Hundreds of delegates gathered this week for the World Economic Forum on ASEAN, to discuss broad issues of “youth, technology, and growth” within a rapidly changing region.
Fifty years after its launch, the Association of Southeast Asian Nations still struggles in many ways to define its place in the world, many experts say. The body promotes cooperation among its 10 member states, but the wealth and development disparities between ASEAN nations and its principle of non-interference, have at times held the bloc back from meaningful action.
At the WEF ASEAN forum held in the Cambodian capital of Phnom Penh from May 10-12, discussion focused on obstacles that will have to be overcome should the region see true, equitable growth. Infrastructure, governance and open dialogue were key components of the talks, but with a widening wealth gap, and a burgeoning Fourth Industrial Revolution that threatens to leave even more of the region’s vulnerable population behind, ASEAN has its work cut out. Some observers pointed out that the venue itself illustrated that conundrum — a glittering $100 million resort built by a powerful businessman on a strip of land from which hundreds of families of poor fishermen were forcibly evicted.
Talk of connectivity and growth were high on the agenda, but ultimately the conference served to raise more more questions than it answered. Below are some of the key issues discussed at WEF.
As the West grows more protectionist, how will China’s role change?
China has long been, in the words of Cambodian Prime Minister Hun Sen, “a strategic partner” of ASEAN. Speaking at a press conference Thursday, Hun Sen chided media not to “accuse me of having a tendency toward China” — an oft-cited claim among local observers — but to “take note of reality.” Among other gains, ASEAN exports more to China than it imports, he pointed out.
“ASEAN benefits a lot from this relationship,” he said.
For years, the U.S. pivot to Asia helped shaped geopolitics, investment and development in Southeast Asia. But with anticipated disengagement and mounting protectionism from the new U.S. administration of President Donald Trump, much discussion at WEF ASEAN centered around what impact that shift may have on China’s role in the region.
At a panel titled Southeast Asia and the Big Picture, speakers grappled with the question of what that shift may mean.
Will there be “a pivot to China,” asked Jamaludin Ibrahim, head of Axiata Group in Malaysia. With the “U.S. disengaging from the region … does China fill the void?”
The answer is far from clear. With WEF ASEAN closing just two days before the much-anticipated Belt and Road Forum in Beijing, China’s presence cast a long shadow.
“Every country in Southeast Asia welcomes Chinese investment, wants to be part of One Belt One Road,” George Yeo, visiting scholar at the Lee Kuan Yew School of Public Policy, told the audience at the panel. There is no question of the economic potential China allows for in the region. Yeo stressed most ASEAN countries prefer to remain “promiscuous” and did not want China to be their “exclusive partner.”
“If you ask Southeast Asian countries to choose between a or b, they will find it intolerable.”
Can Southeast Asia weather the Fourth Industrial Revolution?
Singapore is ranked ninth out of 187 countries for education, Myanmar is ranked 150th. In a region with vast wealth, development and educational disparities, many at WEF ASEAN are asking what impact the Fourth Industrial Revolution of rapid digital and technological change will have.
At the World Economic Forum on ASEAN, participants are in agreement: Now is a make or break time if Southeast Asia is to prosper from the Fourth Industrial Revolution.
“The Fourth Industrial Revolution truly will bring benefits for people in all the countries,” said Cambodian Prime Minister Hun Sen. “But one should not forget that technologies ... will also create risks for jobs.”
In Cambodia, which boasts a garment sector as a cornerstone of the economy, increased automation will lead to massive job loss, Hun Sen gave as an example.
The only way to combat that is with an educational and vocational training push across the region, he and others argued.
“ASEAN must adopt appropriate measures to ensure sustainability of labor market — quality education aiming at increasing labor skills,” said Laos Prime Minister Thongloun Sisoulith.
But some question whether countries plagued by issues of corruption, poor governance and even active suppression of technology have the political will to overhaul education systems in the way necessitated by the Fourth Industrial Revolution.
“I can’t second guess the governments of the region here. The only thing I can say is we’re putting a lot of emphasis — together with our local partners and civil society — in holding governments accountable for the commitments they are making or they are talking about … restriction of communications, restriction of the internet, legislation that controls these issues is very very visible in this region,” said Wolfgang Jamann, secretary general of Care International and the sole civil society co-chair of the forum. “With our local partners we’re trying to counter that. Not just prevent further restriction but free the space that they need.”
