Malaysia: Big Momma takes on Governor Zeti

July 31, 2015

by John Berthelsen@www.asiasentinel.com

http://www.asiasentinel.com/politics/malaysian-pm-wife-seeks-central-bank-governor-ouster/

Two powerful women take center stage in spreading scandal as government clings to power

Rosmah Mansor and The “Boss”

Prime Minister Najib Razak’s controversial wife, Rosmah Mansor, is trying to drive another powerful woman, internationally respected Bank Negara Governor Zeti Akhtar Aziz, out of the central bank,  according to knowledgeable sources in Kuala Lumpur.

Rosmah is said to be enraged over leaks of her personal financial details. She also fears that Zeti has detailed information on the 1Malaysia Development Bhd. scandal that could bring down the government and the prime minister. Insiders say Rosmah, a lightning rod for criticism over her lavish spending, is the field marshal directing the defense of her beleaguered husband’s government.

“My own view is that Najib will fight to the political death because of the wife,” a longtime academician and political analyst told Asia Sentinel. “She is much stronger than Najib and will not accept any retirement package. She is powerful in her own right.”

The year-long scandal has paralyzed Malaysian politics and played a major role in weakening the economy as Najib twists and turns to keep his enemies at bay. Earlier this week, Najib sacked several members of his cabinet for apparent disloyalty; he has also moved against critical news outlets.

Independent authority

Driving Zeti out won’t be easy. The Central Bank Act of 2009 – ironically passed that year at Zeti’s request after Najib became Prime Minister – insulates the central bank from political influence.

The Governor can only be appointed or fired by the Malaysian King, a rotating monarchy that passes among nine sultans. The current King is from Kedah, the home state of Mahathir Mohamad, Najib’s most implacable enemy. The King reportedly has told Mahathir he is staying out of the matter so that the law can take its course.

Rosmah is said to have targeted Zeti after the Sarawak Report published details on July 9 about the deposit of RM2 million [US$523,400] into her account in Affin Bank, after which Rosmah demanded that Zeti find out who leaked the information within 72 hours or resign. When Zeti apparently declined, she came under attack from blogs said to be linked to Rosmah.

Blogs in the fray 

One of the blogs, “Fromtheeleventh,” alleged that the police Special Branch intelligence unit is investigating Zeti and three other Bank Negara officials for sedition and carrying out a parallel investigation into Selangor state water contracts involving Zeti’s husband, Tawfiq Ayman, and their son Alif.

The blog also alleged that Tawfiq is being investigated for allegedly illegal commissions paid in a bank deal in which third parties benefited from insider information, supposedly which could have been provided by the central bank.

“By virtue of the close relationship between husband and wife, Ayman has access to confidential information that has been used for his benefit in his business dealings,” the blog said, indicating that “new information” had been supplied to investigators.

“The husband is a little shaky,” said a Malaysian businessman, “but Zeti has always acted quite properly.” Another extremely well-informed source told Asia Sentinel, “I would totally believe that Rosmah would try to push Zeti out if she felt threatened.

Bank Negara does have lots of smoking guns on all the dodgy bank transfer documentation, both involving Rosmah and also Najib, 1MDB etc. Zeti isn’t an angel and there could be dirt on her somewhere that could be used, though she’s not been associated with any major personal scandals that I can recall.  It’s more that she’s gone along with wonky stuff as required by politics and maybe got rewarded for her compliance.”

But, he said, “I do believe she still thinks of herself as a professional central banker, so she might actually draw the line here. My impression is that Bank Negara is the most likely of all the investigative entities to really be able to pin something on Najib and Co.”   

Long career

Governor Zeti

Zeti has been with the bank for 36 years, becoming governor in 2000.  She was named one of the world’s best central bank chiefs by Global Finance Magazine in 2009 and several times since, and a Bloomberg columnist picked her as one of his favorites to head the International Monetary Fund after Dominique Strauss-Kahn was arrested on sexual assault charges in 2011.

According to one political analyst, Rosmah is believed to have been behind the dramatic ouster of cabinet members earlier this week, including attorney general Gani Patail and Deputy Prime Minister Muhyiddin Yassin, replacing him with uber-loyalist Ahmad Zahid Hamidi, the home minister. To replace fired cabinet members, who were involved in an investigation of 1MDB, Najib appointed members of a parliamentary committee probing 1MDB. Critics say that committee was designed to nullify the cabinet-level investigation, which is now presumably neutralized.

