Caught in the middle? Not necessarily Non-alignment could help Southeast Asian regional integration

By Xue Gong
Xue Gong is Assistant Professor at the S. Rajaratnam School of International Studies (RSIS), Nanyang Technological University, Singapore.

Republished in South China Morning Post: https://www.scmp.com/week-asia/opinion/article/3201804/how-asean-can-bridge-us-china-gap-and-reap-economic-benefits-amid-potential-flashpoints

DECEMBER, 2, 2022

Southeast Asian states must resuscitate ‘non-alignment’ foreign policy as a middle path in great power competition.

Political elites across Southeast Asia see the United States and China as two poles, pulling their countries in opposite directions. In Washington, the bipartisan consensus is that China is a rival that is intent on chipping away at the US’ global leadership. China has indeed been steadily expanding its economic influence in Southeast Asia. It is ASEAN’s biggest trading partner, and has visibly entrenched itself in the region through its Belt and Road Initiative (BRI). China also strongly supported ASEAN’s Regional Comprehensive Economic Partnership (RCEP) initiative and played a key role in stitching it together. This has further motivated Asian economies to embrace China’s leadership in regional integration. To counter China’s regional influence, the US has been setting up a variety of geo-economic tools. For instance, the US launched the Indo-Pacific Economic Framework (IPEF) while pursuing decoupling from China.

ASEAN has long-standing economic and security ties with both China and the US that may seem to be at odds with each other. For instance, even as they seek to enhance economic ties with China, a few key ASEAN member states such as Thailand and the Philippines remain part of the US security structure in the Indo-Pacific. Moreover, the region has many potential flashpoints—such as the territorial disputes in the South China Sea—that may intensify conflict between the two great powers.

Under such circumstances, how can ASEAN achieve greater economic integration at a time when China-US economic competition is heating up? What possible steps can ASEAN take to reap economic benefits and bridge the growing gap between the US and China?

In search of a middle way

For ASEAN to re-assert its centrality and unity, a more pragmatic and issue-based approach to regional integration is required. One way is for the region to consider spearheading a new movement supporting a ‘non-alignment’ foreign policy.

The Non-Aligned Movement (NAM) of the Cold War era was pursued by mostly Global South countries seeking independence in the event of a confrontation between the United States and the Soviet Union. Similarly, in today’s context of great power competition, non-alignment will enable Southeast Asian countries to advance their interests without tying themselves unconditionally to the preferences of great powers.

The prospect of such a movement should instinctively appeal to small and middle powers in the region, which have been searching for ways to defend their interests together in the face of great power competition. Singapore has already explicitly expressed its interest in taking a nuanced approach of non-alignment. Indonesia—with its legacy of leading the NAM in the 1955 Bandung Conference—has taken the lead in crafting regional policies such as the ASEAN Outlook on the Indo-Pacific, which reasserts ASEAN’s centrality and preference for dialogue and cooperation over rivalry. 

The first tenet of non-alignment foreign policy is diversification. Individual Southeast Asian states have taken steps to diversify their stakes to secure their interests. In the area of regional connectivity, for example, Southeast Asia has been seeking out more partners to help fulfil its need for regional infrastructure. Besides China’s BRI and Japan’s Partnership for Quality Infrastructure, Southeast Asia has also explored multiple platforms to enhance regional integration, such as the ASEAN-Europe agenda on Connectivity and ASEAN Regional Integration Support from the EU (ARISE) Programme. Indonesia has even secured better deals on developmental projects (such as the Jakarta-Bandung Railway) due to China and Japan’s competition for influence.

The second tenet of non-alignment foreign policy is pursuing regional integration independent of external influences. By keeping regional dialogues open and by leveraging their strategic value for economic gains, ASEAN member states have been able to work together with various regional stakeholders in strengthening regional economic integration. One prominent example is the ASEAN-centred RCEP.

ASEAN member states have also contributed individually towards regional integration. For example, Singapore, together with various Southeast Asian fellows, has participated in economic governance standard-setting on multiple platforms, including the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). Although not all ASEAN members joined the US-led IPEF (which is not a free trade agreement), the participation of these ASEAN member states indicates the presence of opportunities for small and middle powers to co-write regional economic rules and improve their political economy to attract foreign investment.

The final tenet of non-alignment foreign policy is carving out a resilient development plan. Its Cold War forerunner originated from a clear ideological confrontation between the East and West. Today, the ideological rift is not so obvious. Instead, the new non-alignment foreign policy is rooted in globalisation, a market-driven principle that keeps the regional economy thriving.

As a result of globalization and regional integration, regional states benefit from increasing interconnectedness. Compared to the Cold War period, today’s non-alignment foreign policy will enjoy greater resources from such interconnectedness. After the Cold War, the region reaped benefits from the free-market principles that enable the growth of an efficient regional market which is supported by interconnected logistics, supply chain and vibrant capital flows. Because they prospered from regional integration, Southeast Asian elites understand more than anyone else the importance of an open regional economy that attracts private investment and mutually beneficial trade relations.

With its commodities, diverse markets and 680 million consumers, Southeast Asia is increasingly attractive to foreign investors. For example, the Southeast Asian digital consumer population is growing steadily and is forecast to reach 370 million by the end of 2022. Regional digitalisation presents investment opportunities in areas such as education, fintech, healthcare, logistics and more, resulting in a greater flow of foreign direct investment into the region. The huge market potential further empowers the regional non-alignment stance. Due to the economic gains they have made through regional integration, Southeast Asian states have become less vulnerable.

Regional integration is not merely about the economy but also about security. The economic disruptions arising from the global health crisis and from geopolitical tensions in the Russia-Ukraine war are a strong signal that states should strengthen their capacity to absorb shocks. While pursuing a non-alignment foreign policy, ASEAN members should eschew self-isolation and protectionism, and instead continue to enhance economic openness and interconnectedness as well as multilateralism. A strong, attractive and densely-connected Southeast Asian market would increase other countries’ stake in the region—including that of the great powers.

In the far more globalised world of the 21^st century, a new non-alignment foreign policy can allow Southeast Asia to facilitate interaction between the rival blocs. Of course, mediating between the two powers would be challenging for any country. But by taking the lead to set regional standards, ASEAN member states could gain more leverage amid geopolitical tensions.

---

The views and opinions expressed in this article are those of the author(s) and do not necessarily reflect those of the Asia Research Institute, National University of Singapore.