The Great Annare (MIC) Hoax


October 31, 2017

The Great Annare (MIC) Hoax

When you are a race-based party ostensibly there to protect the interests of your community, but your community is not the people who voted you into office, there is really no incentive for you to look after the interests of your community beyond making superficial noises about Tamil schools and funding budding entrepreneurs.” –S. Thayaparan.

http://www.malaysiakini.com

 

 

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Does MIC care about the plight of the Indian Poor?

COMMENT | I have no idea if the Indian vote will make a difference in 60 electoral constituencies but I do know that voting for the Barisan National establishment in this election will seal the fate of the Indian marginalised poor and further class divisions within the diverse Indian community.

As someone who believes the less you need big government, the stronger you are, the disenfranchised of the Indian community which is the voting base of MIC, is the perfect example of what is wrong with the way the Umno establishment has done business all these years.

There is a robust dialectic in the Indian community which goes unnoticed in the Sino-Malay discourse that dominates the alternative press. Establishment Indian political operatives and their supporters have this strange defence as to why the disenfranchised in the Indian community remain marginalised.

Their excuse is that “rich Indians” unlike their Chinese counterparts are not doing enough for the community. While this may be true, this still does not explain why the Indian community should carry on voting for the establishment when MIC is supposed to be looking after the “interests” of the community.

 

Elites always take care of themselves first, only crumbs for the downtrodden. Expect Samy Velu and his successors in MIC to be any different from UMNO and MCA?

Furthermore, this idea that “rich Indians” are not doing enough is ludicrous because MIC is riddled with plutocrats who are the beneficiaries of a corrupt system that nurtures a feudalistic mindset. In other words, if the rich Indians in MIC cared about their community as the Chinese plutocrats in MCA do, there would be a very different dialectic going on now in the Indian community.

Meanwhile UMNO folk tell me, that whenever funds are dispersed to the Indian community, leakages prevent them from going to where it is needed most. This, of course, is rather disingenuous because everyone knows that there are “leakages”; and funds  are disbursed to ensure that votes would be bought and not that genuine progress is initiated for the disenfranchised of the Indian community.

I, of course, am the last person to talk about the Indian community. I see no reason why the interests of the Indian community should be defined by the Tamil school issue or the building of new temples. Indeed, I view all these language schools anathema to any kind of cohesive nation building but because our public schools is a hotbed of Islamic preoccupations and “ketuanan politics”, the only way young people are assured of any education not politicised by religion and racial superiority are in these kinds of schools.

Beyond that, MIC has a dismal record of holding the line when it comes to religious extremism. Have you noticed that the most disenfranchised of the Indian community – women – have been on the receiving end of Islamic extremism be it forced conversions or their children stolen from them and MIC has done nothing for them.

Indeed the only “Indian” community that has accumulated political and financial power is the Indian Muslim community–the mamaks–who should actually be part of the greater Indian community but instead is an associate member of UMNO. So that is where all the “rich Indians” went.

I mean, take this issue of stateless Indians. I have heard MIC people blame the Indian parents for not registering their newborns. Yes, blame mostly uneducated people for not understanding government bureaucracy. Is it not the job of MIC to ensure that their voting base remains healthy and vibrant? Instead, when opposition politicians bring up this issue – my sincere gratitude to those who specifically put the time and effort into handling these cases – there is this big rush to demonstrate that MIC is earning its keep.

We cannot even talk about the crime statistics, deaths in custody and the shoot first policy as advocated by the Deputy Prime Minister because victims of suspected gangsters are mostly “Malays”, because all this means confronting the issues of religious and racial supremacy and MIC has never been able to criticise the UMNO state because they know, we know and definitely the UMNO state knows, that MIC is part of the problem.

Moreover, let us be truthful especially when it comes to the nexus of crime and political power. While some folks in UMNO may praise their Tiga Line hoodlums as the last line of defence for Malay privileges and religious superiority, MIC has nurtured an overt thug culture which has seen journalists attacked and political meetings turn into freak shows.