Rosmah is also supposedly furious over the role former Premier Mahathir Mohamad has played in undermining Najib. “She thinks Mahathir and gang are behind the campaign to pull down 1MDB and the Sarawak Report,” said a well-informed academic.

More evidence?

If the gossip mills in Kuala Lumpur are right, and Rosmah is indeed trying get Zeti sacked, the most likely reason – beyond personal pique – is  that the Bank Negara Governor is in possession of a report forwarded to her on March 13 by the Monetary Authority of Singapore that is said to contain damaging information about accounts related to 1MDB. So far Zeti has refused to talk about the contents of the report, although she said it would be forwarded to other enforcement agencies looking into the scandal. According to Sarawak Report, the account contains merely paper assets whose true value can’t be determined.

Zeti is feeling her way cautiously through the politically fraught scandal, which involves questions over not just massive debts of RM42 billion [US$11.8 billion] but that as much as US$680 billion allegedly was diverted from companies linked to 1MDB into Najib’s personal account, supposedly to be used illegally to fund the ruling national coalition’s successful 2013 general election campaign. 

“Disclosures will stop all investigations if we talk about it,” Zeti told local media. Although she has been criticized by opposition figures and Mahathir for the central bank’s tardiness in moving ahead on the investigation, Zeti is generally regarded as having played a neutral role.

Over recent weeks, Najib has suspended the publishing license for three months of The Edge Financial Daily and its sister publications, which played a major role in exposing 1MDB irregularities. He has also blocked access to the UK-based site Sarawak Report, written by persistent critic Clare Rewcastle Brown. He has blocked several opposition members and activists from leaving the country and the Inspector General of Police has threatened charges against organizers of a planned rally this weekend. 

That led the Malaysian branch of Transparency International to charge that there is deep concern over whether the 1MDB investigation can ever be completed. Gani Patail, the ousted attorney general, was said by insiders to be about to charge the Prime Minister with corruption when he was booted out.

 

David Cameron talks to Najib on Democracy, Civil Rights and Corruption

July 31, 2015

Bilateral Relations

David Cameron challenges Malaysian PM Najib Razak on Corruption

By Matthew Holehouse, Kuala Lumpur

http://www.telegraph.co.uk/news/worldnews/asia/malaysia/11773733/David-Cameron-challenges-Malaysian-PM-Najib-Razak-on-corruption.html

A Message to Najib and his Cronies on Doggy Money

The Prime Minister urged Mr Razak to clean up his government and challenged the treatment of Anwar Ibrahim, the country’s opposition leader in jail

David Cameron and Najib

David Cameron has confronted Najib Razak, the Malaysian Prime Minister, over the deepening corruption scandal that threatens to bring down his government.

Allegations that $700 million (£450 million) in state development funds ended up in Mr Najib’s personal bank accounts overshadowed a visit by the Prime Minister designed to build trade ties.

During a long, one-to-one meeting, Mr Cameron on Thursday urged Mr Najib to clean up his government.

In a pointed move, he then met with civil society leaders, including journalists, the G25 group of campaigners and lawyers, who are campaigning for greater democracy and a free press.Mr Cameron also challenged Mr Najib over the treatment of Anwar Ibrahim, the opposition leader in jail on sodomy charges.

Sir Kim Darroch, Mr Cameron’s national security adviser, met with Mr Anwar’s daughter who is playing a leading role in the opposition movement.They discussed building a free press and her father’s treatment.

The encounters followed demands from some opposition figures that Mr Cameron cancel the visit, during which he courted investors to fund the so-called Northern Powerhouse infrastructure projects in Britain.

The Prime Minister said: “It is right to go ahead with the visit, but nothing should be off the table. We should talk about these issues including the specific ones now,” he said.

“We always have discussions with civil society figures, anti-corruption campaigners, opposition leaders and all the rest and that will happen on this visit too.

“I don’t think it helps not traveling to a country and turning away. It is better to go and talk about these things.”

UK officials stressed the visit was to build relationships between “peoples”, not leaders.

