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Minilateralism in Southeast Asia: Opportunities and Challenges
Executive Summary
Introduction
As multilateralism is under threat, mainly due to rising protectionism and populist politics, minilateralism appears to be more attractive, receptive and resilient. Some argue that “minilateralism could overshadow and eventually challenge multilateralism.” Minilateralism here refers to functional cooperation on specific issues at the sub-regional level between countries or localities within geographically defined areas or regions. Due to the nature of minilateralism as informal and flexible, it is more appealing to countries that are sceptical of multilateralism. In Southeast Asia, minilateralism has expanded since the early 1990s with a focus on economic cooperation and practical cooperation on non-traditional security issues.
Arguably, if properly utilised, minilateralism provides a net benefit to ASEAN as it offers a more effective decision-making process to overcome the shortcomings of ASEAN’s consensus-based decision making, especially on sensitive regional security issues such as the South China Sea. A regional analyst has argued that, “To save the principle of ASEAN centrality, the regional body should transcend its unanimity/consensus-based decision-making and embrace minilateral arrangements on divisive issues.” However, there are certain risks and concerns deriving from minilateral mechanisms that may adversely affect the centrality and unity of ASEAN, especially if minilateral frameworks are dominated or dictated by any major power.
This paper discusses two dimensions of minilateralism; economic minilateralism and political-security minilateralism. It then discusses the background of externally-driven minilateralism in mainland Southeast Asia and analyses associated risks and concerns associated with minilateralism. It argues that economic minilateralism is complementary to ASEAN multilateralism, but that political-security minilateralism potentially weakens the centrality and unity of ASEAN, especially within the context of heightening geopolitical rivalry between major powers.
Economic minilateralism is cooperation between three or more countries on economic issues to promote cross-border trade and investment, tourism, and infrastructure development and connectivity. It is widely believed that through regional economic cooperation and integration, peace and development can be sustained and further enhanced. Economic minilateralism has proven to be more effective than multilateralism, especially with regards to the process of decision making and actual implementation.
Minilateralism is driven by both state and market forces, and aims to promote cross-border trade and investment cooperation between member countries and localities. Local governments also play important roles in facilitating cross-border cooperation. Minilateral mechanisms have proven to be relatively effective in facilitating cooperation among the parties concerned, helping to reduce poverty and narrow development gaps at the sub-regional level, especially in border regions.
The concept of sub-regional cooperation, mainly driven by economic interests, has been developed as part of regional integration in Southeast Asia. Cross-border cooperation is necessary for strengthening the flow of goods, services, investment capital, and tourists. Minilateralism is complementary to regional integration and connectivity in Southeast Asia. Firstly, it facilitates the implementation of the ASEAN Economic Community Blueprints, especially in the fields of cross-border trade and investment, and regional connectivity. Secondly, minilateralism promotes economic development, particularly along border areas that are relatively remote and less developed.
The SIJORI (Singapore, Johor, and the Riau Islands) was created in 1989 and later expanded to the Indonesia-Malaysia-Singapore Growth Triangle (IMS-GT) in 1994. It is the first growth triangle in Southeast Asia and was initiated to take advantage of geographical proximity to facilitate cross-border trade and investment flows. The growth triangle is complementary to regional economic cooperation and integration efforts, and it can co-exist with more formal regional arrangements such as Free Trade Agreements (FTAs) and Closer Economic Partnerships (CEPs).
In 1994, the Brunei-Indonesia-Malaysia-Philippines East ASEAN Growth Area (BIMP-EAGA) was established to “accelerate economic development in areas that are geographically distant from their national capitals, yet in strategic proximity to each other.” The BIMP-EAGA aims to increase trade, tourism, and investment by facilitating the free movement of people, goods, and services, making the best use of common infrastructure and natural resources, and taking full advantage of economic complementarity.
In mainland Southeast Asia, the Greater Mekong Subregion (GMS) was founded in 1992 with technical and financial support from the Asian Development Bank (ADB). Cambodia, China, Laos, Myanmar, Thailand, and Vietnam are members of the GMS, which is a sub-regional mechanism designed to enhance economic relations among the countries. The GMS has contributed to infrastructure development, which has enabled the development and sharing of the region’s resource base and promoted a freer flow of goods and people in the sub-region. The Hanoi Action Pan 2018-2022 highlights factors and enablers that will determine the successful delivery of results under GMS. These enablers are building synergies with ASEAN and other regional initiatives, effective private sector engagement, innovative approaches to project design and institutional arrangements, technology-enabled processes, and knowledge linkage and use.