 

 

The Tamil Malar incident is a prime example of the relationship between the MIC and UMNO. As I said then, “This merely means that people would go, “well, there is that MIC gangster culture, what do you expect” narrative and the Malay ruling elite would just think it is the price of making a display of Indian representation in the ruling coalition. I am down with that too, but it just goes to show how full of horse manure the Ministry of Youth and Sports really is.”

I can understand why MIC has been extremely ineffective in many issues. The Indian community does not have a large voting base because it is not a sizable demographic. Just like Indian politicians who cannot solely rely on their own community to vote them to power, MIC has to rely on UMNO to literally keep them in power. That always comes at the cost of communal sovereignty and independence.

When you are a race-based party ostensibly there to protect the interests of your community, but your community is not the people who voted you into office, there is really no incentive for you to look after the interests of your community beyond making superficial noises about Tamil schools and funding budding entrepreneurs.

No matter how you self-identify in the Indian community, I hope people understand that as the smallest minority, we would be the first to suffer under the assault of Islamic extremism and racial supremacy. Rejecting the establishment and their proxies is the only way to slow the tide of racial and religious extremism.


S. THAYAPARAN is Commander (Rtd) of the Royal Malaysian Navy.

The Economic Case for China’s One Belt, One Road Initiative


October 14, 2017

The Economic Case for China’s One Belt, One Road Initiative

by Shang-Jin Wei*
https://www.project-syndicate.org/commentary/china-belt-and-road-economic-case-by-shang-jin-wei-2017-10

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In recent years, many of the world’s most influential countries have turned inward, with politicians promising protectionism, immigration restrictions, and even border walls. But, to achieve stronger economic growth and development, the world needs initiatives focused on building bridges – initiatives like China’s Belt and Road.

NEW YORK – Since 2013, China has been pursuing its “Belt and Road” initiative, which aims to develop physical infrastructure and policy linkages connecting more than 60 countries across Asia, Europe, and Africa. Critics worry that China may be so focused on expanding its geopolitical influence, in order to compete with the likes of the United States and Japan, that it may pursue projects that make little economic sense. But, if a few conditions are met, the economic case for the initiative is strong.

As a recent Asian Development Bank report confirms, many Belt and Road countries are in urgent need of large-scale infrastructure investment – precisely the type of investment that China has pledged. Some, such as Bangladesh and Kyrgyzstan, lack reliable electricity supplies, which is impeding the development of their manufacturing sectors and stifling their ability to export. Others, like Indonesia, do not have enough ports for internal economic integration or international trade.

 

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The Belt and Road initiative promises to help countries overcome these constraints, by providing external funding for ports, roads, schools, hospitals, and power plants and grids. In this sense, the initiative could function much like America’s post-1945 Marshall Plan, which is universally lauded for its contribution to the reconstruction and economic recovery of war-ravaged Europe.

Of course, external funding alone is not sufficient for success. Recipient countries must also undertake key reforms that increase policy transparency and predictability, thereby reducing investment risk. Indeed, implementation of complementary reforms will be a key determinant of the economic returns on Belt and Road investments.

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President Xi Jinping’s One Belt, One  Road Initiative  aims to knit together Asia, Europe and Africa through land and maritime corridors that collectively encompass a set of countries representing about 65 percent of the world’s population and one-third of its total economic output. China plans to spend roughly $150 billion a year to advance the initiative through infrastructure projects ranging from railways and roads, to ports and pipelines, to power plants and telecommunications networks.

For China, the Belt and Road investments are economically appealing, particularly when private Chinese firms take the lead in carrying them out. In 2013, when China first proposed the Belt and Road initiative, the country was sitting on $4 trillion in foreign-exchange reserves, which were earning a very low dollar return (less than 1% a year). In terms of China’s own currency, the returns were negative, given the expected appreciation of the renminbi against the US dollar at the time.

