THERE are two ways to see whether something is going to do well or badly – a top-
down view or a bottom-up view.
I spent more than a month travelling through Indochina and visited eight out of the ten
members of ASEAN in the last year to get a first-hand view from the ground up.
In two years time, ASEAN will celebrate its golden (50th) anniversary since its
founding in 1967. This year, Malaysia chairs the community in a year that will fulfill
the dream of an ASEAN Economic Community (AEC).
In a world that is awash with strife and uncertainty, ASEAN remains the world’s rising
star. Taken together, McKinsey Global Institute estimated that ASEAN is already the
7th largest economy in the world, and by 2050 it will be the 5th largest. Trade-wise,
ASEAN accounted for 7% share of world exports in 2012, surpassing all Asian
economies but China (11% share). With US$2.4 trillion GDP (larger than India or
Italy) and 620 million population (100 million larger than European Union), ASEAN
can power global growth. ASEAN labor force is the world’s third largest and very
young, with 50% below 30 years old.
Travelling in local buses through Vietnam, Laos and Cambodia last month, I could
feel personally on the ground ASEAN’s rapid growth rate of more than 5% per year.
Every city and countryside I visited seems to be under construction, feeling very
much like China in the last decade.
Cambodia, one of the poorest countries in the 1990s, achieved over 7% per annum
growth over an extended period. A lot of this was through rapid urbanization, which
exceeded half of the population in 2013. According to the UN “World Urbanisation
Prospects”, Indonesia’s urban population will nearly double to 228 million by 2050,
with ASEAN having over 500 million urban population by then. McKinsey estimated
that 125 million households in ASEAN will join the middle-income class by 2025,
increasing by 87%.
War and Water
As I sat amidst the ruins of Angkor Wat, I reflected on the two factors that struck me
most about this tour around IndoChina – War and Water. Our tour guide in Hanoi
started her introduction to Vietnam history as “fighting China for a millennium, France
for a century and the United States for two decades” and “we beat them all”. You
only have to see that parts of Laos and Cambodia still have unexploded bombs and
see the musicians maimed by mines to remind oneself that this was a region marred
by war.
I brought along Robert Kaplan’s 2014 book "Asia’s Cauldron" about how the South
China Sea could be the next flash point of geopolitical conflict. Born during the period
of the Vietnam war, the ASEAN community realized that geopolitical neutrality and
political stability is the anchor for peace and prosperity. ASEAN is now being actively
courted by the U.S., Europe, China, Japan, India and Russia as well as the Middle
East as a good friend and major trading partner.
You only have to see how the rival proposals for trade and investments, particularly
with Trans-Pacific Partnership and regional groupings of ASEAN+3 (China, Japan
and South Korea) as well as ASEAN+6 (India, Australia and New Zealand) to form
Regional Comprehensive Economic Partnership (RCEP) have basically geopolitical
alliances in mind.
Unlike the European Union, the ASEAN is not a political integration but an economic
zone focused clearly on regional peace. Its fundamental strengths are its consensual
nature of agreement, which can be highly frustrating for some, and its ability to get
the balance of power right, not only amongst the external powers, but also within
ASEAN. Even though Indonesia is by far the largest of the ASEAN nations,
accounting for 40% of the population and 36% of GDP respectively, one tends to
forget that the continental side, from Myanmar to Vietnam, accounts for 27% of the
population and constitute the fastest growth potential.
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