ASEAN

Published on 07 Jan 2025

The Association of South East Asian Nations (ASEAN) was founded in 1967 by Singapore, Indonesia, Malaysia, Thailand and the Philippines with the aim of containing communism in their region. ASEAN countries have a total population of 662 million people and a combined gross domestic product (GDP) of $3.2 trillion. The group has played a central role in Asian economic integration, joining negotiations to form the world’s largest free trade agreement and signing six free trade deals with other economies in the region.

Contribution of ASEAN

• Regional Stability: ASEAN has been instrumental in fostering peace and stability in the region.

• Example:  Initiatives like the Treaty of Amity and Cooperation (TAC) and the ASEAN Regional Forum (ARF). has contributed to the resolution of conflicts 

• Economic Growth: With a collective population exceeding 630 million, ASEAN provides a thriving market for trade and investment, fueled by a burgeoning middle class.

• Example: The region's economic vitality is underscored by its status as the 4th largest exporter in world trade, showcasing its significance in the global economic landscape.

• Manufacturing and Trade Hub: ASEAN stands as a major hub for manufacturing and trade, offering a central platform for economic activities.

• Example: The strategic importance of the Strait of Malacca, a key shipping route in ASEAN, highlights its pivotal role in facilitating global trade.

• Cultural Diversity: The rich tapestry of cultures, languages, and religions within ASEAN creates opportunities for cross-cultural exchange and collaboration.

• Example: Cultural festivals and events across ASEAN nations provide avenues for fostering understanding and appreciation of diversity.

• Strategic Location: Situated at the crossroads of major trade routes, ASEAN's strategic location enhances its significance as a crucial hub for trade and commerce.

• Example: The strategic importance of the region is exemplified by its control over vital maritime routes, such as the Strait of Malacca, influencing global trade dynamics.

• Diplomatic Engagement: ASEAN has cultivat--ed strong diplomatic ties with major global powers like the United States, China, and Japan, leveraging its strategic position on the international stage.

• Example: The network of FTAs with countries like India, Japan, New Zealand, China, and South Korea demonstrates ASEAN's diplomatic prowess.  

Areas of cooperation between India and ASEAN

• Political

• Annual Summit: Engagement as a "Sectoral Dialogue Partner" and subsequent elevation to a "Dialogue Partner" and Summit level demonstrate the political commitment between India and ASEAN.

• Example: The Delhi Dialogue serves as an annual Track 1.5 forum, fostering political discussions on various issues between ASEAN and India.

• Defense and Security:  India's Indo-Pacific vision of Security and Growth for All in the Region (SAGAR) positions ASEAN at the centre of regional security.

• Example: Joint military exercises, like the ASEAN-India Maritime Exercise and the ASEAN Defense Ministers’ Meeting Plus (ADMM+)

• Economic

•  FTA: The ASEAN-India Free Trade Agreement (FTA) and the establishment of the ASEAN-India Business Council contribute to robust economic ties.

• Example: India's bilateral trade with ASEAN, reaching $110.4 billion in 2021-22, showcases the economic significance. India and Malaysia Agree to Settle Trade in Indian Rupees.

• Trade Pact: India and ASEAN agreed to conclude the review of their existing free trade agreement in goods by 2025. 

• Example: The pact is called the ASEAN-India Trade in Goods Agreement (AITIGA).

• Regional Connectivity: India is working on projects for connectivity between regions. 

• Example: Initiatives like the India-Myanmar-Thailand (IMT) Trilateral Highway and the Kaladan Multimodal Transit Transport Project aim to enhance economic connectivity.

• Funding: Financial assistance supports economic development in ASEAN countries and Indian states.

• Example: ASEAN-India Cooperation Fund, ASEAN-India S&T Development Fund, and ASEAN-India Green Fund

• Investment Partner: Singapore, India's largest trade and investment partner in ASEAN, serves as a vital offshore logistics and financial hub for Indian corporations in the Asia-Pacific region.

• Example: Singapore has attracted significant Indian FDI, and collaborations with Maharashtra and Rajasthan showcase its role in urban infrastructure development.

• Trade with Indonesia: India is the largest buyer of crude palm oil from Indonesia while exporting refined petroleum products, maize, vehicles, and various other goods.

