ASEAN

Association of Southeast Asian Nations (ASEAN) is a regional intergovernmental organization of countries in Southeast Asia.

  • ASEAN was established in 1967 in Bangkok, Thailand.
  • It came consequent to the signing of the ASEAN Declaration (Bangkok Declaration) by the founding members of ASEAN.[These are Indonesia, Malaysia, Philippines, Singapore and Thailand.]
  • It, now, also includes Vietnam, Brunei, Myanmar (Burma), Cambodia, and Laos, totaling to 10 members.
  • ASEAN’s six FTA partners are India, China, Japan, South Korea, Australia and New Zealand.
  • The motto of ASEAN is “One Vision, One Identity, One Community”.
  • ASEAN Secretariat is located in Indonesia, Jakarta.

The ASEAN fundamental principles, as contained in the Treaty of Amity and Cooperation in Southeast Asia (TAC) of 1976 are

  • Mutual respect for the independence, sovereignty, equality, territorial integrity, and national identity of all nations.
  • The right of every State to lead its national existence free from external interference, subversion or coercion.
  • Non-interference in the internal affairs of one another.
  • Settlement of differences or disputes by peaceful manner.
  • Renunciation of the threat or use of force.
  • Effective cooperation among themselves.

Objectives of ASEAN

  • To accelerate economic growth, social progress and cultural development for a prosperous and peaceful community of Southeast Asian Nations.
  • To promote regional peace and stability through abiding respect for justice and the rule of law and adherence to the principles of the United Nations Charter.
  • To promote active collaboration and mutual assistance on matters of common interest in the economic, social, cultural, technical, scientific and administrative fields.
  • To collaborate more effectively for the greater utilization of agriculture and industries, the expansion of their trade, the improvement of transportation and communications facilities and the raising of the living standards of peoples.
  • To promote Southeast Asian studies.
  • To maintain close and beneficial cooperation with existing international and regional organizations.

Strengths

  • ASEAN commands far greater influence on Asia-Pacific trade, political, and security issues than its members could achieve individually.
  • Demographic dividend – It constitutes 3rd largest population in the world, of which more than half is below thirty years of age.
  • It is the 3rd largest market in the world, being larger than EU and North American markets and the 6th largest economy in the world, 3rd in Asia.
  • Fourth most popular investment destination globally.
  • The ASEAN Single Aviation Market and Open Skies policies have increased its transport and connectivity potential.
  • ASEAN has contributed to regional stability by building much-needed norms and fostering a neutral environment to address shared challenges.

Institutional Structure and Mechanism

  • Chairmanship of ASEAN rotates annually, based on the alphabetical order of the English names of Member States.
  • ASEAN Summit: The supreme policy making body of ASEAN. As the highest level of authority in ASEAN, the Summit sets the direction for ASEAN policies and objectives. Under the Charter, the Summit meets twice a year.
  • ASEAN Ministerial Councils: The Charter established four important new Ministerial bodies to support the Summit.
  1. ASEAN Coordinating Council (ACC)
  2. ASEAN Political-Security Community Council
  3. ASEAN Economic Community Council
  4. ASEAN Socio-Cultural Community Council

A) Decision Making

  • The primary mode of decision-making in ASEAN is consultation and consensus.
  • The Charter enshrines the principle of ASEAN-X – This means that if all member states are in agreement, a formula for flexible participation may be used so that the members who are ready may go ahead while members who need more time for implementation may apply a flexible timeline.

India and ASEAN

A) Cooperation

  • India’s relationship with ASEAN is a key pillar of our foreign policy and the foundation of our Act East Policy. There are, in total, 30 Dialogue Mechanisms between India and ASEAN, cutting across various sectors.
  • India has set up a separate Mission to ASEAN and the EAS in Jakarta in April 2015 with a dedicated Ambassador to strengthen engagement with ASEAN and ASEAN-centric processes.
  • India and the ASEAN jointly adopted the Delhi Declaration and decided to identify Cooperation in the Maritime Domain as the key area of cooperation under the ASEAN-India strategic partnership.