The Cambodia-Laos-Vietnam Development Triangle (CLV-DT), which was founded in 1999, is the most dynamic growth triangle in mainland Southeast Asia. Vietnam is taking a de facto leadership role in the CLV-DT, to not only promote sub-regional economic cooperation and integration but also to check the rising influence of China in Indochina. Cooperation areas under the CLV-DT include infrastructure development, connectivity, trade and investment facilitation, and human resource development.
Thailand has beefed up its role in promoting the Ayeyawady-Chao Phraya-Mekong Economic Cooperation Strategy (ACMECS) in order to strengthen its leadership role in mainland Southeast Asia. In 2018, a funding mechanism was created to implement the master plan of the ACMECS, which focuses on seamless connectivity (multi-modal transport links), software connectivity (trade, investment and industrial cooperation, and financial cooperation), and development of human capital.
An extended sub-regional cooperation mechanism called BIMSTEC (Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation) involves Bangladesh, India, Myanmar, Sri Lanka, and Thailand. The mechanism plays a bridging role between Southeast Asia and South Asia, and between ASEAN and the South Asian Association for Regional Cooperation. Similar to other economic minilateral mechanisms, BIMSTEC aims to utilise regional resources and geographical advantages for regional growth. Key areas of cooperation are in trade, technology, energy, transport, tourism, and fisheries.
Security minilateralism refers to security cooperation and defence coalitions between a few like-minded countries that aim to address common non-traditional security threats and issues such as terrorism, transnational crime, natural disasters, and water resource management. Minilateralism has become more attractive due to the fact that existing multilateral security mechanisms are unable to provide expeditious and effective solutions to increasing security challenges in the region. The slow decision-making process of multilateral initiatives, normally based on consensus, is the main reason for some countries to opt for minilateral initiatives.
The complexity of the regional security environment is another reason that some countries have opted for minilateral cooperation. Some countries believe that minilateral cooperation in the security and defence sector is more flexible and effective, and “offers a valuable means” to deal with non-traditional security issues and threats. In maritime Southeast Asia, the Five Power Defence Arrangements (FPDA), founded in 1971, is the first “minilateral defence coalition” with a focus on the specific security issues and needs of its member countries (Malaysia, Singapore, Australia, New Zealand, and the United Kingdom). The FPDA remains relevant in addressing common security threats such as terrorism and maritime security, and it is an integral part of the regional security architecture.
In 2004, the littoral states in Southeast Asia (Indonesia, Malaysia, and Singapore) launched the Malacca Straits Sea Patrol to ensure the security of the straits, which is a critical and strategic waterway in the regional and global trading system. A year later, “Eyes-in-the-Sky” (EiS) Combined Maritime Air Patrols launched. In 2006, the Malacca Straits Patrol Joint-Coordinating Committee Terms of Reference and Standard Operating Procedures was signed. In 2008, Thailand became a member of the Malacca Straits Patrol. The first Malacca Straits Patrol Exercise was launched in 2011. The Malacca Straits Patrol consists of the Malacca Straits Sea Patrol, the EiS Combined Maritime Air Patrols, and the Intelligence Exchange Group (IEG).
In 2016, Malaysia, Indonesia, and the Philippines agreed to set up trilateral patrols in the Sulu-Celebes Seas following maritime attacks by the Abu Sayyaf Group in early 2016. In 2017, the three countries launched coordinated naval patrols in the affected areas. Singapore has offered to join patrols, particularly in information sharing. Capacity-building support from extra-regional countries has helped regional states deal with maritime security issues.
In mainland Southeast Asia, the riparian states of the Mekong River (Cambodia, Laos, Thailand, and Vietnam) signed the Mekong Agreement and created the Mekong River Commission (MRC) in 1995 to address water security issues. Compounded by climate change, population growth, and urbanisation, the construction of a series of hydropower dams along the mainstream of the Mekong River has been a controversial issue and potential source of conflict between the riparian countries. For the period from 2016 to 2020, the MRC focuses its work on four key result areas, namely the enhancement of national plans, projects and resources based on basin-wide perspectives; the strengthening of regional cooperation; the betterment of monitoring and communication on basin conditions; and the enhancement of institutional effectiveness and efficiency.
