K. Palonka: ASEAN small countries. Gathering under Chinese umbrella

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K. Palonka: ASEAN small countries. Gathering under Chinese umbrella

Latest ASEAN summit attended directly, after G-20 summit in China, by US president Barak Obama (his first visit to Laos) was not very successful. Neither for USA, when Philippines president Rodrigo Duterte directly attacked USA attitude in the region, nor for ASEAN organization as a whole. There are different interests and different attitudes of ASEAN countries politically and economically as well.

Economy dominates position of small states of ASEAN and no doubt China is behind their actions. One of most significant events was the unexpected visit of Myanmar unofficial leader in China.  As Myanmar’s National League for Democracy (NLD) found out following its victory at the polls last year, the natural inclination for “pro-democracy” parties to gravitate closer to the United States proves problematic when in power. That Suu Kyi chose Beijing, not Washington, as the first major capital she visited after the NLD’s victory meant a great deal. All countries in the region; Singapore, Taiwan, Vietnam, and Malaysia would be first to feel changes in China. Even South Korea is sensitive.

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Indonesia, India and the Philippines are rather more immune, based on trade, tourism and investment links.

Tourism is an important factor linking the fortunes of Asia’s smaller economies to their regional giant. In 2015, the number of Chinese outbound tourists climbed 14.5 percent to 35.4 million, according to the China Outbound Tourism Research Institute. They spent $235 billion in 2015, and most Chinese tourists prefer to holiday in Asia with 60 percent of the trips to the region. This is „heightened sensitivity” because that demand can rub both ways, 20 percent Chinese tourists to Vietnam decreased last year after the two nations were in dispute over territories in the South China Sea.

Another link comes from China’s projects like the “One Belt One Road” (OBOR) initiative and the Asian Infrastructure Investment Bank AIIB. As China delivers decent money into the region, partly to export excess capacity, it’s also increasing its soft power.

Already in June, China forced ASEAN to moderate a strongly-worded statement on the South China Sea dispute, irking many of its regional partners. (It did the same in 2012.) A few days later, China promised Cambodia another $600 million in aid and loans.  (Prime Minister Hun Sen claimed the accusations that his government was ‘bought’ was not “fair for Cambodia,”)

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Since developing infrastructure entails a huge amount of financial resources, countries prefer to be in the good books of China who has recently been enticing the smaller developing countries of ASEAN with infrastructure development schemes such as One Belt, One Road (OBOR) and the Asian Infrastructure Investment Bank (AIIB).

On 24 June 2016, the board of AIIB approved $509 million in investments for its first four projects, three of which are co-financed with the World Bank, the ADB, the United Kingdom Department for International Development, and the European Bank for Reconstruction and Development.  These projects concern power grid upgrades in Bangladesh, slum renovation in Indonesia and highway construction in Pakistan and Tajikistan.

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Since any serious decision within ASEAN is supposed to be accepted unanimously, no hope there would be one against China. For all their imperfections, ASEAN countries are the only visible structure in the region, although with a heap of problems and a variety of structures. They, nevertheless provide a rare opportunity for global leaders to build trust in bilateral meetings rather, on the sidelines. And, for ASEAN, a minor of influence is preferable to none at all.

ASEAN countries need to allocate more resources to regional integration and put regional initiatives at par with their domestic agenda. This will strengthen ASEAN in face of the common external challenges. What is apparently visible – China has resources to help many of their economic issues to be solved. The question is NO EXTRA CONDITIONS?

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K. Palonka: ASEAN small countries. Gathering under Chinese umbrella Reviewed by on 15 września 2016 .

Latest ASEAN summit attended directly, after G-20 summit in China, by US president Barak Obama (his first visit to Laos) was not very successful. Neither for USA, when Philippines president Rodrigo Duterte directly attacked USA attitude in the region, nor for ASEAN organization as a whole. There are different interests and different attitudes of ASEAN

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O AUTORZE /

Absolwentka SGH (dawniej SGPIS), doktorat z ekonomii na Politechnice Warszawskiej (PW). Wieloletni Wykładowca na Politechnice Warszawskiej, następnie pracownik Instytutu Studiów nad Japonią w Stockholm School of Economics i Centrum Badań Ekonomii Chin tamże. Spędziła kilkanaście lat na wielu uniwersytetach Dalekiego Wschodu, między innymi w Australii, Chinach, Japonii, Korei, Wietnamie i Singapurze. Po powrocie do Polski, pragnie włączyć się w nurt badań a także popularyzacji wszelkiej wiedzy o krajach Azji Południowo-Wschodniej i ich kontaktach z Polską.

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