Tuesday, April 8, 2014

Malaysian PM Makes Major ASEAN Institutional Proposals

Today Malaysian prime minister Najib Razak made two major proposals for reforming the ASEAN institutions.  This is rather important as Malaysia will take over as ASEAN Chair in 2015.

First, Prime Minister Najib proposed the possible creation of a fourth “pillar” of the ASEAN Community, in addition to the existing political-security, economic and socio-cultural pillars.  The fourth pillar would deal with cross-sectoral issues which involve two or more pillars.  The prime minister specifically identified climate change and transboundary haze (air pollution) as such issues, but other issues that come to mind include food security, public health (e.g., regulation of liquor and tobacco) and law cooperation. 

Involving the ASEAN Economic Community (AEC), in particular, would be significant because this would raise the possibility of economic sanctions (e.g., withdrawal of ASEAN Trade in Goods Agreement (ATIGA) preferential tariffs) in order to achieve goals currently under the mandate of the ASEAN Socio-Cultural Community (ASCC).  For example, the Malaysian health minister had proposed withdrawing tobacco from the zero percent duty rates of ATIGA, but since health issues fall within the ASCC, and ATIGA falls within the AEC, this proposal was a dead letter. Similarly, some in ASEAN (particularly Malaysia and Singapore) have called for trade retaliation against countries that fail to control the origin of haze (e.g., Indonesia).

Prime Minister Najib’s suggestion is commendable, but I think it should be tweaked to make it more workable.  Creating a fourth ASEAN pillar is probably confusing and could create another policy “silo”, which his proposal attempts to avoid. It would be better to keep the existing three pillars but create another ASEAN Council of ministers that would deal with cross-sectoral issues.  This could be called the “ASEAN Inter-Pillar Council” or the like. More importantly is that the ministers serving on this council should have a proper cross-sectoral perspective; they preferably should not be on the current ASEAN Community Councils.  To maintain the cross-sectoral perspective that the ASEAN Summit of leaders itself has, this new council should be made up of ministers who report directly to the ASEAN leaders, at least in their own countries (the current ASEAN Coordinating Council of foreign ministers would maintain its necessary organizational role and support/coordinate this new Inter-Pillar Council). Hence instead of foreign ministers or economic ministers, the ASEAN Inter-Pillar Council would be made up of deputy prime ministers, vice-presidents, ministers in the prime minister’s office or even new “ASEAN” ministers.   To do otherwise by populating the new council with existing economic or foreign ministers would risk continuing the current “silo” effects that currently exist in the ASEAN Communities.

Second, Prime Minister Najib addressed the issue of ASEAN member states’ annual contributions to the ASEAN Secretariat.  Currently each member state contributes US$ 1.7 million annually.  The prime minister suggested that instead of a set amount, the contribution would be set as a minimum sum, which countries could exceed on a voluntary basis.  He also proposed that contributions be made on a three-to-five year basis rather than on a yearly basis, in order to promote funding predictability.

Again, these are good ideas that need some elaboration.  There is currently no formal restriction to prevent ASEAN members from making additional voluntary contributions to the ASEAN Secretariat.  What prevents this from happening is the potential negative reaction from other ASEAN members, e.g.,  that additional funding would mean additional influence over the ASEAN institutions, or that a revised funding formula could be established based on GDP or economic development.  Singapore, among others, has historically opposed changes to the contribution methodology for these and other reasons. On the other hand, the current overall funding of the ASEAN institutions (including the aid support for ad-hoc ASEAN projects) is much greater and much more dependent on donor funding from the US, EU, Australia and others, yet there is no (public) criticism that these countries have commensurate influence over the ASEAN institutions.   In any event, any change in the funding methodology for the ASEAN institutions, even the modest proposals made by Prime Minister Najib, are welcome and I hope that they are accepted by the other ASEAN member states in some form.

I had predicted that any lasting ASEAN initiatives would have to wait until Malaysia took over as ASEAN Chair in 2015, and it looks like I may be right.  In addition, Malaysia serves as chair of the ASEAN working group studying reforms of the ASEAN institutions so it can pursue these initiatives immediately.  Either way, I hope that Prime Minister Najib’s proposals are the beginning of a dialogue on these issues.