Entries by aseansc

ASEAN After 50: Escaping the Middle Income Trap

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Suraj Shah

Several ASEAN member states such as Malaysia, Thailand, the Philippines, Vietnam and Indonesia have sustained impressive growth rates in recent decades. Whilst this is a good news for ASEAN, they are also trapped in a pattern where the growth based on low cost comparative advantage is curtailed as incomes rise. Political economists called this pattern  “Middle Income Trap”.

This issue has been increasingly important as ASEAN moves forward after its 50th anniversary. In moving from middle to high income status, middle income countries (MICs) must move their factors of production from capital and labour intensive (intrinsic) production to knowledge and innovation-driven production.

Are Middle Income Countries (MICs) able to make this transition smoothly? Not necessarily. MICs are finding it increasingly difficult to make this transition, as they are sandwiched between the  lower cost competitors, and high income economies who have the institutional and human capital bases to drive innovation and technology.

They thus find themselves uncompetitive and trapped in this pattern of income.

Some have put forward regional economic integration, such as through the ASEAN Economic Community (AEC), as a strategy to avoid the middle income trap. However, the AEC is unlikely to provide a route to escape the MIT, and national strategies are likely to remain the priority for individual ASEAN governments.

Over time, ASEAN members progressed through the value chain by upgrading production processes and investing in human capital. It is worth noting that ASEAN’s success in maintaining security and stability in the region has been a key to unlocking the economic benefits regional stability brings.

This cannot be sustained forever, however. As illustrated by the Lewis Turning Point, when these economies have exhausted their surplus labour, wages begin to rise. This income growth erodes comparative advantage of low cost labour if wage rises are not accompanied by increasing productivity and technological upgrading. Growth rates subsequently slow as countries become uncompetitive.

Consider, for example, Indonesia, Malaysia and Thailand. They have not seen growth levels as experienced before the Asian Financial Crisis.  Future growth is also of no guarantee. In essence, economies who experience this process become ‘trapped’, as they reach a certain level of income but find it difficult to move to high income levels. Only 13 out of 101 countries have moved from middle to high income since 1960.

ASEAN economies are facing significant challenges in relation to the MIT. In particular, innovation in ASEAN is low, which is indicated by the origins of patent registration. Data shows that the majority of patents registered in ASEAN economies come from multinational corporations, whose profits often flow back to the high income economies.

In addition, research and development funding in ASEAN economies is significantly low. For example, Indonesia under invests in Research and development, with only 0.1% of GDP spent in this sector and 0.3% on higher education. This contrasts with South Korea who escaped the middle income trap, and spends 4.4% of GDP on research and development, ranked first in the OECD.

We could see a problem here: Middle income ASEAN members are stuck in the middle, with higher labour and logistical costs and imperfect institutions making them uncompetitive. They are also lacking in innovation capacity and human capital for technological capabilities.  

What could be done to resolve this problem? As Gill & Kharas convincingly argued, there is a need for institutional reform in areas of finance, governance and legal systems. ASEAN members need to become more specialised in what they produce –as well as shift from investment driven to innovation driven growth. This necessitates another factor: a structural transformation in ASEAN economies.

But could ASEAN provide a regional strategy for such transformation? Whilst ASEAN does provide some institutional anchoring, the AEC –regional platform for economic integration—are not institutionally deep enough to bind countries faster to reform. Rather, ASEAN tends to become a trend follower instead of a trend setter.

This is evident from various economic agreements and integration strategies adopted by ASEAN. To sum up, ASEAN’s institutional design are made to increasingly attract investment from to the region. Therefore, they are relying upon Foreign Direct Investment (FDI) rather than building up a more ambitious regional strategy.

This strategy might be relevant to facilitate transitions for some lower middle income nations –Vietnam, Indonesia and the Philippines— to middle income or from low income to lower middle income status like Myanmar, Cambodia and Laos. But still, it does does not represent the structural transformation necessary to escape the middle income trap, as growth continues to heavily rely on FDI rather than innovation.

The institutional weakness of ASEAN economic community has, to some extent, prevented the transformation from middle income countries higher to high income economies.

In light of this, the ASEAN Economic Community would have the potential to increase income growth for its member states. They could also allow economies to transition from lower middle income to middle income status. But the prospects of a regional strategy to transition from middle to high income do not hold as much promise, given the institutional weakness of the ASEAN Economic Community.

ASEAN member states who are seeking to avoid the middle income trap will need to unilaterally focus on their own political and institutional reform processes rather than relying on a regional commitment such as the ASEAN Economic Community. ASEAN policy makers should concentrate on implementing current agreements rather than focussing on grand designs.

As ASEAN is a trend follower rather than trend setter, middle income member states should focus on unilateral reform whilst keeping cooperation with neighbours in mind. This would provide fertile ground for ASEAN to follow. But it also provide future prospects of regional strategies for avoiding the middle income trap for current lower income members.

Let us see this happens in the next 50 years of ASEAN Economic Community.

*) Suraj Shah is MSc Candidate in the Political Economy of Emerging Markets, King’s College London and Visiting Fellow at ASEAN Studies Center, Universitas Gadjah Mada

 

ASEAN After 50: Why Political and Economic Integration are Not Sufficient

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Ahmad Rizky Mardhatillah Umar

ASEAN is now 50 years old. Originally established only as a platform for interstate dialogue, ASEAN has progressed through the ‘long and winding road’ to become a region. ASEAN has successfully managed to navigate through the Cold War, underwent a devastating financial crisis, and now

After 50 years, what does ASEAN need to do?

