Asean Meets to Strengthen Ties as U.S., China Vie for Influence

By Daniel Ten Kate
Source: Bloomberg.com

July 20 (Bloomberg) -- Southeast Asian foreign ministers met to strengthen ties before a broader gathering this week to discuss security threats in the region with the world’s fastest- growing major economies.

“Effective action must replace extended deliberation,” Thai Prime Minister Abhisit Vejjajiva said in an opening address in Phuket, Thailand, where the meetings are being held. “We must show to the world that Asean is ready to meet any challenge and is well prepared to act decisively.”

Top diplomats from the 10-member Association of Southeast Asian Nations are meeting this week to further their goal of forming a European Union-style economic alliance. U.S. Secretary of State Hillary Clinton will join them in two days for the Asean Regional Forum, where 27 nations representing half the world’s population will discuss security issues such as North Korea’s nuclear program, border disputes and terrorism.

The U.S. and China are competing for influence in a resources-rich region that contains sea lanes vital for carrying oil from the Middle East to China and northeast Asia. The adoption of a charter last year has fortified Asean’s structure even as individual members struggle with recession, political upheaval and terrorism.

Wide economic disparity among the countries has made it difficult to leverage the group’s market of 575 million people in vying for investments with China and India, the world’s fastest growing major economies. Abhisit said the bloc should “continue to nurture a culture of concerted action” in order “to reinforce Asean’s centrality.”

Swine Flu, Currencies

Abhisit called for cooperation in making vaccines for swine flu and lauded the group’s completion in May of a $120 billion foreign-currency reserve pool to help revive investor confidence. The pool, formed with China, Japan and South Korea, widens access to foreign-exchange reserves and allows Asean countries to defend their currencies.

Foreign direct investment into Asean fell 13 percent last year to $60.1 billion, according to the group’s official statistics. China attracted a record $92.4 billion last year, excluding the financial sector, and has since seen overseas investments decline each month this year as companies pare spending to weather the global financial crisis.

Export-dependent countries like Thailand, Singapore and Malaysia are all facing recession as the global slump crimps demand for electronics, cars and computer chips. Indonesia, which has avoided recession because of a stronger domestic economy, suffered a blow last week when suicide bombers killed nine and wounded 53 in attacks at two U.S.-run luxury hotels.

Purchasing Power Disparities

Southeast Asia’s four largest economies -- Indonesia, Thailand, Malaysia and Singapore -- account for almost 80 percent of all foreign investment into Asean. The purchasing power of the group’s four richest countries was 10 times greater than the other members last year, according to statistics on the bloc’s Web site.

“We should begin to think about what type of community we want to see,” Abhisit said. “In a region as diverse as Southeast Asia, I am sure our ideas will be varied but I hope as we get to the year 2015, our ideas will converge.”

Internal political fights in the 10-member bloc have disrupted the region’s efforts to integrate and stymied progress on a human rights body. An April summit of Asian leaders in Pattaya, Thailand, was canceled midway through after anti- government protesters who wanted Abhisit to resign stormed the meeting venue. Thailand has beefed up security this week.

Human Rights Body

Asean foreign ministers today hope to complete the details of a human rights body that has no mandate to investigate country-specific issues, according to Thai Foreign Minister Kasit Piromya. The commission reflects a “maximum consensus” among member states and its powers will be reviewed every five years, he said.

Since its founding in 1967, Asean made decisions mainly by consensus, refusing to comment on affairs of individual members. Two years ago the bloc’s leaders signed a charter, the group’s first legally binding document.

Governments found to be in violation of its rules will be referred to Asean leaders to come up with a consensus on action. The group rejected proposals to add voting, expulsion or sanctions on its members.

Asean includes Indonesia, Thailand, Malaysia, Singapore, Brunei, the Philippines, Cambodia, Laos, Myanmar and Vietnam. Thailand holds the rotating chairmanship until December.

To contact the reporters on this story: Daniel Ten Kate in Cha-am, Thailand at dtenkate@bloomberg.net;