Workshop by Centre for Multilateralism Studies
Economic Security in ASEAN and Singapore
The subject of economic security has always been bandied about in academic discourse since the emergence of an interconnected world economy. With Singapore and ASEAN getting increasingly enmeshed in free trade agreements, and common market like arrangements, it is imperative to explore what economic security means for national governments today. The Donald Trump presidency of the USA imparts another timely momentum for inquiring after economic security. If the USA embodies the idea of zero-sum economic logics as the way forward into the twenty first century, it becomes even more urgent that Asians re-examine the degrees of openness needed to sustain growth and prosperity in the Asia-Pacific or Indo-Pacific. Contributors to this workshop will not only examine government-to-government trade and finance interactions, Small and Medium Enterprises and technological transfers will also be analysed in terms of how they can make or break conventional notions of economic security.
Programme can be found here.
1.1 ASEAN’s Economic Security: New Challenges for Regional Cooperation
Over the past thirty years, ASEAN has actively increased its level of integration to the world economy in a way to strengthen economic security. At the national level, several ASEAN economies initiated liberal economic reforms to boost their chances for economic growth and development. At the regional level, ASEAN has established multiple institutional and organizational mechanisms for enhancing regional economic integration and cooperation, as exemplified by the ASEAN Free Trade Area and the ASEAN Economic Community. ASEAN as a whole has been also actively strengthening its economic linkages to other global trading partners including the European Union, China, and many other countries in the Asia-Pacific region through a series of free trade agreements. Despite the rapid expansion of trade and investment chances, however, it is still not clear to what extent such efforts for ASEAN’s regional economic cooperation will enhance the ability of its member countries to project their political and economic power.
In this vein, this article examines newly emerging challenges that ASEAN currently faces: first, the rise of protectionism and the increasing rivalry between major powers that generate instability to the international trading system; second the clashes of domestic interests that slow down the implementation of liberal economic reforms. The author argues that ASEAN’s regional economic cooperation can maximize its potential as a vehicle for economic security when ASEAN unity efficiently signals regional stability to other trading countries and regional blocs, and serves as a mechanism that allows member countries’ credible commitment to cooperation and reforms. The role of political leaders in solving the conflicts of domestic economic interests and moderating economic nationalism will also be important.
1.2 Economic Security in the Mekong Subregion
The Mekong subregion has been witnessing the burgeoning of subregional cooperation frameworks in which Cambodia, Laos, Myanmar, Thailand, and Vietnam (CLMTV) have relied on to foster ties with external players. Against this backdrop, this paper examines the roles of economic security in affecting the Mekong subregional governance. It aims at answering a broad research question: “How does economic security shape international cooperation outcomes?” My argument is that the fact that regional states’ economic security is undermined or threatened by more powerful external actors triggers their desires to band together and restore such security. Using the Ayeyawady-Chao Phraya-Mekong Economic Cooperation Strategy (ACMECS) as a case study, I show how this grouping’s development has been influenced by economic security of CLMTV. Insights from this study not only enhance our understanding of the dynamics between economic security and subregional governance, but also help policymakers gauge the future directions of subregional cooperation and coin effective policy responses.
1.3 Economic Security in Southeast Asia – a Gendered Analysis
Thinking of social and economic development and growth in current times; we place it in the context of existing global challenges of trade protectionism, ageing societies, ongoing technological developments, environmental challenges, exhaustion of natural resources, and the increasing incidence of natural hazards. The impacts of each of these is highly gendered and will significantly contribute to widening inequalities and have long-reaching effects on social inclusivity, access to vital resources, labour migration patterns and even conversations around regional co-operation and security. But do existing discourses surrounding economic security in Southeast Asia embrace these challenges vis-à-vis gender differentials? This paper attempts to answer this question by examining gender gaps in (i) labour participation rates, (ii) vulnerable employment, and (iii) the impacts of technology and the productive potential of the labour force. How might ASEAN member states or ASEAN itself, as a regional governing body, respond to global challenges given these inequalities? In other words, how can a gendered economic analysis help the region establish and maintain economic security for its people?
1.4 The Internet and Economic Security in Asia: National Security as Profit
Although Christopher Dent (2001) articulates supply security as one of the pillars of economic security in his discussion of Singapore, and more broadly Asia, Internet security can be treated as an appendage of supply security. In this presentation I will argue that the Internet is socially and politically embedded in Asian states. This means that the Internet can be used by both private and public sectors for correcting market imperfections through surveillance and forewarning. Equally, because of this socio-economic embeddedness, the Internet economy will witness battles over format implementation such as those involving the installation of 5G networks. The conclusion will suggest that the Internet economy adds to how we comprehend the supply and intelligence dimensions of Economic Security.
