Saturday, October 26, 2013

Strengthening Support for ASEAN at the National Level

This week CIMB Bank head Nazir Razak proposed that ASEAN adopt a region-wide master plan for the banking industry and that ASEAN member states create ASEAN-specific government ministries to deal with ASEAN Economic Community issues.  These are positive suggestions to advance the AEC, suggestions which result from the overlapping competencies at play in ASEAN which often act at cross-purposes.  (NB: I have done instructional work for CIMB and written for the CIMB ASEAN Research Institute.)

The banking sector of course falls within the purview of the AEC and is covered as part of the financial services industry under the ASEAN Framework Agreement on Services (AFAS). However, AFAS deals with market access and not with the details of banking regulation, which would be covered by the ASEAN Banking Integration Framework,  which is still under discussion.  Furthermore, banking issues in ASEAN have been traditionally supported by the Asian Development Bank rather than the ASEAN Secretariat, even though the Secretariat is charged with monitoring the AEC. 

The issue of overlapping bureaucracies and competencies in ASEAN is not limited to the banking industry.  Intra-ASEAN relations themselves are subject to such overlap. As ASEAN was initially a political grouping, internal coordination was originally handled exclusively by the foreign affairs ministries of the member states. Later,  the addition of economic issues led to the involvement of other ministries such as trade and commerce ministries. 

The overlap has slowed down some operational aspects of ASEAN. For example, the ASEAN Charter calls for member states to station permanent representatives in Jakarta to deal with ASEAN matters.  These usually are senior foreign affairs ministry officials with relatively limited experience in economic matters.  The ASEAN Charter also calls for member states to establish national secretariats for ASEAN matters, but again these are all part of the foreign affairs ministries.

Thus, Dato Seri Nazir’s call for the master plan and national ASEAN ministries would better serve the implementation of the AEC.  Having ASEAN-specific ministries would allow member states to put all aspects of ASEAN cooperation – e.g., the political-security, economic and socio-cultural pillars – under one roof in each country, with a singular focus on ASEAN community construction.  For example, many EU member states have a ministry devoted to EU matters to provide such cooperation. 

Creating a Ministry of ASEAN Affairs in each member state would be a good step to creating “more ASEAN”. The question is whether the newly designated ministry officials would look back to their former colleagues as their peers or view the ministry as their new bureaucratic home.  If the former were to occur, then the creation of ASEAN ministries would simply be putting a new label on the ASEAN national secretariats.  However, if the new Ministry of ASEAN Affairs officials take their new responsibilities to heart, all aspects of the ASEAN Community will be better supported and less subject to the bureaucratic wrangling that currently happens in ASEAN.  Let’s hope that Dato Seri Nazir’s proposal is taken seriously as ASEAN leaders review the institutional structure of the grouping.