• Example: Collaboration opportunities in the 5G field were suggested by the Vietnamese Minister of Information and Communications.

• Energy Cooperation: ASEAN is making efforts for opportunities in expanded grid integration.

• Example: ASEAN Power Grid align with India's 'One Sun-One World-One Grid' initiative

• Oil and Gas Exploration: Private Companies in India engage with ASEAN for oil and gas. 

• Example: Essar and ONGC Videsh, actively engage in oil and natural gas exploration in Vietnam, contributing to energy cooperation between India and ASEAN.

• Social

• Social and Cultural: Cultural exchanges enhance people-to-people ties.

• Example: Initiatives like the Students Exchange Programme, Special Training Course for ASEAN diplomats, and Exchange of Parliamentarians foster social and cultural bonds.

• Education and Research: The ASEAN-India Centre at the Research and Information System for Developing Countries (RIS) promotes educational and research cooperation.

• Example: Inviting ASEAN students to India each year for cultural exchange programs strengthens socio-cultural connections.

• Singapore: The significant presence of Indian expatriates in Singapore contributes to the cultural diversity of the country 

• Example: Ethnic Indians make up approximately 9% of Singapore's population, with Tamil being one of the official languages.

• Malaysia: The diverse linguistic background of Malaysian PIOs, including Tamil, Telugu, Malayalam, and Punjabi, enriches Malaysia's cultural landscape 

• Example: Malaysia hosts one of the world's largest communities of Persons of Indian Origin (PIOs), constituting about 7% of the population.

• Indonesia: India maintains active cultural centres in Jakarta and Bali, fostering cultural exchanges and strengthening ties between India and Indonesia.

• Cultural heritage: Increased cultural cooperation is observed through shared cultural elements such as Buddhism and Yoga.

• Example: The planned revival of Nalanda University, an ancient centre of learning, reflects a shared commitment to preserving cultural heritage.

Contribution of Indian Diaspora in ASEAN Region

• Malaysia

• Key Spheres of Influence: In Malaysia, the Indian diaspora holds significant influence in civil services, education, professional services, and trade and commerce.

• Economic Impact: The Indian community contributes approximately 2% to Malaysia's GDP, showcasing their substantial role in the country's economic development.

• International Trade: Their share in Malaysia's international trade is around 3%, highlighting their active participation in trade activities.

• Singapore

• Representation in Governance: Indians in Singapore are well-represented in the judiciary, executive, and legislative spheres, contributing to the governance and decision-making processes.

• IT Industry: The Indian diaspora fuels Singapore's IT industry with their expertise, playing a vital role in technological advancements and innovation.

• Scientific Research: Significant contributions are made to scientific research, particularly in areas such as biotechnology and medicine, showcasing the intellectual impact of the Indian community.

• Philippines and Indonesia:

• Role in Textile Exports: In the Philippines and Indonesia, the Indian diaspora has played a prominent role in the export of textile products, contributing significantly to their economies.

• Diverse Business Engagement: Sikhs, Tamils, and Sindhis engage in various businesses, contributing to the economic diversity and development of the region.

• Brunei:

• Human Resources Contribution: In Brunei, besides running businesses like mini-marts and small restaurants, Indians have filled human resources gaps, making a crucial contribution to the country's workforce and economy.

The Indian diaspora has played a multifaceted role in the South-East Asian region, contributing to various aspects of life, including governance, economy, trade, technology, and culture. Their diverse contributions underscore the importance of the diaspora in shaping and enriching the socio-economic fabric of the region.

Challenges Faced by ASEAN

• Implementation Gap: ASEAN faces criticism for being perceived as more talk than action.

• Example: It has been noted that less than 50% of ASEAN agreements are actually implemented. 

• Consensus: ASEAN's adherence to consensus and non-interference limits its effectiveness in addressing critical issues.

• Example: Handling crises in specific member states, like Myanmar, becomes challenging due to the organization's soft approach.

• Human Rights Dilemma: Lack of a common understanding of fundamental rights and the principle of non-interference hinder efforts to address human rights abuses.

• Example: ASEAN nations divided on condemning the Rohingya cleansing.

• Security Challenges: Maritime disputes, human trafficking, narcotics, refugee flows, and terrorism pose significant security challenges.