There is a joint patrol between China, Laos, Myanmar, and Thailand, which started in 2011 to ensure safe navigation along the Mekong River. Counter-terrorism, counter-trafficking (drug and human trafficking), and search and rescue are the three main areas of cooperation. China has taken a leadership role and sent the largest number of officers and vessels to participate in the patrols, which take place regularly. From 2011 to 2018, there were approximately 80 joint patrols.
Within the context of geopolitical rivalry between major powers, particularly between the US and China, some Southeast Asian countries have been convinced to take part in minilateral security cooperation mechanisms initiated and led by major powers. Some regional observers have argued that, “The Asia-Pacific to Indo-Pacific shift is really an instance of an emerging minilateral security regionalism, rather than the predominant forms of bilateral and multilateral security and economic regionalism that have dominated Asia in recent decades.” This reflects a new dynamic of security minilateralism in the region that is driven by major powers. The US-China rivalry could potentially lead to the weakening of multilateral institutions such as ASEAN, which in turn could force weaker states to look for alternative minilateral mechanisms.
Externally-Driven Minilateralism
Mainland Southeast Asia is not the most dynamic region in terms of minilaterals driven by major and middle powers. Currently, there are five main cooperation mechanisms led by India, Japan, the Republic of Korea, the United States, and China. These mechanisms could potentially weaken ASEAN centrality and unity if ASEAN does not take effective measures and provide a certain degree of leadership in synergising these mechanisms with ASEAN community-building projects. There is a risk of increasing division between mainland and maritime Southeast Asia. There is also a concern, particularly from Vietnam, that these mechanisms do not provide effective solutions to transboundary water resource management, and that power competition between China and the US will largely shape the region’s development trajectory.
Minilaterals in mainland Southeast Asia have not been integrated or synergised in order to maximise their utility. In order for member countries to realise their ambitious development goals and to further narrow the development gap, they need to build synergy across these various minilaterals and strengthen coordination and cooperation between key agencies (the public sector, private sector, civil society organisations, the research and academic community, and local people).
Mekong-Ganga Cooperation (MGC)
India has been actively involved in the Mekong sub-region since the early 1990s. In 1989, India introduced the “Look East Policy” to engage with ASEAN. In 2014, President Narendra Modi upgraded the “Look East Policy” to the “Act East Policy” to give more impetus to India’s regional integration strategy with ASEAN and East Asia. In 2000, the Mekong-Ganga Cooperation (MGC) mechanism was established to promote regional cooperation. There are six members in the MGC, namely, Cambodia, India, Laos, Myanmar, Thailand, and Vietnam. The MGC focuses on four cooperation areas including tourism, culture, capacity building, education, and connectivity. However, due to a lack of leadership and resources, the MGC has produced limited results. At the 6th MGC Ministerial Meeting in 2012, India announced the establishment of Quick Impact Projects with an annual budget of US$1 million to fund projects in areas such as connectivity, education, social infrastructure, health, agriculture, farming, and animal rearing. In 2018, India expressed its interest in becoming a partner of the MRC to share their expertise on water resource management.
Japan-Mekong Cooperation (JMC)
Japan reached out to the Mekong countries in 2007 through the Japan-Mekong Regional Partnership Program. Japan-Mekong cooperation has been institutionalised and intensified since 2008 when the first foreign ministers meeting took place in Tokyo. A year later, the Japan-Mekong exchange year was organised and the first Japan-Mekong Summit launched. In 2015, Japan and the Mekong countries adopted the Tokyo Strategy 2015 with a financial commitment from Japan of US$110 million over a five-year period. The Tokyo Strategy emphasises four pillars of cooperation. The first pillar is “hard efforts” concentrating on industrial infrastructure development and strengthening “hard connectivity”. The second pillar is “soft efforts”, which refers to advancing industrial structures and human resource development, and strengthening “soft connectivity” (institutional connectivity, economic connectivity, and people-to-people connectivity). The third pillar relates to sustainable development and Green Mekong. Disaster risk reduction, climate change, water resource management, and conservation and sustainable-use fishery resources are included in the third pillar. The fourth pillar focuses on coordination between various stakeholders, including institutional coordination among various regional initiatives, relevant private sector stakeholders, NGOs, and other development partners, such as the United States and China. In 2018, Japan and the Mekong countries adopted the Tokyo Strategy 2018, which emphasises the strengthening of synergies between Mekong-Japan Cooperation, the 2030 Sustainable Development Goals, the Free and Open Indo-Pacific, and the Ayeyawady-Chao Phraya-Mekong Economic Cooperation Strategy (ACMECS). The three new pillars of cooperation under the 2018 strategy consist of (1) vibrant and effective connectivity (hard connectivity, soft connectivity, and industrial connectivity), (2) people-centred societies (human resource development, healthcare, education, and legal and judicial cooperation), and (3) realisation of a Green Mekong (disaster risk reduction and climate change, water resource management, circular economy, and conservation and sustainable use of fishery resources).
