Walter Lohman, Mar 28, 2007
Southeast Asia’s half-billion people reside in the most dynamic area of the world. China, a rising economic and military power with an economy of more than $2 trillion and a population of over 1 billion, sits on their northern doorstep. India, another billion-person nation, is outside their western door. Japan, which has the world’s second largest economy, and South Korea, a country with such energy that it maintains an economy the size of India’s with only 5 percent of India’s population, are each a short flight away.
The Association of Southeast Asian Nations (Asean)—composed of Burma, Brunei, Cambodia, Indonesia, Laos, Malaysia, the Philippines, Singapore, Thailand, and Vietnam—faces the challenge of safeguarding its interests and prospering in this hypercompetitive neighborhood.
The United States has an overarching interest in seeing that it succeeds while also remaining independent and outward-looking.Securing this strategic imperative relies on two mutually reinforcing approaches to the region: bilateral and U.S.– Asean. While bilateral approaches to the countries are absolutely necessary, they are not sufficient. Without a coherent, robust U.S. approach to the region as a whole, the grouping will develop its common interests in association with alternative benefactors—likely China. In such a scenario, the interests of the U.S. and its partners in the region will drift apart.
The U.S. has too much at stake in the region to let this happen.Asean can be much greater than the sum of its parts. It can grow strong and remain independent, and it can be a reliable U.S. partner far into the future. It is this long-term vision that should be the basis of U.S. foreign policy aspirations.The purpose of this paper is to lay out the stakes involved, guidelines for securing them, and specific policy recommendations.
America’s Stake in Southeast Asia
The U.S. has major economic, political, and security interests in Southeast Asia.
Economic. The U.S. exports $50 billion in goods to Asean per year. Only Canada, Mexico, Japan, and the European Union (EU) are bigger markets for U.S. goods. U.S. private-sector investment in Asean exceeds $80 billion, surpassing U.S. investments in each of China, Japan, and India.
These numbers, while clearly significant in themselves, reflect U.S. interest in maximizing Southeast Asia’s economic performance. The better the performance, the greater the opportunity the U.S. will have to expand its stake; the greater that stake, the stronger will be the rationale for U.S.– Asean ties.
If the 1997 Asian financial crisis proved anything, it proved that global financial markets and convertible currencies impose an inescapable interdependence among national economies. Poor performance or financial crisis in one country can quickly affect U.S. economic and political interests elsewhere.Economic performance is closely correlated with economic freedom.
For 13 years, The Heritage Foundation has conducted an annual analysis that proves this thesis. The Index of Economic Freedom, published by The Heritage Foundation and The Wall Street Journal, systematically and empirically evaluates national economies on such things as ease of doing business, tariff and non-tariff barriers, property rights, corruption, and investment regimes. It uses data from internationally authoritative sources—the International Monetary Fund, World Bank, World Trade Organization, Transparency International, and others—to calculate a percentage rating for each country.
The Index has consistently ranked Singapore as the world’s second freest economy, behind Hong Kong. Malaysia and Thailand rank eighth and ninth out of the 30 countries in the Asia–Pacific region. Others in Asean do not fare as well, but all of them rank higher than China, except for Vietnam, Laos, and Burma.
As a region, Asean has a 55.2 percent rating on the economic freedom index, compared to China’s 54 percent rating.The U.S. has an interest in Asean’s improving its ratings, as does Asean itself. This dynamic economic interest makes the United States different from Asean’s other economic partners. It is not content with the status quo, working around difficult environments to make or sell more widgets. It seeks positive economic change by way of broader, deeper economic freedom.
Political Development. Democratic reform strengthens Asean and facilitates its relationship with the U.S. The U.S. has an abiding stake in how it develops.
The current state of democratic development in Asean is diverse, complex, and fluid. Freedom House’s annual index lists one Asean member country as “free,” three as “partly free,” and six as “not free.”
