only affect the country’s poor populations, as they have limited access to clean water meaning that Indonesians are already spending a large amount of their income on bottled water. Due to criticism of the excise tax, some have suggested a tax on plastic packaging that cannot be recycled, such as “straws, microbeads, and Styrofoam”, but not include water bottles, which can be recycled. Government initiatives are a good starting point, but if they are not paired with public education it will not create a long lasting impact. It is important the local communities understand why recycling and the decreasing of single use plastic is important. A focus also needs to be directed to Indonesia’s waste management plan. This process loses 1.1 million tons of local plastic trash, because it becomes too dirty in the landfills to be used in Indonesia’s recycling industry. Luckily, a developmental plan has just been released. It has a broad focus on the handling of trash transportation and minimalizing the spillage from pick up to drop off. It also aims to create a safe working atmosphere for waste pickers. Jokowi also plans to issue new regulations to speed up the prosecution of river polluters, especially corporations. The Indonesian military has also started a large-scale clean-up operation with the hope of preventing public littering, as well as to help villagers build septic tanks.


International Cooperation among Indonesia and other Countries

If successful Indonesia could be used as a model for many different countries around the world attempting to lower their amounts of single use plastic. Indonesia recently joined the Global Plastic Actions Partnership (GPAP) which works with local businesses and global partners to create solutions to reduce plastic pollution and advance a roadmap for implementation. GPAP is hosted by the World Economic Forum and aims to redesign the global “take-make-dispose” economy. As Indonesia continues to work to reduce marine plastic this creates and issue for Australia. Indonesia has taken 19% of Australia’s total waste, but now it vows to enforce tight restriction around what recyclable waste will be accepted. At this point, the recyclables from Australia are not always in the best condition, which means Indonesia is not able to use them. Hopefully, Indonesia’s new environmental stance will force Australia to stop offloading trash to other countries and invest in their own re-manufacturing facilities.


NGO’s and the Individual

Avani Eco is a company within Indonesia that is currently converting cassava into plastic bags and straws, but the bags are 50 percent more expensive than regular plastic bags. This would again force many lower socioeconomic families to bear the brunt of these environmental efforts. While looking for alternative methods for packaging is necessary, it is also important to ensure the production cost remains relatively low. Education is another important tool the Indonesian government can do to help combat marine waste. Programs such as the Bali Environmental Education Center (PPLH) and the Indonesia Plastic Bag Diet Movement (GIDKP) have mentor programs for high school students encouraging them to become leaders in solving environmental problems. While beach clean ups are not the answer to solving the plastic issue throughout Indonesia they are a good way for students to gain a better understanding of the plastic crisis that Indonesia is facing. Beach cleans ups can be used to motivate communities throughout the country, and teach them about the effects plastic pollution has on the marine life and their own communities.

The new pledge is at least a step in the right direction. The Indonesian government has admitted it is facing a problem and has created a platform for discussion. They are actively seeking for new ideas and solutions. It is important that Indonesia remains proactive about finding a solution and not back away from taking hard stances, even as large corporations or fellow countries continue to push for the overturn of restrictions. As Indonesia continues to head into the 5-year countdown it is important that these initiatives begin to yield concrete results and not just remain as empty promises.


*Carter Anne Jones is a member of Baylor University’s Class of 2020 with a major in International Studies and Russian. She is currently learning Bahasa Indonesia at UGM and works as a program intern for ASEAN Studies Center from March-May 2019.

ASEAN EE Industry: What Now?

Picture: Electronics factory workers in Cikarang Indonesia (© ILO/Asrian Mirza https://www.flickr.com/photos/iloasiapacific/8096440106/in/photostream/)

The heart of ASEAN’s regional economic connectivity, both in intra-regional and extra-regional trade, is the electronic and electrical (EE) industry an industry that has provided millions of jobs and holds ASEAN’s importance in the global economy for decades. The last statistics published by ASEAN in 2015 stated that “electrical machinery and equipment and parts thereof; sound recorders and reproducers, television image and sound recorders and reproducers, and parts and accessories of such articles” the intra-regional total trade in ASEAN is USD 543,751 million and the extra-regional trade nearly tripled with the total amount of USD 1,726,558the highest of all 99 forms of commodities.

It is no wonder, then, why ASEAN included ‘Electronics’ as its export industry focus. But should ASEAN continue to rely on its electronic industry?