In this sense, Belt and Road investments are not particularly costly for China, particularly when their far-reaching potential benefits are taken into account. China’s trade-to-GDP ratio exceeds 40% – substantially higher than that of the US – owing partly to underdeveloped infrastructure and inadequate economic diversification among China’s trading partners. By addressing these weaknesses, China’s Belt and Road investments can lead to a substantial increase in participant countries’ and China’s own trade volumes, benefiting firms and workers substantially.

This is not to suggest that such investments are risk-free for China. The economic returns will depend on the quality of firms’ business decisions. In particular, because efficiency is not the primary consideration, Chinese state-owned enterprises (SOEs) might purse low-return projects. That is why China’s SOE-reform process must be watched carefully. Nonetheless, while the Belt and Road initiative is clearly driven partly by strategic objectives, a cost-benefit analysis shows that the economic case is also very strong – so strong, in fact, that one might ask why China didn’t undertake it sooner.

Even the United States and other countries may reap significant economic returns. A decade after the global financial crisis erupted, recovery remains weak and tentative in much of the world. Bold, large-scale infrastructure investments can provide much-needed short-run stimulus to global aggregate demand. The US, for one, is likely to see a surge in demand for its own exports, including cars, locomotives, planes, and high-end construction equipment, and financial, accounting, educational, and legal services.

In the longer term, the new infrastructure will ease logistical bottlenecks, reducing the costs of production inputs. The result will be higher productivity and faster global growth.

If Belt and Road projects are held to high environmental and social standards, significant progress can also be made on global challenges such as climate change and inequality. The more countries choose to participate in these projects, the better the chance of achieving these standards, and the greater the global social returns will be.

In an era when some of the world’s most influential countries are turning inward, talking about erecting trade barriers and constructing border walls, the world needs initiatives focused on building bridges and roads, both literal and figurative – initiatives like the Belt and Road strategy.

 

Rethinking Southeast Asian Economic Diplomacy


September 18,2017

Rethinking Southeast Asian Economic Diplomacy

by Henry Wai-chung Yeung, NUS

http://www.eastasiaforum.org
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In today’s global economy of cross-border production networks, the need to understand the changing ways in which the state and firms work together has become even more pressing. While the state plays an important role in supporting these production networks, it is firms and other private organisations — industry associations and standards organisations, for example — which coordinate and organise these networks.

UNCTAD’s World Investment Report 2013 estimated that some 80 per cent of today’s world trade is conducted through firms in these production networks — they are the backbone and central nervous system of the global economy.

 

In Southeast Asia, many economies are heavily involved in production networks, some of which are highly regional in nature. The ASEAN Investment Report 2016 suggests that regional production networks will be critical in realising the ASEAN Economic Community’s goals, which include building a single market of over US$2.5 trillion and a single production base of over 620 million people. As Escaith et al argue in East Asia Forum Quarterly ‘Strategic Diplomacy in Asia‘, ‘understanding the nature and dynamics of these production networks will be more important to securing stable and fair growth throughout the region’.

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Donald Trump has abandoned TPP and opened the door to China in favour of America First. Now ASEAN must get on with RCEP. Towards a more calibrated approach to strategic economic diplomacy

We need to rethink the strategic diplomacy of economic development — it can no longer be entirely state-driven in an era of global production networks. I use the concept ‘strategic coupling’ to describe the mechanism of strategic economic diplomacy through which domestic firms couple their specific initiatives and advantages with those of global lead firms. Through this process, firms coordinate diverse production networks spanning across national and regional territories.

The Apple–Foxconn case is one example of strategic coupling at work. Taiwan’s Foxconn is instrumental not only in ‘manufacturing’ Apple’s iPhone success but also in integrating Taiwan and mainland China into the iPhone’s global production networks.

