Reality check: ASEAN Economic Community

ASEAN economic community

 

By December 31, 2015, ASEAN (or for those outside Southeast Asia, known as Association of South East Asian Nations) has officially entered a new phase of its region-based integration with the launching of ASEAN Economic Community, or AEC in short. With that new precedent established, the 10-country association will become a single-market base, integrating a combined population that is projected to surpass 640 million by the end of 2016, with total GDP output approaching 3 trillion US$. The launching of AEC will enable near-limitless intra-ASEAN capital, human, investment, talent, and social mobility. People from all ASEAN member-states will soon be faced with intense competition with the free inflows and outflows of goods, services, labor, capital, and almost everything within the region.

Heck, a lot of my close friends I personally asked had not even the slightest idea what ASEAN Economic Community is.

If you look at all these numbers and figures (640 million people, middle-class population of over 100 million, 3 trillion US$ of GDP output, over 1.5 trillion US$ in goods and services exports and another 1.3 trillion US$ in imports), they are sexy. Indeed, these figures make the notion of AEC so sexy and attracting, particularly for multinational corporations seeking to invest in this region as labor costs remain lower than those in China. But, hold a second, why the heck do a lot of people here seem not attracted to this idea of ‘economic integration’? Even more people out there, I bet, would think of a cow playing a piano when imagining the impacts of this agreement.

Beforehand, we need to unmask the uneasy reality being faced by ASEAN in facing this brand-new world of free trade agreements, economic unions, customs unions, and so much other stuff you may think they are a series of one-off talk shows.

We have been so integrated economically, but separated culturally and socially.

Even before the implementation of AEC, ASEAN has signed lots (and damn lots) of trade agreements, mostly with our own neighbors. China, Japan, South Korea, India, Australia, and New Zealand have attested to such cooperation, and European Union (to a lesser extent also including Gulf Cooperation Council) are hastening up negotiations for the completion of another round of FTA – albeit EU is pursuing the negotiation with individual states. The implementation of ASEAN Free Trade Area, or AFTA, has also eliminated most existing trade barriers, in this regard the imposition of tariffs. All ASEAN countries have reported the rate of tariff elimination at above 95%, with the exception that some non-tariff barriers remain. And what about Myanmar, our ‘friend’ that just (supposedly, maybe?) became a democracy after November 2015 election? Economic reforms beginning in 2011 have resulted in Singapore and Thailand becoming the largest foreign investors in the country, but to which extent the economy will further open up remains another question worthy of further scrutiny.

The table below provides the data regarding ASEAN member-states, as cited from MIT’s damn-pretty data-visualization website Atlas of Economic Complexity:

 

ASEAN export-import

By the way, never mind with the fact that most Southeast Asian countries look up to the world’s biggest panda for trade (at least for now, as China is Asia’s biggest economy currently), with the exception of Brunei, which exports bulk of its oil to Japan, and Laos, which has Thailand as its ‘friendlier’ partner. One obvious indication with such pattern is the increasing Asian-centric nature of these countries’ trading activities. If you dig more data from the Atlas, especially with regard to ASEAN member-states, one major thing you observe is the overwhelming domination of Asian (and fellow ASEAN) countries taking huge portions of their trading volume.

Nevertheless, the inconvenient truth is that we remain ‘separated’ culturally and socially. Never mind with the fact that intra-ASEAN migration is of a huge and tremendous scale, especially if you try to consider these figures below (data obtained by UN International Migration 2013 report):

  • More than 3.7 million foreign migrants residing in Thailand originate from Myanmar, Laos, and Cambodia, overwhelmingly employed in low-paying jobs, particularly in construction, farming, and fishing industries
  • Over 1 million Indonesians are currently staying in Malaysia (mostly to work as domestic helpers or factory workers), but many unofficial estimates put the figure between 2.5 and 3 million people instead, due to the possibility that a lot of them ‘overstay’
  • Almost 1 million Malaysians are currently in Singapore, coming in and out of Johor Bahru on a daily basis, mostly for work

Or consider these news samples, based on what I obtained and summarized from mainstream media:

  • People in Yangon (capital of Myanmar) protest against death-sentence verdicts against two Myanmar nationals charged of first-degree murder in Thailand they possibly didn’t commit
  • Discrimination, at a lower level, continues for ethnic Vietnamese living in Cambodia
  • More than 150,000 Cambodian migrants rushed home in the aftermath of 2014 May coup in Bangkok, for fear of military persecution
  • Thousands of Rohingya (a Muslim ethnic group from Myanmar) refugees were stranded in seas as Indonesia, Malaysia, and Thailand refused to grant them protection, only to be resettled after months of intense negotiation between the countries
  • Potential future standoff by Sulu insurgents (from the Philippines) in Sabah State, Malaysia (located in Borneo Island)

Without trying to provide further explanations, I suppose I have given enough examples to highlight the problems with regard to our concept of integration. No?

