Southeast Asia: The Sum of Its Parts



Summary

The Association of Southeast Asian Nations turns 50 this year, and at no point in its history has the region it represents been more attractive to outside powers or more indispensable to the global system than it is today. The 10-member bloc’s combined gross domestic product is on pace to reach nearly $3 trillion. It receives more investment than China, the country in whose shadow Southeast Asia has historically lived, and boasts a humming manufacturing sector manned by low-cost workers. Its position gives it stewardship over some of the world’s most prolific trade routes and makes it strategically valuable to navies vying for control of the increasingly crowded waters of the Western Pacific. It has become the front line in the competition between the United States and China. It is globally relevant in the fight against terrorism. 

And yet Southeast Asia is best described not as a coherent region but as a loose affiliation of disconnected states, economically disjointed, physically separated by hostile border regions and, to varying degrees, indifferent to the problems of their neighbors. With no central leadership, the region cannot execute a common strategy, act decisively in times of crisis or project power in any meaningful way. Vast economic disparities and divergent strategic interests wrought by geography tend to undermine collective attempts to redress these problems. 
And so ASEAN struggles to become more than the sum of its parts, all but powerless to shape a global system in which it is becoming a more important part. Their fates will, to different degrees, depend on how outside powers use them as they compete for regional influence. The following report explores why this is so and explains how the region will respond to the coming challenges it cannot escape. 
 
Separate but Unequal
The defining feature of Southeast Asia, historically as today, is geography. The region’s countries pockmark shipping lanes that link Northeast Asia’s exporting powerhouses — China, South Korea and Japan — to consumer markets in Europe and North America and to their resource suppliers in the Middle East.
 
Through its waters pass trillions of dollars in trade, if not always so easily: The region is riddled with chokepoints that, if blocked, would ruin economies such as China’s that rely almost entirely on exports for growth. This, along with the strategic value of the region’s island nations, all but guarantees a long-term presence of the world’s naval superpower, the United States. Peripheral powers Australia, India and Japan are also keen to secure their interests amid the rising competition in this space — and they are developing the ability to do so. Vast as Southeast Asia may be, it’s starting to feel a lot smaller to the countries that call it home.
 
 
The encroachment by foreign powers only increases the need for Southeast Asian nations to act in concert; after all, it’s harder to push around a 10-member bloc than it is one small country. But these nations have always struggled with uniformity, thanks largely to the division their geographies engender.

Southeast Asia can be divided into two main regions: the archipelagic region and the continental region. Archipelagic Southeast Asia encompasses the Philippines, Indonesia, East Timor and part of Malaysia. The internal incoherence of these countries is obvious. The Philippines consists of more than 7,000 islands. Indonesia consists of more than 17,000. The two halves of Malaysia are separated by roughly 400 miles of water. Though major islands like Luzon, Borneo, Java and Sumatra are home to fertile coastal plains that produce robust, relatively homogenous population centers, they are beset with extreme subregional disparities and ethnic fissures, as are the rest of the region’s countries. The Philippines, for example, has nearly 200 ethnolinguistic groups. Indonesia has around 350.

Continental Southeast Asia, which encompasses the countries of Indochina and the Malay Peninsula, may not be divided by water but it is no less fractured. Its defining feature is the Himalayan foothills that sweep through the region from the Tibetan Plateau. What these mountains lack in size they make up for in density and tropical inhospitality. Kingdoms took root in fertile river valleys and deltas and matured into the political and economic heartlands of today’s states. But the rugged borderlands between them have often been ill-defined and contested, marked by impenetrable terrain and home to ethnic minority groups that have time and again proved adept at resisting central control.

In both regions, the fringes of most states are constituted by swathes of largely ungoverned space given to black market activity, statelessness and rebellion. These areas have historically been subject to foreign exploitation. They allowed colonizers to weaken the resistance of the region’s feudal rulers and became battlegrounds between the Japanese and the Allied powers during World War II. Ethnic militias turned into well-armed U.S. or Soviet proxies during the Cold War. Southeast Asian history has left a legacy of artificial borders, shattered power structures and still-unsettled civil conflict — all of which drive modern states apart. It also created economic disparity: During the Vietnam War, U.S. bombing laid waste to Vietnam, Laos and Cambodia, but U.S. aid gave Thailand a lasting economic leg up on its war-torn neighbors.

