The drastic consequences of Covid-19 have had a devastating cost worldwide, but especially for less developed countries which started the crisis at a disadvantage. This is the case for much of Southeast Asia, where the recovery process has also proven stubbornly slow. Most members of the Association of Southeast Asian Nations face challenges – and more often than not the problems come down to the issue of economic growth.
The pandemic has weakened the global economy. For ASEAN countries, the economic stress has been compounded as the region has transformed into an even more fertile ground for great power rivalry between the United States and China. This means Southeast Asian countries need to be especially careful when striking deals with any of the major powers seeking to help their economic recovery. The priority for Southeast Asian countries should remain their various regional security challenges caused by the pandemic; generous pledges of aid must be carefully considered.
The optimistic regional economic outlook scenario presented by the Asian Development Bank will see ASEAN growth rebound by 4.0-5.2% in 2022, with trade being a key driver. Growth is underpinned by broader integration momentum, with the launch in 2020 of the comprehensive ASEAN recovery framework and implementation plan. ASEAN has agreed to use the RCEP regional free trade agreement (formerly known as the Regional Comprehensive Economic Partnership) as an anchor to establish a greater degree of engagement with international markets. Ironically, the pandemic has helped propel ASEAN’s longstanding goal of regional integration – it has also advanced a common agenda for health and human security, while promoting general cooperation.
But ASEAN members have not been able to manage the pandemic alone or among themselves. Foreign aid has been crucial, especially in raising vaccination rates as a turning point in the “new normal”. International assistance will also be the main contributor to the recovery of ASEAN economies. This need for foreign aid allows outside governments to seek to expand their sphere of influence. ASEAN will remain a strategic place, geographically, and as a center of production and trade. Having ASEAN as an economic partner will be a price for Washington or Beijing.
Southeast Asian governments remained wary of any expectation from major powers that the provision of assistance would come in return for allegiance and commitment.
The experience of so-called “vaccine diplomacy” illustrated the opportunity as the United States and China each sought to support ASEAN countries with millions of doses of Covid-19 vaccines and at the same time. time to cultivate their influence. The short-term gain for ASEAN was to help the rate of recovery – in the health of citizens and the economy – and so the support was welcomed with open arms.
Yet, at the same time, some Southeast Asian governments have remained cautious of any expectation from major powers that the provision of assistance will come in exchange for allegiance and commitment. This is consistent with historical experience given that ASEAN is largely made up of former colonies that yearn to create a regional “safe space” for themselves.
To maintain peace and stability in the region, especially because the free trade agreement under the RCEP involves China while the Indo-Pacific Economic Framework for Prosperity proposed by the United States would generously support the economic growth of ASEAN members during the recovery from the effects of the virus, Southeast Asian governments have yet to maintain a fine line between themselves and the rivalry of the two great powers. As economic security is ASEAN’s main interest, deeper regional cooperation and integration among ASEAN member countries should be the main discussion. What ASEAN states need most from the major powers, as subsequent waves of the virus last year showed that further threatened the recovery, is support in the event of a deficiency in public goods, such as vaccine and oxygen shortages. Rivalry and efforts to induce “choice” should be avoided.