After the one-to-one meeting, Mr Cameron is understood to have repeated the message to a wider gathering of Malaysian government figures in front of Mr Najib.

In an address in Singapore on Tuesday, Mr Cameron denounced corruption as the “enemy of progress” that held back growth and fuelled al-Qaeda and migration.

“We have a strong relationship and that enables us to talk difficult issues. I want to raise some of the issues I raised in my speech earlier in the week, such as ethics in business and fighting corruption,” he is understood to have said.

“We should be working together for an open society and open economy.”

Mr Najib is facing growing calls to resign over the allegations, which he denies. He this week fired attorney-general Abdul Gani Patail, who was investigating the scandal, and Muhyiddin Yassin, who had criticised him over the affair.

Time to welcome Timor Leste into ASEAN

July 31, 2015

Foreign Affairs

COMMENT: Friends of Timor Leste welcome this initiative by the Jokowi administration to push for the country’s admission into ASEAN. There are no grounds to postpone this decision and one hopes that come November 2015 ASEAN summit in Kuala Lumpur ASEAN leaders will welcome Timor Leste as a full and equal partner.

It is commendable that Indonesia, a former occupier of this little island nation, should take the initiative to raise the matter at the forthcoming August 2015 ASEAN Foreign Ministers meeting in Kuala Lumpur. This will be seen as a final reconciliation move and as formal endorsement of Timor Leste as a sovereign and independent nation state by Indonesia.

I remember  being in Dili several years ago when the question of Timor Leste’s admission into the ASEAN community was the sole agenda for the forum organised by the Malaysian Institute of Economic Research Institute. At the time, Timor Leste was protected by a UN Peacekeeping Force which included a contingent from our Royal Malaysian Police.

There was consensus among forum delegates that Timor Leste’s membership in ASEAN should be a non-issue. We, however, agreed at the time that their officials should use the interim period to learn more about ASEAN processes and work on a campaign to convince their own citizens that ASEAN would be good for their country. I was impressed with these officials for their commitment to and understanding of ASEAN.

I am now glad that the opportunity has come to admit Timor Leste. I am sure that we can look forward to welcoming the people of this beautiful island nation into our community in Kuala Lumpur at the  November 2015 ASEAN Summit. I thank President Jokowi Widodo, Foreign Minister Retno Lestari Priansari Marsudi and officials of the Indonesian Foreign Ministry for this important initiative. Timor Leste deserves our support and encouragement. –Din Merican

ASEAN: Time Leste as 11th Member –A Welcome and Timely Move

The Indonesian delegates would raise the issue of membership of Timor Leste in ASEAN during the 48th ASEAN Foreign Ministers’ Meeting in Kuala Lumpur early next month, an Indonesian official said in Jakarta today.

The Indonesian government would persistently attempt to include the new nation into the ASEAN membership, China’s Xinhua news agency reported MI Derry Aman, Director at the Indonesian foreign ministry, as saying.

“Indonesia will raise the issue of Timor Leste membership in ASEAN (at the meeting). It is time for the ASEAN member countries to consider the membership of Timor Leste,” he said at his office.

Indonesia is the first country giving support to the membership as the new nation is located in the Southeast Asia region, according to Aman.

“Indonesia’s commitment is clear that Timor Leste will be an ASEAN member country in the future,” he revealed.

A study on the readiness of Timor Leste on the membership has been carrying out which will determine whether the new nation will be accepted into the Asean membership, according to him.

– Bernama

Malaysia: What Collective Responsibility Means

July 31, 2015

by Dr. Mavis Puthucheary

http://www.themalaymailonline.com

The Prime Minister of Malaysia is fully within his constitutional rights to reshuffle the Cabinet, getting rid of those whom he thinks are not loyal to him and packing the Cabinet with a new line-up of faithful supporters.

But for him to say that he had to take this action because they contradicted the concept of collective responsibility shows a lack of understanding of this important democratic convention. The purpose of this article is three-fold.

First it demonstrates that the concept of collective responsibility refers to public criticism of government policy and cannot be used to condone any wrong-doings of individual ministers. Second, it is the Prime Minister who is responsible for taking action that has had the effect of contradicting the concept of collective responsibility. Third, for the concept of collective responsibility to work effectively, members of Parliament, both from the opposition and from the ruling coalition, need to act like parliamentarians rather than representatives of their political parties.