Another problem is our extremely huge economic discrepancies within ASEAN member-states. Seriously.

Consider another table below for your reference. Do notice, for the fourth column, that I input ‘4 US$ a day’ as a threshold, largely following the guidelines set by World Bank and also Japan’s Ministry of International Trade and Industry (for the latter, the reason is you know why) to differentiate those as ‘lower-middle-class and above’ and ‘low-income and poor’.

ASEAN middle class

With such extremities occurring if comparing these countries, it is worth questioning the viability of socio-economic integration of communities representing a huge array of income strata, particularly when everyone is entering the AEC era, as the leaders always like to envision. Then there comes the gap in the quality of manpower. A large proportion of population, especially in countries with GDP per capita below 10,000 US$ per year, are deprived of access to education due to poverty and many other reasons, and of course this is a legitimate reason to worry about. How will people compete on a level playing field if the resources provided to them are not even on their own level playing field? While unfortunately this is the underlying reality that shapes the contemporary world (and we can’t deny that fact), it takes a massive investment to equip individuals in these countries with sufficient capacity to compete against each other, and the amount itelf is of a no-joke hold-no-breath size; McKinsey Global Institute, the world’s most optimistic consulting firm (I guess), forecasts that ASEAN member-states have to spend upwards to 3.3 trillion US$, from 2015 up to 2030, to totally upgrade their infrastructure, especially in education. Where on earth are they going to get the money? While asking for international aid sounds more like an off-sounding joke, the only possible models that can be envisioned are either public-private partnership (PPP) or simply total liberalization that will enable inflows of foreign direct investment (FDI).

Even in terms of political orientation, each ASEAN country is completely ‘unique’ on its own.

If one has to look at it from a very truthful, and I could say somewhat inconvenient, language, the unique ‘selling point’ of ASEAN lies in its all-inclusive spectrum of political orientation. It has 1 absolute monarchy (Brunei), 2 military dictatorships (Thailand and Myanmar, so long as the junta doesn’t permit Aung San Suu Kyi to become the president), 2 Communist countries (Laos and Vietnam, but the latter has better political space than China), 3 semi-democracies (Cambodia, Malaysia, and Singapore, which have continuously been ruled by the same ruling party), and 2 ‘problematic’ democracies (Indonesia and Philippines, which are still struggling to control corruption and cronyism).

And in recent years, there have been concerns by academics whether many countries are actually deteriorating in terms of quality of democracy. While I’m not to subscribe to the belief that democracy is a panacea or a cure-all, the major advantage of democracy is it allows freedom to voice dissenting opinions on existing issues. But that’s it. Numerous research works in political science, mind you, have warned the public that rule of law has absolutely nothing to do with the fact if a country is a democracy or a dictatorship. And even in terms of rule of law, most Southeast Asian countries are lagging behind (except Singapore). Indeed, corruption and abuse of power have been deeply entrenched as a kind of ‘inalienable’ mindset among a large proportion of population in those countries.

Even then we still intensely debate and struggle to define what is corruption, which has only been constrained to these two actions: either you bribe or are bribed, or that you steal state assets. But what about these possibilities:

  • Because you are close to people with influential political power, you can monopolize an economic sector, depriving other more capable players of equal opportunity to compete. Is that not corruption?
  • Major corporations donate to political parties financial support so that they can win election. Is that not corruption? (okay, some consider this lobbying, but still, you know what I mean)
  • Political parties, especially ruling regimes, create ‘linked companies’ as their major source of revenue, controlling various economic sectors. Some consider this a legitimate way of earning money and lessening dependence on private donors, but again, is that not corruption?

This is the big Achilles’ heel that almost all ASEAN countries are being faced with. How will there be a level playing field if one side endorses one thing more than the other? One can talk about the concept of ‘single market base’, but with governments sometimes going to all available means to protect their cash cows, is that not killing competition? Is that not corruption?

But the most challenging aspect is their solidarity in international issues, especially those that carry significant stakes to ASEAN. Did anyone still remember the failure in 2012 ASEAN Summit in Phnom Penh, Cambodia? If not familiar, this is the brief explanation: all the 10 countries failed to deliver a major communique about their stance on South China Seas, which are currently being disputed between China, Taiwan, Brunei, Malaysia, Philippines, and Vietnam. Even to deliver only a unified response ended up as a major fiasco! While further communication has been done and some ‘unified messages’ have been crafted, there remains an aura of uneasiness among those countries in responding to this issue, which has been their biggest major international challenge. Still, given the huge socioeconomic gaps that become internal problems in those countries, to some extent we also have to understand why these countries fail to show unity when presented with some crucial issues.

