Connect with us
//pagead2.googlesyndication.com/pagead/js/adsbygoogle.js (adsbygoogle = window.adsbygoogle || []).push({});

Asean

Abe’s ASEAN tour

Published

on

Author: Dennis D. Trinidad, De La Salle University

Abe’s recent trips to Southeast Asia show that Japan is turning once again to the region. Abe travelled to Indonesia, Thailand and Vietnam in January — his first foreign tour since his re-election as prime minister.

He visited Myanmar in May, and then Malaysia, Singapore and the Philippines in July. Abe is also set to visit Brunei, Cambodia and Laos in October. While many observers interpret such visits primarily as a strategy to counter China, it can be argued that Japan’s major motive for this diplomacy is a mix of both commercial and strategic interests.

Abe’s Southeast Asia visits are not unprecedented. Japan has turned to Southeast Asia numerous times in the past, evident in foreign policy changes orchestrated by Prime Ministers Sato, Tanaka and Fukuda. Each time Japanese leaders have approached Southeast Asia the main issues have usually involved China, concerns over Japan’s economy, or both. While it was not accompanied by a tour, Japan’s first turn to the region in the post-war period happened in the 1950s under Prime Minister Yoshida. The motive for the turn was mainly commercial, as the Southeast Asian region was seen then as a substitute for the ‘loss’ of the Chinese market after it shifted to a socialist system. Since then, Japanese leaders have consistently attached great importance to its relationship with countries in Southeast Asia. This observation is reinforced by Japan’s huge economic presence in the region in the form of aid, trade and investment, which have grown progressively over the years.

The first three countries that Abe chose to visit in January reflect his intention to maintain these valuable relationships. Among ASEAN member countries, Thailand was the most popular destination for Japanese investment in 2010, followed by Vietnam, while Indonesia has the biggest market among ASEAN member countries. Another reason for these visits was to monitor the disruptive effects of natural disasters on Japan’s regional supply chain; after the flooding in Thailand and the Tohoku earthquake, some Japanese manufacturers have contemplated shifting their operations to Indonesia and Vietnam. Moreover, the third arrow of Abe’s ‘three arrows strategy’ calls for a reform program that promotes private sector investment-led growth. This conforms to the New Growth Strategy launched in 2010, which emphasises the promotion of ‘superior’ Japanese technology, such as railways and water technology. The growing affluence of Southeast Asian societies and the high demand for regional infrastructure are conducive to Japanese leaders ‘peddling’ Japan’s own products and technology, which can be funded through loans and Japanese development assistance.

The strategic component of the visits is also manifested by Cambodia’s and Laos’ inclusion in the itinerary, Abe’s constant reference to ‘shared values’ in his dialogue with regional leaders, and a proposal to promote maritime cooperation, particularly with the Philippines. China’s economic and military assistance to Cambodia and Laos have strengthened bilateral ties and Chinese influence within these countries. The latter was made evident during the July 2012 ASEAN Ministerial Meeting in Phnom Penh, in which Cambodia, acting as chair, opposed the inclusion of the South China Sea/West Philippine Sea issue in the concluding joint statement. Cambodia’s stand was a diplomatic victory for China, which prefers to settle territorial disputes via bilateral talks rather than multilateral forums. This episode also reveals the divisive effect of China’s charm offensive on ASEAN. Great economic dependence by any ASEAN member on China could potentially damage the association’s cohesion and unity in the long run. This possibility leads to the second strategic motivation of Abe’s Southeast Asian tour.

By further strengthening ties with ASEAN members, Japan could help mitigate China’s charm offensive by resorting to a strategy of soft containment. This subtle version of containment is different from the policy used by the United States against the spread of communism during the Cold War. Japan knows that it has nothing to gain by containing China, now its largest trading partner. Instead, this flexible strategy allows both engagement and curtailment of China’s expanding influence. There are two ways by which Japan could achieve this: value diplomacy and institution building. During his dialogue with Southeast Asian leaders, Abe constantly referred to a set of shared values, such as democracy, human rights and rule of law. Abe declared that he ‘wants to emphasise the importance of strengthening ties with [Southeast Asian] countries that share such values’. China could not seek to realise these values, and nor does it have the credibility to pursue them — although if ‘value’ diplomacy works, it may put pressure on China to eventually embrace those values.

Meanwhile, the proposal for strengthened maritime cooperation represents Japan’s desire for long-term regional stability through institution building. During his Philippines visit, Abe reiterated the importance of cooperation on maritime and oceanic affairs. Abe can use this opportunity to take the lead in building institutions for a maritime code of conduct (including a fisheries code). Building maritime institutions in order to reduce tension complements Japan’s strategy, since participation in any form of collective security or military deterrence is constrained by constitutional and other domestic factors.

Dr Dennis D. Trinidad is Associate Professor and Head at the International Studies Department, De La Salle University, Manila, Philippines.

