Dynamics of ASEAN Since Its Establishment

When we look at how far ASEAN has come in its journey, the Regional Comprehensive Economic Partnership (RCEP) that was signed on November 15, 2020, actually seems like a part of an already existing process.

The Association of Southeast Asian Nations (ASEAN) has a demographic structure with 622 million people in an area covering 4.5 million square kilometres. Consisting of ten countries that differ from each other in terms of economic development, political system, and cultural background, the Association is regional and intergovernmental integration. ASEAN stands out as a globally active actor in the current international conjuncture with its trade flow and rising position in the value chain, as well as an important global production centre with a rapidly growing middle class and consumer market.

The Regional Gross Domestic Product (GDP) of the Association, which was $577 billion in 1999, reached $2.55 trillion in 2016. These figures even rose to $3.11 trillion in 2020 despite the novel coronavirus (COVID-19). It is now foreseen to become the fourth-largest economy in the world by 2030. We can consider its labour advantage and increased productivity in production as the hallmarks of ASEAN’s economic growth. The Association is home to the world’s biggest labour centre after China and India.

The dynamics of its establishment give us a different picture from current ASEAN structuring since it corresponded to the spirit of the time that it was founded. ASEAN was founded on August 8, 1967, with the Bangkok Declaration signed by Indonesia, Malaysia, the Philippines, Singapore, and Thailand. The Declaration, in which 5 ASEAN countries took part as founding members, listed topics such as “ensuring regional economic growth, promoting social progress and cultural development, encouraging peace and stability and active cooperation in common interests”, in line with the objectives and purposes of the Association. In fact, discourses on security and politics were gaining more importance during the sharp polarity conditions of the Cold War.

The first summit meeting of the Association was held in February 1976, and the ASEAN Agreement proposed that the meetings, which had been held only by foreign ministries since 1972, should be held informally before the presidency as of 1976. As to its organisational structure, the secretariat of the Association was established in 1976, and the heads of states, ministries of foreign affairs, and other ministries of member countries have been coming together in forums and summit meetings. At the Singapore Declaration of the 4th ASEAN Summit in 1992, an official summit was proposed to be held once every three years. Today, heads of member states and ministries of foreign affairs come together once a year.

The economic agenda of the integration in the 1980s, which came about in parallel with the global conjuncture, was shaped by the decisions of the member countries, focusing on economic liberalisation and export, rather than import substitution. Meanwhile, ASEAN was expanding with Brunei in 1984, Vietnam in 1995, Laos in 1997, and Cambodia in 1999. When the economic modernisation programs of Vietnam and Laos in the 1980s coincided with China’s Reform and Opening-Up initiative, ASEAN came face to face with the rising reality of China, as well as with the international system. In this respect, the advantages and disadvantages imposed by China will be decisive in the future structural strategic expansions of the ASEAN.

We can consider the 1990s as the period when ASEAN really started to position the economy at the centre of its agenda. We cannot deny ASEAN’s efforts to find a place for itself in the international system that transformed with the end of the Cold War. Another deeper economic integration progressed gradually in 1992 with the ASEAN Free Trade Area (AFTA) and its aims to remove regional trade barriers and become a centre of attraction for foreign direct investment.

And we should mention the 1997 Asian Crisis, which was also one of the important catalysts since the establishment of ASEAN. We can say the crisis that started in Thailand and shortly spread out, in a sense, put the organisational structure and content of ASEAN to test. So, ASEAN started to diversify its economic and commercial relations and accelerate its existing relations on the one hand, and strengthen its organisational structure in terms of regional integration on the other. Thus, the range of regional economic integration was aimed with the ASEAN+3, ASEAN+6 initiatives, and mutual Free Trade Agreements (FTAs).

2007 stands out as another year for ASEAN for providing legal status to the Association with the ASEAN Charter, and for the creation of an action plan titled ASEAN Economic Community Blueprint, for creating a single market and a production centre, competitive economic region, equal economic development, and integration with the global economy by 2015.

When we look at how far ASEAN has come in its journey considering these action plans and organisation dynamics, the Regional Comprehensive Economic Partnership (RCEP) signed on November 15, 2020, actually seems like a part of an already existing process. On the other hand, cyclical factors such as COVID-19 and the transforming/contracting global supply chains as a result of the US-China trade wars were also effective in the agreement. At this point, RCEP can be interpreted as taking precautions against the side effects of the existing trade system such as unilateralism, protectionism elements, destructive effects of trade wars, etc. with the motto, “Protectionism Against Protectionism”. RCEP is now regarded as the world’s largest free trade agreement, where current agreements with China, Japan, and South Korea -ASEAN’s mutual FTA partners- are consolidated, with members corresponding to 30% of the world population, and one-third of the global economy at $26.2 trillion in terms of GDP.

In its regional integration journey from its establishment in 1967 to today, ASEAN has transformed itself at certain points in history such as the end of the Cold War, the inclusion of China in the global trade and economic system, and the 1997 Asian Crisis. From this perspective, we can say that it will focus on the theme of sustainable economic growth in the near future. The Association, which recorded an annual average economic growth of around 3.5% in the last 50 years, in fact, contracted by approximately 0.7% in terms of regional GDP in 2020 due to the pandemic. The growth is estimated to be around 6.2 to 6.8% in 2021.

Aiming to deepen the physical, organisational, and humanistic relations, Master Plan on ASEAN Connectivity 2025 is at the top of the other current priority areas of the Association. Thus, ensuring sustainable infrastructure, digital innovation, invisible logistics, administrative excellence, and human mobility through coordination at the level of national, regional, and foreign relations has been determined as the focal point. The “digital economy” is emphasised at the same time, with factors such as being the world’s third-largest labour centre but with a digital economy corresponding to 7% of the GDP of member states.

At this point, ASEAN’s objectives such as ensuring connectivity in infrastructure and increasing regional resistance against external shocks such as COVID-19 and China-USA competition show us a promising revival in foreign relations in the upcoming period. Accelerating regional and global collaboration as seen in the example of RCEP will also help ASEAN’s momentum in sustainable economic growth. In terms of its organisational and agenda area, the Association has gradually improved its regional integration dynamics with a holistic perspective in line with the cyclical change of the international system. Finally, ASEAN will be able to reflect its competitive advantage in full efficiency by deepening its organisational structure in addition to expanding the areas of cooperation in its foreign relations.

Sibel Karabel, Director of İstanbul Gedik University ASEAN Research Centre