ASEAN can bridge the US-China gap and benefit economically as tensions rise: A foreign policy analysis

ASEAN's "non-aligned" foreign policy and preference for dialogue and cooperation over great power competition are crucial. Here is the policy analysis
policy analysis of ASEAN potency

A foreign policy that is "non-aligned" is important, as is ASEAN's preference for dialogue and cooperation over the intense competition between the great powers.

ASEAN members should also avoid self-isolation and protectionism. Instead, they should work to make their economies more open, connected, and multilateral.

Southeast Asia's political leaders see the US and China as two magnetic poles that pull their countries in opposite directions. How could that be fair?

In Washington, both Democrats and Republicans agree that Beijing is a rival that wants to weaken the US's position as the world's leader. China's economic influence in Southeast Asia has been growing steadily. It is ASEAN's biggest trading partner, and its Belt and Road Initiative has made it clear that it wants to stay in the area.

China also gave ASEAN's Regional Comprehensive Economic Partnership (RCEP) a lot of support and helped put it together in a big way. This has given Asian economies even more reason to follow China's lead in bringing the region together.

The US has been setting up several geo-economic tools to counter China's influence in the area. For example, Washington started the Indo-Pacific Economic Framework (IPEF) while trying to break away from China.

ASEAN has had economic and security ties with China and the US for a long time, even though these ties may seem at odds with each other. Some important ASEAN countries, like Thailand and the Philippines, are still part of the US security structure in the Indo-Pacific, even though they are trying to improve their economic ties with China, for example.

Also, many possible flashpoints in the area, like the territorial disputes in the South China Sea, could make the fight between the two big powers worse.

How can ASEAN work toward more economic integration when the economic competition between China and the US is getting worse? What steps could ASEAN take to help the economy and close the gap between the US and China?

Looking for a compromise

For ASEAN to reassert its centrality and unity, regional integration needs to be done more practically and issue-based. One way would be for the region to think about leading a new movement that backs a foreign policy that is "non-aligned."

During the Cold War, the Non-Aligned Movement (NAM) was led mainly by countries in the Global South that wanted independence in case the US and the Soviet Union got into a fight. In the same way, non-alignment will help Southeast Asian countries advance their interests in a world where big powers are competing with each other. They won't have to be tied to the preferences of big powers.

The idea of such a movement should be appealing to the small and medium-sized powers in the region, which have been looking for ways to protect their interests together in the face of competition from the big powers.

Singapore has already said that it wants to take a nuanced approach to not being aligned. Indonesia has taken the lead in making regional policies such as the ASEAN Outlook on the Indo-Pacific, which reaffirms ASEAN's centrality and preference for dialogue and cooperation over competition. Indonesia led the NAM at the 1955 Bandung Conference.

Diversification is the first tenet of a foreign policy that is not tied to any one group. Southeast Asian countries have taken steps to protect their interests and spread out their stakes. Southeast Asia has been looking for more partners to help it build the regional infrastructure it needs, like in the area of regional connectivity.

Southeast Asia has looked into other ways to improve regional integration, such as China's "Belt and Road" and Japan's "Partnership for Quality Infrastructure." These include the ASEAN-Europe connectivity agenda and the ASEAN Regional Integration Support from the EU (ARISE) program. China and Japan's competition for power have made it possible for Indonesia to get better deals on development projects like the Jakarta-Bandung Railway.

The second part of a non-aligned foreign policy is to work toward regional integration without being influenced by outside forces. ASEAN member states have been able to work with other regional stakeholders to strengthen economic integration by keeping regional dialogues open and using their strategic value to make economic gains. The RCEP, which is led by ASEAN, is a good example.

Individually, ASEAN member states have also helped bring the region together. For example, Singapore and other Southeast Asian countries have worked together to set standards for economic governance on multiple platforms, such as the Comprehensive and Progressive Agreement for the Trans-Pacific Partnership.

Even though not all ASEAN members have joined the US-led IPEF, which is not a free-trade agreement, the fact that ASEAN members have joined shows that small and middle powers have the chance to co-write economic rules for the region and attract foreign investment.

The last part of a non-aligned foreign policy is to make a plan for sustainable development. During the Cold War, it grew out of a clear clash of ideas between the East and the West.

Today, the difference in ideas is not as clear. Non-aligned foreign policy, on the other hand, is based on globalization, which is a market-driven idea that keeps the regional economy growing.

As a result of globalization and regional integration, there are more connections between states in the same area. Due to these connections, non-aligned countries today would have access to more resources than they did during the Cold War.

After the Cold War, the region reaped the benefits of free-market principles, which make it possible for an efficient regional market to grow with logistics, supply chains, and lively capital flows that are all connected. Southeast Asian elites know better than most people how important it is to have an open regional economy that attracts private investment and trade relationships that are good for both sides.

Southeast Asia is becoming more and more appealing to foreign investors because of its goods, variety of markets, and 680 million consumers. For example, the number of digital consumers in the region is growing steadily, and by the end of the year, it is expected to reach 370 million.

Regional digitalization opens up investment opportunities in areas like education, fintech (computer programs and other technology that support financial services), healthcare, logistics, and more. This results in increased foreign direct investment in Southeast Asia. A non-aligned stance for the region is made even stronger by the fact that the market is so big.

Southeast Asian countries are less at risk now that they are more economically connected

Regional integration isn't just about the economy; it's also about keeping people safe. The disruptions to the economy caused by the pandemic and the geopolitical tensions caused by the Russia-Ukraine war are clear signs that states need to improve their ability to handle shocks.

ASEAN members should avoid self-isolation and protectionism if they want to have a non-aligned foreign policy. Instead, they should keep improving economic openness, connections, and multilateralism. A strong, attractive, and well-connected Southeast Asian market would give other countries, including the big powers, a bigger stake in the area.

In the 21st century, when the world is much more connected, a new foreign policy of non-alignment can help Southeast Asia by making it easier for the different groups to work together. It would be difficult for any country to find a middle ground between the two powers. But if ASEAN member states took the lead in setting regional standards, they could have more power during times of geopolitical tension.

Adapted from "How Asean can bridge US-China gap and reap economic benefits amid potential flashpoints"

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