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Southeast Asia

ASEAN – A Pacific NATO?

Luis Durani

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The Association of South East Asian Nations (ASEAN) is a union of nations that was born out of a desire for economic modernization and development as well as a common fear during the Cold War; communism. Despite many organizations/unions being formed in this era, ASEAN was one of the few that were able to survive the end of the Cold War.

Even though one of the original mandates, the existential threat of communism, has been eliminated, it still has managed to carry on with an updated focus. With the rise of China, ASEAN members have begun to sign defense treaties with one another separately as well as with the US. It is only a matter of time before the organization evolves to become a security alliance.

ASEAN evolved from a previous organization known as the Association of Southeast Asia (ASA), which consisted of Thailand, Malaysia, and the Philippines. Shortly thereafter, on August 8, 1967, ASEAN was inaugurated by the signing of the Bangkok Declaration by five countries; Indonesia, Malaysia, the Philippines, Singapore, and Thailand.

Despite the creation of the union, ASEAN members had internal squabble and bickering with one another and did not illustrate a semblance of a regional organization. The internal dynamics began to change with the conclusion of the Vietnam War and the US withdrawal. The balance of power shifted with the US defeat and the unification of Vietnam under a Communist regime. From that point on until the end of the Cold War, Vietnam along with its benefactor, the Soviet Union, became the main threat to the organization. The Vietnamese aggression into Cambodia and other actions caused the union to not only strengthen in unity but also proclaim a unified response to Vietnam’s actions.

With the collapse of the Soviet Union and the end of the Cold War, the fear of Communism and Vietnam evaporated amongst the ASEAN members. As a result, ASEAN began to focus on regional trade and security issues. In July of 1995, the regional calculus changed. The former nemesis, Vietnam, not only established diplomatic relations with the US but became a member of ASEAN. Shortly after, Laos and Burma joined the organization. With the inclusion of the entire region, the focus of the organization shifted to economic growth, but also resolving outstanding territorial issues. Even though China had not been a formal ally, ASEAN and China were united in their stance towards the Soviet Union and Vietnam during the Cold War. However, with the Cold War over and China’s rise, ASEAN had its eyes on a new antagonist.

China has consistently held the position that it prefers bilateral negotiations over multilateral negation when it comes to discussions of the South China Sea. China is a large nation both physically, demographically, economically and militarily, certainly relative to the other nations of the region. The imposing stature of China can be more influential when dealing with the different Southeast Asian members singularly rather than in a plurality. Another major premise behind this tactic of negotiation is that China does not want to lend any credence or recognition to ASEAN.

China’s claim and desire to recover the lost territories in the South China Sea due to the Century of Humiliation is seen as aggression and expansionist by ASEAN. They see China’s slow expansion as an approach to seizing the resource-rich area without provoking too much international outcry. Rather than a full out military operation, China uses time as a weapon and incrementally expands in the region without drawing much global attention, according to ASEAN.    

China’s reticence to engage ASEAN as an entity is seen by many as a divide and conquer tactic towards the Southeast Asian nations. The prevailing sentiment in the region appears to be that China is a threat to the stability and peace of the region.

As a bloc of nations, ASEAN’s goal was to help the US contain Vietnam and the Soviet Union in the region. With the Cold War gone, the organization has set its sight on China as a threat to the region. Washington has fully supported the efforts of ASEAN and its members going to the extent of establishing military relations with almost all of them and supplying most with arms.

China’s only escape from its geographical prison is through the sea, which is now littered with the US military. China views ASEAN similar to how the Soviet Union perceived NATO. Even though ASEAN does not possess the military regime that characterizes NATO it is slowly getting there. China views ASEAN as a nascent military coalition and collective security arrangement that is backed by the US military.

ASEAN members in the last decade have witnessed an exponential increase in bilateral defense and security arrangements with one another and foreign powers that China views as hostile in some respects. The head of the Indonesian army referred to the myriad of bilateral alliances amongst ASEAN members as a “defense spider web in ASEAN.” The discussion of a multilateral ASEAN security regime is no longer an afterthought or whisper, but actual discussions are taking place by ASEAN members as well as supported by the US and Japan. Members will no longer feel obligated to peace first, but rather use its military power, backed in some cases by the US, to challenge China. Diplomacy will no longer be the preferred approach. Such a coalition will only further isolate and contain China. In addition, these nations are in control of the important commercial straits that not only supply China’s economy, but also fuel its growth as an aspiring global power.