But this well told story has a critical and often missed dimension — the even more crucial role played by South Korea’s Samsung. Apple’s major competitor in the global mobile handsets market, Samsung has also supplied critical components to successive generations of iPhones assembled by Foxconn.

While serving as the iPhone’s largest supplier by value of components, Samsung has kept busy building its own production networks throughout East and Southeast Asia, including a giant industrial park in the Bac Ninh province of North Vietnam. Opened in 2009, Samsung’s smartphone production there has transformed a province of rice fields into Vietnam’s second-largest export centre after Ho Chi Minh City.

While the state and its policy initiatives in Taiwan, mainland China, South Korea and Vietnam facilitated this Foxconn–Apple–Samsung strategic coupling, they are not the only domain through which this new mechanism of economic development can be effective and successful.

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My recent work Strategic Coupling shows that equally if not more important than state policies are the organisational and technological innovations developed by national firms, such as Samsung and Hon Hai (Foxconn’s parent). These firms seize opportunities embedded in the cross-border production networks spearheaded by global lead firms from advanced industrial economies in North America, Western Europe and Japan.

The state’s capacity to steer national economic development and ‘govern the market’ has become more constrained since the 1990s. The transformation of state roles has led to the weakening of the state’s embedded autonomy in countries like South Korea and Taiwan. State institutions began to facilitate the redistribution of state power towards more horizontal and functional policy in support of domestic firms and industries that take advantage of growing global opportunities.

As Southeast Asian states move from active economic intervention to facilitating strategic coupling between firms and global production networks, developmental partnerships start to broaden from top-down state–firm relations to include inter-firm networks. This new mechanism of strategic economic diplomacy recommends a dynamic conception of state-firm relations that goes beyond the debilitating market–state dichotomy.

The integration of Vietnam into Samsung’s global production network is a good example of this rethinking of strategic economic diplomacy. Samsung’s US$15 billion investment in Vietnam represents a strategic imperative to diversify away from mainland China, where Foxconn is dominant. It allows Samsung to tap into strong existing industrial clusters in Singapore, Malaysia and Thailand.

What does the strategic coupling story suggest in terms of public policy? While it is now much harder for almost any Southeast Asian economy to develop internationally competitive vertically integrated industries, there remains significant room for a new kind of strategic economic diplomacy — one that encourages domestic firms to tap into the developmental opportunities inherent in most global industries.

The call for a more calibrated approach to strategic economic diplomacy brings with it the possibility of focusing on more niche policies that nudge strategic coupling. As industrial production becomes ever more fragmented and globalised, state planners in Southeast Asian economies will find it harder to identify which products and technologies should be developed in their domestic industries.

Today’s obstacles to economic development are less about large capital outlays and scale of investment, and more about developing specialised niches within different global industries. In most global industries characterised by vertical specialisation and modularisation (transport equipment, ICT, agro-food and so on), a niche approach to industrial policy is likely to yield stronger coupling networks than a ‘big spurt’ approach to state-led industrialisation.

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The politics of industrial and sectoral choice is confounded by the growing uncertainties of today’s global economy. Value creation and capture tends to be much greater in new innovation-based industries in the manufacturing and service sectors, such as nanotechnology, biomedicine, green tech and digital media. Here, catching up is not just a matter of capital investment led by state-controlled financial institutions and elite industrial development agencies. The sheer complexity and wide range of actors and interests with specialised knowledge in these industries makes it rather unruly for bureaucratic targeting, even for a state with well-coordinated industrial policy.

Looking forward, the post-developmental state should focus on creating broad-based capabilities in new technologies, product and process innovations, and market development, rather than choosing specific winning firms, industries or sectors.

Henry Wai-chung Yeung is Provost’s Chair and Professor of Economic Geography at the Department of Geography and Co-Director of the Global Production Networks Centre, National University of Singapore.

This article appeared in the East Asia Forum Quarterly, ‘Strategic diplomacy in Asia’.