And there is another table that I have obtained from The Economist, Transparency International, and Freedom House. While the ranks may be somewhat subjective and disputed, at least they offer a general overview of the current sociopolitical situation in these Southeast Asian countries. For more examples, I would encourage you to look them up by yourself (as too many examples will render this blog post more like a ranting essay):

ASEAN political quality

This is the reason why the real ASEAN Economic Community will only be felt in a longer future to come, given the existing obstacles. Despite such reality, still, the initiative has been launched, and even with that celebration merely in name one has to start preparing oneself to face future challenges. While red tape will still exist, companies will face less restriction in investing in these emerging markets. A large population still below middle-class status will experience upward social mobility with closer economic cooperation. Furthermore, with mega-regional free trade agreements such as TPP already reached and soon to be ratified, as well as negotiations in RCEP that will also be completed in the near future, by which most ASEAN member-states are participating, this is the huge opportunity (altogether with its underlying risks) that the countries must adapt with in order to succeed in the long run. Now, the challenge with AEC is how long it will take for the entire bloc to achieve the envisioned integration, and truth be told, the path towards that vision will not be as easy as we imagine.

And yes, my friends already knew about this initiative, anyway.

SEALNet – an epilogue.

 

Having looked at the title, please don’t infer that SEALNet Medan Chapter is going to end. I mean, in brief, not too fast. Perhaps not in the upcoming years, not even until this decade submerges. But knowing the fact that I should let go the title and the organization, and leave this job to my successors, I am primarily concerned on the long-term existence of it. I have no precognition on where direction exactly they are going to bring it to, nor do I possess prophetic skills to see what they are exactly going to do – whether in accordance to all the visions I have set forth in my outline or not – after leaving this CCA, and more exactly, this school.

I have never been updating any information about the progress in the last 6 months. And now I see today it’s my obligation to inform those in the headquarters, after myriad times of procrastination, while at the same time, to announce my resignation from SEALNet Medan Chapter. In general, workshop condition was slightly better off compared to that in the first year. The materials were a bit more structured, but we had not brought significant satisfaction for all the mentees, as there remained some complaints regarding the ‘boredom’ our tutelage induced. We also did not fully manage to implement all the outreach plans we had designated before the chapter’s new formation: out of 8, we only succeeded to make 3 out of them. This was largely due to the ‘overspending’ we had had in ensuring their success. Nevertheless, instead of merely paying visits to orphanages, we had diversified the scope, including visit to an NGO-operated school on the railside (which I myself did not participate in due to being abroad) and ‘study tour’ in a cow livestock and a strawberry farm in Berastagi.

 

 

The school’s name is, for your information, PAUD Dian Bersinar Foundation. It even has a blog.

 

 

Our trip in Berastagi.

 

Some of my friends inquired me, “What did you feel after being positioned for almost 2 years?” Well, there were the best of times, there were the worst of times, and, you know, it’s kind of hodgy-podgy. I had personally gone through the zenith, through the abyss, pulchritudinously, like a continuous array of longitudinal waves. Doing something that is not of your particular interest, particularly in leading it, is never as simple as I had imagined before. At least, that’s what the ‘leadership’ itself tries to define. Reminiscing through all the experiences I had felt until these penultimate moments, I had garnered a few conclusions on being a leader. First, a leader is no different from a servant; both have the needs to serve, one for the masters and the other for the public as their ‘bosses’. Second, no leaders ever believe that what is meant ‘take it easy’ dictum is entirely ‘take it easy’; some of them merely conceal such worrisome attitude, only to convince the outsiders that ‘everything is going fine’, while the others had a penchant for emotional outburst by expressing their frustrations. Third, you realize who, upon your subordinates, that are seriously committed to realizing your goals, and those who have a ‘parasitic’ tendency to stay indolent. Every institution, as I believe, has ‘germs’ by its own that leaders can’t ever purely eliminate, for whatever reasons, like, you see, having been acquainted with them for so long that the bond can’t be let loose by dismissing them. I had, personally, witnessed such phenomenon. I feel no necessity to leak it to you who these persons are, that I still have to respect their decency of privacy. But I know who upon them are willing to work, and who simply stick their names unto it.