Since 1993, China has been a net importer of fuel and almost all of it comes through the Malacca Strait and the South China Sea. Such an alliance could cripple China and threatens the existence of the regime because of its ability to control the vital straits to China. Thus, China has been reticent since the beginning to give credence to ASEAN in the hopes of working bilaterally with the nations of the region rather than collectively. However with the continual support of the US and Japan, ASEAN has managed to get China to become a signatory to the Code of Conduct, which entails a behavior of peaceful resolution of issues regarding the South China Sea. However, the growing militarism of ASEAN and the potential for this nascent military alliance to actually become a multilateral security regime could not only threaten the code of conduct but isolate and contain China further. The balance of power is tipping in favor of ASEAN, but China – which sees itself as a victim of occupation once before – will not allow itself to be subjugated at the hands of foreign nations again.

Luis Durani is currently employed in the oil and gas industry. He previously worked in the nuclear energy industry. He has a M.A. in international affairs with a focus on Chinese foreign policy and the South China Sea, MBA, M.S. in nuclear engineering, B.S. in mechanical engineering and B.A. in political science. He is also author of "Afghanistan: It’s No Nebraska – How to do Deal with a Tribal State" and "China and the South China Sea: The Emergence of the Huaqing Doctrine." Follow him for other articles on Instagram: @Luis_Durani

Southeast Asia

In Myanmar, Better Oversight of Forests a Vital Step in Transition to Rule of Law

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Authors: Art Blundell and Khin Saw Htay

For the first time, the Myanmar Extractive Industries Transparency Initiative (MEITI) has opened the books to share information with the public on revenue Myanmar’s government collects from harvesting timber. Last month, the MEITI released two reports juxtaposing statistics on production and tax payments from government ministries’ ledgers with corresponding figures reported by the state-owned Myanma Timber Enterprise (MTE) and forestry companies.

The reports are an important step toward improved transparency and accountability in Myanmar’s forest sector because they shine a light on irregularities that may point toward mismanagement or illegal activities. Unclear legal frameworks and weak enforcement in Myanmar’s forestry sector – a remnant of decades of military rule – have created an environment ripe for illegal logging and illicit trade, and mismanagement of natural resources.

The role of forests in Myanmar’s transition to democracy cannot be overemphasized. Money from illegal logging helped to fuel Myanmar’s decades-long civil war. Smuggling of illegally harvested timber to countries like Chinahas led to the loss of millions of dollars each year in government revenue. Corruption also fuels continued violence and prolongs armed conflict, especially in the heavily forested states that are home to most of Myanmar’s ethnic minorities.

The MEITI is committed to sharing its results at the state level—especially in Myanmar’s forest-rich regions. Myanmar’s citizens have the right to understand how their forests are being managed for the public good.

The EITI framework was launched globally in 2003 with a focus on oil, gas, and mining, given that these lucrative sectors are often key drivers of corruption in resource-rich countries. Myanmar is one of only a few countries (following Liberia’s lead) to add forestry to its EITI reporting, thanks to advocacy from civil society. 

Myanmar’s newest MEITI reports are a commendable step by the government toward transparency. But producing a report like this is not easy. The reporting highlights numerous disparities and irregularities in government record-keeping. This is not unusual for a first EITI report. It is also a major objective of the EITI: transparency leads to meaningful discussion about necessary reforms, while regular reporting creates an accountability mechanism to demonstrate progress.  MEITI is now preparing their next report covering fiscal years 2016-2017 and 2017-2018.

The MEITI is already driving progress. Myanmar’s Ministry of Planning and Finance (MoPF) has announced it will close the so-called “other accounts” maintained by State-owned Economic Enterprises, like the MTE, that have kept more than half their profits separate from the government’s central budget. Data in the MEITI report suggest that MTEretained74% of its $1 billion profits from fiscal years 2014-2015and2015-2016 in these other accounts–significantly more than the 55% that is permissible.

Myanmar’s Ministry of Natural Resources and Environmental Conservation (MoNREC) now holds important data that can be used to investigate and resolve irregularities uncovered by the MEITI reporting. For instance, the Forestry Department’s data on production does not match the data provided by the MTE, and it is substantially more than the Annual Allowable Cut (a government-determined sustainable level of harvest). Likewise, the MTE indicated that more teak was sold than its total reported supply. The source of the additional volume of teak logs is unexplained.

Reforms should help MoNREC address these irregularities.  Current reporting is obviously insufficient to capture reality.  With the help of a workshop that followed the MEITI launch, stakeholders are working with MoNREC to develop appropriate reforms for MTE and the Forestry Department, and to improve forestry sector governance in general. 

Opacity hurts the country in more ways than one. Illegal logging, corruption, and smuggling siphon off revenues meant for programs serving the public. Illegalities also threaten forests – and the communities that rely on forests for their livelihoods – and they drive off credible investment, leaving a gap often filled by investors with less regard for environmental and social regulations.