The geopolitical landscape of Southeast Asia continues to undermine the control of central governments, which have been conditioned to mistrust foreign powers as well as one another. Consider Thailand. It antagonizes Myanmar by giving sanctuary to Burmese separatist groups along its western border. It chafes Malaysia when it shelters ethnic Malay-Muslim rebels in the far south. Cambodia, in turn, irks Thailand for stoking political divides in the restive east. Then there is Myanmar, which is extremely vulnerable to China in its northeast and, to a lesser extent, to India in its west. Indonesia, for its part, harbors long-held suspicions about Australia’s ability to exploit ethnic separatist movements in far-flung regions like West Papua. (Jakarta accused Canberra of as much during East Timor’s independence process.)

With so many separatist movements and border disputes, countries of the region tend to be preoccupied by land-based threats. They have prioritized army and air force development accordingly – a curious trend in a predominately maritime region – while neglecting the more expensive endeavor of fielding a modern coast guard or navy. Some countries are beginning to attune themselves to the necessities of their environment, but doing so is a long-term and costly project. Only Singapore, ever the outlier in Southeast Asia, has the resources and legacy fleet needed to meet its maritime imperatives. But Singapore is a small city-state, unable and unwilling to guarantee security for the entire region.

Whatever strategic value these states get from their geography is betrayed by the divisions that same geography creates. Divisions have hindered the development of the infrastructure – particularly east-west road and rail links between the mainland states – needed to unlock the region’s trade potential. It would need to spend some $1.5 trillion on infrastructure annually until 2030 to sustain its economic growth momentum, according to the Asian Development Bank. But even if the funds were available, integration is elusive in Southeast Asia. Countries are too busy consolidating control, and too reluctant to forge deeper ties with their neighbors, to build difficult, multilateral frameworks for military, political or economic cooperation. They defer almost invariably to their own judgment.

This creates a number of practical problems for regionwide cooperation and integration. On security issues, Southeast Asian nations need to act collectively, now more than ever, to manage criminal and terrorist networks that exploit the region’s lawless fringes. But there is little evidence to suggest they are setting aside their differences for the sake of collective security. The Philippines, Malaysia and Indonesia have proved reluctant to jointly address militancy and piracy in the Sulu and Celebes seas. Similarly, their reluctance to address more insidious long-term threats, including the depletion of offshore fisheries and the degradation of the Mekong River system, sows the seeds for future conflict.

On economic issues, Southeast Asian nations have often balked at the idea of reducing protectionist policies and of breaking down barriers to the free movement of labor, both of which contravene the region’s comparative economic advantages. Establishing the ASEAN Economic Community – which means to reduce internal trade barriers, streamline infrastructure investments and mutualize regulations – is a notable step forward. But here, too, progress has been incremental at best; many states have erected informal barriers that offset the gains made by the community. Continued progress remains vulnerable, moreover, to setbacks during periods of stress induced from the outside, whether by powerful states or by market forces.

Going Their Own Way

Naturally, the geopolitics of Southeast Asia shapes how the region engages with the global system — and how it engages with the major powers vying for influence over it.

The region’s states typically interact with the global system and outside powers individually. Take their relations with China for example. Most countries have negotiated with China bilaterally on issues over which they would appear to have shared interests – upstream control of the Mekong River and territorial disputes in the South China Sea, to name just two – affording Beijing the opportunity to nearly always negotiate from a position of strength. At annual summits, ASEAN members have famously struggled to form a united stance on Chinese assertiveness in the region, evidenced by the toothlessness of joint communiques on the South China Sea dispute.
 