In a series of article, ASEAN Studies Center Universitas Gadjah Mada aim to address this issue to see where ASEAN should be directed to after 50 years and what issues that needs to be the focus of ASEAN in the future. I argue that it is important for ASEAN to move from its ‘traditional’ pattern of cooperation, which is concentrated upon economic or political security issues.

It is a common wisdom to perceive ASEAN integration on either ‘political security’ and ‘economic’ perspective. This might be inevitable. Yet, this is also not sufficient. ASEAN should also equally consider social integration, which is arguably neglected in the first 50 years of its existence as the cooperation in the Single Market or free flow of labors stole the spotlight.

Perhaps ASEAN analysts and scholars could argue that ASEAN did not originally provide a space for social and cultural cooperation. I do not intend to challenge this view, given the historical backdrop of ASEAN integration. However, as ASEAN progresses in the last decade, social and cultural problems emerged and ASEAN faces difficulty to deal with such problems.  

Consider, for example, the Rohingya problem. In 2015, a waves of irregular Rohingya migrants reach ASEAN member states as a part of unresolved crisis in Myanmar. This leads to a regional crisis when ASEAN member states were affected by these migrants, which resulted in several new regional initiatives to resolve the refugee issues.

So far, there is so far no permanent solution of such issue from ASEAN perspective.

The Rohingya case is not merely about the violation of human rights and it is actually more complicated than that. How ASEAN handles the situation shows that they are, in fact, not fully ready to implement the social integration, which compel every component in the society to embrace the diversity.

What is at stake? Why is there no proper ‘social integration’ in ASEAN’s 50 years existence? At least three problems needs to be addressed.

Let us begin with the primacy of ‘state-centric’ approach ASEAN Studies. It is also a common wisdom to embrace a state-centric view of ASEAN, particularly for those who regard ASEAN merely as ‘cooperation’. From this viewpoint, ASEAN is understood as a practice of diplomatic cooperation, which was institutionally developed after the Asian Crisis.

This perspective might be relevant in the past one or two decades. Yet, it misses one important point: the growing complexity of regional environment. Whilst state remains the most important actor in the region, the last decade witnesses the rise of various non-state patterns of interactions, either business-to-business, the growing civil society activism, or the most recent ICT integration.

It leads to the second problem in much of ASEAN literatures: the negligence of actors other than state or business. From the national perspective, literatures on ASEAN studies tends to overemphasise the preparedness of central government or market integration.

Less has been said, however, on how local government respond to ASEAN, which is different in each country. Also absent from such debate the role of peasants indigenous group –to name but a few— whose lands have been transformed into extractive industries or government-led development project. They are under-represented in ASEAN. They might not feel that ASEAN belongs to them.

However, in recent decade, there is a growing regional civil society activism or more works on ASEAN’s sectoral issues. Emerging literatures have attempted to cover their activities –which is good for ASEAN.

These problems have been complicated by the division of ASEAN integration into three different pillars –political security, economic, and social cultural. It assumes that each pillars has each own logic and operates differently each other.

What is at stake on our understanding of ASEAN is the absence of what Bob Jessop said as metagovernance: the underlying normative ideas that constitute ASEAN. As Dutch academic cum politician Bastian Van Apeldoorn explained it, every formulation of regional and international institution has a social purpose behind it, whether it is to maintain the hegemonic neoliberal project –as evident in the European Union— or something else.  

So what is the social purpose of ASEAN?

Historically, ASEAN has been served to maintain its founding member’s national interest. The end of Cold War brought another project: to craft a cooperation based on state-led capitalist development project. During its first 25 years, ASEAN has managed to navigate through devastating Cold War effects, which was continued by a series of economic cooperation.

The Asian crisis in 1997-1998 has brought a devastating effect, which makes ASEAN leaders rethinking the fate of ASEAN. It was resulted in a more complex form of integration, with the introductio  of the so-called ‘ASEAN Community’.

This is where regional integration was directed in the last 50 years, and where the faultlines of cooperation was originated. We might be disagree with the whole idea, but this is what history has brought to us in the last 50 years.

But we could also outline an alternative trajectory in the future.

The latest ASEAN Vision, signed in Kuala Lumpur in late 2015, has clearly emphasized the purpose of the cooperation. ASEAN should be people-oriented (oriented toward the people) and people-centered (centralising in the interest of the people).

Yet, the ASEAN Vision did not explain people-oriented and people-centered into details. Who is the ‘people’? What kind of integration design could be proposed to incoroporate people-oriented and people-centered ASEAN?

The blueprint of ASEAN Social and Cultural Community associates the term people-oriented ASEAN into the context of human development that adopted from the UN model. This concept assumed that the development that centralized in the fulfilling human rights, especially economic and social rights.

But with the existing market-based and state-led regional cooperation, the question  of ‘rights’ seems to be neglected. This is where our argument matters. To navigate after 50 years, political and economic integration is not sufficient for ASEAN. We need to do and think something more about our future regional governance. We need a better and fairer ASEAN, which people-centred and people-oriented. It must be proposed as regional agenda in the future.

