Moving Away from the ASEAN is a Costly Mistake

front20130221 (As published in The Manila Times, Thursday, February 21)

One of the key reasons Southeast Asia is the world’s most economically-promising region is the strength and stability of the regional multilateral partnership, the Association of Southeast Asian Nations (ASEAN). With the debatable exception of the European Union, no other multinational cooperative in the world performs as effectively in promoting the common interests of its members, almost always to everyone’s mutual benefit, and in helping to solve local disputes with a minimum of disruption and collateral damage.

Or at least that was the case, before Benigno S Aquino 3rd assumed the presidency of the Philippines in 2010 and, for reasons known only to him but which would probably not make any sense whatsoever even if he did share them, embarked on a campaign to undermine the regional bloc of which his country was a founding member.

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The big issue as far as the Philippines is concerned, of course, is China’s “encroachment” on disputed territory in the South China Sea. Unhappy with what is perceived to be a lack of support from the ASEAN neighbors, the Aquino Administration has raised the matter to the United Nations, calling for an arbitration tribunal under the UN Convention on Laws of the Sea (UNCLOS) agreement. Most rational observers consider this move utterly futile. Both the Philippines and China, while signatories to the agreement, reject any use of it to determine the extent of national sovereignty, which is exactly what the Philippines is asking the UN to do.

In the process of pursuing the Philippines’ counterclaim to the disputed areas in the South China Sea, Aquino has managed to offend his ASEAN colleagues a number of times. In September of last year, a spurious claim that the Prime Minister of Singapore “expressed support for the Philippines in the West Philippine Sea” issue drew a sharp public rebuke from the Singapore Ministry of Foreign Affairs. At a meeting of the ASEAN leaders two months later, Aquino publicly contradicted Cambodian Prime Minister Hun Sen in a press conference when the latter stated that the group had agreed in principle to a common set of guidelines for conduct in the South China Sea. And just last month at the World Economic Forum in Davos, Aquino wasted his only opportunity to speak at an official session to stammer out a statement favoring US involvement in Southeast Asia as a check against Chinese ambition, quickly drawing fire from the other ASEAN leaders in attendance – among them Malaysian PM Najib Razak, the deputy Prime Ministers of Thailand and Laos, and the Vice President of Myanmar – who pointed out it was in the ASEAN’s best interests not to favor one power over another.

And while reacting petulantly to China’s recent printing of passports bearing a map showing the infamous “nine-dash line,” the Philippines had produced the same kind of “insult,” as respected international political scholar B.A. Hamzah, writing in the New Straits Times two weeks ago, pointed out. “Incidentally, its new official map that has renamed the South China Sea as the West Philippines Sea has re-incorporated Sabah, which is sure to reopen old wounds,” Hamzah explained, adding, “People who live in glass houses should not throw stones, as they will expose not only the throwers’ hypocrisy but also vulnerability.”

Further aggravating the relationship with Malaysia is the standoff in Sabah between Malaysian forces and a ragtag “Royal Army of Sulu” who invaded an island off the coast of Sabah to “enforce” the Sultanate of Sulu’s claim to the Malaysian state. Except to express concern for the “safety of the Filipinos in Sabah,” the Administration has done nothing to reassure the Malaysian government over the gross violation of its sovereignty that even the Philippines tacitly recognizes, as this country has not officially recognized a Sulu Sultan (despite there being dozens of claimants to the title, most of whom hold court in various hotels in Kota Kinabalu) since the death of Sultan Mahakutta Kiram in 1986.

The unaccountable posturing of Malacañang at the expense of its productive relationship with the rest of the ASEAN bloc will, if it does not stop, further isolate the Philippines from the regional economic environment. One thing that policymakers in this country have never really grasped is that, because of the relative economic, political, and geographical cohesiveness of the ASEAN group, investors take a regional approach to assessing opportunities in Southeast Asia, and choose particular countries according to their own needs and objectives. One of those objectives usually is to access opportunities for regional expansion, whether physically or through access to different markets.

While a lot of intraregional politics can be ignored by most business interests, the souring relationship between the Philippines and the rest of the ASEAN cannot, because of the weak dispute resolution process in the ASEAN Free Trade Area framework, which will come into full force in 2015: Since the ASEAN Secretariat has no jurisdiction to mediate trade disputes, these must be handled by arrangements between the countries in conflict, something that is obviously much easier if the countries in question are otherwise getting along reasonably well.