• Example: Disagreements persist on security issues despite diplomatic efforts, threatening ASEAN's unity.

• Mekong River Crisis: Disagreements on addressing the Mekong River's degradation reveal challenges in addressing environmental issues collectively.

• Example: Vietnam's attempt to prioritize the Mekong in 2020 faced resistance, highlighting differing member state priorities.

• Territorial Disputes: Political claims over parts of Malaysia by some Philippine politicians create tensions within the organization.

• Example:  Ongoing disputes like the Cambodian–Thai border issue strain unity among ASEAN nations.

• Economic Integration Struggles:  The lack of a common regulatory framework and economic disparities among member states hinder ASEAN's goal of economic integration.

• Example: Protectionist stances of member countries impede deeper regional integration.

• Business Environment and Corruption: Widespread corruption and entrenched interests of large conglomerates undermine the business environment, particularly hurting small enterprises.

• Example: The presence of powerful family-owned conglomerates adds complexity to the economic landscape.

• Geopolitical Tensions: ASEAN grapples with strategic competition between the U.S. and China, forcing member countries to navigate a delicate geopolitical landscape.

• Example: The region's struggle to find a joint response to China's rise threatens stability amid the U.S.-China rivalry.

• China's Influence: China's emergence as a major power creates internal divisions within ASEAN, particularly evident in territorial disputes in the South China Sea.

• Example: Disagreements over the South China Sea escalate tensions, with ASEAN members torn between their ties to China and the United States.

• Indo-Pacific: The release of the 'ASEAN Outlook on the Indo-Pacific' reflects the organization's challenge in balancing ties between the U.S. and China.

Challenges in India-ASEAN Relations

• FTA Challenges: India's trade deficit with ASEAN has increased over the years.

• Example: India's trade deficit with the region, which was $7.5 billion per annum when the pact was implemented, has since ballooned to $43.57 billion

• RCEP Withdrawal: India's withdrawal from the Regional Comprehensive Economic Partnership (RCEP) deal further influences the trade dynamics, affecting India's economic engagement with the region.

• China's Growing Presence: China's assertiveness and dominance in the South East Asian region surpass India's current level of engagement

• Example: Despite issues in the South China Sea, China is expanding its presence in the region through the Belt and Road Initiative (BRI), presenting a challenge for India.

• Delayed Infrastructure Projects: Political and financial constraints have impeded progress, affecting the potential benefits of enhanced connectivity.

• Example: The delay in completing crucial infrastructure projects, such as the India-Myanmar-Thailand trilateral highway and the Kaladan Multimodal Transit and Transport Project.

Way Forward

• QUAD+ Arrangement: The concept of QUAD (Quadrilateral Security Dialogue) can be expanded to include ASEAN countries, forming a QUAD+ arrangement.

• Enhanced Military Ties: India can play a significant role by strengthening military partnerships with ASEAN nations.

• Strengthening Cultural Connect: Mutual branding efforts can be undertaken to encourage tourism between India and ASEAN, promoting cultural exchange and fostering stronger people-to-people connections.

• Strengthen Connectivity: Focusing on improving land, air, and sea linkages will facilitate increased people-to-people flows, boost business, enhance investment, and encourage tourism.

• Common Interests in Forums: India and ASEAN countries can collaborate in international and regional forums such as the United Nations, East Asia Summit, and ASEAN Regional Forum to promote common interests and address shared challenges.

• Domestic Economic Measures: Addressing issues related to land and labour laws can create a business-friendly environment, particularly benefitting Micro, Small, and Medium Enterprises (MSMEs).

• Infrastructure: Expedite the conclusion of infrastructure projects to ensure better connectivity and create new avenues for export-import activities.

By pursuing these strategies, India can strengthen its ties with ASEAN, contribute to regional stability, and create a framework for broader cooperation in economic, cultural, and security domains.

Tags:
Polity

Keywords:
ASEAN Association of South East Asian Nations Brunei Darussalam Burma Cambodia Indonesia Laos Malaysia Philippines Singapore Thailand Vietnam ASEAN Defense Ministers’ Meeting Plus ADMM+ ASEAN-India Free Trade Agreement

Syllabus:
General Studies Paper 2

Topics:
Bilateral and Multilateral Relations