EAGA: Charting the linkages

EAGA: Charting the linkages

By Pushpa Thambipillai

The East ASEAN Growth Area (EAGA) seems set to proceed on a
shared but varying pace of cooperation.

SINGAPORE: According to an Indonesian minister, his country's
vision is to ensure that at least 18 of its provinces will be
involved in some form of growth triangle with its neighbors. It
is no surprise then that Indonesia (like Malaysia) is currently
in all three growth areas in ASEAN: the Indonesia-Malaysia-
Singapore Growth Triangle (IMS-GT), the Indonesia-Malaysia-
Thailand Growth Triangle (IMT-GT) and the Brunei-Indonesia-
Malaysia-Philippines East ASEAN Growth Area (BIMP-EAGA).

The BIMP-EAGA is particularly significant in that Indonesia
dominates in terms of the participating provinces - 10 out of the
16 members come from the Indonesian provinces of Kalimantan,
Sulawesi, Maluku and Irian Jaya. But numbers alone may not be the
answer to a successful growth area; while IMS-GT started off with
three members, EAGA took off with three times that number.

The East ASEAN Growth Area (EAGA) was set up in March 1994,
largely on the initiative of President Ramos. He had persuaded
the leaders of Brunei, Indonesia and Malaysia to develop the
eastern parts of ASEAN through collective efforts. Of special
interest to him were his own depressed regions in southern
Philippines beset by poverty and insurgency.

Manila on its own was unable to deliver the much needed
economic package. An attractive option was to cooperate with the
neighbors to promote cross border trade and investment.

Thus was born EAGA, originally grouping Brunei, West and East
Kalimantan, North Sulawesi, Sabah, Sarawak, Labuan, Mindanao and
Palawan, to be joined by seven other Indonesian units in July
1996 (two each from Kalimantan and Sulawesi plus Maluku and Irian
Jaya). The Indonesian minister cited above was no doubt taking
note that all of Kalimantan, Sulawesi, Maluku and Irian Jaya were
linked up with the neighboring provinces of ASEAN - a move to
supplement its national development efforts.

While the three years since its inception is a short time to
assess the impact of sub-regional cooperation, it is illustrative
of the direction EAGA has adopted. A modest level of joint
activities is underway. But the main focus is still on charting
the framework for substantive cooperation.

The Asian Development Bank has completed a major study
identifying areas for collaboration. The "getting to know you"
agenda seems to be of prime concern. A mini ASEAN is already in
the making; to date, EAGA has held numerous meetings and trade
expositions. Where ASEAN failed to integrate the far reaches of
the association into its mainstream activities, EAGA is
attempting to do so; where ASEAN only looked at the capital
cities or posh resorts for its gatherings, EAGA is convening in
far off destinations, thereby exposing other ASEAN areas of
interest to the tourist world - Manado, Davao, Kota Kinabalu,
Kuching, Balikpapan and Puerto Princesa - to cite a few.

Like the other two ASEAN growth triangles, EAGA does not have
a central secretariat.

Instead its policy proposals are coordinated through a series
of meetings in different locations, at the ministerial and senior
officials levels, with participation from the private sector as
well.

The various regional chambers of commerce established the East
ASEAN Business Council (EABC) in November 1994, leading to the
establishment of a Secretariat in Bandar Seri Begawan in 1996;
half of EABC's operating cost is borne by the Brunei government.
EABC's task is to encourage cross border investment by collecting
and disseminating information. Representation from the various
members' private sectors is now a permanent fixture in all the
committee meetings as they are the vital component of any growth
area strategy.

Public-sector backing and private sector-led growth is the
slogan of the growth area. But will it move further than
sloganeering? EAGA extends from West Kalimantan in the west to
Irian Jaya in the East, stretching for about 3,500,km in length
and 2,000,km in width.

One wonders if there is anything in common between Palawan in
the north and Jayapura in the south or Kuching in the west and
Ternate in the east.

While the grouping represents a population base of 40 million,
it also depicts extremes in income distribution, from about
US$16,000 in Brunei, the third highest per capita income
state in Asia, to about US$40 in the least developed areas of
Indonesia where subsistence economy is the norm.

The abundant natural resources alone will not propel the
ambitious target areas of cooperation that the policy makers have
adopted. The sub-region has lacked a consistent pattern of formal
political interactions, transport and communication links,
trained labor force and an enterprising entrepreneurial community
that could look beyond its national borders.

The private sector's lack of a regional business strategy is
not entirely to blame; the various provincial governments have to
concentrate on their respective territories in line with national
directives from their centers of power. Direct official links,
even if they affect the subregion need to originate from the
centers of BIMP before descending to EAGA. A reduction of the
strict control from the center would assist in a more effective
sub regional cooperation for mutual benefit; on the other hand,
central assistance in terms of political and economic
contribution is crucial.

Expansion

Expansion of air and sea linkages, fisheries cooperation and
joint tourism development have been targeted as priority areas
for cooperation. There are nine other areas for cooperation:
construction, agroindustry, capital formation and financial
services, forestry, telecommunications, energy, people mobility,
human resource development, and environmental protection. The
expansive area under EAGA would definitely need more lines
of communication if the goals of EAGA's framers are to be
realized - to facilitate the freer movement of people, goods and
services.

Infrastructure development in transportation is seen as a
basic requirement for EAGA to succeed. For example, on the island
of Borneo, a coastal road link has been lacking because of gaps
in certain sections. Over the past six months, there has been
political interest to ensure that the Pan Borneo Highway becomes
a reality within the next five years. The positive attitude could
have been inspired by the proposed rail link from Singapore to
Yunnan, a much more complex scheme than the Borneo road link.
Direct air links are also under study; government and business
leaders while planning their itineraries realize the cumbersome
methods of having to fly to a capital city in order to reach a
neighboring one.

Improved air links will spur tourism and people mobility,
especially migrant labor moving from the exporting to the
importing regions.

A visible phenomenon is for micro geo-economic entities to
emerge, clustered around contiguous urban centers. Capitalizing
on common interests and physical proximity, air/sea linkages and
tourism are advancing urbanization in EAGA. Miri-Bandar Seri
Begawan, Kuching-Pontianak, Davao-Manado, are a few of the paired
centers that are beginning to record shared activities.
Consequently, the more distant and isolated areas would be left
behind and not drawn into the linkages, thereby remaining on the
periphery of EAGA, as they have in pre-EAGA time. That could
further divide the developed EAGA from the undeveloped EAGA.

Successful growth areas thrive on existing patterns of
interaction. Within EAGA, one can see historic and cultural links
being strengthened along the Sabah-Brunei-Sarawak corridor.

It is inevitable that familiar affinities will take precedence
while other opportunities will emerge for the other areas. They
could be the providers of labor and other resources to the
developed corridors and thus participate in enjoying the spill
overs, rather than seeking an equitable share of the action,
hoping for investment and jobs to arrive. Like the concept of
the 6-X formula in ASEAN or the staggered application of CEPT in
AFTA, EAGA seems set to proceed on a shared but varying pace of
cooperation.

The size of the participating units or the number of MOUs
signed will not by themselves contribute to the success of the
EAGA. The political will for policy reform, a transparent
economic system and a positive attitude on the part of
entrepreneurs both from within and outside to engage across
borders will be crucial for the dynamism of the sub-region.

The writer teaches Politics and International Relations at the
Department of Public Policy and Administration, Universiti Brunei
Darussalam.

Window: Within EAGA, one can see historic and cultural links
being strengthened along the Sabah-Brunei-Sarawak corridor.