Because another ASEAN is possible!

 

*) Ahmad Rizky Mardhatillah Umar is the Executive Secretary of
ASEAN Studies Center Universitas Gadjah Mada. Parts of this argument appeared at our recent book ASEAN in 2017: Regional Integration in an Age of Uncertainty.

The Treaty on the Prohibition of Nuclear Weapons: Historic Progress, Yet Not a Complete End to the Struggle

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122 members of the United Nations, including Indonesia, voted in favor for the adoption of an international treaty eliminating the use of nuclear weapons, at the UN Conference to Negotiate a Legally Binding Instrument to Prohibit Nuclear Weapons on Friday (7/7).

The treaty, called the Treaty on the Prohibition of Nuclear Weapons, was finally adopted after last December, with an overwhelming majority of UN member states approving a resolution to begin negotiations. It is the first document after the end of World War II, that calls for the prohibition and dismantling of nuclear weapons.

Elayne Whyte Gomez, president of the UN conference, stated that, “The world has been waiting for this legal norm for 70 years,” after the first atomic bombs were deployed to target Hiroshima and Nagasaki in August 1945.

The negotiation for the treaty was scheduled last March and continued from the 15th of June to the 7th of July, with the participation of governments, international organizations, and civil representatives. 129 countries, which represent two-thirds of the total UN membership, were present at the conference to negotiate the substantive materials of the treaty.

Unlike the previous nuclear treaty, the Non Proliferation Treaty (NPT), this treaty sternly prohibits any nation to develop, test, produce, manufacture, otherwise acquire, possess or stockpile nuclear weapons or other nuclear explosive devices. According to Beatrice Fihn, executive director of the International Campaign to Abolish Nuclear Weapons, the treaty is a clear categorical prohibition of nuclear weapons, and is firmly rooted in humanitarian law.

With strong provisions enshrined in the treaty, a greater challenge awaits, as the adoption of the treaty does not necessarily mean that the struggle to eliminate the use of nuclear weapons has come to an end.

Indonesia’s Longstanding Interest on Denuclearization

Indonesia has a strong interest in nuclear disarmament, and this does not automatically come to an end after the adoption of the new Prohibition of Nuclear Weapons treaty.

Indonesia’s ambitions in denuclearization became increasingly visible between the 1970s and 1980s under President Soeharto’s leadership. Together with Malaysia, Indonesia proposed the establishment of a Southeast Asia Nuclear Weapon Free Zone (SEANWFZ). The idea was formally raised and presented at Jakarta’s ASEAN Foreign Ministers meeting in 1984.

For Indonesia, the enactment of the SEANWFZ, also known as the 1995 Bangkok Treaty,  was a historic achievement. The Bangkok Treaty consists of two legally binding instruments; the main treaty and its protocol. The main treaty is aimed towards all States comprising the territories of Southeast Asia and the protocol is open to signatories of the Nuclear Weapon States (NWS), namely the People’s Republic of China, France, the Russian Federation, the United Kingdom and the United States of America.

In addition, It is aimed commit signatories to refrain themselves from undertaking nuclear weapon activity against any State party to the Treaty, and/or within the Southeast Asia Nuclear Weapon-Free Zone.

On 8-12 August 2011, for the first time ever, under Indonesia’s leadership, ASEAN officials met with representatives from the NWS to discuss the further accession and ratification of the Bangkok Treaty. Intensive negotiations with the NWS were continued at the 2011 ASEAN Summit, where ASEAN member states finally resolved substantive differences and concluded negotiations to enable the five NWS to accede to the Treaty.

At a later date, when the NWS met in Washington D.C. in the fall of 2016 as part of the UN Security Council meeting, they reaffirmed “their readiness to sign the protocol to the Southeast Asia Nuclear Weapon Free Zone [SEANWFZ] at the soonest possible time.” However, despite Indonesia’s reputable leadership in ASEAN, to this date, none of the NWS have become party to the treaty.

Indonesia and ASEAN: Post-International Nuclear Ban Treaty Adoption

The successful attempt made by the international community to create an international framework to abolish the use of nuclear weapons must not sway Indonesia and ASEAN’s effort to promote the accession of the NWS to the Bangkok Treaty.

Though the document was successfully adopted, ratification will only commence on September 19th, at the annual meeting of the General Assembly, and will be put into force 90 days after successful ratification from 50 countries.

Only the Netherlands voted ‘against’ the adoption of the international treaty eliminating the use of nuclear weapons. However, immediately after the treaty was adopted, the Permanent Representatives of the United States, United Kingdom, and France released a Joint Press Statement emphasizing that they have not taken part in the negotiation of the treaty and do not intend to sign, ratify, or become party to the treaty.

Their standpoint is clear: “There will be no change in the legal obligations of our countries with respect to nuclear weapons”,  as mentioned in the Joint Press Statement.

With Indonesia currently drafting national legislation on ‘nuclear security’ to align the Bangkok treaty action plan with domestic policy, it is imperative that Indonesia continues its nuclear disarmament diplomacy efforts and negotiations at both the regional and international level. This would ensure that the NWS recognize the catastrophic humanitarian consequences of nuclear weapons.