Trade Strategy: RCEP offers ASEAN and Asia a critical line of defence


September 14, 2017

Trade Strategy: RCEP offers ASEAN and Asia a critical line of defence with the Trump Induced Collapse of TPP

by Dr Peter Drysdale, ANU

http://www.eastasiaforum.org

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It might seem strange in this time of global crisis to turn to ASEAN, dogged as it is by perceptions of weakness and vulnerability and distracted by the political and security problems in the South China Sea. But ASEAN, with Indonesia at its core, is a regional enterprise with a distinctly global outlook and objectives, an experiment in open regionalism that has succeeded. ASEAN’s economic cooperation strategy has persisted despite its perceived weaknesses and slow pace. It is still the crucible for action on regional cooperation within Asia and across the Pacific.–Dr. Peter Drysdale

Some may think that the Trump shock is a passing moment and US leadership in international trade and economic policy can be quickly restored. But there is little doubt that the postwar trade regime and the primacy the multilateral order delivered are now vastly less certain. That was clear for all to see at the Hamburg G20 summit.

The question is how Asia — that has benefited so much from the certainties of economic openness that the WTO and other global institutions have provided — can protect its strategic economic and political interests in the face of the retreat of leadership by the world’s largest economy. Even if Trump and his White House advisers do not embrace all of the policies that they’ve foreshadowed in trade policy, policy uncertainty will undermine global economic and political security as well as damage US standing in the world.

Trump’s withdrawal from the Trans-Pacific Partnership forewent the potential lift to US incomes which that deal would have delivered mainly through the opening of the Japanese markets to US farm and services trade. The threats to impose trade barriers against US trading partners will actually reduce US incomes. The costs of imposing punitive tariffs on China and Mexico, or slapping tariffs on US imports such as steel are calculable. Now he threatens to tear up the US–Korea free trade agreement. All these actions would damage trade and incomes in US trading partners, but they’ll also reduce American incomes substantially. On one scenario US income will be cut by 1 per cent for every year putative higher US tariffs stay in place — paring close to half a year’s growth from US incomes annually.

US protectionism empowers protectionists globally. But other countries would only aggravate the costs to themselves and others if they retaliated in kind. A better strategy is to maintain open trade in the face of the United States’ self-inflicted harm and, a better strategy still, in coalition with other countries, is to protect the open global trade regime by maintaining the momentum of global liberalisation and economic reform.

The rest of the world has a continuing and strategic interest in new commitments to openness however Trump’s United States might choose to damage itself.

No one country — even China which is the second biggest economy and largest trader in the world —can make the difference alone in holding the line as the United States turns inwards. But there is a powerful interest in pushing collective leadership on trade openness from Asia.

Asia has its problems but it remains the most dynamic part of the global economy. There is intense focus on Asia’s response in the unfolding uncertainty about global trade policy because of its size and importance to future global growth and because of what it can deliver to the world through further opening up.

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Asia’s economic dynamism depends, in turn, upon success with its own programs of economic reform, programs that will be made more difficult in a hostile international policy environment. Confidence in the global trading system is important to Asia. It has underpinned the growth of Asian interdependence, economic prosperity as well as its political security.

In guarding these strategic global interests ASEAN has a critical role to play, through the ASEAN-led Regional Comprehensive Economic Partnership (RCEP). RCEP includes not only the ten ASEAN economies but also Japan, South Korea, China, India, Australia and New Zealand. It is a coalition of countries with considerable economic weight, able to deliver a powerful message to the world. But without movement in ASEAN, RCEP is likely to go nowhere.

RCEP trade ministers and officials are now meeting in Manila to meet their deadline to deliver East Asian trade reform this year or wimp it.

 

It might seem strange in this time of global crisis to turn to ASEAN, dogged as it is by perceptions of weakness and vulnerability and distracted by the political and security problems in the South China Sea. But ASEAN, with Indonesia at its core, is a regional enterprise with a distinctly global outlook and objectives, an experiment in open regionalism that has succeeded. ASEAN’s economic cooperation strategy has persisted despite its perceived weaknesses and slow pace. It is still the crucible for action on regional cooperation within Asia and across the Pacific.

