Think about Southeast Asia and you’re likely to think about beautiful beaches,
street food, and even traditional architecture like this.
But here’s the economic reality – this holiday destination has emerged as a leader
in global growth and is being courted by all the major powers, especially the United States and China.
So how did a group of emerging economies draw the attention of the superpowers?
That’s where Asean comes in.
The association of Southeast Asian nations, more commonly known as Asean,
marked its 50th anniversary last year.
Asean was born out of the superpower rivalry between the U.S. and the then-Soviet Union.
It was founded during the height of the Vietnam War by five countries,
Thailand, Indonesia, the Philippines, Singapore and Malaysia.
Its purpose was to promote stability and contain the influence of communism during the Cold War.
After the Cold War ended, five other countries, Brunei, Vietnam, Laos, Cambodia and Myanmar joined,
rounding off the 10 members of Asean today.
The alliance seems to make sense because all the countries are in the Southeast Asian region.
But it’s crucial to think of Asean as being more like this Indonesian gamelan orchestra.
Everyone plays a different instrument.
For instance, Indonesia represents nearly 40% of the region’s economic output, while
the GDP per capita of Singapore, the highest in the 10, is 24 times higher than that of the lowest, Cambodia.
But as a group, Asean is a powerhouse.
It’s the sixth largest economy in the world, on par with the United Kingdom and ahead of France and India.
It’s poised to be the world’s growth engine as Asean countries,
like Vietnam and the Philippines, boast phenomenal growth rates.
Last year, Asean’s growth reached a five-year high of 5.2%.
The group’s fast growth has drawn interest from businesses.
The EU is Asean’s biggest investor, while China is its biggest trading partner.
While foreign direct investment to Asean fell in 2016,
overall investment from the EU rose by 46% to $30.5 billion,
while Chinese investment rose by 44% to $9.2 billion.
Those ties look set to grow.
Asean has the world’s third largest labor force of more than 600 million people,
behind China and India, but ahead of the EU and U.S.
More than half of Asean’s population is below 30 years old and they love going online with their mobile phones.
Southeast Asians spend more time than on the mobile internet than anyone else on the planet.
That’s why tech giants like Google, Facebook and Alibaba are scrambling for a share of
Asean’s digital economy, forecasted to grow to $200 billion by 2025.
But Asean is about more than just business.
The group was founded amidst a superpower rivalry, and it still finds itself in the middle of one today.
China claims almost all of the South China Sea, while four Asean nations have competing claims.
While the U.S. says it doesn’t take sides in territorial disputes, it has sent ships
and planes near contested islands, calling them freedom of navigation operations.
This year, it sent one of its nuclear-powered super aircraft carriers into Vietnamese waters
for the first time since the end of the Vietnam War.
China followed with the largest naval display of its kind.
Asean countries risk becoming pawns for the superpowers in this dispute,
and the South China Sea issue has been particularly divisive.
In 2012, the ten states failed to issue a joint statement for the first time in its history
because the nations couldn’t agree on how to deal with China’s claims.
But the calculations of Asean states are ever-evolving.
Just over a year ago, the Philippines fought China in an international legal case.
But new Filipino president Rodrigo Duterte has pursued stronger ties with China,
straining those with its longstanding ally, the U.S.
China’s growing clout is unnerving some Asean countries.
Indonesia, which doesn’t even have a claim in the South China Sea, is now lobbying Asean to patrol its waters.
Some Asean countries have allied themselves with one of the superpowers,
but others, like Singapore, have substantive ties with both.
We hope not to have to pick sides.
The U.S. and China have long been dominant in this region,
but many other countries are looking to deepen their relations with Asean.
Earlier this year, India invited Asean leaders to its annual Republic Day celebrations for the first time.
Last month, Australia and Asean held an unprecedented joint summit.
This year, Singapore is the Asean chairman and hosts the Asean Summit in April.
And it has a challenging year ahead, as Asean and China begin talks around adopting
a code of conduct in the South China Sea.
As tensions escalate, Asean will be looking to safeguard its economic growth
and carefully navigate, as it’s always done, between two major powers.
Hi everyone, it’s Xin En. Thanks for watching.
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