Entering 2020, there were many reasons for Asean to take pride in the bloc’s progress towards sustainable development. Extreme poverty has decreased from 138 million in 2000 to 44 million in 2015. Life expectancy, which was 63 years in 1984, rose to 70.9 by 2016. Asean’s gross domestic product has more than quadrupled since 1999, from US$577 billion in 1999 to US$2.5 trillion in 2016, making it the sixth-largest economy in the world. However, that progress should not ignore the various problems the region is still facing over inequality, the environment, and marginalized communities. The unprecedented coronavirus pandemic threatens to halt the region’s movement towards sustainability and its hopes of achieving long-term development goals. Thus, the bold Asean project is now facing a significant test of its future relevance.
The region has been relatively successful compared to others at handling the spread of the crisis with Vietnam being a noteworthy success story. However, even though many of the member states’ economies might be functioning again, there are serious concerns due to member nations relying on export-oriented growth. Thus, the effects of the pandemic could be particularly long-term for the bloc as the world sees the fragility of global supply chains. Even before the crisis, the US-China trade war indicated that economic nationalism and protectionism was on the rise and the pandemic will only foster these trends.
With this new predicament, the Asean countries will need to rely on one another during these difficult times. Asean’s trade with itself has disappointingly stood at around 25% for almost two decades which contrasts with the EU’s 65% trade with itself. Thus, member states have to now show their willingness to do business with one another. Non-tariff measures are still posing a significant barrier to further trade and it is imperative that they are reduced. The region has to also look into the possibilities of onshoring or even nearshoring as Southeast Asia is becoming known for being a business-friendly hub. For example, countries such as Singapore and Malaysia were ranked 2nd and 12th respectively in Ease of Doing Business in 2020.
The crisis should also provide a reminder about other perennial problems in the region such as its currently weak social protection systems. Member states only spend around 6 percent of GDP on social protection with only Malaysia, Singapore, Thailand and Brunei obtaining anything near universal health coverage. Furthermore, the region’s dominant form of social protection is social insurance such as pensions and health insurance which mainly benefit salaried employees. Thus, a large number of those in the informal sector are failing to get adequate social protection.
There are also serious environmental worries due to rapid urbanization leading to increased air and water pollution as well as growing amounts of waste. Studies also predict a 4.8°C rise in mean annual temperature and a mean 70cm rise in sea level by 2100 in Indonesia, Philippines, Thailand and Vietnam, putting millions at risk. The transboundary haze which is a regular occurrence from July to September is a persistent challenge too.
These challenges that will continue to plague the region have led many to argue that now is the time for the member states to come together and create their own ‘Green New Deal’, (GND) that will help the region recover from the crisis but also ensure that future development is indeed sustainable. Such a scheme will of course be ambitious, but the EU’s introduction of its own GND in March, should provide an inspiration to the bloc. Attempting a major initiative such as a GND would be an indication to the world that Asean has a coherent regional strategy to overcome its long term issues.
With the problems highlighted, it is clear that now is a defining moment in the bloc’s history. There is undoubtedly an opportunity for the member states to bounce back stronger to meet the targets of the UN’s 2030 Sustainable Development Goals and the Asean Socio-Cultural Community 2025 blueprint. However, if daring steps are not taken, ASEAN’s relevance towards a coherent regional development strategy may continue to be questioned.
This article first appeared in New Straits Times on 17 June 2020.