 
Their struggle is due partly to the founding principles of ASEAN itself. Central to ASEAN’s founding charter is a zealous commitment to consensus and non-interference, but the group’s members have wildly different interests, as most countries do. The group’s stance on China can be as strong only as its most pro-China member will allow it to be. Naming and shaming wouldn’t change Chinese geopolitical imperatives, so members shouldn’t forfeit Chinese investment by voting against China, or so their thinking goes.

Their struggle is also due to the realization that a collection of small states will inevitably be at a strategic disadvantage compared to a powerful state, which benefits from a monopoly on force and the ability to act quickly and decisively in the face of a crisis. To form a united strategy on China, one ASEAN member would have to carry the bulk of the costs, subsidizes efforts to address the vulnerabilities of weaker members, and ensure bloc-wide compliance. No Southeast Asian country could do that anytime soon, even if it wanted to. On the most paramount issues of the day, ASEAN member states appear to have little choice but to go their own way.

These countries are nearly as passive when engaging the international system. They have neither the intent nor the means to solve their internal problems by expanding outward (as China does), so they have little choice but to rely on outside powers for investment, consumer markets and the security of their export routes. When they do wade into broader geopolitical competitions, they try to do so omnidirectionally. Their histories as vassal states or proxy groups have bred in them a healthy skepticism of working with outside powers, not to mention a wariness of binding alliances, so they are careful to balance these powers – never relying too much on one and, where possible, playing them off one another. The Philippines, for example, is poor and weak but has become singularly important to the balance of power in the Western Pacific. Under President Rodrigo Duterte, Manila is courting aid, investment and security assistance from a range of powers. Vietnam, rightly more worried about China’s rise than any country in the region, has been rapidly building its navy with Russian ships, cultivating military and energy ties with India and accelerating a political rapprochement with the United States. Just last year, the government in Hanoi opened its strategic naval port at Cam Ranh Bay to any foreign navy that wants to stop by. Its willingness to undertake the politically complicated reforms required to join the Trans-Pacific Partnership illustrated its imperative to hedge against economic reliance on the Chinese.
New Landscape, New Stresses
For more than a decade following the end of the Cold War, most ASEAN states thrived despite their individual limitations and their collective limitations in ASEAN. Vietnam’s departure from Cambodia in 1991 marked the end of a major military confrontation between regional states, and the U.S. departure from Subic Bay in the Philippines the following year punctuated a shift in global attention away from the region. With the Chinese still largely focused inward, with communist insurgencies across the region withering from the loss of outside support, and with the U.S. still guaranteeing maritime trade even from afar, Southeast Asian states were generally free to tend to their own internal affairs and gorge on the low-hanging fruits of a newly globalized system. Low-cost manufacturers like Cambodia and Vietnam rode global economic currents to newfound prosperity. Middle income states like Thailand and Malaysia, reaping the gains of Western infrastructure aid during the colonial era and the Cold War, made themselves vital links in global auto and semiconductor supply chains. Oil producers such as Malaysia, Indonesia and Brunei were buoyed by a decade of high prices. Singapore positioned itself as an indispensable banking center and shipping and refining hub – emerging as the steady pendulum that makes East Asian commerce tick. A lot of people got breathtakingly rich.

A tourist boat sails past the stone islands of Halong Bay in Vietnam. PHILIPPE LOPEZ/AFP/Getty Images
Prosperity can paper over deep-seated geopolitical challenges, but it cannot suppress them forever. The Asian financial crisis first brought these challenges back to the fore in 1997, laying bare Southeast Asia’s vulnerabilities to rapid changes in global finance. The 2008 global financial crisis, likewise, showed just how reliant the region had become on distant markets and how far it still had to go to tap into its internal trade potential. It triggered political upheaval throughout the region, disrupting entrenched power structures and unearthing the social forces that continue to preoccupy the region’s leaders today. In Southeast Asia’s ungoverned spaces, the fallout aggravated long-simmering local ethnic conflicts, emboldening separatist movements on the fringes and in the borderlands. Global terrorist networks, meanwhile, transformed otherwise local conflicts in Muslim-majority areas to regionwide problems that demanded joint solutions that afflicted countries either would not or could not devise.