Mekong-ROK Cooperation (MKC)
The Republic of Korea started engaging with the Mekong region in 2011 to contribute to reducing the development gap in ASEAN and facilitate economic cooperation between ROK and the region. In 2011, foreign ministers from ROK and the Mekong countries adopted the “Han River Declaration on Mekong-Korea Comprehensive Partnership for Mutual Prosperity”, which emphasised connectivity, sustainable development, and people-oriented development. The Mekong-Korea Plan of Action (2014-2017) prioritised six areas: infrastructure, information technology, green growth, water resource development, agriculture and rural development, and human resource development. South Korea has provided US$3.4 billion to ASEAN, 72 percent of which has been channelled to the less developed economies in the Mekong region (Cambodia, Laos, Myanmar, and Vietnam) with a focus on capacity building and infrastructure development. In 2018, both sides agreed to elevate their cooperation to a higher level through the New Southern Policy, which focuses on three pillars (people, prosperity, and peace) and four connectivity areas (transportation, energy, water resources, and ICT). The first Mekong-ROK Summit will take place by the end of 2019 to upgrade their cooperation and partnership.
The US’ Lower Mekong Initiative (LMI)
The US initiated the Lower Mekong Initiative (LMI) in 2009, with cooperation areas focusing on agriculture and food security, connectivity, education, energy security, water security, environmental issues, and public health. The US’ approach is to strengthen public institutions, empower civil society, promote social justice and human rights, and support sustainable and inclusive development. In 2016, the US also emphasised sustainable infrastructure and narrowing the development gap within ASEAN. At the foreign ministers meeting in 2018, the US and lower Mekong countries agreed to streamline cooperation areas under two pillars: (1) the Water, Energy, Food, and Environment Nexus; and (2) Human Development and Connectivity (which also includes activities related to connectivity, health, and education). Moreover, the member countries will integrate themes of gender equality and women’s empowerment, connectivity, and public-private partnership into all LMI projects and activities. In terms of water resource management and information sharing, the member countries agreed to (1) strengthen the individual capacities of the lower Mekong countries to collect, analyse, and manage water, land, and weather data, and to promote sustainable economic development across the water, food, energy, and environment nexus; and (2) strengthen the capacity of the MRC to collect and analyse globally accessible datasets, remote sensing, and other real-time data to support flood, drought, and extreme event forecasting, basin-wide water resources, hydrological modelling, and impact analysis tools.
Lancang-Mekong Cooperation (LMC)
The Lancang-Mekong Cooperation was launched in 2015 with a focus on three areas of cooperation: political-security issues, economic affairs and sustainable development, and social affairs and people-to-people exchanges. The LMC is one of the core elements of China’s neighbourhood diplomacy and economic statecraft in the Mekong region. At the first LMC Summit in 2016, China committed US$1.54 billion in preferential loans and a credit line of US$10 billion to support infrastructure and production capacity projects in the Mekong countries. As an upstream country, China has a responsibility to better manage the Mekong River to support the improvement of living conditions of downstream populations.
The second LMC Summit in 2018 elaborated on the three pillars of sub-regional cooperation, namely: (1) political and security issues (with a focus on maintaining high-level exchanges, political dialogues and cooperation, exchanges among political parties, and non-traditional security cooperation), (2) economy and sustainable development (with a focus on connectivity, production capacity, economy and trade, financial cooperation, water resource management, agriculture, forestry, poverty reduction, environmental protection, and customs and quality inspection), and (3) social and cultural cooperation (with a focus on cultural exchanges, tourism development, education, health, media, people-to-people exchanges, and local government cooperation).
Minilateralism helps facilitate international cooperation at the sub-regional level on specific issues as it has the above-discussed advantages. However, there are also limits to minilateralism. It is argued that, “If minilateral institutions in South-east Asia are framed as being competitive rather than complementary to existing multilateral institutions and subsequently garner more interest from outside powers, they can contribute to further weakening the centrality of wider ASEAN-led institutions.”