It is important to note that the MEITI reports cover only the period from April 2014 through March 2016, prior to Aung San Suu Kyi’s NLD Party coming into power. The current administration has committed to fairer distribution of benefits from Myanmar’s natural resources among its citizens, yet systematic barriers remain. Endorsing the recommendations from the MEITI report and implementing a roadmap for reform would signal the NLD’s commitment to good forest governance. Meanwhile, companies should do their part to comply with the law and accurately report production, sales, and other data in an accessible manner that allows for independent monitoring.

Myanmar’s forest resources hold great promise for the country’s people, its economy, and the government budget, if managed responsibly. The MEITI has a clear role in charting that path forward and in helping Myanmar manage its natural resources based on the principles of good governance.

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Southeast Asia

South-East Asia youth survey: Skills prized over salary

MD Staff

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Young people in South-East Asia face a relentless challenge to upgrade their skills as technology disrupts job markets, according to research released today by the World Economic Forum and Sea.

In a survey of 56,000 ASEAN citizens aged between 15 and 35, some 9% of respondents say their current skills are already outdated, while 52% believe they must “update their skills constantly.” Only 18% believe their current skills will stay relevant for most of their lives.

These concerns about skills are reflected in attitudes to jobs. ASEAN youths say the number one reason they change jobs is to learn new skills – the desire to earn a higher income comes second. 5.7% report having lost a job either because their skills were no longer relevant, or because technology had displaced them. Other reasons include the desire to create a more positive social impact and to have a more innovative working environment.

The survey also shows 81% of ASEAN youths believe internships are either equally important or more important than school education. In addition, over half are keen to spend time working overseas in the next three years, probably to gain new skills, with a significant portion wanting to work in another ASEAN country.

“It is impossible to predict how technology will change the future of work.” said Justin Wood, Head of Asia Pacific and Member of the Executive Committee at the World Economic Forum. “The only certainty is that job markets face accelerating disruption, where the lifespan of many skills is shortening. It is encouraging that ASEAN youths are aware of these challenges and show a deep commitment to lifelong, ongoing learning.”

Soft versus STEM skills

Overall, ASEAN youth attach greater importance to soft skills, and less importance to STEM skills – science, technology, engineering and maths. They see “creativity and innovation” as the most important skill – in which they also rank themselves highly – followed by the ability to speak multiple languages. They are confident about their soft skills, such as emotional intelligence, and list the two least important skills as “maths and science” and “data analytics”. They are particularly positive about their ability to use technology such as social media platforms, e-commerce sites, and e-payment systems.

Santitarn Sathirathai, Group Chief Economist of Sea, noted: “While it is essential that the region continues to invest in developing STEM skills among young people, we can also see that soft skills will have a vital role to play – even in the tech sector. In the world where knowledge becomes obsolete more quickly, soft skills such as adaptability, leadership and creativity will be crucial in ensuring young people have the resilience to constantly evolve their skill-sets in step with a changing market.”

The importance of re-skilling

Responding to the need to train workers in the face of technological change, the ongoing ASEAN Digital Skills Vision 2020 programme, launched by the Forum in Bangkok in November 2018 is assembling a coalition of organizations to train 20 million workers at ASEAN SMEs by 2020, and to provide internship and scholarship opportunities.

“The World Economic Forum’s ASEAN Digital Skills programme is delivering significant impact. In its first eight months, the initiative has already secured commitments to train over 8.9 million workers at SMEs, and to provide over 30,000 internships,” said Mr Wood.

Some 16 organizations have so far joined the programme: BigPay; Certiport, a Pearson VUE Business; Cisco; FPT Corporation; General Assembly; Golden Gate Ventures; Google; Grab; Lazada; Microsoft; Netflix; Plan International; Sea; thyssenkrupp; Tokopedia; and VNG Corporation.

“Government policy and business practices need to catch up to what is happening on the ground. Advances in technology will continue to impact labour markets into the future, and this requires ongoing education and skills training,” said Saadia Zahidi, Managing Director and Head of the Centre for the New Economy and Society at the Forum. “Anything less than a systematic shift in our approach to education and skills risks leaving people behind.”

Future jobs

When asked what type of organization they work for today, and where they would like to work in the future, ASEAN youths show a strong preference for entrepreneurial settings. Today, 31% are either entrepreneurs or work for a start-up. In the future, 33% want to work in an entrepreneurial setting. 19% of young people also aspire to work for foreign multinationals in the future (the current figure is 9%).

Traditional SMEs (as opposed to start-ups) are seen less favourably. While SMEs form the backbone of ASEAN labour markets, the survey reveals that small companies face recruitment challenges. 18% of youths work for SMEs today, but only 8% want to work for an SME in the future. One reason for the low interest is because young people say they receive less training at small companies compared to larger ones.