The doctrine of ministerial responsibility, whether collective or individual, expresses the conventional relationship of ministers to Parliament. For the doctrine to work properly, it requires that all ministers be jointly responsible as a team. This means that individual ministers may not in public express views that contradict public policy.

Since the ministers who have been sacked did not openly criticise the policies of the government, they cannot be said to have contravened the doctrine of collective responsibility. Collective responsibility does not mean that ministers must condone the personal misconduct of their fellow ministers.

Indeed, they have a moral duty to protect the integrity of the government. A prime minister who does not take action against a colleague who has been found to have committed a serious personal offence, runs the risk of having his whole government fall.

But what happens when it is the PM who does not resign even though he is directly involved in a financial scandal? In such a situation, individual ministers or the Cabinet as a whole may revolt against the PM.

If this fails to bring about the PM’s resignation, the matter will be brought up in Parliament where it is likely to result in a vote of no confidence against the PM. The fact that the Cabinet has not taken action to censure the PM is an indication of the extent to which money politics has seeped into the political system.

Although the PM accused his deputy of bringing about a negative public perception of the government, it cannot be denied that this negative public perception was already there before the deputy intervened and it is likely to increase with the deputy’s dismissal.

Second, if anyone should take the responsibility for contradicting the concept of collective responsibility, it is the prime minister himself. Although the PM does have the prerogative of choosing his Cabinet, the fact that he chose to appoint the Chairman of the Public Accounts Committee (PAC) to be a deputy minister shows his complete disregard for the concept of collective responsibility.

For this committee is most closely identified with the function of securing government accountability to Parliament. The work of this committee is based on the principle that Parliament grants money to the government to carry out certain expenditures and holds the ministers accountable for the proper use of this money.

It is directly involved in the task of holding government accountable for the way it has spent public money. Our Parliament’s PAC was in the midst of carrying out this important function when the PM appointed the chairman and three other members of the PAC to Cabinet positions.

Clearly, the move has had the effect of reducing the effectiveness of the PAC and indirectly preventing  Parliament from carrying out its important function of holding government accountable. This, together with the sudden removal of the Attorney-General from office, has had the effect of weakening Parliament and jeopardizing the concept of  collective responsibility.

In Britain and other parliamentary democracies, the chairman of the PAC is, by convention, drawn from the Opposition and the committee consists of equal numbers of Members of Parliament  from each side of the House.

This reduces the chances of pressures from the government to influence the outcome. In Malaysia the fact that the PM also heads the Ministry of Finance and, further is also head of a Department with diverse functions and has nearly one-third of the ministers working directly under him — a kind of Cabinet within a Cabinet — makes him the most powerful PM in the world. The convention that the PM’s status is one of “primus inter pares” (first among equals) simply does not apply in Malaysia.

Third, paradoxically the principle of collective responsibility can also act as a shield to protect the government against Parliamentary scrutiny. This is particularly the case when backbenchers in Parliament are prevented from making their own decisions because of a strong party discipline.

In such a situation, Parliament and the public are presented with the appearance of a united front that is impenetrable. For collective responsibility to work properly, it is important that backbenchers are given a degree of freedom to exercise their responsibilities as parliamentarians and not just as party members.

This is important because in a parliamentary system, the majority of members of Parliament come from the ruling party. If the assertion of accountability is exclusively a function of the Opposition, we could not properly speak of ministerial responsibility to Parliament.

The maintenance of an effective responsibility to Parliament depends not only on the Opposition but also on the willingness of backbenchers to play their role as parliamentarians. The tendency in Malaysia is for the party whip to come down hard on backbenchers who may wish to query any aspect of government policy.

This practice has the effect of reducing the status of Parliament to a rubber stamp of the government. Yet the role of the backbenchers can be crucial, especially in times of crisis such as what Malaysia is facing today. It is when dissatisfaction among the government’s own backbenchers threatens to break out in open revolt that the government is most responsive to parliamentary pressure.

In many developed democracies, the concept of collective responsibility is regarded as something which has its uses but which can also be inimical to good government. It is recognised that the best decisions are made in an atmosphere of transparency and open debate and this has led to a more tolerant view of public dissension within the government.