RCEP was designed by ASEAN policy strategists to buttress regional trade reform and lift Asia’s growth potential in the global economy. It is now the only active, credible multilateral endeavour anywhere in the world positioned to deliver significant push-back on the retreat from globalisation, soon.

RCEP is not simply another free trade and investment arrangement. It is structured to be open to easy sign-on by other partners. Importantly it incorporates a cooperation agenda, an essential element in building capacity for economic reform and mutually reinforcing regional development over time. That agenda has an important political and security dimension. That will assist in ameliorating regional tensions and managing relations with the bigger powers, like China, Japan and India (on geo-economic issues such the Belt and Road Initiative for investment in connectivity and geo-strategic territorial issues), and those outside it, like the United States and Europe (in staking out Asia’s interest and claims to ownership in the global public good of an open economy).

RCEP offers ASEAN and the Asian region a critical line of defence against fragility in the global political economy. There is too much at stake strategically at this turning point in global economic history for Asia’s leaders to fail to step up and deploy it.

Dr. Peter Drysdale is Emeritus Professor in the Crawford School of Public Policy at The Australian National University and Head of the East Asian Bureau on Economic Research.

 

KayJay on ASEAN beyond 50


August 17, 2017

KayJay on ASEAN beyond 50

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As ASEAN celebrates its Golden Jubilee, it is opportune for us to take a step back and ask our people what they want of the regional bloc in the next 50 years before striving forward together as one community.

THERE has never been a better time to examine ASEAN as a regional bloc, how far we have come and where we are heading next. It has been exactly 50 years since ASEAN was formed and since then, this regional bloc has never been stronger and more prominent in the global stage.

Malaysia will always be a pro-active member of ASEAN and other multilateral organisations. Our success story as a nation has been predicated upon the stability provided by a multilateral framework. Malaysia as a country is one that reaches beyond its potential and one that has always set its sight on the distant future. For that reason, we must be integrated into a region that is greater than the sum of its parts.

The past is prologue while the future is ours to shape. While taking lessons from the past, we must continue the work of building the future.

Immediately after the 1969 riots, Malaysia embarked on the New Economic Policy, which was to be a new deal for Malaysia in eradicating poverty and rebalancing the economic distribution in the country. Thirty years later, that was followed by Vision 2020, which would leapfrog Malaysia to a country that is modern and developed.

As we are nearing 2020, it became imperative for us to ask ourselves “what’s next?”. The world in 2050 will be much different from the world today – what will guide us to face this future?

This is I have been tasked to reach as many youths as possible to get their aspirations of what they want to see the nation be in the future, to be recorded in a massive plan called the National Transformation 2050 (TN50).

TN50 is an initiative to plan for the future of Malaysia in the period between 2020 and 2050. From the vision of becoming a developed nation, we should strive to be among the top countries in economic development, citizen well-being and innovation.

For this, I’ve spent the first six months of 2017 traveling through all corners of Malaysia, reaching out to more than one million youths and what they aspire for. Most of them coalesce around wanting a future that is fair, sustainable, competitive, united and happy.

What that means is we want a future that goes beyond the old measurement of GDP growth as an indicator of success to one that looks at well-being more comprehensively. One that looks into wealth and income inequality, healthcare, access to quality education, environmental protection, a good standard of living, integrated public transport, sporting achievement, civic consciousness and greater investments into scientific research, among many others.

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With shared dreams come shared responsibility – and nothing binds a society better than having a common weight on their shoulders. Similarly, as ASEAN heads towards 2050, it is opportune for us to take a step back, ask our people what they want of ASEAN in 2050 and then strive forward together as one community.