2.1 Integrating into ASEAN to Enhance Business Opportunities
With economic uncertainty plaguing the world and rapid technological advancements becoming increasingly disruptive, Singapore’s economic security may be undermined with new economic problems emerging every day. As such, the Singaporean government has stepped up efforts to encourage Singapore-based companies to regionalise and integrate into the ASEAN region. This paper intends to examine why and how does the Singapore government promote regionalisation among the small and medium enterprises based in the city-state. This paper first examines the theoretical reasons behind SMEs being encouraged to venture overseas, namely the Melitz model of international trade, where productive companies can earn greater profits if they become exporters or investors to tap on the growing middle class in ASEAN and the liberalist argument of economic interdependence as a means to promote economic security. Using open-source trade figures, this paper finds that there is potential for greater economic integration within ASEAN and SMEs should utilise the growing links among ASEAN countries. This paper also highlights the underutilisation of ASEAN initiatives, especially in the digital market and how Singapore-based SMEs can tap on these frameworks to build up Singapore’s e-commerce capabilities.
2.2 Securitisation, Financialisation and Ethics in Finance
The character and state of a financial system are key contributing factors to the performance, stability and security of any economy, something which has been repeatedly demonstrated during times of financial crisis. While assessments of earlier financial crises tended to focus on shortcomings in the governance of financial sectors, not least when the crises occurred in the developing world, many noted issues with the moral character of the industry in the wake of the global financial crisis (GFC) of 2007. Against these recent criticisms, Islamic finance was pitched as a more ethical alternative. The religiously-informed features of Islamic finance and its products were juxtaposed against specific failures that were identified in the GFC (such as greed, and the processes of securitisation and financialisation), thus purporting to offer greater stability and security in finance, and the economy more generally. Although, Islamic finance holds the promise of a more ethical alternative to conventional finance, the industry itself has not been immune to processes of financialisation and securitisation, driven by developmental ambitions as well as possibly ethically questionable motives, that have arguably undermined the market’s initial promise. Thus, despite additional ethical and institutional mechanisms that restrain the perceived excesses of the financial industry, the Islamic finance industry displays the same broad competitive dynamics as those in the conventional sector, which colour the evolution and character of both markets albeit to varying degrees.
2.3 Technology Rules: The Case Of 5G affecting the Economic Security of a Country
The unprecedented high-level global campaign by the US government against the deployment of Chinese 5G equipment around the world highlights the importance of this technology on economic growth and economic security.
The presentation looks at the current state of the 5G technology and analyzes the industry from five perspectives: (1) The economic potential of 5G vs earlier generations mobile communication technology (2) Global 5G industry ecosystem (3) Global 5G deployment status (4) Current 5G technology landscape with discussions on 5G industry standard-setting, chipset and handset development (5) 5G business model development and the role of government regulation.
The 5G technology is going to be one of the disruptive General Purpose Technology underpinning the Fourth industrial revolution and affects the economic growth potential and security of all countries, not just for countries aspiring to be in the technological frontier. The entire 5G industry ecosystem is still in an early stage of development, and the industry pecking order in the 5G era is still evolving. The likely outcome will be decided by whoever can best integrate the 5G technology with economics and develop business cases to propel their national economic growth. History had shown that the economic merit of technology ultimately decides technology adoption and not geopolitical consideration.
Based on current publicly available information, we will argue that China had become a leading player in 5G technology, an astounding achievement from being a technology follower in the 1G and 2G era just twenty years ago.
The ASEAN countries must carefully monitor the 5G industry development on its national economic growth. In light of the technology rivalry between the two most important partners of ASEAN, US and China, they should also closely monitor the potential spillovers from the competition.
2.4 Overview of Chiang Mai Initiative Multilateralization (CMIM) / The ASEAN+3 Macroeconomic Research Office (AMRO) and the way forward
Since the Asian Financial Crisis began in 1997, the ASEAN+3 members have built a multilateral liquidity support arrangement in an effort to strengthen the regional self-help and support mechanisms and also to supplement the existing international arrangement. The Chiang Mai Initiative Multilateralization (CMIM) has provided liquidity insurance to members facing BOP and short-term liquidity crisis, which has been supported by regional surveillance and contingency planning by AMRO since 2011. Nonetheless, CMIM has not seen any drawings yet as it has not been requested by members. Its institutional framework, including its legal status, financing and funding mechanism, remains less centralized than peer regional financing arrangements (RFAs) such as FLAR or ESM. For more than 30% of each swap quota under CMIM, it appears to be seen as functionally dependent to decisions made by the IMF.
As RFAs emerged as a significant part of the global financial safety net (GFSN) after the global financial crisis, they became a research subject for many scholars. This paper tries to compare the main features of CMIM with other RFAs according to a series of academic suggestions for benchmarks of optimal RFAs in terms of mandates, legal basis and institutional framework, resources, financing and funding structure, and the IMF involvement. This comparative analysis is followed by brainstorming a number of agenda items for the future development pathways of CMIM. This will guide the CMIM members’ efforts to further develop the efficiency and reliability of the CMIM to serve as a regional guarantor of financial stability in East Asia.