Can the region figure out a way to make its growth inclusive?
Just two days before WEF ASEAN, the ADB held its 50th annual meeting in Yokohama. Two days after WEF ASEAN, Beijing is to host its Belt and Road Forum. It is perhaps unsurprising then that infrastructure as a means to economic development was a chief topic of discussion at the meeting in Phnom Penh.
Speaking at a panel to introduce the forum’s co-chairs, Asian Infrastructure Investment Bank President Jin Liqun said AIIB was there to promote broad-based infrastructure and development.
“We believe infrastructure is very important for emerging market economies in efforts to move to upper income countries … and that poverty reduction will be the natural logical outcome.”
Over the past 50 years, Southeast Asia has seen massive economic growth and made leaps in development. At the same time, however, unequal growth has led to an out-of-control wealth gap within many ASEAN nations.
Figuring out how to make growth inclusive is key said Grete Faremo, UNOPS under-secretary-general and executive director, speaking at the Southeast Asia panel.
“It’s also about inclusion, about leaving no-one behind,” she said. “Both the connection with the citizens and how we build jobs is important.”
Should ASEAN countries look to an EU-style political and economic union?
A question frequently raised was whether ASEAN countries needed to replicate an EU-style policy of unification.
At a panel discussing the connectivity conundrum for the region, connecting the ASEAN countries through transportation, telecommunications and critical infrastructure networks, political unification was considered a necessity. Across the region it could facilitate trade, enable sharing of resources, and develop consistent policies for environmental protection to continue the economic, political and social development of the region.
“It’s right to make the case for connectivity as a way to reduce inefficiencies,” Anna Marrs, CEO for the Standard Chartered Bank, told the audience.
An important first step in making this happen was for governments to come together to create consistent policy and processes, including trade policies and cross-border employment, ensuring the private sector is encouraged to invest and do business in the region. Sun Chanthol, the Cambodian minister of public works and transport, explained that for Cambodia in particular this was an important step in the process to continue the expansion of infrastructure investment and open his country to the region and the world.
While donors including Thailand, South Korea, China, Japan, the World Bank and Asian Development Bank had been fundamental in supporting infrastructure development to date, it was private sector investment that would be needed for the future. Stable investment would lead to improved job prospects, stronger economic growth and the ability to better support developing communities and respond to growing environmental crises in the region.
And the first step was better communication between governments to break down the barriers preventing connection.
Could anti-globalization sentiment spread to ASEAN countries?
The increasing anti-globalization sentiment from the West — most evident in the U.S. with the election of President Trump and in the United Kingdom with Brexit — was a cause for discussion at the forum. But it was not just the impact of these changes on trade and economics in the region that was discussed, but whether ASEAN nations could also face similar social and political backlash.
At a panel discussing East, West and the fusion of ideas, experts agreed that ASEAN countries “had the DNA” to follow an anti-globalization path, but as they had benefited from it economically, leading to a growing middle class, this was unlikely.
However, they did face risks from other social or political issues.
Care International’s Jamann suggested that a possible risk ASEAN nations would face would be from bad governance and political corruption. Climate policies and the Sustainable Development Goals, he said, were a potential example of bad governance with their implementation and maintenance under threat.
Debbie Aung Din Taylor, co-founder of Proximity Designs, suggested a similar challenge, saying that leaders of Southeast Asian countries required a “higher level of consciousness” or they risked alienating the younger generation. And Victor Chu, CEO of the First Eastern Investment Group, warned the middle class of the future could become a problem, with expectations for their children to excel themselves.
But a clear threat was from communities getting left behind, and with growing urbanization it was regional communities that faced the greatest risk. Yoshito Hori, CEO of the GLOBIS Corporation, said the lesson for the East from the West was ensuring strong and wide engagement, making everyone an important part of decision making. “I believe community of the difference,” he said, explaining Japan had less social turmoil because of this approach. “We treat workers as assets. In the West, workers are expenses.”
ASEAN countries needed to be adaptable to changing social needs, they agreed, with the next decade either make and break for regional and economic stability.