The challenge of automation and robots, the need for a differently-skilled and adaptive workforce, the breakdown of societal fabric into smaller family units, the shifting powerhouses in global trade and many other challenges await us in the near horizon.

Though individual countries are looking at these in their own way, there are many areas we can embrace together, leveraging on individual strength to compensate for individual weaknesses, so ASEAN can future proof the region and truly become a global powerhouse in the next 33 years.

What would we like ASEAN to be in the next decade, or five decades? The current generation entrusted with the responsibility to shape the future of ASEAN would like to see an ASEAN that will be able to realise all of its potential. An association consisting of 10 sovereign high-income nations fully developed with prosperity for all. It is indeed a tall objective, but not an impossible one, for ASEAN is a work perpetually in progress passing from one generation to the next, a sacred trust to be upheld.

I am an optimist on the future of ASEAN and I am a firm believer in its role as the catalyst for peace and prosperity in this region. Our fate in ASEAN has been pre-determined by our geography. As the saying goes, we can choose our friends but we cannot choose our neighbours.

The success of one nation in the region will have a positive bearing on all, while the failure of any will have a calamitous effect on all. ASEAN’s future is in its togetherness. We can either leverage on our collective strengths to soar together towards greater heights or go separately to face a more dangerous and challenging world.

Economically, we must continue to build upon the ASEAN Economic Community. More integration is needed, not less. By all means draw lessons from Brexit but the right ones not the wrong ones. We must be serious to further bring down barriers to trade both tariff and non-tariff.

We must work to better integrate our economy and welcome investments, ease the process of doing business, and protect intellectual property while better leveraging our various competitive advantages. Healthy competition coupled with pragmatic cooperation must be the way forward.

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ASEAN leaders must focus on good governance, fight corruption, end crony capitalism and work for peace, stability and development with equity. Make ASEAN relevant to the lives of Southeast Asians. That means more action and less talk.–Din Merican

We must work to make ASEAN more relevant to the needs of members and the challenges that they are facing, be it political, security or economic. ASEAN will continue to thrive, despite its many challenges, if every member perseveres to make it a national priority; for the national interest of each member could only be advanced effectively through ASEAN collectively.

The first 50 years is coming to an end, so let us now turn the work at hand to the next 50 years dedicating it to the future generation. Let us continue to build on the dreams of the founding fathers of ASEAN who started a journey so improbable that they themselves in their wildest imaginations never could have thought how successful it would eventually be.

That 50 years later, we are marveling at their collective wisdom in every capital of a united ASEAN is the most fitting tribute of all to this greatest and most enduring of endeavours.–by Khairy Jamaluddin

Khairy Jamaluddin is the Youth and Sports Minister. The views expressed here are entirely the writer’s own.

ASEAN– New Challenges Ahead after 50 years


August 12, 2017

ASEAN– New Challenges Ahead after credible 50 years

by Dr. Munir Majid

http://www.thestar.com.my

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FIRST, let us give credit where it is due: 50 years of continued existence in half a century of challenge and change is a feat of achievement. ASEAN can consider that the cup is half full.

The problem with ASEAN is that not enough is known about it. And what is known is usually about where it has failed, like its failure to take a common stand or to propose creative cooperation in the South China Sea disputes.

Or its pusillanimity in removing non-tariff barriers (NTBs) which are seriously hindering ASEAN economic integration and establishment of a single market and production base.

The fact that so many things – the half-full cup – are happening on the ground, is lost. Taking just the ASEAN Economic Community (AEC), how many Malaysians, for instance, appreciate there are over 1,000 of our companies all over ASEAN, taking advantage of regional growth against the frustrations of investment laws and domestic bureaucracies?

How many are aware of huge Thai companies like Charoen Pokphand (one of the largest private conglomerates in the world, employing 500,000 people across the globe) with big plans to make Malaysia its halal food hub?

