Challenges to SE Asian resilience

By Juwono Sudarsono

This is the first of two articles on Southeast Asia based on a paper presented at the 30th Anniversary of Indonesia Petroleum Ltd., (INPEX) in Tokyo on Sept. 25.

TOKYO: At the threshold of the 21st Century, it is worth remembering that in the past 30 years the Southeast Asian region was fortunate enough to have been at the center of the East Asia economic growth process. At the strategic level, Southeast Asia's success was the result of the successful Japanese-U.S. partnership which helped transform the area from an arena of Cold War confrontation to a model of regional cooperation and North- South dialog between rich and poor countries.

From SEATO in 1954 to the ASEAN Regional Forum (ARF) in 1994, the trajectory of regional stability and economic cooperation was made possible by the underpinnings: Japan's powerful economic "pull" to the region since the mid-1960's; the accelerated growth of the economic tigers of Northeast Asia in the 1970s and the subsequent economic growth of the ASEAN grouping beginning in the early 1980s. Japan provided the economic underpinning whilst the United States assumed the strategic nuclear and conventional assurance. From the Japan-U.S. Treaty in Northeast Asia down to the ANZUS grouping in the South Pacific, the ensuing arc of security and development survived the many crises and tensions of the Cold War and post-Cold War era. What the United States lost in Vietnam is gained in ASEAN.

The Japan-United States connection is important because the future course of Southeast Asia in the 21st Century may well depend on how the countries in that region follow through on the success of building a more coherent Southeast Asian identity. In fact, ASEAN's success is currently being tested in the distinct but intertwined twin processes of APEC/AFTA and the ARF. Can the economic growth of the countries in the region, which had been geared for 30 years to exporting more than 35 percent of its products to the United States and Japan, survive the shift toward more than 37 percent intra-regional trade within the East Asian and Southeast Asian context? Can strategic stability survive the retrenchment of American military interest and rising East Asian nationalism?

Southeast Asia's success has been a product of its geo- strategic importance, its abundant and varied natural resources and its potential as vibrant markets for the Japanese and American economies matching both opportunity and self- advancement. That success has also been underpinned by the constant flow of 60 percent of energy resources from the Middle East, allowing key economies such as Thailand, Malaysia, Singapore, Indonesia and the Philippines to benefit from the Japanese economic powerhouse and American military power.

Success breeds success. The original "ASEAN-5" now aims at incorporating all of Indochina and Myanmar into "ASEAN-10" by the year 2000. But success brings new strategic imperatives and new priorities to the forefront. After 30 years of regional economic cooperation based on the trinity of political stability, economic growth and social justice, a new generation of Southeast Asians are now taking charge of their governments and their economies. These young leaders, officials in government and the military, professionals and technicians in the private sector are only too aware that the region must play a more assertive role in facing and cooperating with the great powers -- China, Japan, the United States and Russia.

In the past, Southeast Asian leaders were aware that the great powers tended to view the region as an area of secondary strategic importance, and to a degree that view may politically still be valid. But the imperatives of geo-economic interaction and more importantly, global business activity, make it inevitable that the region will play a more significant role in determining the terms and conditions of trade, investments, finance and human resources. Certainly Southeast Asians would not want their region to remain mere recipients and consumers of products and services provided by powerful external powers and their multinational corporations.

Another important dimension is that the energy market in the region is changing fast. In the past, energy requirements were met from the Middle East and supplemented by local production, principally from China and Indonesia. But in the next 15 years, the Malacca and Singapore Straits, as well as the Lombok and Makassar waterways, will see two to three times the current amount of oil traffic from the Gulf. By the year 2010, it is estimated that the dependence ration will reach 60 percent of OPEC-produced oil. Barring new oil strikes in the South China area, this means that many countries in Southeast Asia will have to reach agreements on security which would guarantee the flow of energy to Southeast and Northeast Asia.