Global leadership is flagging. Can ASEAN or ASEAN+3 step up?

Both ASEAN and its Plus Three partners – China, Japan and Korea – have been ramping up efforts to fight the Covid-19 pandemic. It is time now for the Plus Three to step up to the plate.

Police personnel hold up placards reminding people to stay at home amid concerns of the spread of the Covid-19 coronavirus in Manila on March 31, 2020. (Photo: Maria Tan, AFP)

Jayant Menon

8 April 2020

ASEAN and its bigger counterpart, the ASEAN+3 comprising the ten countries and China, Japan and Korea, have been slow to respond to the Covid-19 pandemic. But they have been strenuously ramping up their efforts. But more needs to be done, and quickly. There are many things they can do immediately, employing their machinery to increase consultation and cooperation to limit contagion – both medical and economic – and beggar-thy-neighbour policies. But in some areas, turning rhetoric into action will require large-scale funding, requiring the Plus Three countries to contribute when they are themselves struggling. Since global efforts have been wanting, a regional response is more important than ever, to complement national actions.

Covid-19 is a global health problem best addressed through a coordinated multilateral response. But the G7 could not even release a communique because President Trump insisted on using “Wuhan virus” instead of coronavirus. The G20 communique appeared “big on rhetoric, but short on substance”, unlike its response to the Global Financial Crisis. Although the main responses will occur at the national level, regional efforts can complement them, and increase their effectiveness.

China and South Korea have been the hardest hit in the region. Both have employed lockdowns with success, and South Korea has demonstrated the value of mass testing in curbing its spread. While there is great variation in infection rates across ASEAN countries, responses vary even more. While all have restricted international movement, domestic activity has been curtailed to varying degrees. Malaysia, the Philippines, Thailand and Vietnam have imposed virtual lockdowns, with Japan creeping up to it, while Singapore has ramped up its social distancing measures.

True to form, ASEAN’s first response was to convene a Special ASEAN-China Foreign Ministers’ Meeting in Vientiane on 20 February, where both sides agreed to strengthen cooperation to fight the disease without specifying any concrete actions.

The ASEAN Senior Health Officials met virtually on 13 March, and arguably the most important takeaway was a need to involve the Plus Three countries, as with previous epidemics. A Special Meeting of the ASEAN+3 Health Ministers should be convened immediately to draft specific actions, as they did quite successfully when the H1N1 outbreak occurred in 2009.

The role that consultation and cooperation can play should not be downplayed, however. When Malaysia implemented its lockdown in March, the measure had direct and immediate impacts on the livelihoods of 300,000 of its residents employed in Singapore. To minimise the disruption, Singapore hastily arranged temporary domicile to accommodate affected Malaysian workers in Singapore. This has raised economic and social costs for employers and employees. Had there been more advance consultation prior to the unilateral action, measures could have been pursued to reduce such costs, or to share them more equitably. As an honest broker, ASEAN is well placed to deal with bilateral issues such as these, to maximise collective welfare rather than often narrow, if not misguided national interests.

It is estimated that the majority of the 7 million migrant workers in and from ASEAN are undocumented. As illegal workers, they are denied any kind of social protection. Apart from the risk this poses to their health, it threatens the curtailment measures of host countries. The ASEAN Parliamentarians for Human Rights have called on ASEAN to address these issues urgently, but ASEAN has remained characteristically silent.

The Plus Three have more than their experience and expertise to share, having been at the epicentre. They also have the appropriate financial firepower, if tangible actions are to accompany pronouncements. ASEAN has very limited resources, not least because its richest members are small and there is limited appetite to surrender sovereignty to a supranational body. If actions require funding, the ASEAN+3 must be involved.

ASEAN+3 countries stand out as shining examples of what globalisation can deliver. At a time when globalisation is under threat, they can and should stand up to defend it.

An ASEAN+3 Finance Ministers Meeting should be called to coordinate individual stimulus programs. Coordinated monetary and fiscal responses will increase their impact nationally, and reduce free-riding. Divergent national policies, even if they are all in the same direction of monetary easing, can add to financial market volatility. Coordination would limit exchange rate instability, which may result in competitive devaluations and other beggar-thy-neighbour attempts, as well as destabilise inflation expectations.

Should a financial crisis erupt, the Chiang Mai Initiative Multilateralization (CMIM) – the ASEAN+3 financial safety net – is available. As a series of promises rather than a fund, it has never been used. But again, the regional effort could complement rather than substitute for national (and first line of defence, foreign reserves) and global (the lender of last resort, IMF) efforts.

ASEAN’s success as an economic community has been defined by its ability to use regionalism to promote globalisation. It has done this by pursuing trade and investment liberalisation in a non-discriminatory and outward-looking manner. It is important and timely for ASEAN to reaffirm its commitment to free and open trade, as the temptation to retreat behind borders or resort to all forms of protectionism (including export bans) starts rising further. The same applies to the Plus Three countries.

Most ASEAN+3 countries stand out as shining examples of what globalisation can deliver. At a time when globalisation is under threat, they can and should stand up to defend it. Covid-19 is exacting a horrendous toll in terms of human life – it does not have to also ruin the processes and institutions that have served us so well. It is in fact an opportunity to put geopolitics aside and increase cooperation in the fight against a common enemy.

Dr Jayant Menon is a Visiting Senior Fellow in the Regional Economic Studies Programme at the ISEAS – Yusof Ishak Institute, Singapore.

ISEAS Commentary — 2020/48

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