The ASEAN executive committee met on the 25t May 2017 to review the progress of implementation and accession of the five NWS to the treaty. Furthermore, the recent adoption of a global treaty on the total elimination of nuclear weapons that will be opened for signatures in September, the 24th ASEAN Regional Forum (ARF), to be held in August 2017.

This combination is seen as a strategic platform to further discuss the progress of the SEANWFZ Plan of Action. In particular, Indonesia should encourage the 9th ARF Inter-Sessional Meeting on Non-Proliferation and Disarmament to be hosted during the ARF Ministerial Meeting, and take a leading role to further open discussion on the practical matters in regards to the accession of the NWS to the Bangkok Treaty.

*) Dio Herdiawan Tobing is the Research Manager of ASEAN Studies Center UGM. He will start his LLM in Public International Law at Leiden University in  September.

AYIEP Participants Learn from Asian Start-Ups

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After joining International Seminar on  ASEAN 50th Anniversary at the 1st day, the ASEAN Youth Initiative Empowerment Program (AYIEP) continues by presenting two public lectures from young, creative digital entrepreneurs. Mr Alfatih Timur (also renowned as Timmy), the founder of Kitabisa.com –the first Indonesian digital crowdfunding platform—shared his experience alongside Mr Makshud Manik, the founder of youthop.com, a Bangladeshi platform for youth opportnities information.

In the first session, Mr Timmy shared his experience by introducing his crowdfunding initiative to Indonesian digital audience since 2013. “We created a platform to help people who need financial assistance by facilitating campaign in digital media. It succeeds with many campaigns funded even exceed 100% of their proposed target”, said Timmy in front of 24 AYIEP participants.

A former student activist at the University of Indonesia, Timmy’s achievement has been acknowledged by Kompas, the most prominent Indonesian newspaper, and Forbes. His initiative was also endorsed by Professor Rhenald Kasali, his mentor and Professor of Business at the University of Indonesia.

Timmy also expanded his digital charity to help people abroad, including Rohingya.  “As long as there are initiatives, we are keen to help”, said Timmy.

The second session presents Mr Makshud Manik, the co-founder of Youthop.com. He provided platform for Asian youths to share information of opportunities, such as; conference, workshop, and summer schools.

“We are fortunate to have Indonesia and ASEAN as the biggest viewer of our website”, said Makshud, who also works as a Senior Researcher for Dhaka-based think-tank Institute for Policy  Advocacy and Governance (IPAG).

With emerging global connectivity, ASEAN remains one of the biggest shareholder in world market. “It should be responded by digital innovation, which saw ASEAN as a growing user in the latest decade”, said Makshud.

He also addressed some challenges for digital innovation. “We also face the emergence of both deep webs and dark webs, which oftenly misused digital platform for transnational crime. Our innovation try to encounter these trends by providing access and opportunities for young people”, Makshud added.

The ASEAN Youth Initiative Empowerment Program was held from 23-29 July 2017. The short course program includes series of Public Lectures, Seminars, Working Groups and recommendation drafting session which aimed to enhance global and regional connectivity.

Ambassador Ong Keng Yong: Digital Transformation is the Future of ASEAN Integration

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ASEAN’s 50th anniversary should be addressed by nurturing digital integration, says H.E. Ambassador Ong Keng Yong, former ASEAN Secretary-General in FISIPOL UGM  (27/7).

Speaking as a Keynote Speaker at an International Seminar held by ASEAN Studies Center UGM, Ambassador Ong highlights the importance of ICT development in future ASEAN integration, which has been set up since his tenure as ASEAN Secretary General.

“Today we face rapid technological development following the rise of ICT platforms in the region, particularly in Indonesia. ASEAN needs to foster digital innovation and strengthen local economies through digital platform,” said Ambassador Ong.

He highlights the progress that has been advanced in ASEAN since early 2000s, which involved the creation of ASEAN ICT Masterplan and other regional policy frameworks in tackling digital divide.

“ASEAN is indeed not perfect, but we are keep progressing and ASEAN is the only regional organisation we have now”, said Ambassador Ong.

The International Seminar on ASEAN’s 50th Annivesary was held in conjunction with the 2nd ASEAN Youth Initiative Empowerment Program (AYIEP), an annual program by ASEAN Studies Center UGM to foster social awareness among ASEAN youths. The program is held from 23-29 July 2017 in Yogyakarta, following the success of the 1st AYIEP in August 2016.

Several prominent figures in ASEAN are invited to deliver speech and lectures. Besides Ambassador Ong, the speakers are Ambassador Djauhari Oratmangun, Senior Adviser for Indonesian Minister of Foreign Affairs, H.E. Mr. Stuart Shaw (Political Counsellor at Canadian Mission to ASEAN), Alfatih Timur (Founder and CEO of Kitabisa.com), and Makshud Manik (Founder of Youthop.com). Ambassador Foster Gultom (Senior Official at the Directorate-General for ASEAN Cooperation) and Dr. Poppy S Winanti (Vice Dean of FISIPOL UGM) were also present to chair the sessions.

There are 24 participants from neighbouring ASEAN countries and outside the region who participate  at the Program, including from Vietnam, Phillippines, Japan, Egypt, and Indonesia. Several exchange students from African countries also joined the program. They will exchange ideas at Working Groups and visit some digital hubs in Yogyakarta as a part of the program.

