ASEAN and the Economic Arms Race in Southeast Asia

Neil Andrews

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The “Nine-Dotted Line”. Photo Source: U.S. Central Intelligence Agency via Wikimedia Commons.

October saw ten of Southeast Asia’s most prosperous nations meet for the biannual Association of Southeast Asian Nations (ASEAN) summit – the twenty-third of its kind held since 1967.  Hosted in Brunei, the gathering of nearly a dozen of the continent’s rising economic dragons would usually pass without a fuss.  The notable absence of Barack Obama from proceedings, however, (who could not attend due to the fiscal stand-off in Capitol Hill) has led many to ponder whether America is losing its influence in the region.

Forged out of the depths of the Cold War nearly fifty years ago, ASEAN was established as part of an American-supported attempt to stem the tide of communism in the Far East; most notably the threat posed by Maoist China.  Today, the political bloc – made up of Indonesia, Malaysia, the Philippines, Singapore, Thailand, Myanmar (Burma), Cambodia, Vietnam, Laos and Brunei – is much less politicised, describing its aim being to “accelerate the economic growth, social progress and cultural development of the region”.  This sounds friendly enough.  Yet the cosy rhetoric merely disguises the organisation’s real raison d’etre.  In truth, it is a political pawn, manipulated by America and China in order to gain hegemony over the Far East.

Of the summit’s main talking points this Autumn, the issue of maritime disputes – a topic that has plagued East Asia for decades – cropped up time and again.  As evidence of how ASEAN can be used as a political bargaining chip, one of its members, the Philippines, is being groomed by America (its former colonial overseer and ally) to antagonise China over disputed historical claims to parts of the South China Sea, including an area known as the Scarborough Shoal.  In fact, so incensed is the Philippines by China’s refusal to recognise its claim to the archipelago, that Manila has called upon the United Nations Convention on the Law of the Sea (UNCLOS) to seek a legal resolve to the issue.  This is not all.  Taiwan and Japan, also allies of the U.S., frequently lock horns with China over hotly contested swathes of ocean.  Along with Vietnam, they oppose China’s so-called “nine-dotted line” agenda, a U-shaped demarcation line that earmarks territory supposedly belonging to the People’s Republic, encompassing the Paracel Islands, Scarborough Shoal and the Spratly Islands.


The “Nine-Dotted Line”.  Source:

Nevertheless, Washington has grand designs of its own for Southeast Asia.  Aside from acting as the prime guarantor of security in the region (in addition to being a friend and close ally of the economic powerhouses Japan and South Korea) the U.S. has other, less obvious vested interests.  This year, for example, marked the birth of the U.S.-ASEAN Expanded Economic Engagement Initiative (“E3″ for short), an ambitious project designed to create “a framework for economic cooperation … to expand trade and investment ties between the United States and ASEAN”.  Running in tandem with this is the Trans-Pacific Partnership (TPP), a plurilateral agreement aimed at opening up trade between Pacific nations, which is also being led by America.  The White House recognises the economic potential to be unlocked from Southeast Asia.  As the U.S. Department of State excitedly declares, the region has a combined GDP of over $2.2 trillion, represents America’s fourth-largest export market, and is its fifth-biggest trading partner.

Such activity has done little to quell the fears of those reliant on American security and investment, however.  Many, including Australia, are concerned that Obama’s promised “pivot to Asia” was an empty threat.  This follows a 9-day tour of Australia and Indonesia back in November 2011, during which the American President spoke of a special commitment to the Asia-Pacific region.  But Mr Obama’s no-show in Brunei may have poured cold water over the U.S.-ASEAN relationship.  Instead, it is the Chinese President, Xi Jinping, who has taken the initiative.  His paunchy presence at the Asia-Pacific Economic Co-operation forum (APEC), which took place shortly before the meeting in Brunei, exuded confidence and calm.  Li Keqiang, the Chinese Premier, then proceeded to steal the limelight over his adversary, John Kerry, at the ASEAN summit.  This has put China in the driving seat, leaving America to lick her wounds.

Mr Xi speaks of a new “maritime Silk Road” and the idea of a central Asian development bank, and it is clear that America has much to do if it wishes to keep up appearances in the region.  But instead of entering an economic arms race, it would be better for everyone if China and America worked together to ensure the peace and stability of a historically troubled region.  This is not a time for economic greed, or petty territorial disputes.  After all, they have both been here before – Korea, Vietnam and the Cold War: does that not send alarm bells ringing in Beijing or Washington?

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