When asked what industry sectors are most attractive, the results reveal a clear preference for the technology sector, with 7% working in the industry today and 16% aspiring to work there in the future. In comparison, more traditional parts of the economy may face recruitment challenges. For example, 15% of youths work in manufacturing today, but only 12% want to work there in the future. Likewise, 8% work as teachers, yet only 5% want to work in education in the future.

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Southeast Asia

Being Wealthy Helps Singapore’s Naval Ambition

Bahauddin Foizee

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There’s an image that has been imprinted in the minds of the millions about Singapore, that it is a tiny yet wealthy city-state and an important Asian financial hub. But many are unaware of the fact that Singaporean armed forces are stronger than many regional forces, as it has one of the best navies, airforces and armies in the region.

Singapore’s navy, officially known as the Republic of Singapore Navy (RSN), in particular has been shaped over the years into a maritime force which is highly sophisticated and well-trained. An article on The National Interest ranked the RSN among the top five Asian navies, even when Indian Navy did not find a place in the list.

According to the aforesaid article, the RSN is a better navy than the Indian Navy in terms of quality, operation and policy-making, though the RSN lacks the experience, manpower and size of the Indian Navy. Arthur Waldron, an International Relations academic at the University of Pennsylvania, believes that if Chinese Navy, necessarily dividing the fleet, sends a taskforce to subdue the RSN at the Philip Channel, the narrowest part of the Strait of Malacca, the RSN would beat the Chinese taskforce.

Ambitious Procurement Plans

Singapore intends to build a navy that could protect its territories and economic interest from the potential hostility by any immediate larger neighbours, and more importantly a navy that could become lethal if combined with other regional and extra-regional navies (like Australia and Indonesia) against a greater navy (e.g. against Chinese navy). That is why, the RSN is currently on a spree to acquire more capabilities and next-generation platforms.

As part of its submarine force renewal program, the RSN is acquiring four Type 218SG submarines from Germany to improve the operational and combat capabilities of its submarine fleet. These new submarines will be having far more capabilities and durability — and are built to stay submerged about 50% longer — than those of the existing ones.

It’s worth mentioning here that submarines, unlike surface warships that have both peactime and wartime functions, is built to shoot and destroy targets as well as to conduct surveillance, even surveilling foreign coasts to gather vital intelligence. The very fact that a small city-state like Singapore has submarines in operation and is now renewing its fleet with even more capable submarines — shows how ambitious Singaporean navy has become about increasing its naval power.

Because of the larger capacity, these submarines have plenty of scopes for future upgrades, meaning that these submarines could be equipped with weapon systems such as long-range missiles to carry-out an offensive strike.

There’s more to the Singapore’s naval ambitions. Take for example the Joint Multi-Mission Ships (JMMSs), one of the RSN’s major new procurements. With full-length flight deck, these vessels would be almost 540 feet long with an estimated displacement of around 14,500 tons, and are expected to carry five medium and two heavy helicopters on a flight deck. What’s more, these vessels could potentially support limited operations of fixed-wing aircraft, including the F-35B warplanes which Singapore airforce is expected to purchase from the U.S. sometime in near future. Therefore, these vessels could potentially serve as aircraft carriers.

The RSN is also very well aware of the fact that wars these days are fought from a distant with the help of unmanned drones and unmanned vessels that carry cameras and weapons in order to see farther and respond quicker. Hence, the RSN plans to procure new vessels that will be having multiple unmanned air and surface vehicles to extend their reach and flexibility against threats. Take the eight new Littoral Mission Vessels (LMVs) for example. These LMVs will have a helicopter landing pad that will be able to carry an unmanned aerial vehicle. The aforesaid JMMSs and the new Multi-Role Combat Vessels (MRCVs) too will have unmanned air and surface vehicles.

Being Wealthy Helps

An Asian financial hub, the city-state of Singapore has a lot of wealth. The tiny landmass of the state and the already developed infrastructures allow the Singaporean government to allocate comparatively lesser wealth on infrastructures and other conventional sectors and to invest more on innovation and technology as well as defense and security. This is how the tiny state affords to make the quality defense procurements.

Singapore has been the Southeast-Asia’s largest military spender for several years now. Singapore was the top regional military spender in 2018 with an expenditure of US$10.8 billion and the Southeast Asian neighbour with the closest figures was Indonesia with an expenditure of US$7.4 billion. For 2019, Singapore has allocated US$11.4 billion for defense on its budget — something which amounts to about 19 percent of total government expenditures and around 3.3 percent of national GDP.

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