Why ASEAN isn’t ready to replicate the European Union

A highly ambitious ASEAN wants to create a genuine integrated market much like the European Union (EU) – but it has some way to go, according to Southeast Asia expert Hans Vriens.

Hans Vriens shared his expert knowledge of ASEAN with FCC members and guests. Photo: Sarah Graham/FCC

Despite its aim to build a single market that would see the free flow of goods, investment and skilled labour, the Association of Southeast Asian Nations (ASEAN) will face challenges for a variety of reasons, many of them governmental, said Vriens, whose club lunch on May 4 sought to answer the question of whether ASEAN was an economic powerhouse in the making, or back to being tribute states of China. The answer, he concluded, was yes and no.

“Not a single government leader in the ASEAN is pushing for this,” he said, adding that member states were not yet serious about giving up their sovereignty.

Vriens, Managing Partner of Vriens & Partners, outlined the major differences between ASEAN’s Economic Community (AEC) and the EU, including that currently there was no parliament, no ASEAN law, a myriad of political systems, and no plan for a monetary union.

“So do not be misled by talk about an ASEAN Economic Community,” Vriens, a past president of the FCC, said.

ASEAN was formed in August 1967 by Indonesia, Malaysia, the Philippines, Singapore and Thailand. It was later joined by Brunei, Cambodia, Laos, Myanmar and Vietnam. Further regional integration saw the creation of ASEAN Plus Three to include China, Japan and South Korea. Much like the EU, it aims to encourage economic growth among its members, as well as social progress. The AEC was established in 2015.

Another reason why regional harmony was not yet in ASEAN’s grasp was China’s growing influence in the region, and in particular the fierce competition between China and Japan over railroads. The Philippines and Vietnam were also involved in disputes with China over sovereignty in the South China Sea, Vriens said.

While ASEAN was diverse with an emerging middle class and relatively low GDP per capita, it faces big challenges, said Vriens. Poor education and infrastructure, coupled with low quality universal healthcare and poverty, were hurdles to overcome, he said.

Vriens examined political developments in Indonesia, Singapore, Thailand, Myanmar, the Philippines, Vietnam and the Philippines. The rise in populist presidents like the Philippines’ Rodrigo Duterte could be positive because “they want to build to show progress”.