Already shut out of the potential Trans-Pacific Partnership, futilely clinging onto a “special relationship” with a United States that not only will soon (as soon as next month, in fact) be cutting spending on all forms of aid but has also all but written off bilateralism in foreign and trade policy, and having poisoned its relations with its strongest and wealthiest regional neighbor, China, the Aquino Administration has inexplicably chosen to set fire to its last possible bridge by antagonizing the rest of the ASEAN group. It is a costly mistake, and one that will take a lot longer than the remaining three years of the President’s term to correct.

5 Replies to “Moving Away from the ASEAN is a Costly Mistake”

  1. The only real things he can claim to have ever really done prior to becoming president was becoming a senator, with no laws and the like to his name.
    Considering his rather bland background, it shouldn’t really come as a surprise that he sucks as a president. He’s kind of like Obama in several sense.

  2. The isolationist and protectionist philosophy/policies have resulted in FDI to the philippines – foreign direct investment – showing no annual increase in the past 3 years as opposed to other ASEAN countries which are enjoying the benefits of their strategies, and attracting cash faster than a vegas stripper.

    So no surprise that the recent World Bank report –
    Ease of doing business in ASEAN countries 2013 – paints a gloomy picture within the philippines.

    “The Philippines’ overall rank in the world bank report is No. 138 out of 185 countries in the world. We are now No. 8 out of nine in Asean, just ahead of Laos but behind Cambodia, Indonesia, Vietnam, Brunei, Thailand, Malaysia, and Singapore. Moreover, our position in the world has remained unchanged for the last three years.” Phil. daily inquirer

    With regard to TPP – trans-pacific partnership – a visiting US state department official said yesterday that the Philippines “must be willing to negotiate even a
    politically sensitive issue like foreign ownership limits, if it wants to join the US and 10 other nations in talks aimed at creating an Asia free trade pact, but significant reforms are needed to make it happen, and that seems unlikely at present”

    In a Jan. 9 2013 HSBC research report titled “The Great Migration: How FDI is moving to Asean (Association of Southeast Asian Nations) and India, HSBC
    economist Trinh Nguyen said that with the prevailing political conditions, any major economic reform would not likely take place until 2016, the year when President Aquino leaves office.
    “As such, we believe FDI will only increase marginally in the
    Philippines until 2017 at the earliest,” she said.

    Also, the Philippines’ weight on the influential MSCI
    Emerging Markets Index has remained insignificant, at below 1
    percent, despite the growth in the local equities markets in the past
    few years.
    For this to increase, a visiting MSCI executive said more companies must go public, increase their free float and provide more room for foreign investors.

    For aquino to continually ignore what is so evident to the international community and seasoned investors is the height of irresponsibility and shows how the interests of the oligarchs comes before jobs for the people.

    I wonder who he will blame in a couple of years time when the unemployment and poverty levels are still rising, the wealth gap increasing, and our asean neighbours are looking down at us.

    Closed minds and closed markets will only result in less investment, less jobs, higher prices, and more poverty.

    P-noy needs to read ‘ economics for dummies’. The clues are there staring him in the face.

  3. BSA’s posturing is like diplomatic adventurism where the attention of the commons is diverted to this instead of pressing issues that inflict our country. Note I do not like China’s encroachment on our territory, but when you think about BSA action are hasty, reckless and stupid. If this is his way of gaining popularity (among others) he is treading on dangerous ground…..

  4. What can be expected of a president who even during his campaign time as president could not even display real strong and determined backbone towards questions which requires him to make his own decision? The most common answers that can be heard from him was “we’ll discuss about it…”

    Perhaps at this time he’s doing fine with his efforts to quash corruption in the government, and need to be appreciated. However, with his consistent display of lack of strong principles to make his own decisions bring question as to how long he could continue without encouraging more corruptions to proliferate even more than when he started.

    Perhaps the more intellectual citizens could remember that his mother, Cory Aquino, in her pure and clean intentions but lack of political and field experience, was merely exploited and used by the “trapos” to get back to power and even more brazenly corrupt, who continue to distort the real concept of right and wrong.

    1. I don’t buy the “clean” Aquino image at all. “Pure and clean intentions” my ass. Everyone conveniently forgets that Cory Aquino was the comptroller for the family business for about 12 years before she became president, and if she was “used” by anyone, it was because she purposely let herself be. This whole Aquino mythology is based on what was nothing more than a straight feud between one faction of aristocrats and another. And it’s still going on today; the only difference is, the second generation has figured out how to buy people off more efficiently, so they can avoid the same string of coup attempts and general upheaval that happened the first time around.

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