The launch of the Asean Economic Community on January 1 represented the next stage of the economic grouping's integration, and stands in stark contrast to the EU's progress.
The Association of South-east Asian Nations, or Asean, has the credentials to match any regional economic grouping in the world. Its 662 million people would make it the third largest country in the world after China and India, and its economy the seventh largest. More importantly, its gross domestic product has nearly doubled in the past eight years, and an impressive 24% of Asean trade is between members.
But Asean has something else that the EU, to which it is often compared, sadly lacks – it take a pragmatic, rather than an ideological, approach. The latest chapter in Asean’s development, the Asean Economic Community (AEC), was officially launched on January 1 and will be a key talking point at this year’s annual meeting of the Asian Development Bank in Frankfurt.
The AEC blueprint does indeed contain some of the key elements of the EU’s single market, such as free flow of goods, services, capital and labour. There is also emphasis on increasing competition, equitable economic development and further integrating Asean into the global economy.
Critics of Asean complain that the emphasis on individual sovereignty of its 10 members and its 'Asean way' approach of consensus and non-interference stymies any quick process of integration. But given the problems currently being experienced by the EU, a more powerful argument is that such factors are exactly Asean’s strength.
Over-ambitious projects such as a single currency are non-starters in Asean, especially in the light of the eurozone crisis. Region-wide institutions such as the European Parliament are also ruled out. But where Asean has learned from the EU is in setting clear goals and timelines for integration, with an AEC scorecard to keep track.
Sharp differences in economic development pose challenges for Asean, as they have done for the EU. Members such as Myanmar, Cambodia, Laos and Vietnam are considerably behind the more advanced economies of Singapore, Malaysia and Thailand. Sensibly Asean has placed emphasis on moving skilled labour between the members rather than the completely open borders that have caused so many difficulties in Europe.
Asean is moving ahead from a position of strength. It can show huge gains from its initiatives and is not nursing the pains of substantial failures. The EU, by contrast, has to acknowledge its failures before it can move to repair them – this it has so far avoided doing.