The 2006 coup in Thailand was a big blow to freedom. Although most the countries in the region are listed as “not free,” the number of people living in either “free” or “partly free” countries still outnumbers those in “not free” countries by 150 million.
Indonesia is the one “free” country in the region. Indeed, its political development since President Suharto’s departure in 1998 has been astounding. National parliamentary elections were held in 1999. In 2004, a total of 350 million votes were cast in three national elections, including the two rounds of the 2004 presidential election—the first direct election of the president. The final round involved 117 million voters—the “largest single day election in the world.”
And there is far more than just elections to Indonesian democracy, as any perusal of its daily press will affirm.In 2006, the Philippines and Thailand were downgraded from “free” to “partly free,” but the Freedom House categorization of the Philippines is debatable.
In the Philippines, the political debate, press coverage, and jockeying of politicians are vigorous. President Gloria Macapagal-Arroyo has been under constant, sometimes serious assault by opposition politicians.
The report is on firmer ground with Thailand. Since its 2006 downgrade, which was concerned primarily with the excesses of Prime Minister Thaksin Shinawatra’s democratically elected government, Thailand has taken yet another step backward with the September 2006 coup. It remains to be seen whether the generals will keep their commitment to return the country to constitutional democracy and elections by the end of the year.
Security. “Southeast Asia is the Front Line of the War on Terror in Pacom [U.S. Pacific Command]” is how Admiral William J. Fallon summed up his command’s perspective on Southeast Asia.Terrorism and insurgency are real, if manageable, threats in Southeast Asia.
Indonesia has faced major attacks including the Bali bombings of October 2002 and 2005, the 2003 bombing of the Jakarta Marriott Hotel, and the 2004 bombing of the Australian embassy. The Philippines is fighting Jemaah Islamiyah, the Abu Sayaf terrorist group, the Moro Islamic Liberation Front, the Rajah Sulaiman Movement, and an armed communist movement. Thailand has struggled to find a solution to a persistent insurgency in its far south.
The U.S. military is helping the region to fight terrorism by “building and strengthening the ability of countries in the region” to resist it. The Philippine armed forces’ recent success against Abu Sayaf in the southern islands is due in large part to close cooperation with the U.S. military.
All indicators suggest that the deaths of Abu Sayaf leader Khaddaffy Janjalani in September 2006 and his possible successor in January 2007 have significantly degraded the group’s strength.
The U.S. plays a critical role in helping the region combat terrorism. Americans know well from experience that allowing terrorists to operate in isolated circumstances halfway around the world can lead to tragic consequences at home.
In addition to its focus on counterterrorism, the U.S. military presence in the region is indispensable to hedging against a burgeoning Chinese military capability.U.S. security relations with Southeast Asia are centered around two treaty allies: the Philippines and Thailand. The U.S. holds major military exercises with both during the year. The U.S.–Thai Cobra Gold exercise is the largest U.S. exercise in Asia. “The May 2006 drill featured over 7,800 troops from the U.S. and 4,200 from Thailand.” Japan, Singapore, and Indonesia also participated.
The 2006 Balikatan exercises with the Philippines involved approximately 5,500 U.S. personnel and 2,800 Filipino personnel. With these exercises and others in the region, the U.S. improves the interoperability of its forces and those of its partners, improves joint response to emergencies, and enhances their military capacity. Joint military exercises are essential to joint readiness.
The U.S. also has a very close security relationship with Singapore. The U.S.-Singapore Strategic Framework Agreement covers cooperation in “areas such as counterterrorism, counter-proliferation, joint military exercises and training, policy dialogues, and defense technology.” Combined with Singapore’s first-class full accommodation of the U.S. Navy, the framework provides a perfect example of the “places, not bases” approach to aligning security cooperation.
Walter Lohman is Senior Research Fellow for Southeast Asia and Acting Director of the Asian Studies Center at The Heritage Foundation. This is an abridged version of his paper.