 

Digitalizing ASEAN (2): Three Key Pillars

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In the second of two-series article, we introduce ASEAN Youth Initiative Empowerment Programme, a one-week program for ASEAN Youth organized by ASEAN Studies Center, Universitas Gadjah Mada. The theme of the program is “Digitalizing ASEAN”, which will be explained in this article and the following article.

We have acknowledged the importance of “digitalizing ASEAN” as an inseparable part of ongoing regional integration. What is to be done in the future? What would ASEAN youths do to socially integrate people across the region  through emerging digital platforms?

In this context, we develop three pillars of “digitalizing ASEAN” that encapsulates the need for digital integration in ASEAN, namely (1) digital diplomacy; (2) digital activism; and (3) digital citizenship.

Where do we start? Standard understanding on ASEAN and regional integration project usually depart from the relationships between “state” and “society”. Two positions are in contention. The first view perceives ASEAN as merely “state project”. Diplomatic practices makes ASEAN. Diplomats represent ASEAN. The future of ASEAN, from this viewpoint, is the future of statecraft and diplomacy.

We argue that understanding ASEAN merely from a “statist” lens is not sufficient. ASEAN is also built upon the “people” –businessmen, activists, academics, youths, religious leaders and many other elements in a complex society. This is the virtue of the second view, that perceives ASEAN as a relationship between state and non-state actors.

Thus, we need to go beyond “traditional” understanding of ASEAN as merely “state-led project” to ASEAN as a complexity. This is how “digitalizing ASEAN” should be perceived. “Digitalizing ASEAN” isn’t merely a state-led program; it should also be at the heart of people-to-people interaction in the future

This is where the role of young people is essential.

From this viewpoint, we could identify two key pillars of “digitalizing ASEAN” in the future: importance of digital diplomacy in ASEAN and the growing digital activism across the region. Both of them are intertwined. The complexity between the two pillars be framed under the idea of digital citizenship: a complex relationship between state, markets, and civil society in a newly established digital environment in Southeast Asia.  

First Pillar: Digital Diplomacy

The traditional conception of “diplomacy” often refers as the relationship among states conducted by a formal representative. However, in this globalized era, the important of citizens role in could not be neglected. For example, civil society organisations have used diplomatic apparatuses to advance their interest to embrace ‘alternative regionalism’. Various elements of peacemakers have been involved in the so-called “multi-track diplomacy”. Recently, multinational corporations have also considered as an actor of diplomacy through lobbying and trade.  

It is thus safe to say that emerging digital landscape creates opportunity for a new platform for diplomacy, too. Jan Melissen calls this  trend as ‘digital diplomacy’. Indonesian Foreign Minister, HE. Retno LP Marsudi, has also used similar term in one of her speech.

Digital diplomacy come as a solution to address the complexity of regional politics. In Digital Diplomacy, the growing use of ICTs and social media platforms by a diplomat is acknowledged as a part of diplomatic practices. As a consequence, a diplomat needs to engage with ‘digital native’. Diplomatic pratices have since transformed: from a formal roundtable meeting to livetweet; from an official press conference to a live Facebook video.  

The instrument might be changing, but the purpose is still the same: to achieve foreign policy goals. It benefits not only diplomats, but also ordinary citizen. This is obviously an opportunity to further bring ASEAN at the heart of its citizen.

Second Pillar: Digital Activism

As the diplomatic practices have been evolved, our understanding of state-society relations in ASEAN should be updated, too. ASEAN not only encompasses state-facilitated activities through ‘formal’ diplomatic practices, but also through social movement. We need to acknowledge  the rise of social movement and NGO activism in ASEAN, including youth.

ASEAN has also witnessed the rise of various youth movements that take part in advocating youth-related issues in ASEAN. The rise of these movements is also accompanied by the use of technological devices, such as mailing list and other forms of media and communication.

Rapid technological development brought by ICT industries in the region connect the people across the region. However, it is not necessarily new. In Indonesia, the Reformasi itself has been the very product of the use of internet in driving social change. The internet connects not only pro-reform activists in Indonesia but also with broader social movements abroad .

In emerging youth activism in ASEAN, the growing uses of ICT is inevitable. Telegram, Whatsapp, and Facebook has been the main medium of interaction among the young people. They publish the program through Instagram, Twitter, and connected Website. Some of them uses it for political purposes –a campaign to release Mary Jave Veloso, for example.  Some of them merely spread the opportunities for regional events. Some of them are embracing social entrepreneurship. And so on.

It is thus necessary to understand how social activism in ASEAN is forged through the medium of ICT. Let us see this happen in ASEAN.  

Third Pillar: Digital Citizenship

What connects the first and second pillar? We introduce the third pillar, digital citizenship. This might be a complex concept. Put it simply, we regard digital citizenship as a complex relationship between state and society in the region. It connects digital diplomacy and digital activism in everyday life.

The emergence of ICT industries has raised further questions over civic engagement and political life. So does in ASEAN. It brings us questions as to where the rapid digital advancement would be heading to. Would it tackle inequality among the people? Or would it instead raise racist sentiment in social media?

As the digital society is taking further steps forward, a good sense of digital citizenship is required. ASEAN should raise a sense of ‘collective identity’, which is lacking in the people across the region due to the lack of regional engagement in the past.