The Good News: ASEAN still has time
When the Southeast Asian countries joined the trend of production-sharing or supply-chain in early 1990s that was previously done by the East Asian countries in 1980s, the success was undeniable. Trading parts and components produced by one country for further process and manufacturing have contributed Singapore, Malaysia, Thailand, and the Philippines more than 2.5 million jobs combined. The crisis in late 1990s have indeed disrupted the flow as it was in other sectors, yet it was also the first sector to recover.

For at least another decade, the electronic industry would remain a billion-dollar industry – something that ASEAN needs to take advantage from. In the Global Value Chains (GVC), the electronic industry generally has the highest value-added, second to automotive industry. In Singapore, Malaysia, Thailand, and the Philippines, the value-added is increasingly coming from domestic instead of foreign countries meaning that the local industries are more and more involved and capable. ASEAN member-states hence have the opportunity to utilize the local industries through this chain of electronic industry. Additionally, ASEAN member-states’ purchasing power are getting stronger each year with its growing middle class, and so does the demand for electronic-related goods. Hence, albeit the demand for electronic-based goods in ASEAN depends on the parents-market in which the final-processed goods will be sent, ASEAN has the potential to make its own market for such goods.

The next good news would be, since electronic industry is chain-based, not only does the industry help ASEAN intra-regional trade, it will also strengthens the region’s economic connectivity. It has been known that, along with Non-Tariff Measures (NTM), the lack of intra-regional trade, connectivity, and development gap is still considered as the biggest challenge in realizing ASEAN Economic Community. Electronic industry, through the global value chains, have so far boosted the business connectivity, companies connectivity, and states connectivity amongst the ASEAN countries. Those advantages can surely contributes to the preparation of AEC 2025, especially if ASEAN can further involve Cambodia, Laos, and Myanmar in the scheme, remembering the economic development gap between the three countries and the rest of ASEAN member-states is still substantially high.

The Bad News: time is running out

When the ASEAN member-states first develop their electronic industry, it was export-oriented with low labour-costs as  the main source of its attractiveness. This have worked for decades, but will not sustain for long. While some had argued that China’s rising labour-costs will advantage ASEAN member-states, for the better or worse, labor costs have also been rising in the region – and it will keep rising. Singapore had tasted the consequence of this back in 2011 to 2013, when there is a contraction in its electronics cluster due to the rise of labor and energy costs. This might not yet be the problem for the rest of the ASEAN member-states, but it needs to be remembered that China’s improvements in worker skill, worker productivity, and technology readiness might make The Dragon regain the cost advantage it had lost to Southeast Asia before.

The problem does not stop there. Though it has been mentioned that ASEAN has the potential to create its own electronic market and even the possibility of an ASEAN-owned electronic brand   ASEAN’s ability to do so is questioned. Albeit there have been researches showing that technology transfer exists in the decades developing the industry, workers may only be familiar in creating their assigned components. ASEAN might be the specialty of hard-drives and semiconductors, but generally, that was all. In this case, it is necessary to applaud Malaysia who has been focusing on technology transfer to its people, making ‘technology transfer’ as a ‘recognized profession’.

Finally, full automation and artificial intelligence might still be years away, but the 4th industrial revolution (4IR) is still coming, and the electronic industry will be the industry that will either influence or get impacted the most. ASEAN has indeed embraced one of the core characteristics of 4IR, digital economy, which reflects in the ASEAN ICT Masterplan 2020 – but it has yet to have a plan on overcoming the disruption in its goods-export industry. In ASEAN member-states where electronic industry is mainly focusing on electronic components, 4IR will impact negatively on the workers. ILO reported that Indonesia, Vietnam, Cambodia, and Laos are amongst the countries which workers are very likely to be replaced in automation. ASEAN, who has the credit of ‘less-interested in developing technology’, must start to fix their priorities, go beyond hard-drives and semiconductors, and at the same time making a move in making 4IR technologies inclusive to the SMEs, as it has been mostly undertaken by MNCs and large local enterprise.

Firstya Dizka Arrum Ramadhanty is currently a Research-Intern in ASEAN Studies Center Universitas Gadjah Mada. She is also an Undergraduate Student at Department of International Relations, Faculty of Social and Political Sciences, Universitas Gadjah Mada. She is available at f.dizka@mail.ugm.ac.id.