Only in these last months I had kind of burdensome feelings in managing SEALNet, honestly. Obviously because of the amounting tasks I gotta prepare in the last year I’m in school. You know, being faced with TOEFL IBT tuition, SAT preparation, AO Maths tuition, excluding the overwhelming school exams that confiscated my time in evaluating all the progress we had made in this second year. And there was pretty much dwindling interest, as shown by the number of mentees admitted this year; no more than 70 students applied for us, and only 1 first-grader (compared to the burgeoning 70 in its first year) registered. A little more than half of them were already third-graders, clear signs that our ‘organization’ is experiencing over-rapid ‘aging’ (mini-Japan?). Taking its positive remarks, we had better capability in managing these mentees. Nevertheless, on its negative side, it just made me fully concerned on its future fate, in years to come long after I have graduated. I comprehend the adage of ‘everything that has its beginning has its own end’, but realizing its promising prospects, it was just, you know, a ‘waste’ if they simply ended it up within 2 or 3 years. The organization has yet accomplished many feats, and tackling all the problems it encounters would be a huge responsibility for future mentors to solve. If they were willing to endure a bit longer, that would be a pride of their own of having resolved the first years’ challenges and let it grow exponentially. If they gave it up, I had no more words to say. Knowing that it will be no longer my own to make it progress, I have to let it go, leaving it up to my juniors to complete the unfinished businesses. I could only, so far, outline long-term goals and visions for SEALNet Medan Chapter in years to come, but it has been up to them whether to follow my ‘instruction’ or make one by their own.

 

One of our workshop sessions included a ‘simulated mayoral election campaign’ between 2 competing pairs.

 

All of us do have still so much yet to learn. And I myself have particularly realized that there is still so much yet to gain having led it. To admit it, I have not succeeded in bringing concrete unity to the organization. We lack of promotion, for sure, that many even doubt whether SEALNet is actually ‘a  leadership-nurturing CCA or just another Facebook Starcraft-sounding online game’. Many others, meanwhile, still prefer extracurricular programs (and I don’t have to mention which they are) that will score them straight As only by ‘writing down’ their names on their membership list. It’s not uncommon in our school, to be honest, but I also do not see it as rightful and wise to describe them here. But, just, in brief, I think that’s plain unfair. I believe that I always have to make sure that all the members are evaluated and scored based on how much, and how often, they have done in accordance to whatever tasks we have assigned them and ourselves.

Well, I am, given my nearly 2-year bond in SEALNet, concerned about its fate in the near future. Its ups and downs are inextricably connected with our win-and-lose experiences as well. It still has tremendous space to grow and expand, major potential yet to be explored, more problems yet to be solved, a plethora of potential mentees yet to diminish, and, most importantly, a fact that I love to hate, a school to sustain. (of course it closes down if the school collapses!)

In the long run, I want to thank a lot of mentors (whose names I tag here) who have assisted me a lot in making this organization progress every time. I want to thank Elvira, my co-partner in leading SEALNet. You have, given your animating attitude, so many creative ideas that you embody in the outreach.  Then there is Vinnie, our lil’ petty Secretary. You are active, and you are fierce. But only through your ‘ferociousness’ (does it seem exaggerating?), you can emulate pretty much useful suggestion to improve our workshop materials. Then there is Grisella. You are smart, and you are such a great idea shower for us! I felt so guilty that I had, instead of assigning you in Project Division, placed you in Publicity. Then Lily. You are strict, well-disciplined, and despite your mere two-week post as Head of Project Division, you made me really learn how to manage a project really well, as seen by your capability in directing any outlines you have set to your subordinates. Then there’s Cindy, our treasurer, who has arranged well our cash reserves in the last 5 months. Then this ‘couple’, Iin and Riyan. Both of you have contributed pretty much in this recent year for the betterment of our workshop and outreach sessions. And there are Anthony and Budi, who have helped us in negotiating economical bus fares each time for our outreach sessions. Then there’s Ricky, who has also helped very much in our outreach. Then Ferry, who has helped quite much during our workshop session. And to the rest, all of you, exactly, (I can no longer mention their names one by one specifically here), thanks a lot!

Last but not least, I also would like to thank our coach, Mr.Supian, who, despite his occupied schedule as a teacher, a lecturer in many colleges other than our school, and a church speaker, has been an ardent supporter, and an idea-shower as well, for the betterment of our organization.

And particularly to all my seniors now scattered in universities, home and abroad, like Edric, Riandy, Winnie, Desilia, Adeline, Ricky, Juned, JA, and a list too long to go on, thank you for giving me this opportunity. I hope we’ll meet someday!

 

 

 

Well, it’s old days recalled.