Just imagine, Buddhist Thailand working in Muslim Malaysia to propel a fast-growing industry forward – despite whatever halal certification problems it might face in Indonesia, for instance – for its food products. Charoen Pokphand will find a way, as it has all over the world, since its establishment in 1921.

The point is, what is heard are the complaints. Inevitably, as these are louder than what is quietly achieved, with whatever difficulty, by the likes of Sime Darby or Gamuda Land or auto-parts company Ingress Corp Bhd.

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AirAsia Bhd, however loud and incessant its complaints, is now the largest low-cost airline in Asia, truly well-established in ASEAN.

The other side of the story, of course, is – the glass is half empty. The loud, big, private sector push is for ASEAN to strive for optimality.

This is where the great divide begins. Old ASEAN hand Bilahari Kausikan of Singapore once famously said ASEAN is a cow which some people expect to be a horse. The suggestion is, it cannot.

However, why not? Even if it cannot, is the cow fully-milked? Perhaps there should be a convergence between those who say the glass is half full and those who say it is half empty.

With respect to the AEC, there is great effort by the official ASEAN side to engage the private sector to forge cooperation, if not quite convergence. The AEC 2025 Blueprint clearly recognises the role of the private sector in the economic integration process.

In 2015, ASEAN Economic Ministers acknowledged there has to be concentrated effort to get NTBs reduced, and agreed with the ASEAN Business Advisory Council (ASEAN-BAC) that the way forward is by concentrating on a few people-centric sectors – agri-food, healthcare, retail and e-commerce, and logistics.

In the middle of 2016, the ASEAN Trade Facilitation Joint Consultative Committee (ATF-JCC) was revived, with part of its remit being to form working groups with expert private sector entities to address NTBs in those four sectors with, additionally, the tourism sector.

In January this year, the ATF-JCC met in Bangkok and ASEAN-BAC was called to discuss the way forward. Some progress in terms of customs procedures was made just recently on how intra-ASEAN trade could be facilitated. But work on the specific, prioritised sectors has yet to begin.

This is part of the reason why, while there is cooperation between the official and private sectors, there is not quite convergence. Rate of progress: the process is not just slow. It is long, grinding and exhausting.

Beyond the AEC, more generally, there is great need to raise the profile of ASEAN among the people at large, especially the young, whose knowledge of what it does is lacking. It is like a close-kept secret. The top-down approach among those of a certain age has to change.

ASEAN’s young population have to be brought into the whole process, to energise it and to form the future that will be theirs. If ASEAN wants to bring them along into that future, it is absolutely essential to form an ASEAN Youth Consultative body to hear from the young what they want of and for ASEAN.

If ASEAN does not do this, it will be wasting one of its most valuable assets – its demographic vitality. They can take on the digital world.

After we recognise credit should be given to ASEAN for what it has achieved, it is a totally pro-ASEAN thing to do to highlight the formidable challenges it faces going forward. The biggest is happening now: digitisation.

ASEAN has not quite addressed what is now popularly dubbed Economy 4.0. ASEAN talks about the opportunities of e-commerce and, correctly, intones that the trading platforms, payments settlement and connectivity have to be in place to drive it. But even as this being talked about – and inadequate progress is made – the sweep of the digital economy might have uncomfortable consequences for ASEAN if it does not prepare itself.

The fourth industrial revolution is more comprehensive than just e-commerce. There are vast opportunities for new industries and services, as well as for greater productivity. But there are also grave challenges to employment and skills development.

ASEAN needs to fashion clear policies on education and training – with emphasis on cognitive skills – and retraining, and on employment displacement. Yet the ASEAN mantra to attract investment remains low-cost of production. But will the manufacturing industries come to low-labour cost Indonesia or Myanmar in the new digital economy?

Unemployment and unemployability could seriously affect these countries, particularly their micro, small and medium enterprises sector. Serious socio-economic problems could scupper ASEAN economic integration, indeed threaten regional cohesion.

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The time to act is now. ASEAN really has not that much time to celebrate its creditable 50 years.