B) Political Security Cooperation:

  • Politico-security cooperation is a key and an emerging pillar of this relationship. Rising export of terror, growing radicalization through ideology of hatred, and spread of extreme violence define the landscape of common security threats to societies.
  • The partnership with ASEAN seeks to craft a response that relies on coordination, cooperation and sharing of experiences at multiple levels.
  • ASEAN, as a regional grouping based on consensus, has worked tirelessly over 50 years to help secure peace, progress and prosperity in the region.
  • India places ASEAN at the center of its Indo-Pacific vision of Security and Growth for All in the Region.
  • The main forum for ASEAN security dialogue is the ASEAN Regional Forum (ARF).
  • The ASEAN Defence Ministers’ Meeting (ADMM) is the highest defence consultative and cooperative mechanism in ASEAN. The ADMM+ brings together Defence Ministers from the 10 ASEAN nations plus Australia, China, India, Japan, New Zealand, Republic of Korea, Russia, and the United States on a biannual basis.

C) Socio-Cultural Cooperation:

  • Large number of Programmes to boost People-to-People Interaction with ASEAN have been organized, such as
  1. Students Exchange Programme,
  2. Special Training Course for ASEAN diplomats,
  3. Exchange of Parliamentarians,
  4. ASEAN-India Network of Think Tanks, etc.
  • The 2nd edition of the ASEAN-India Workshop on Blue Economy, jointly hosted with the Socialist Republic of Viet Nam, was held on 18 July 2018 in New Delhi.

D) Economic Cooperation:

  • India-ASEAN trade and investment relations have been growing steadily, with ASEAN being India’s fourth largest trading partner.
  • India’s trade with ASEAN stands at US$ 81.33 billion, which is approx. 10.6% of India’s overall trade. India’s export to ASEAN stand at 11.28% of our total exports.
  • Investment flows are also substantial both ways, with ASEAN accounting for approximately 18.28% of investment flows into India since 2000. The major Southeast Asian economies investing in India are Singapore, Malaysia and Thailand
  • The ASEAN-India Free Trade Area has been completed with the entering into force of the ASEAN-India Agreements on Trade in Service and Investments on 1 July 2015.
  • ASEAN and India have been also working on enhancing private sector engagement. ASEAN India-Business Council (AIBC) was set up in March 2003 in Kuala Lumpur as a forum to bring key private sector players from India and the ASEAN countries on a single platform for business networking and sharing of ideas.
  • Southeast Asian countries such as Singapore, Malaysia and Thailand have emerged as major export destinations for India.
  • The main export items to Singapore include mineral fuels, oils and bituminous substances, ships, boats and floating structures.
  • Many Indian banks, such as Bank of Baroda, Indian Overseas Bankhave established branches in the ASEAN region. This is essential to integrating banking and financial services between the two regions.

E) Connectivity cooperation

  • ASEAN-India connectivity is a priority for India as also the ASEAN countries.
  • In 2013, India became the third dialogue partner of ASEAN to initiate an ASEAN Connectivity Coordinating Committee-India Meeting.
  • India has made considerable progress in implementing the India-Myanmar-Thailand Trilateral Highway and the Kaladan Multimodal Project,
    1. The Kaladan Multimodal Transit Transport Project is the first major project undertaken by India in Southeast Asia. When completed, this project will connect Kolkata with Sittwe port in Myanmar, facilitating the movement of cargo across the India-Myanmar border through the sea route.
    2. This project will also provide an alternative transit route between India’s northeastern region and Myanmar by establishing new road, and inland water connectivity links between them.
    3. It is expected to revolutionize the transit system for goods and tradable services between India and Myanmar, later extending to other Southeast Asian nations such as Laos, Cambodia, and Vietnam.
  • A consensus on finalising the proposed protocol of the India-Myanmar-Thailand Motor Vehicle Agreement (IMT MVA) has been reached. This agreement will have a critical role in realizing seamless movement of passenger, personal and cargo vehicles along roads linking India, Myanmar and Thailand

F) India-ASEAN Funds

Financial assistance has been provided to ASEAN countries from the following Funds:

  • ASEAN-India Cooperation Fund:
  1. It envisage cooperation in a range of sectors as well as capacity building Programmes in the political, economic and socio-cultural spheres for deepening and intensifying ASEAN-India cooperation.
  • ASEAN-India S&T Development Fund (AISTDF):
  1. India announced the setting up of an ASEAN-India Science & Technology Development Fund with a US$ 1 million contribution from India to promote joint collaborative R&D research projects in Science & Technology.
  • ASEAN-India Green Fund:
  1. This fund has been set up to support collaboration activities relating to environment and climate change.
  2. Some of the areas identified for collaboration under the Fund are climate change, energy efficiency, clean technologies, renewable energy, biodiversity conservation and environmental education.

G) ASEAN-India Projects:

India has been cooperating with ASEAN by way of implementation of various projects in the fields of Agriculture, Science & Technology, Space, Environment & Climate Change, Human Resource Development, Capacity Building, etc.

  • Some of the prominent projects, are as follows:
  1. Space Project envisaging establishment of a Tracking, Data Reception/Data Processing Station in Ho Chi Minh City, Vietnam and
  2. upgradation of Telemetry Tracking and Command Station in Biak, Indonesia;
  3. Setting up of Centers of Excellence in Software Development & Training in CLMV(Cambodia, Laos, Myanmar and Vietnam) countries;
  4. e-Network for provision of tele-medicine and tele-education in CLMV countries,
  • India has been supporting ASEAN, under the Initiatives for ASEAN Integration, which include
  1. projects on Training of English Language for Law Enforcement Officers in CLMV countries
  2. Training of professionals dealing with capital markets in CLMV by National Institute of Securities Management Mumbai,
  3. Scholarships for ASEAN students for higher education at Nalanda University,
  4. Training of ASEAN Civil Servants in drought management, disaster risk management, sustainable ground water management etc.
  • In Agriculture, we are cooperating with ASEAN by way of projects such as
  1. Exchange of Farmers and Agriculture Scientists
  2. ASEAN-India Fellowships for Higher Agricultural Education in India and ASEAN,
  3. Empowerment of Women through Cooperatives,
  4. Training Course on Organic Certification for Fruits and Vegetables etc.
  • In the S&T field, we have projects such as
  1. ASEAN-India S&T Digital Library,
  2. ASEAN-India Virtual Institute for Intellectual Property,
  3. ASEAN-India Collaborative Project on S&T for Combating Malaria,
  4. ASEAN-India Programme on Quality Systems in Manufacturing,
  5. ASEAN-India Collaborative R&D Project on Bio-mining and Bioremediation Technologies

Opportunities for further Collaboration

A) India-Southeast Asia regional value chain

  • Regional value chains strengthen economic cooperation by expanding market access among nations.
  • Integrating with regional value chains leads to benefits such as reduced cost of manufacturing and trading for the participating countries.
  • There are a range of policy measures including trade facilitation, liberalisation of goods, services and capital, competition policy, and infrastructure quality that promote value chain integration.
  • FDI flow is one of the major factors that enable integration of economies by linking them to regional and global value chains.
  • The textiles manufacturers in India could benefit by engaging with less developed countries such as Cambodia, Laos, Myanmar and Vietnam.
  • There is potential to create value chains in textiles between India and a few ASEAN economies, as the latter import cotton yarn (an input used in manufacturing of textiles) from India.
  • Creating a value chain in fibres is another area of possible collaboration between India and ASEAN. Myanmar, for instance, is open to FDI in sectors such as garments, textiles and agriculture, which are conducive to creating a value chain between India and Southeast Asia.
  • The free trade in goods agreement signed between India and ASEAN in 2009 has also facilitated the development of supply chains and production networks in many products such as electronics and automobiles, including vehicle and component manufacturing.

B) Physical/infrastructure connectivity

Better transport connectivity is critical to India-ASEAN relations. The seamless movement of goods and services across borders is highly dependent on effective transportation links.

  • Transport and infrastructure barriers exist between India and Southeast Asia—including poor quality of roads, missing railway links, inadequate maritime and port facilities, and lack of customs cooperation.
  • India’s northeast is fundamental to efforts towards regional connectivity with ASEAN countries, given its strategic location.
  • Myanmar shares a land border with India’s northeast, thereby providing a bridge between Indian and Southeast Asian markets.
  • Similarly, improving maritime connectivity between India and Myanmar is fundamental to their mutual growth and development.