Minilateralism may potentially lead to political or strategic fragmentation and division within ASEAN if its mechanisms and agendas are driven and dominated by external major powers. For instance, strategic competition between China and Japan in mainland Southeast Asia is on the rise, which exacerbates strategic challenges for the Mekong countries, particularly in how they adjust and balance their external relations with both Asian powers. A Cambodian analyst argues that, “While Mekong cooperation mechanisms are considered as complementary to regional economic development and integration, Mekong countries seem to lack ownership over how they are run – with development partners having the upper hand.”
China has effectively exerted economic inducement and coercion strategies to achieve its geopolitical goals. Under the LMC, China has shored up its leadership role and economic and political influence in the Mekong region. China’s mounting geopolitical clout in mainland Southeast Asia may prevent ASEAN from having a united position against China’s core national interests, particularly in the South China Sea. Mainland Southeast Asian countries, especially Cambodia, Laos, Myanmar and Thailand, are reluctant to take any position that might harm their good relationship with China, their key economic partner.
Japan has also strengthened its engagement with mainland Southeast Asia. Notably, in the Tokyo Strategy 2018, the Mekong countries have expressed their common support for the Japan-initiated Free and Open Indo-Pacific (FOIP). Cambodia, which is widely perceived as a close ally of China in Southeast Asia, was the first country to express support for the Japan-proposed FOIP, while ASEAN has not taken a clear position on FOIP. The statement in the Tokyo Strategy 2018 reads:
“Leaders of the Mekong countries welcomed Japan’s policy to realize a free and open Indo-Pacific to contribute to the peace, stability and prosperity in the region and the world. Leaders expressed their determination to steadily implement the Mekong-Japan Cooperation projects which contribute to and complement the promotion of a free and open Indo-Pacific.”
The US’s influence in mainland Southeast Asia is in decline relative to that of China and Japan. The LMI does not have the financial resources to implement projects and activities. Moreover, India has not taken any concrete measures nor invested more resources in its Mekong-Ganga initiative. In such a geopolitical context, rising China-Japan competition will largely shape the geopolitical landscape in the Mekong region. The engagement of the US and India in the Mekong region will help leverage Japan’s position vis-à-vis China. The lower Mekong countries will need to adjust their foreign policy postures accordingly as they implement hedging strategies to varying degrees. For small states like Cambodia, the challenge is how to maintain trust and good relations with its two strategic partners, China and Japan (Cambodia signed a strategic partnership agreement with China in 2010 and with Japan in 2013. So far, these are Cambodia’s only two strategic partners).
Conclusion
Minilateralism is becoming more attractive due to its relative flexibility and effective decision making, and has gained renewed interest from Southeast Asian countries. In the field of economic cooperation and integration, minilateral mechanisms are complementary to, rather than competitive with, ASEAN given that they generally aim to facilitate cross-border trade and investment, strengthen connectivity, strengthen regional supply chains, and narrow development gaps. Minilateral cooperation on non-traditional security issues complements existing multilateral mechanisms, as minilaterals offer more practical and effective solutions to specific security issues such as counter-terrorism. Minilaterals that have been founded and led by ASEAN member states are complementary to and integral parts of ASEAN community building.
Minilateralism is a double-edged sword, as it could either undermine or complement multilateralism. If it is not managed carefully, minilateralism may damage the centrality and unity of ASEAN. In the political-security realm, minilateralism poses certain risks to ASEAN, given that external major powers often influence the security agenda. Some ASEAN member states may opt to join minilateral mechanisms led by major powers. If these ASEAN members subsequently lose their balance and decide to bandwagon with any major power for their economic and security interests, ASEAN unity and centrality will be compromised.
Amidst heightening geopolitical rivalry, especially between the US and China, ASEAN risks being divided. For minilateral mechanisms to provide a net benefit to ASEAN, they must align their projects with ASEAN community blueprints, and the principles of ASEAN unity and centrality must be institutionalised in regional minilaterals. The proposal for an “ASEAN Minus X” decision-making formula remains a controversial and inconclusive issue. A geopolitical divide between maritime and mainland Southeast Asia still exists, and minilateralism could potentially widen rather than narrow this gap.
The opinions expressed are the author’s own and do not reflect the views of the Asian Vision Institute.
