Thursday, November 13, 2014

Malaysia's Vital Role as 2015 ASEAN Chair

Today in Naypyidaw Myanmar concluded its second and last ASEAN Summit as ASEAN Chair. With that, the figurative gavel associated with the ASEAN Chair was handed to the 2015 ASEAN Chair, Malaysia.  Although Malaysia does not formally take over as ASEAN Chair until the end of the year, in reality Malaysia has been acting in an ASEAN leadership role this year, and likely beyond next year, particularly with regard to the ASEAN Economic Community (AEC).  This is all for the better for the AEC.

As discussed previously, the major accomplishment of Myanmar as ASEAN Chair is that it was allowed to serve as ASEAN Chair, and that the ASEAN Summits and various associated meetings took place this year without difficulty.  The position of ASEAN Chair served as a carrot for Myanmar to undertake its economic and political reforms, and the ASEAN Summits allowed the Myanmar government to display its willingness to continue those reforms.  The real question for Myanmar is how next year’s elections will play out, e.g., whether a new Myanmar government will be established that can fully implement these reforms.

However, to use an old American aphorism, Myanmar is not (yet) able to “walk and chew gum at the same time.”  Although it should be complimented being able to “walk” (e.g., serve as ASEAN Chair), years of economic isolation left Myanmar ill-prepared to take on the AEC-related tasks, particularly in the run-up to the AEC’s December 31, 2015, implementation date. 

Fortunately ASEAN’s leadership had foreseen this possibility and allowed Laos and Malaysia to swap their terms as ASEAN Chair.  Malaysia, as a founding member of ASEAN and an active trading nation, is much more experienced and capable of handling the AEC issues.  Furthermore, in the Razak brothers, Malaysia’s public and private sectors have leadership devoted to ASEAN and the AEC.  Prime Minister Najib Razak wants to establish a diplomatic and political legacy, while Nazir Razak wants to create a fully functioning AEC in which his CIMB Bank thrives. 

Thus, we have seen Malaysia pushing for reforms of the ASEAN institutions as leader of the High Level Task Force on institutional reform, with Prime Minister Najib Razak openly calling for changes to ASEAN’s organizational and financial structures.  Meanwhile, Nazir Razak has been calling for similar changes to support the AEC as both a single market and a single production base. 

Indeed, because of the rotation of the ASEAN Chair, Malaysia could continue to have a continuing role beyond 2015.  Laos, despite being an enthusiastic supporter of the AEC, has limited resources and capabilities; hence its own role in AEC development in 2016 could and should be augmented by Malaysia serving as an unofficial holdover role (and when the Philippines, the 2017 ASEAN Chair, may be preoccupied with its own elections to take on early responsibilities).

The coming year therefore promises to see Malaysia continuing its work, only with the added formal position as ASEAN Chair.  It is vital for the AEC’s success that Malaysia fully follow through and deliver actual institutional reforms.  December 31, 2015, is only the end of the first stage of the AEC, and such reforms are necessary to deliver on the AEC’s full promise.