Taking together the idea of digital diplomacy and digital activism, the ICT development in the region should not be merely understood as a part of growing ‘regional market’. It should be seen as a tool for cultivating active citizens participation, too. Moreover, both digital diplomacy and digital activism should craft a more vibrant sense of belonging between ASEAN citizens.

Thus, we put the idea of digital citizenship as a part of our call for ‘social integration’ in ASEAN. It should be embraced by all ASEAN people in the future. Information and Communication Technology should not be put as an end in ASEAN integration. Instead, it should be utilised as a means to put forward deeper integration among ASEAN citizens and redefine our identity through engagement with technology.

The Rationale for AYIEP 2017

So here were are. We attempt to incorporate these key pillars by introducing the The 2nd ASEAN Youth Initiative Empowerment Programme (AYIEP) in 2017, which will be held between 23-29 July 2017 in Universitas Gadjah Mada, Yogyakarta. All of the programs are organised along these key pillars. We hope it consistently brings the participant to take part in our call for “digitalizing ASEAN” throughout the programs.

The 1st AYIEP has been successfully put forward the agenda for bringing social awareness among ASEAN youths, with various visits to NGOs in Yogyakarta and Working Groups. Critical thinking is at the heart of our event.

The 2nd AYIEP embarks upon the success of the previous program to bring social awareness and embrace critical thinking through digital platform. We intend to address the need for regional integration by bringing about youths across the region. To do so, we adapt three sub-themes engage all of the elements of youhts from all ASEAN countries, as well as other regions that might be interested with ASEAN-related issue.

We have a simple mission here. We pledge to pave the way for “digitalizing ASEAN” through youth engagement. So that, ASEAN could be more “people-oriented” and “people-centred” in the future. Let us see this happen in the future!

 

Ahmad Rizky Mardhatillah Umar is the Executive Secretary of ASEAN Studies Center, Universitas Gadjah Mada

Digitalizing ASEAN (1): What It is and Why It is Important

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In this first series of article, we introduce ASEAN Youth Initiative Empowerment Programme, a one-week program for ASEAN Youth organized by ASEAN Studies Center, Universitas Gadjah Mada. The theme of the program is “Digitalizing ASEAN”, which will be explained in this article and the following article.

ASEAN is now 50 years old. We are now witnessing the age of rapid technological development as well as greater connectivity in the region. We are also stepping forward into ASEAN Community, which has been implemented since 2015.The rapid development on regional economic cooperation under the so-called ASEAN Economic Community (AEC) demonstrates high commitment of ASEAN member countries to become not only the largest market, but also to establish a form of collective identity.

ASEAN has declared to be a “people-oriented” and “people-centered” organization in 2015. The consciousness of shared culture, geography, and history at the community level has bound the peoples together. the importance of ASEAN as a regional organization is now becoming a vehicle to create a more cohesive and united regional community.

The complexity in world politics necessitates ASEAN to embrace a form of ‘social integration’. The recent regional outlook from ASEAN Studies Center UGM has showed that the current trend in 2017 has showed a decline of regionalism, the rise of intra-regional problems related to economic growth, social cohesion, and some degree of political uncertainty.

ASEAN, therefore, needs to embrace a non-traditional form of integration. This is where the idea of digital integration comes to the fore. Digital integration does not only means greater connectivity among people across the region –it also calls the young people to embrace a sense of collectivity. Digital integration supports ASEAN to be a ‘people-oriented’ and ‘people-centered’

Against this backdrop, we call for the further steps towards ‘digitalising ASEAN community’. This notion constitutes the central theme of ASEAN Youth Initiative Empowerment Program, an annual event of ASEAN Studies Centre, Universitas Gadjah Mada that will be held in 23-29 July 2017.

Why digital integration?

Information and Communication Technology is the most important issue in the world politics in at least the last two decades. The invention of the worldwide web, the growing IT systems, and connectivity across the world, as well as rapid use of technology have largely contributed to the advancement of global society. It connects, along with a globally-connected IT systems, a quantum leap in people’s ability to communicate both one-to-one and one-to-many and also access to knowledge, are unlimited.

Klaus Schwab called this recent phenomenon as the fourth industrial revolution. It raises questions over how to deal with Big Data, not only in terms of ‘technological advancement’, but also in terms of the changing international order.

It also necessitates International Relations scholars to rethink the relationship between digital revolution, intergenerational changes, and the transformation of international order.

The concept of ‘digital revolution’, however, is not necessarily new in International Relations. Following rapid ICT development in some countries, several global governance institutions has brought about the issues of ICT governance as their main programme. The United Nations, for example, set up a task force on Information and Technology and several initiatives to address digital divide since 2000.

ASEAN is also adapting to this trend by establishing the ASEAN ICT Masterplan (AIM) in 2009. The first completion report was due in 2015 and was continued until 2025. It aims to bring ASEAN member states towards a ‘digital revolution’ by 2025 through many digital platforms and programs—the “smart city”, financial technology, as well as e-commerce.

Yet, we need more. With growing ‘digital integration’ in regional level, ASEAN still needs to deal with increasing development gap in the regionASEAN is also struggling to resolve the classic ‘digital divide’, as well as enhancing the participation of young people across the region.

ASEAN ICT Masterplan, so far, has only a little to offer to overcome these problemsm, given the limit of ASEAN integration.