Cabinet ministers seem to be given a greater degree of freedom to express views that are contrary to the official view without having to resign or be dismissed.

In Malaysia we have lost out on both counts. A strong party ensures that MPs toe the party line to the extent that Parliament cannot carry out its function to hold the government accountable in any meaningful way, and ministers are prevented from speaking openly against wrong-doings in the government because if they do, they risk being sacked by the prime minister.

As backbenchers fail to see their role as parliamentarians and become lackeys of their party bosses, the concept of collective responsibility becomes little more than a myth to be used by politicians to justify whatever action they choose to take.

* The writer was formerly Associate Professor, Faculty of Economics and Administration, University of Malaya. 

Lightning Strike Against Enemies in UMNO and Public Officials may yet save Najib

July 30, 2015

Malaysia: Lightning Strike Against Enemies in UMNO and Public Officials may yet save Najib

by P. Gunasegaram@www.malaysiakini.com

Whichever way one looks at the changing of the Attorney-General, the appointment of a new Special Branch head and the cabinet reshuffle, they have everything to do with that self-styled strategic development company that isn’t – 1MDB. Just what is the Prime Minister trying to achieve with the 1MDB reshuffle?

Yes, it is the Prime Minister’s prerogative to reshuffle the cabinet and perhaps even to change the attorney-general and the Special Branch head. But if he hopes by this to show his strength, then he is mistaken. He exposes his weakness instead.

The cabinet reshuffle yesterday afternoon was preceded by the change of the attorney-general. Effectively Abdul Gani Patail was removed in an announcement by the Chief Secretary to the government, Ali Hamsa – the reason, health. But Abdul Gani himself was in the dark about the announcement and refused any comment to reporters.

So why was Abdul Gani so unceremoniously removed after his many years of service dating back to the time of Dr Mahathir Mohamad when he was Prime Minister? He was lead prosecutor in Anwar Ibrahim’s first sodomy case and became Attorney-General in 2002. He has served under three Prime Ministers.

More recently he became head of the task force investigating 1Malaysia Development Bhd (1MDB). As attorney-general, he had the sole authority to decide on prosecution in the country. Others in the task force are Dr Zeti Akhtar Aziz, Governor of Bank Negara Malaysia, the Inspector-General of Police Abdul Khalid Abu Bakar, and the Malaysian Anti-Corruption Commission (MACC) Chief Commissioner Abu Kassim Mohamad.

Right now the Prime Minister is facing allegations, not properly denied by him or his office, that some RM2.7 billion was deposited into his accounts at AMIslamic Bank. This was reported by The Wall Street Journal which has unambiguously stood by its story. Perhaps the Prime Minister thinks that Abdul Gani is too close to Mahathir, a constant critic of him in recent times and especially over 1MDB, and therefore cannot be trusted.

The new Attorney-General is an UMNO loyalist and a former Federal Court judge. A change at this stage must raise questions as to whether it is being done to ensure that there is no prosecution of the Prime Minister in investigations related to him and 1MDB.

The change in heads at the Special Branch, which does a lot of undercover investigations, acts as the eyes and ears of the government and provides it with intelligence of what is happening on the ground, will raise similar questions especially about why the changes are taking place now.

And then there is the cabinet reshuffle which is related entirely to the 1MDB issue. First out was Deputy Prime Minister Muhyiddin Yassin to be replaced by Ahmad Zahid Hamidi. And out was also another Minister, Shafie Apdal. Their only ‘crimes’ were to question the way the Prime Minister was handling the multi-faceted 1MDB problems.

Echoing the feelings of a section of the public

Muhyiddin had at the UMNO Cheras meeting come out strongly against 1MDB. Admitting that he read the suspended The Edge for some of his information on 1MDB, he was merely echoing the feelings of a wide section of the Malaysian public when he reiterated strongly that 1MDB has to be answered, putting the onus squarely on the prime minister. Presumably, as a member of the cabinet, he was not getting enough information on 1MDB.

The Prime Minister’s response was that Muhyiddin and others have to stand behind the concept of collective responsibility of the cabinet and therefore since they could not, they had to go. It was generally expected that this would happen if there was a cabinet reshuffle and it should not have come as a surprise for either Muhyiddin or Shafie and the general public, too.

