Since its establishment, the Association of South East Asian Nations (ASEAN) has astonished global observers: ten countries with diverse history, culture, political ideology, and economic conditions successfully have come together to form a stable powerful economic block. The major contribution to such a remarkable achievement has been said to be the “ASEAN Way,” which is the ideology that gives room for member states to integrate in ASEAN, while preserving their full sovereignty. However, the “ASEAN Way” contains in itself a puzzle that ASEAN leaders can no longer ignore in the context of globalization: where is the balance between national sovereignty and regional integration?

The historical journey from ASEAN 5 to ASEAN 10:

Being one of the major economic blocks in the East, ASEAN has drawn global attention towards its integration and development. The 1967 ASEAN Declaration (commonly known as the Bangkok Declaration) marked the birth of ASEAN with five founding members: Indonesia, Malaysia, the Philippines, Singapore, and Thailand. Together, they shared the common goals of strengthening the internal economic power of the region and facilitating economic development of country members.

Moreover, in the past few decades, with regional integration centered at the association’s agenda, ASEAN has undergone several major economic and political transformations to accommodate new members. Currently, the ten member countries of ASEAN include: the five founding members, plus Brunei (1984), Vietnam (1995), Laos (1997), Myanmar (1997), and Cambodia (1999).

The tricky puzzle of the “ASEAN Way”

In the past few years, ASEAN has achieved spectacular economic success varying from the surge in inward FDI in the region to significant GDP growth among its member states. Specifically, aggregating the economies of its ten members, ASEAN currently constitutes a collective GDP of $2.4tn, which is the seventh largest economy in the world, and 25 per cent larger than that of India in 2013. These numbers undoubtedly speak for ASEAN’s successful achievements within the global economy.

More importantly, what has been credited by ASEAN leaders for the association’s economic success is the “ASEAN Way.” Simply put, the “ASEAN Way” is the strategic ideology that ASEAN is based on to develop its economic strength and integration. Different from other economic integration ideologies, the “ASEAN Way” perceives individual states as pivotal actors in the political sphere as well as national economic agenda. The two major principles of the “ASEAN Way” are musyawarah (consultation), and mufakat (consensus-building). While musyawarah stands for the decision-making process through informal discussion and consultation, mufakat implies the final unanimous decision.

On one hand, the state-centric approach embedded in the “ASEAN Way” appears as an optimal solution to resolve the vast differences in the sociopolitical arena and the economic conditions of member states during the process of economic integration. On the other hand, the expansion of ASEAN coupled with ceaseless growth of globalization has sparked controversies regarding the drawbacks of the “ASEAN Way” in terms of hindering the economic integration of the region. In the current wake of globalization, the quest for deep economic integration has become the crux of economic competition among regional economic blocks. In this context, it is imperative to ask if the “ASEAN Way” should still be a sheer strategic plan for ASEAN members. How long can ASEAN hold onto the “ASEAN Way” while searching for a unified economic power? Furthermore, can a state’s autonomy and economic integration be compatible?

How much of enough is enough for economic integration?

The first obstacle posed by the “ASEAN Way” is the burden of finding common economic policies for the block as a whole. Even though the “ASEAN Way” has succeeded in providing cohesion and economic cooperation for the regional economy, it has also been a slowingdown factor for the development of a unique common market among member states.

For example, the lack of a common external tariff has been a challenge for ASEAN in the context of Free Trade Agreements (FTAs) burgeoning across the globe. In 2007, the intended FTA between the European Union (EU) and ASEAN failed to be concluded due to several factors, among which was the disagreement among ASEAN member states on a common external tariff. The result was a split-up of the regional FTA into individual member FTA with the EU. In this case, the lack of common economic policies for the block as a whole has placed ASEAN one step behind in the game of international trade. In other words, ASEAN is sustaining its members’ economic flexibility at the expense of trade power of the region.

The challenge of economic integration without supranational authority

Another major pitfall resulting from the “ASEAN Way” is the lack of a supranational authority, which regulates fairness and justice for conflicts within the region. As mentioned above, mufakat means unanimous decision; however, when country members fail to reach a unanimous agreement, there is not an ASEAN official authority to step in to regulate the disagreement. Rather, when intra-ASEAN issues cannot be resolved, they are left aside in order not to affect cooperation on other issues.

Currently, trade disputes in the block are expected to go through the dispute settlement and decision-making process. Both the dispute settlement and decision-making procedures are intergovernmental negotiations, where the final ruling is based on an agreement among the parties involved. However, in fact, this dispute settlement procedure has never been applied. Instead, member states opt for relying on the World Trade Organization to resolve conflicts of interest.

In some ways, ASEAN’s soft-law approach has impaired the long-term goals of the region. In order to achieve a certain regional target, say improving environmental standards, it requires member states’ legal obligations. The role of a strong legal basis is to ensure that member states commit to implementing their obligations. Lacking a solid legal ground will undoubtedly jeopardize ASEAN’s economic future achievements.

Can ASEAN achieve economic integration while forgetting about its political controversies?

Looking at the political sphere, concerns about the “ASEAN Way” get even more complex. A lesson learnt from the evolution of the European Union is that, even if countries agree on following a set of common political principles, such as pursuing democratic values, politics can still get messy. Here, the ten members of ASEAN have no collective political ground. In fact, within the framework of the “ASEAN Way,” member states freely preserve their own political ideologies and agenda. For this reason, rarely do ASEAN members express a common political voice.

Currently, with the South China Sea being hotly debated, the divisible political factors among member states are now worse than ever before and have started to threaten the regional economic stability. In this context, it is vital that ASEAN members harmonize their political core values before any further economic integration can take place. Without solidifying its political integrity, ASEAN cannot move closer to deeper economic integration.

One way or another, the “ASEAN Way” has successfully held together ASEAN’s ten members states, whose culture, politics and economies differ greatly. However, the puzzle which remains in the “ASEAN Way” is the search for the compatible framework that can preserve the states’ autonomy without curbing regional economic integration. In 2015, ASEAN will officially launch the ASEAN Economic Community (AEC). This will mark a phenomenal economic integration for ASEAN. It is hopeful that the AEC will help to resolve the puzzle embedded in the “ASEAN Way”: finding a balance between member states’ sovereignty and ASEAN’s full integration into the global economy.

Photo copyright: Kuala Lumpur, musimpanas ©2012


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