C) Institutional connectivity

To deepen connectivity between India and ASEAN nations, it is essential to build effective institutional connectivity by harmonising trade, investments, and financial policies.

  • Physical connectivity (transportation and soft infrastructure requirements such as telecommunications) has to be built in tandem with proper institutional arrangements to achieve improved cross-regional connectivity.
  • According to a 2015 report by the Asian Development Bank, there are ample opportunities for energy trading between India and Myanmar.
  • Given the vast natural resources and hydropower reserves of Myanmar, it becomes a potential source of energy for India.
  • However, due to lack of adequate physical and institutional infrastructure between India and Southeast Asia, energy trading remains underutilized.
  • The presence of non-tariff barriers and restrictive institutional arrangements hinder the movement of goods and services.
  • Trade facilitation measures to reduce the volume of documentation required – and thereby the time of transit – are necessary to improve economic exchanges between India and Southeast Asian countries.

D) People-to-people connectivity

India has a long history of people-to-people connectivity with Southeast Asian countries, particularly with Singapore, Malaysia and Indonesia, which are home to large populations of the Indian diaspora.

  • Indians comprise nine percent of Singapore’s population and seven percent of Malaysia’s.
  • India and the member countries of ASEAN jointly organise regular exchange programmes for students, farming communities, diplomats, and business and media personnel, among others.
  • However, there are certain restrictions on the movement of professionals and labour between India and Southeast Asia.
  • Under the agreement on trade in services signed in 2015, India and ASEAN have agreed to liberalise trade in a few areas such as telecommunications and financial and insurance services, while regulating the movement of natural persons.
  • For the growth of the less-developed ASEAN countries (Laos, Cambodia, and Myanmar), skilled labour and professionals are required. This is one area where India can play an important role.

Challenges and Issues

  • Regional imbalances in the economic and social status of its individual markets.
  • Gap between rich and poor ASEAN member states remains very large and they have a mixed record on income inequality.
  • While Singapore boasts the highest GDP per capita—nearly $53,000 (2016), Cambodia’s per capita GDP is the lowest at less than $1,300.
  • Many regional initiatives were not able to be incorporated into national plans, as the less developed countries faced resource constraints to implement the regional commitments.
  • The members’ political systems are equally mixed with democracies, communist, and authoritarian states.
  • While the South China Sea is the main issue exposing the organization’s rifts.
  • ASEAN has been divided over major issues of human rights. For example, crackdowns in Myanmar against the Rohingyas.
  • Inability to negotiate a unified approach with regards to China, particularly in response to its widespread maritime claims in the South China Sea.
  • The emphasis on consensus sometimes becomes the a chief drawback – difficult problems have been avoided rather than confronted.
  • There is no central mechanism to enforce compliance.
  • Inefficient dispute-settlement mechanism, whether it be in the economic or political spheres.


Conclusion and Way Forward

Notwithstanding the massive promise carried by stronger connectivity between India and Southeast Asia, there are various barriers that hobble such integration.

  • For one, the delay in completing infrastructure projects—including road, rail, seaports, and highways—due to various political and financial constraints, has impeded the progress of economic cooperation
  • India has undertaken initiatives to enhance cross-regional cooperation. For instance, India invited Myanmar to join the Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (BIMSTEC) as it has a locational advantage that can be leveraged to integrate India with Southeast Asia
  • Trade in services remains largely protected in ASEAN member countries.
  • As India has a comparative advantage in the services sector, especially information technology services, domestic regulations in ASEAN economies need to be liberalized to promote cross-regional cooperation.
  • The challenges of inadequate physical connectivity (road and rail linkages), along with infrastructural bottlenecks (non-tariff barriers) need to be addressed to strengthen India-ASEAN partnership.
  • Greater progress can be achieved in India-ASEAN relations upon liberalization of the services trade (particularly Mode 4 – movement of natural persons), and other areas of common interest and potential.

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