If Muhyiddin and Shafie expected this, then surely they have some other plans. One could be to force an extraordinary general meeting of UMNO, and the other to move a vote of no-confidence against the Prime Minister in Parliament. Both don’t seem that likely to succeed considering that few have broken ranks and gone against the Prime Minister.

Insiders are reading some things into Muhyiddin’s remarks post the reshuffle. “What you know about 1MDB, I would know a little more than that,” he told a press conference at his residence in Kuala Lumpur this afternoon.

If that implies there will be more information coming out about 1MDB, it is not certain if it will be enough to significantly affect the Prime Minister’s position. But one can expect the playing out of a game plan by those opposed to the Prime Minister although it is not visible yet.

The general expectation was that Ahmad Zahid would replace Muhyiddin and he did, which is not to say that his appointment would be widely welcomed. It helps that he has wide grassroots support in UMNO but not that he is considered a hardliner who as Home Minister  was directly responsible for suspending The Edge.

Much more surprising than Muhyiddin’s ouster was the appointment into the government of four members of the parliamentary public accounts committee (PAC) investigation into 1MDB, including its chairperson Nur Jazlan Mohamed who was appointed deputy home minister. This leaves four Barisan MPs out of eight still remaining as PAC members.

Nur Jazlan himself said that the PAC investigations have been stopped pending the appointment of new members which can take place only after Parliament sits again in October. That means PAC’s interview of, among others, 1MDB CEO Arul Kanda next week will have to be postponed. However, opposition MPs, including DAP’s Lim Kit Siang, have commented that investigations can still go on despite some PAC members joining the government.

Observers feel that the Prime Minister’s appointment of four PAC members into the government was deliberate and aimed at postponing the investigations into 1MDB, buying time for 1MDB and for himself.

Yes, it is the prerogative of the Prime Minister to make cabinet changes and perhaps even to change the attorney-general midstream, although legal opinion is divided on this, as well as the head of the Special Branch. But it certainly does not indicate strength.

It is because the Prime Minister’s position is weak that he has to resort to such strong-arm tactics to keep people supporting him. It is because his position is weak that he has to demonstrate that those who do not support him will have to be prepared to pay the price. It is because he is weak that he has to muzzle the press and stop them from reporting legitimately on 1MDB.

Emulating Mahathir

What he is doing emulates what Mahathir did in a bigger way in 1987 with Operation Lalang, when scores of people were detained under the Internal Security Act and The Star had its licence revoked. Mahathir even pushed members of the old UMNO out of his UMNO Baru, which he set up following a judicial decision against the old UMNO. He moved decisively against the judiciary the following year, raising questions of its independence till today.

He made numerous constitutional changes to the new UMNO, making it all but impossible for a candidate to challenge an incumbent president. Mahathir won very narrowly against Tengku Razaleigh Hamzah in 1987 in the closest battle for presidency in UMNO ever.

Razaleigh eventually set up the opposition Semangat 46 to challenge UMNO and Barisan Nasional but had little success except in Kelantan.

For now, the Prime Minister and UMNO President Najib Abdul Razak has the upper hand, and thanks ironically to Mahathir, his most vocal critic, it does not look like he will be dislodged anytime soon. Few who call themselves politicians will be foolhardy enough to go against Najib when they don’t see a viable game plan that can, well, overthrow him. Najib is certainly not popular in the court of public opinion right now but that does not mean that he will be exiting anytime soon.

Indeed despite the tide of public opinion against him, like Mahathir before him, he is likely to prevail. And then he will have to hope that people will forget or at least forgive, like they did Mahathir before him.

ASEAN Economic Community?

July 30, 2015

Foreign Affairs:  ASEAN Economic Community? 

By Pattharapong Rattanasevee

http://www.asiasentinel.com/econ-business/is-asean-ready-to-integrate-not-likely/

…without a strong central authority and mandate, ASEAN integration will remain in a mess and the AEC remain an illusion. A single market across ASEAN nations requires a strong central authority that can harmonize and standardize regional regulations, and it must be recognized by all member countries.– Rattanasevee

With just six months left before the end of 2015 and the scheduled implementation of the ASEAN Economic Community, it is clear that the member nations of ASEAN are far behind in planning what is supposed to be the integration of the region into a close-knit community featuring free movement of goods, services, skilled labor and freer flow of capital.

