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Need for Increasing the Pace of Regional Cooperation

Updated On: Jun 12, 2007

As efforts are underway to complete the drafting of an ASEAN Charter to be ready for the leaders summit in November this year, doubts have been raised as to what the ASEAN Charter could achieve.

An Indonesian observer at the University of Indonesia, Baginda Pakpahan echoed doubts that the ASEAN Charter would turn the grouping into a ‘supranational’ body like that of the EU. Instead, the Charter is more likely to only provide the grouping with a legal umbrella.  While optimistic that the grouping may achieve the goal of establishing an ASEAN community in 2015, he was not as sanguine as to whether this would create prosperity for all its members.

Singapore’s Minister Mentor Lee Kuan Yew also cautioned against over ambitious plans for integration in Asia. He said, “What Asia can do is to study the lessons learned from the EU and then take a step-by-step approach to any kind of integration.”

Rather, Asia should focus on smaller incremental steps such as negotiating FTAs (between ASEAN and India). He explained, “The incremental completion of these focused FTAs [such as Asean-India, Asean-Japan, Asean-China, Asean-Korea, and Asean-Australia-New Zealand] can form the basis for a gradual evolution of a wider East Asian Economic Community.”

However, two recent commentaries in Straits Times highlighted the urgent need for greater cooperation in the region in various areas and not only in trade and investments for peace and prosperity in the region.  The first that appeared in the Straits Times (9 June) pointed out that Southeast Asia has not recovered from the pre-Asian Crisis level of foreign direct investments (FDI). It noted that the FDI inSoutheast Asia in 2003 was US$20 billion compared to US$34 billion in 1997. As a share of total world FDI, the FDI flow into the region fell from 7.7 per cent in 1992-1997 to only 2.9 per cent in 1999-2005. This was only slightly higher than Africa's share of 2.2 per cent.

While the article urged the regional governments to ‘strive towards a more integrated ASEAN market, given investors’ interest in market size,’ the bulk of its proposed measures were focused on what the individual states needed to do at the domestic level. For instance, governments needed to focus on improving infrastructure, improving human capital development and the quality of institutions and regulatory environment to promote investors’ confidence.

The other commentary by Pang Eng Fong, a labour economist, called for greater cooperation and policies to best ensure that migrant workers from elsewhere in the region could be an asset to the national economies.  Migrant labour is a reality in the region as many states such as South KoreaSingaporeMalaysia and Thailand are now home to sizeable presence of migrant workers. Other states such asIndonesia, the Philippines and Vietnam are increasing the number of migrant workers abroad.  There is therefore a need for systematic plan and cooperation on how to handle migrant workers.  It is therefore crucial that regional states It noted with concern that most regional states did not have a systematic plan on how to handle migrant workers.

The article called to attention the fact that that these migrant temporary workers were becoming permanent in the receiving economies, saying, “So what began as side-door temporary labour migration is gradually turning into front-door immigration.” It suggested three proposals to deal with the issue of migrant workers. First, the regional governments needed to improve their capacity- the ability ‘to understand where migrants are employed, their impact on local labour markets and their benefits to the economy.’ Hence, governments needed to improve their statistical data collection to include migrant workers.

Second, governments needed to have the coherence to implement the policies announced and to think through other policies that might affect the number of migrant jobs. Finally,  Governments should also cooperate with the countries where the migrant workers are from to promote legal migration and reduce smuggling and trafficking.

Both the need to increase the level of FDI and the handling of migrant workers are issues that the individual governments cannot handle effectively on their own. While effective cooperation might not entail regional integration, the regional governments have to pick up their current pace of cooperation in order to prosper the region.  (11 June 2007)

Sources:

Not Certain ASEAN Charter to Turn Grouping into “Supranational” Body: Observer(Antara, 9 June 2007)  

Cautious Integration (Bangkok Post, 9 June 2007)

Can S-E Asiaride the next FDI wave? (Straits Times, 9 June 2007)

Making migrant labour work across Asia (Straits Times, 8 June 2007)