But it does not mean ASEAN should abandon the ongoing ICT-related regional projects. With a large and youthful population increasingly equipped with smartphones, ASEAN has an opportunity to pioneer the development of new digital services, especially advanced mobile financial services and e-commerce. These sectors are likely to give rise to digital champions that will lead the way for the broader economy.

What ASEAN needs to do, nevertheless, is to integrating the ongoing digital integration in regional level with rising youth participation in the region. The future of ASEAN lies in the development of digital technology. It also necessitates ASEAN to embrace young people –those who are considered as ‘digital native’— to consider their special attention to the task of connecting community in ASEAN. Digitalizing ASEAN also can increasingly enable citizens to engage with governments as voice their opinions.

The advancement of technology should be a good platform for ASEAN to foster connectivity among people. This is also useful to embrace a culture of good “digital” citizenship, thus ensuring the realization of “people-oriented” and “people-centred” ASEAN.

Nevertheless, the rise of digital technology should also be followed by critical perspectives. Recent series of article by OpenDemocracy and Sheffield Political Economy Research Institute showed that the emergence of digital use in everyday economy (which is also renowned as ‘gig economy’) also creates many problems in workforce, labour-related issues, and broader socio-economic aspects in everyday life.

In Indonesia, for example, several start-up companies operating in transportation, such as Grab, Uber, or Gojek have clashed with ‘conventional’ ojek or Taxi drivers. Digital integration, therefore, does not entirely positive. Various social problems emerged from this development, which necessitates further analysis on how to resolve it. Addressing this issue requires creative and critical thinking from the young generation.

Here lies our challenge to talk about digital society in regional context. This is why we desperately need a more concrete action for “digitalizing ASEAN” in the future.

 

Ahmad Rizky Mardhatillah Umar is the Executive Secretary of ASEAN Studies Center

Bincang ASEAN Discusses EU and ASEAN Model of Integration

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ASEAN Studies Center UGM held the sixth meeting of Bincang ASEAN in Friday (19/5), which invited Prof. Janos Vandor (Professor at Budapest Business School) and Suraj Shah (Graduate Student at King’s College University of London) to share interesting views on whether on European Union can serve as an integration model for ASEAN as there has been several attempts to achieve integration outside of Europe, including ASEAN. However, how do EU model integration suits ASEAN?

Shah Suraj begin the discussion by examining the Varieties of Capitalism Approach (VoC) applied by EU and ASEAN. Suraj pointed out ASEAN and EU has a different path to select related to VoC. EU develops supranational institutions that suit a Liberal Market Economies (LME), whereas ASEAN develops intergovernmental institutions that suit a Co-ordinated Market Economies (CME). Reviewing the condition of ASEAN recently, Prof Janos Vandor from Budapest Business School who paid a visit to ASEAN Studies Centre added that EU and ASEAN develops a different political will. ASEAN shows no indication of sovereignty sharing and a high chance of competitiveness within the members — a striking contrast to EU.

Recapitulating the international political economy, EU and ASEAN shares different mechanism. To enforce the mechanism, EU established European Parliement and European Courts which determine all member states to adhere to this and can not pursue their own bilateral agenda. While, ASEAN constructs ASEAN centrality that allows members to engage outside of the region, and make their own trading agreements on a bilateral level.

Suraj also mentioned that so long as ASEAN maintains the institutional form of the ASEAN Way, there is no way to enforce or socialise system coordination or institutional complementarity that would allow for supranational integration. In conclusion, Prof Vandor and Suraj agreed that ASEAN must find its own path towards integration based on its institutional form as a limited access order and economic model of a coordinated market.

ASC Discusses Global Discourses on Rohingya

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ASEAN Studies Center UGM held the fifth meeting of Bincang ASEAN in Friday (12/5), which invitedHadza Min Fadhli Robbi, S.I.P.  (alumnus of the Department of International Relations who is currently completing a Master’s program at the Eskisehir University Osmangazi, Turkey) to share information about the geopolitical issues of the Rohingya community. Held at BC building room number 207, the discussion was initiated with the issue of global discourse and political contestation in Rohingya-Arkan, looking at the issue from the discourse of countries such as Myanmar, ASEAN, China, West and Turkey.

Hadza began by arguing that Myanmar tends to place the Rohingyas as “radical others”. It makes the Rohingyas regarded as unworthy human beings. The Rohingyas have no civil rights like any other ethnic group in Myanmar.

ASEAN as the second closest actor in this case also wants to be involved in resolving the Rohingya conflict. However, this is hampered by the sensitive norms. ASEAN is still considered lack of will and empathy. Countries in Southeast Asia mostly see the Rohingyas problem with the point of view of illegality, and not in the perspective of human rights.

“The Chinese in Rohingya’s problems tend to be pragmatic. As a country that has a giant corporate partnership, China sees the Rohingyas as a poison that hinders growth for Asean as well as China, ” said Hadza. In the similar vein Western countries such as America, England, Australia who sees the conflict Rohingya from the liberal norms of democracy. Western countries wish to protect both Rohingya and the government of Myanmar.

