Page 2 of 2 ASIA
HAND One step forward, two
back for ASEAN By Shawn W
Crispin
very little among one
another and instead compete head-to-head for
similar global markets, particularly in textile,
electronics and commodity exports. Intra-regional
trade has for decades hovered around 20-25% of
ASEAN's total trade, of which bilateral
Malaysia-Singapore trade accounts for about 40%.
Those structural barriers have made
integration both less beneficial and more
difficult to achieve over both the short and
medium terms. But the
nationalistic essence of the latest round of
spats, which significantly hinges on cross-border
investments rather than trade in particular
products, represents a worrying turn that
threatens to undermine ASEAN's broader
liberalization aim of encouraging more foreign and
particularly Chinese investments into the region.
Racial dimension Bangkok's spat
with Singapore, in which the former's military
leaders have publicly accused the island state of
violating its national sovereignty through its
investments in communications infrastructure
including satellites, is deeply enmeshed with
Thailand's unfolding and unresolved political
crisis.
Thailand's ruling generals have in
effect ordered into bankruptcy the television
station ousted prime minister Thaksin Shinawatra's
family sold last year to Singapore's Temasek,
demanding more than $2 billion in fines and
delinquent fees. They are now threatening to
follow up by rescinding the build-operate-transfer
concession held by Advanced Info Services, Shin
Corp's money-spinning mobile-telephone company now
owned by Temasek.
The latter move would
render Singapore's $1.9 billion investment in the
conglomerate almost worthless and raise questions
about whether the move represents a full-blown
expropriation of a foreign investment. As
currently constituted, Singapore would have little
recourse through ASEAN's untested
dispute-settlement mechanism, which historically
has shied away from mediating in regional economic
disputes. [2]
Singapore's ongoing rows
with Malaysia and Indonesia, on the other hand,
have a potentially harsher undercurrent. Though it
is unstated by government officials and unexplored
by the regional mainstream media, some observers
believe there is an implicit element of
anti-Chinese sentiment in Indonesia's and
Malaysia's current protectionist rumblings against
Singapore, where about 80% of the population is
ethnically Chinese.
Southeast Asia's
minority ethnic-Chinese diaspora has historically
kept a low profile in its adopted countries -
particularly in Indonesia, where it represents
about 2% of the population but controls large
swaths of the country's production. But Chinese
have more recently started to assert their ethnic
identity with greater public confidence as
mainland China gains more regional influence. It's
a social trend nationalistic politicians across
the region have no doubt noted.
If
now-simmering nationalistic sentiments were to
boil over into overt anti-Chinese sentiments and
actions, as was the case in the anti-Chinese
pogroms that swept Indonesia in 1998, [3] Beijing
would no doubt have second thoughts about
deepening its financial commitments to ASEAN -
crucially at a point when China is aggressively
investing overseas. Underscoring that point,
Beijing has played a significant behind-the-scenes
role in trying to reconcile Jakarta with various
ethnic-Chinese Indonesians who fled the country
with their capital for Singapore in the wake of
the 1998 violence.
Significantly,
protectionist sentiments are now being stoked in
the very ASEAN countries that throughout the 1980s
and into the 1990s served as regional showcases
for the benefits of economic openness. Now, never
have the economic rifts opening between certain
ASEAN member states been articulated in such
nationalistic and acrimonious terms. And arguably
never has the backsliding come at such a critical
juncture in the region's fast-shifting economic
evolution.
Notes 1.
China's emergence as a low-cost producer continues
to hollow out Thailand's industrial base, pushing
its export-geared economy further down the
value-added ladder. Thailand's National
Statistical Office recently released statistics
showing that manufacturing employment fell by
30,000 year on year last December, while
lower-earning agriculture-based employment
increased by 60,000. 2. ASEAN's Secretariat
declined to take on a case in 2000 petitioned by a
Singapore-based investor who allegedly had her
joint-venture investment in the Mandalay Brewery
seized at gunpoint in November 1998 by Myanmar's
military government. ASEAN officials at the time
justified their inaction by saying the investor
had failed to file the complaint through "proper
channels". 3. See Jemma Purdey's comprehensive
account of the violence, Anti-Chinese Violence
in Indonesia, 1996-1999, Singapore University
Press, 2006.
Shawn W Crispin is
Asia Times Online's Southeast Asia editor.
(Copyright 2007 Asia Times Online Ltd. All
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