Asean learns EU lessons

A blueprint and a cautionary tale

The Asean Economic Community, established in 2015, is taking a pragmatic and flexible approach to integration to ensure that its diverse and rapidly expanding economies have room to grow. Power is decentralised and there is no one-size-fits-all policy. The approach seems to be working: analysts believe that the union could be one of the world’s four largest economies by 2050.

European integration has long been a model for countries looking to strengthen ties with neighbours. The results were not always fruitful: African and Latin American nations tried out trade areas and common markets but with little success.

Now the European experiment is under stress, tested by Brexit and a resurgence of nationalism. But the European Union’s ideal of social, political and economic harmony isn’t necessarily on the retreat. Southeast Asia, to name one region, is embracing tighter integration, in its case through the AEC. If the region can avoid the EU pitfalls, the rewards will be there for the 600m people the AEC brings together.

The EU has long been a beacon for the Association of Southeast Asian Nations, offering an example of what might one day be possible. This has made the struggles of the EU all the more sobering.

The two unions were, however, never on identical paths. The AEC offers far looser integration – its agreements focus on freedom of movement for goods and services, rather than people. Monetary union has never really been on the agenda.

Europe’s troubles have reinforced regional convictions that the AEC should not follow the EU model too closely, according to Kishore Mahbubani, dean of the Lee Kuan Yew School of Public at the National University of Singapore. ‘The EU has always been rigid and legalistic, while Asean is flexible and pragmatic,’ he says. ‘Countries that are ready will proceed first – other Asean members can join in later.’

Arguably, such pragmatism is necessary to accommodate the cultural diversity and range of economic development in Southeast Asia. ‘Our economic diversity is not a weakness, it is a strength,’ says Mahbubani. ‘It shows the potential for Asean to grow.’

For smaller economies, the AEC is attractive – it offers a chance to pool resources and promote and protect member interests. ‘Asean often moves like a crab: it takes two steps forward, one step backwards and one step sideways,’ says Mahbubani. ‘We know we’ll never become a major power that can balance regional giants like China or India. Yet, when one analyses Asean’s progress decade by decade, it makes great strides.’

Bilateral deals with states such as China can present challenges to Asean cohesion, but the bloc is good at defusing tensions. In the end, the group’s success will be judged by the stability it can bring to the region – whether economic, political or in terms of security.

For Southeast Asia, the EU is both a blueprint and a cautionary tale. Brussels’ efforts to rethink and reform show that political discord need not be fatal.

This is an edited version of an article from Global-is-Asian, the digital platform of the Lee Kuan Yew School of Public Policy, and is reproduced here with the permission of the National University of Singapore.

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