Turkey, in this case, hold a different approach based upon historical connections. Both Myanmar and Turkey had a good relations in the past. The Turkish government with its state-centered approach is very cautious in helping to resolve the sensitive conflicts of Rohingyas. Various aids, such as refugee and logistics tents, have been distributed to the conflict area. In an effort to support Rohingya, Turkey also often broadcast the Rohingya conflict on Turkish cooperation media. (/in)

ASEAN Economic Community: In Search of a Single Production Base

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A key motivation behind the pursuit of a comprehensive ASEAN Economic Community is to establish a single production base. By doing so, ASEAN member states hope to increase their competitiveness, which in turn will boost exports and continue to attract investment to the region. However, whilst ASEAN has been successful in tariff reduction, Non-Tariff Barriers (NTBs) impede a truly single production base and ASEAN Economic Community. Given the slow progress at the regional level, ASEAN members must individually take unilateral action in addressing NTBs, as well as advancing trade facilitation measures, such as coordinating and sustaining investment in infrastructure with a regional orientation.  

Why does ASEAN need to establish a single production base? In the last decade, the way that the globalised economy conducts trade has undergone dramatic transformation. Whereas in previous decades goods were produced from their initial to final production stage in one country, we have now moved to global production sharing. Trade is now increasingly intra-firm, with design, trading of parts and components, and final assembly conducted across global production networks. The place of a country in the value chain of global production involves specification in a certain task based on relative cost advantage, which determines production locations and trade flows. Furthermore, the division of production has become more fragmented and no longer solely confined to the production of goods, with the growth of the service sector that goes into the production of final goods.

ASEAN members are integrated into these production networks given their export led growth models. However, the relatively smaller economies of ASEAN member states have not been large enough to produce products from start to finish in one country competitively. Through this process, ASEAN members struggle to move up the production chain into value-added production. Furthermore, import substitution measures in previous decades that have sought to address this have shown to be inefficient and impede rather than advance economic growth, whilst failing to move countries up the value chain sustainably.

Furthermore, the huge and growing internal markets of China and India, as well as other regional trading arrangements such as the Single Market of the European Union (EU) and North American Free Trade Agreement (NAFTA), have created structural change in the global political economy. For ASEAN members who value foreign direct investment for economic development, these structural changes have led to trade and investment diversion away from their economies, and ASEAN has received a diminishing share of foreign direct investments. This has acted as a driving force for ASEAN economic integration, as establishing a single regional production base would allow ASEAN to exploit economies of scale and increase the region’s competitiveness.

Achieving this goal has never been so relevant for ASEAN. Regional production sharing creates opportunities for participation in the international division of labour, with factor endowments and relative prices determining which country produces what components. Small and developing ASEAN member states can choose to specialise in a stage of production, and a regional production base further allows for small and medium enterprises within ASEAN to specialise in any one part of the value chain to engage in global trade. Developing member states in ASEAN should engage in the way trade increasingly takes place in the form of ‘tasks’ at the regional level rather than goods being produced from beginning to end in a given country to exploit comparative advantage.  

However, political and institutional constraints have impeded the realisation of this goal. On the one hand, ASEAN members have not been ready to liberalise their markets as their members economies are competing rather than complementary. Furthermore, politically sensitive sectors continue to be protected. Despite attempts to liberalise trade since the 1992 ASEAN Free Trade Area, Non-Tariff Barriers (NTBs) such as complex licensing regulations, quotas, and corrupt customs procedures continue to be significant impediments to regional free trade. Furthermore, ASEAN has been institutionally weak in addressing NTBs, given the lack of a coercive mechanism to ensure compliance and limited monitoring capacity of the ASEAN Secretariat.   

Non-Tariff Barriers in ASEAN create an environment that is inefficient and increases the costs for engaging in regional production. Alternative and non-complementary sets of rules, uneven product standards, and mixed tariff measures under bilateral and weak multilateral agreements prevent harmonisation, and act as serious impediments to regional integration and discourage investment. As a case in point, Multinational Enterprises (MNEs) have become the leading vehicle for ASEAN member states to enter global production networks. However, ASEAN members have been increasingly unattractive to MNEs to engage in regional production due to the extra costs of production sharing through non-tariff barriers, poor infrastructure and connectivity, and the difficulty of coordinating activities regionally into the production of a final good. These associated costs often outweigh the gains of lower labour costs, where ASEAN members often derive their current comparative advantage.

Thus establishing an integrated single production base seeks to address these issues. Trade based on regional production sharing, through networked trade or value chains, functions more efficiently through a regional trading system with one set of rules, standards, and market access commitments. By creating a single production base with tariff free movement between ASEAN members, the costs of producing goods from start to finish in the region will be significantly reduced. This would enhance competitiveness that would boosts exports, and make the region a more attractive for investment.

To realise a single production base and true ASEAN Economic Community, ASEAN needs stronger institutional governance. However, given the slow progress on this at the regional level, ASEAN member states should act unilaterally in tackling NTBs. In complementing the pursuit of a single production base, ASEAN members must continue to invest in infrastructure and improve regional connectivity. Through better infrastructure, the costs of producing goods and services regionally will be significantly reduced. This allows for trade facilitation that allows for better regional integration and improves competitiveness.

Having said this, ASEAN has made some positive steps towards establishing a single production base, however much is left to be achieved if ASEAN is to achieve a truly single market and ASEAN Economic Community.

 

Suraj Shah is a Visiting Fellow at ASEAN Studies Center, Faculty of Social and Political Sciences, Universitas Gadjah Mada.