With the United States distracted in the Middle East, China started to assert itself in places like the South China Sea. With its assertion came a surge in aid and investment that, for political and economic reasons, often proved irresistible to Southeast Asian governments, giving Beijing ample new means with which to sow regional divides. Meanwhile, Japan began removing legal constraints on its ability to develop its military.

When Washington’s attention eventually returned to the region, the Americans methodically laid the groundwork for a lasting presence there by assuming greater regional counterterrorism responsibilities and striking key basing agreements in Singapore and the Philippines. Then there was the Trans-Pacific Partnership, a U.S.-led multilateral trade agreement meant in part to help some Southeast Asian states avoid economic over-reliance on China. The TPP, however, has stalled, a victim of the global backlash against free trade.

In other words, the geopolitics of Southeast Asia was shaped just as much by the world’s foremost powers as they were by the land and water that constitute Southeast Asian territory. Nations in this region simply play too valuable a role in the competition between other countries.

Myanmar is a case in point. It is emerging from a half-century of international isolation. The country is valuable to China primarily as an outlet to the Indian Ocean basin. It poses a risk to China as a potential ally to India or Western powers and as a source of instability emanating from the ungoverned borderlands, where well-resourced rebel groups hold vast swathes of territory. To magnify its influence, secure its One Belt, One Road infrastructure projects and prevent ethnic conflicts from spilling over the border, Beijing is becoming more involved in the peace process between Myanmar’s government and the rebel groups Beijing has occasionally supported. Myanmar’s internal fractures and geographic position between India and China mean it cannot really determine its own fate; it can only try to position itself to benefit from the competition over it.

Like Myanmar, other nations of the region are adapting to new geopolitical circumstances, sometimes to the benefit of all. For example, regional spending on arms imports grew roughly 71 percent between 2009 and 2016, according to the Stockholm International Peace Research Institute, an independent firm that researches global security, with a growing emphasis on submarines and other maritime assets. The launch of trilateral patrols in the Sulu and Celebes seas lays the groundwork for more robust security cooperation. These nations are redoubling efforts to unlock internal flows of trade and investment through the ASEAN Economic Community and maintain a united front in negotiations over the Regional Comprehensive Economic Partnership, a China-led trade pact. They are welcoming Japan’s return as a military power – and therefore as a natural foil to China. The 2014 coup in Thailand and the peace processes in the Philippines’ Mindanao and Indonesia’s Aceh show Southeast Asian nations are trying to get their houses in order so that they are not so vulnerable to outside powers.

Still, these countries can’t escape their constraints. They can’t spend their way to military parity with China, nor can they police their vast maritime domains without U.S. support. As useful as the ASEAN Economic Community may be, capitalizing on what it promises would require trillions of dollars of aid or investment (and thus reliance on outside powers), not to mention untold amounts of political capital. China’s dominance of the Regional Comprehensive Economic Partnership could drown ASEAN economies with exports, weakening their prospects. Though regional states might welcome Japan’s remilitarization as a counterbalance to China, the prospect of a more assertive Japan nonetheless revives unhappy memories of other countries’ conflicts. And the unyielding geography of conflict-ridden regions makes sustained peace elusive.

A strategy that plays off all the outside powers is worthwhile, and for now all Southeast Asian states appear to be benefitting from the competition that strategy creates. Some, of course, are better positioned than others. Thailand and Malaysia do not see the competition as a zero-sum game and see no reason why accepting Chinese infrastructure investment and buying Chinese arms should jeopardize its U.S. security ties or access to Western consumer bases. In countries like the Philippines, however, where the stakes are higher, balance may prove harder to sustain in practice. Manila is too poor to reject Chinese aid and investment, and too weak and threatened to reject the United States. Given its geopolitical imperatives, Beijing will expect a return on its investment. Ultimately, in a crisis, the choice won’t be Manila’s to make.

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