Asean @ 50: A road map of key challenges ahead

SINGAPORE (The Straits Times/ANN) - The issues facing Asean include economic integration, capitalising on demographics and making the most of Asean's tech-savvy youth. Countering terrorism is another issue rearing its head.

Asean has enjoyed a relatively successful and prosperous first 50 years. A key milestone is the establishment of the Asean Free Trade Area (Afta) which laid the foundation for the Asean Economic Community (AEC), one of the three pillars of the Asean Community.

With this year marking the 50th anniversary of Asean, it is apt to chart out a road map of key issues of regional importance for the next five decades. To ensure continued success, Asean needs to further consolidate economic integration, capitalise on favourable demographic factors and channel the skills of today's tech-savvy youth to harness the digital revolution.

Against the backdrop of growing anti-globalisation and protectionist sentiments across the world and an unpredictable United States Trump administration, it has become an imperative to maintain economic growth for continued stability and prosperity in the region.

As such, intra-Asean initiatives like the AEC as well as regional initiatives such as the Regional Comprehensive Economic Partnership (RCEP) will be the cornerstone in making Asean the bulwark of an outward-looking South-east Asia, championing trade liberalisation and engaging the rest of the world.

The successful completion of the RCEP will link Asean, a market of 628 million people, to its six partner countries (China, Japan, South Korea, India, Australia and New Zealand) creating a bigger market of 3.5 billion people.

In recent years, Asean has been growing by around 5 per cent a year, ushering the rise of a huge middle class.
The Asian Development Bank estimated that by 2030, nearly half a billion of Asean's population will be classified as middle-income class.

Asean can perform better, with a potential growth rate of 7 per cent, if member states align their interests with the Asean community agenda. At the start of last year, Asean was the seventh largest economy in the world; by the start of this year, that rank had improved to sixth, and by 2020, it is predicted to be fifth.

DEMOGRAPHIC SWEET SPOT

Coupled with stable economic growth, Asean currently enjoys a demographic sweet spot. Governments of Asean member states must take the right measures today, such as restructuring the educational curriculum to ensure youth are better prepared to take on jobs of the future, before the population starts to age by 2025.

Asean's citizens are still very young (although Singapore and Thailand are already ageing). As the working-age population grows in number, it will not only boost the region's spending, but also increase its savings - and its capacity to invest. Investment should be made in human capital. To maintain dynamic growth, we cannot rely on natural resources and unskilled labour, but have to aim for sustainable development and equitable growth, through increased productivity and innovation, to move up the value chain.

Asean's rapidly growing economy and population need to be accompanied by a strong strategy for sustainable development. The region is already facing a myriad of transboundary environmental issues such as haze, water and land pollution, along with dwindling forest cover.

However, Asean's balancing act between environmental sustainability and economic development will be made more challenging because of existing region-wide social inequities. Asean member states are in varying stages of national development and the growing middle class only adds to the increasing consumption of resources and degeneration of the environment and biodiversity.

As Asean enters its sixth decade, the world stands on the cusp of a digital revolution, driven by technologies such as artificial intelligence, machine learning, autonomous vehicles, ubiquitous mobile Internet and accelerating progress in genetics, materials science and ultra-cheap automation.

Asean has the potential to enter the top five digital economies in the world by 2025. Moreover, implementation of a radical digital agenda could add US$1 trillion (S$1.36 trillion) to the region's gross domestic product over the next 10 years.

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. A recent report from Google and Temasek calculates that the region's online population is expanding by 124,000 new users every day - and will continue at this pace for the next five years.

TOUGH QUESTIONS ARISE

With the digital economy come tough questions about how to navigate the accelerating pace of technological change and digital disruption. In terms of job creation, we have to ensure that the Asean population is equipped with the right skills in the digital age.

There is an urgent need to update the educational curriculum, retrain teachers, and bring computers and the Internet not only to rural areas but also to the urban lower middle class and below for more digital inclusion.

With digital inclusion and the right skill sets, the Internet and social media will strengthen the basis of governance.

An important dimension is the issue of transparency. As it becomes increasingly easy to expose corruption in the digital age, there is also a simultaneous need for more engagement with citizens and more measures to deal with those who are corrupt.

As we see education, skill sets and technological transparency increase, we also have a situation where people in northern Laos and the far-flung eastern provinces of Indonesia are becoming more aware of job opportunities in other parts of Asean, leading to intensified migration of people across the region.

The dynamic movement of people in Asean will also attract increased drug and human trafficking, and other kinds of transnational crime will rise. Asean security and the police authorities will require a stronger framework of cooperation in managing the consequences of this movement of people.

ENHANCING CROSS-BORDER COOPERATION

What are the applicable legal regimes? We do not have them yet. Asean member states are still caught up with arguing about sovereignty issues.

The problem is getting acute. Extremism and terrorist activities must be checked and threats eradicated. This requires enhanced cross-border cooperation and effective legal measures. Considering the geography of the region and the fact that we are now equipped with increasingly sophisticated technology, only a concerted Asean agenda will prevent Asean from imploding in the next 50 years.

Apart from these internal challenges, there are the geopolitics and prevailing strategic and security circumstances as well. The diversity of Asean culture, history and society is legendary. Going forward, how the 10 member states manage external relations for Asean will decide its enduring qualities and effectiveness.

Will it be a regionalism revolving around a risen China or harking back to the principles underlying Asean's Zopfan (Zone of Peace, Freedom and Neutrality) initiative of the 1970s? Or could it be an orientation to preserve the international order as we know it today, with Asean able to play a balancing role?

Asean is not perfect. Community-building is an ongoing learning process. There is no alternative to this inter-governmental regional grouping to enable the South-east Asian nations to engage external powers and states beyond the immediate neighbourhood.

We need to accelerate Asean's visionary plans to realise an open, inclusive and peaceful region to secure its future. Leaders matter in this endeavour.

Much will depend on the leaders of member states going beyond parochial and national considerations to exert the regional ego to develop a resilience for Asean to stay in business and for the Asean Community to flourish.

The writer is executive deputy chairman of the S. Rajaratnam School of International Studies. He served as Asean Secretary-General from January 2003 to January 2008. The Ambassador-at-Large with the Singapore Foreign Ministry was High Commissioner of Singapore to Malaysia from 2011 to 2014 and to India from 1996 to 1998. This is a special series of articles to mark the 50th anniversary of the regional grouping by The Straits Times and the Asean members of its media partner Asia News Network, an alliance of 23 regional media entities. This article was contributed by The Straits Times.

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