It is a significant step forward and could be a crucial turning point for ASEAN. But without a strong central authority and mandate, ASEAN integration will remain in a mess and the AEC remain an illusion. A single market across ASEAN nations requires a strong central authority that can harmonize and standardize regional regulations, and it must be recognized by all member countries.

ASEAN will need a guardian of competition. It will need to significantly improve the current trade competition policy and arbitration. The scheme itself requires a consensual agreement among members that should be implemented as a bundle. That is, governments should not be allowed to pick and choose among components or sectors.

ASEAN is dealing with a colossal and ambitious task but with limited resources and capacity.But how limited are these resources? ASEAN has no intention to become a supranational organization like the European Union, where members coordinate within the context of inter-governmentalism. The internal dynamics of ASEAN institutions have been designed to uphold the roles of national governments and the norms of the association — known as the ASEAN Way.

The ASEAN Secretariat — the current central authority and only real institutional organ — remains at the margins of ASEAN policy making. It does not possess the mandate or power to command individual member states, or the power to devise common policies on its own. It is a glorified secretary, responsible for only administrative support, sorting out the daily paper work and arranging meetings for the organization.

There is no guarantee that the central authority will implement policy effectively and ASEAN will be unlikely to enforce compliance from obstinate members. Interestingly, Barry Desker pointed out that during the preceding 40 years of ASEAN, only 30 percent of agreements were actually implemented.

ASEAN will need to increase funding if it is to strengthen the Secretariat. The current operational budget relies on equal contributions by the member states, reflecting the norms of equality and stemming from the belief that different contributions might lead to a hierarchy of powers. The payment has never been increased substantially and has been kept low enough to ensure the poorest members can pay. ASEAN also receives substantial funding from dialogue partners and external donors — mostly through specific projects or operations — but this is not sustainable in the long run if ASEAN wishes to present itself to the world as a non-aligned power.

The Secretariat lacks professional staff, making it difficult for it to become a powerful central administration and the backbone of the association. It employs roughly 300 staff: 65 managers and experts, 180 local staff and 55 people from donor organizations. These figures are miniscule compared to other organizations with similar size and missions. They do not fairly represent a community of 625 million people and a nominal GDP over US$2.5 trillion.

The secretariat has also been facing difficulties attracting talented and capable people. Working for ASEAN is not seen as prestigious or well-paid, unlike other regional organisations that could offer up to US$74,000 for bright talent.

These problems raise the question about how prepared ASEAN is to implement the single market scheme, and how feasible that scheme will be. The region contains countries that are prone to financial shortfalls, domestic weakness, poor governance, corruption and coordination problems.

he member states lack an ‘ASEAN mindset’ to facilitate cross-national and cross-sectoral interactions. The AEC will not thrive unless there is a significant improvement to how ASEAN policy is implemented. ASEAN does not need to — and will not — depart from the ASEAN way to become a supranational or fully-consultative organization like the EU.

But its central administration is a basis of continuity. It needs to be given mandate and resources in order to acquire the capacity to encourage compliance and support its administrative functions. This could narrow the gap between ASEAN’s rhetoric of cooperation and its actual commitments. It could improve the poor implementation record.

Additionally, the contribution system should be substantially revised. It is not realistic nor applicable to the growing activities of the association and the excessive tasks of the ASEAN Secretariat. It should consider a GDP-based contribution system or seek other sources of revenue such as a share of taxes, import duties and licensing.

Finally, ASEAN awareness must be promoted among private sectors and ordinary citizens. The AEC could bring tremendous benefits to their daily lives. Improved ASEAN awareness would encourage public scrutiny and would put massive pressure on governments to focus on accomplishing the AEC in time.

ASEAN is not quite ready for the AEC. But with some significant improvements to how the ASEAN Secretariat is run, it may just be possible.

Dr Pattharapong Rattanasevee is a lecturer at Burapha University, Chonburi, Thailand. This was adopted from an article that appeared on the website of the East Asia Forum, This was written for the East Asia Forum, a platform for analysis and research on politics, economics, business, law, security, international relations and society centered on the Asia-Pacific region. It is based out of the Crawford School of Public Policy at the Australian National University