Asean

ASEAN weathering the COVID-19 typhoon

Published

on

Vietnam's Prime Minister Nguyen Xuan Phuc addresses a special video conference with leaders of the Association of Southeast Asian Nations (ASEAN), on the coronavirus disease (COVID-19), in Hanoi 14 April, 2020 (Photo:Reuters/Manan Vatsyayana).

Author: Sandra Seno-Alday, Sydney University

The roughly 20 typhoons that hit Southeast Asia each year pale in comparison to the impact on the region of COVID-19 — a storm of a very different sort striking not just Southeast Asia but the world.

 

Just how badly is the COVID-19 typhoon thrashing the region? And what might the post-crisis recovery and reconstruction look like? To answer these questions, it is necessary to investigate the strengths and vulnerabilities of Southeast Asia’s pre-COVID-19 economic infrastructure.

Understanding the structure of the region’s economic house requires going back to 1967, when Southeast Asian countries decided to pledge friendship to one another under the ASEAN framework. While other integrated regions such as NAFTA and the European Union have aggressively broken down trade barriers and significantly boosted intra-regional trade, ASEAN regional economic integration has chugged along slower.

Southeast Asian countries have not viewed trade between each other as a top priority. The trade agreements in the region have been forged around suggestions for ASEAN countries to lower tariffs on intra-regional trade to within a certain range and across limited industries. This has lowered but not eliminated barriers to intra-regional trade. Consequently, a relatively significant share of Southeast Asian trade is with countries outside the region. This active extra-regional engagement has resulted in ASEAN countries’ successful integration into global value chain networks.

A historically outward-facing region, in 2010 around 75 per cent of Southeast Asian commodity imports and exports came from countries outside of ASEAN. This share of extra-regional trade nudged closer to 80 per cent in 2018. This indicates that ASEAN’s global value chain network embeddedness has deepened over time.

Around 40 per cent of ASEAN’s extra-regional trade is with the rest of Asia. From 2010 to 2018 Southeast Asian countries forged major trade relationships with four Asian countries: China, Japan, South Korea and India. Outside Asia, the United States is the region’s major trading partner. ASEAN’s trade focus on Asia’s largest markets is not surprising. Countries tend to establish trade relationships with large, geographically close, and culturally similar markets.

Fostering deep relationships with a few large markets, however, is a double-edged sword. While it has allowed ASEAN to benefit from integration in global value chains, it has also resulted in increased vulnerability to the shocks affecting its network connections.

ASEAN’s participation in global value chains has allowed it to transition from a net regional importer in 1990 to a net regional exporter in 2018. But the region’s deep embeddedness in a small and tightly-coupled network cluster of extra-regional global value chain partners has exposed it to disruption to any and all of its external partners. By contrast, ASEAN’s intra-regional trade network structure is much more loosely-coupled: a consequence of persistent intra-regional trade barriers and thus lower intra-regional trade intensity.

In the pre-COVID-19 period, ASEAN built for itself an economic house held up by just five extra-regional markets, while doing less to expand and diversify its intra-regional trade network. The data shows that ASEAN trade became increasingly concentrated in these few external markets between 2010 and 2018.

This dependence on a handful of markets does not bode well for risk and crisis management. All of the region’s major trading partners have been significantly affected by COVID-19 and this in turn is blowing the ASEAN economic house down.

What are the ways forward? The immediate task at hand is to get a better picture of the region’s position in global value chain networks and to get on top of managing its network risk exposure. Already there are red flags around the region’s food security arising from its position in food value chains. It is critical to look for ways to introduce flexibility into existing supply chains for greater agility in responding to crises.

It is also an opportune time for ASEAN to harness the technology transfer gains of global value chain participation and invest in innovation-driven diversification of products and markets. The region’s embeddedness in global value chain networks certainly places it in a strong position to readily access large export markets not just in Asia but also Europe and the Americas.

Over the longer term, ASEAN is faced with the question of whether it should seriously look…

Source link

Continue Reading

Markets

Tiger Trade Launches SGX Trading, Meeting Demand from Asian Investors

Access to the Singapore Exchange (SGX) adds to Tiger Brokers’ current menu of stock exchanges, such as the New York Stock Exchange (NYSE) and the Nasdaq Stock Market (NASDAQ), the world’s two largest stock exchanges, as well as the Hong Kong Stock Exchange (HKEX).

Published

on

SINGAPORE (ACN Newswire) – Tiger Trade, a one-stop mobile and online trading application by Tiger Brokers, has launched access to the Singapore Exchange (SGX).

(more…)
Continue Reading

Asean

Can Asia maintain growth with an ever ageing population ?

To boost productivity in the future, Asian governments will have to implement well-targeted structural reforms today.

Published

on

Asia has been the world champion of economic growth for decades, and this year will be no exception. According to the latest International Monetary Fund Regional Economic Outlook(REO), the Asia-Pacific region’s GDP is projected to increase by 5.5% in 2017 and 5.4% in 2018. (more…)

Continue Reading