This week I was in Chiang Mai for the 2012 International Conference on International Relations and Development, jointly organized by Chiang Mai, Thammasat, Chualongkorn and Mahidol universities. The subject this year is “Towards an ASEAN Economic Community (AEC): Prospects, Challenges and Paradoxes in Development, Governance and Human Security.” I spoke on “Developing an Indigenous ASEAN Economic Community Law and Policy,” which I have written about before.
It was interesting to speak directly with Thai academics about the AEC. The daily Google news summary I get in my e-mailbox is routinely filled with articles expressing dread and anxiety about the AEC, mainly from the English language media based in Thailand. Having written for them before and being somewhat familiar with their core readership, O had thought that these media outlets were somewhat overreacting to the AEC. Indeed, Khun Nipon Poapongsakorn of the Thailand Development Research Institute did a very good job in his opening address at the conference, explaining away many of the myths perpetuated about the AEC, particularly that the fear of a flood of goods, labor and capital in 2015 is overblown. Those who regularly read this blog know that the AEC is already in effect for goods, and will not lead to massive waves of labor movement or capital flows by 2015, so they will already know that Khun Nipon is mostly correct.
Yet there is a palpable fear of the AEC in Thailand, a fear which I have not sensed in other parts of ASEAN. This insecurity, I think, comes from Thai fears that they will not be able to compete with the CLMV (Cambodia, Laos, Myanmar and Vietnam) countries in goods due to their higher cost structure, and that they will not be able to compete with the other ASEAN-5 countries in services due to inefficiencies in Thailand. A recent study showing that Thailand ranked below Malaysia, Indonesia and Vietnam in English language proficiency may have something to do with this. Without doing better in Bahasa ASEAN, e.g., English, the medium of delivering services in ASEAN, Thai companies will not be able to compete. In that regard, Thailand does have some grounds to worry, and Thais should take steps to improve English proficiency and service standards. But these concerns are not unique to Thailand and apply to every ASEAN member. The AEC should be viewed as an opportunity to improve ASEAN economies, not just an eventuality to be feared.
Also happening this week was the arrival of China’s resident Ambassador to ASEAN, Yang Xiuping in Jakarta. This makes China the fourth country to have a resident ambassador solely accredited to ASEAN, after Japan, the US, and South Korea. This reflects the importance of ASEAN to China in economic and diplomatic terms. Yet it also elevates ASEAN-China relations to a more formalized level, establishing another means for ASEAN to raise the South China Sea territorial dispute directly with China, and on an ASEAN-China basis rather than on a bilateral basis. Perhaps after the events of the past month – the ASEAN foreign ministers’ impasse in Cambodia, Indonesia’s shuttle diplomacy to patch things up, China putting up South China Sea drilling rights up for bidding, and China’s establishment of a municipal government for the South China Sea – China may feel more confident about dealing with ASEAN. Whether this will lead to China continuing to overplay its hand, as some have argued, will remain to be seen. Again, ASEAN needs to address the South China Sea dispute as an opportunity its value as a regional organization, not just an eventuality to be feared.