MAPPING
EU-ASEAN Relations
Gauri Khandekar
Preface EU-ASEAN relations: Time for a strategic partnership
Brunei Cambodia Indonesia Lao PDR Malaysia Myanmar Philippines Singapore Thailand Vietnam Table 1: Comparative indicators Table 2: Top trade partners of ASEAN member states EU-ASEAN dialogues List of abbreviations
3 4 20 24 28 32 36 40 44 48 52 56 60 64 66 68
Contents
Mapping EU-ASEAN Relations
2
About the Author
Gauri Khandekar is researcher and head of the Agora Asia-Europe programme at FRIDE.
About FRIDE
FRIDE is an independent think-tank based in Madrid and Brussels. Our mission is to inform policy and practice in order to ensure that the EU plays a more effective role in supporting multilateralism, democratic values, security and sustainable development.
About AGORA ASIA-EUROPE
Agora Asia-Europe is a knowledge hub on EU-Asia relations, which connects think-tanks, analysts, policy-makers, opinion leaders and other experts from both regions to discuss ways to add input and guide the EU’s approach towards Asia.
Mapping EU-ASEAN Relations
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7KLV SXEOLFDWLRQ WKH ¿UVW VWXG\ RI LWV NLQG SURYLGHV DQ LQ depth review of the European Union’s (EU) relationship with the Association of Southeast Asian Nations (ASEAN) and each of the 10 ASEAN member countries. Individual country briefs assess the state-of-play of the EU’s bilateral relations with ASEAN states and outline their strengths and weaknesses, priorities and outlook. The publication draws on an extensive collection of statistical data and other indicators across a variety of policy areas, and calls for a strategic partnership between the two regional organisations.
The purpose of this exercise is not to provide comprehensive coverage of all relevant statistical information or a conclusive analysis of the politics and perspectives of each bilateral relationship. ‘Mapping EU-ASEAN relations’ seeks, rather, to capture some of the salient features of each partnership and of the respective partners. This publication aims to help foster debate RQWKHGH¿QLWLRQRIWKH(8¶VELODWHUDOSDUWQHUVKLSZLWK$6($1 – an important dimension of the Union’s presence and role in a JOREDOUHJLRQRIJURZLQJHFRQRPLFDQGSROLWLFDOVLJQL¿FDQFH
The study relies on a number of interviews carried out between -DQXDU\ DQG 2FWREHU ZLWK (8 DQG $6($1 RI¿FLDOV LQ Brussels and visiting experts from Asia. Data have been drawn from a variety of authoritative sources, including the United Nations, the World Bank, the International Monetary Fund, the International Energy Agency, the US Energy Information Administration, the Asian Development Bank as well as the EU and ASEAN. Non-governmental sources include the World Economic Forum, INSEAD Business School, Transparency International, as well as think tanks such as the Stockholm International Peace Research Institute (SIPRI). The author wishes to thank Shada Islam, Director of Policy at Friends of Europe, for reviewing the publication, the many EU and Asian RI¿FLDOV ZKR VKDUHG WKHLU YLHZV DV ZHOO DV )LOLS &LRUWX] DQG
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Preface
4
ASEAN
in the regional context
POLITICS AND ECONOMICS
The ASEAN integration process and the bloc’s role have developed into key features of Asian geopolitics in recent years, especially as the global economic centre of gravity shifts towards the continent. ASEAN’s strategic location, straddling HPHUJLQJJLDQWV,QGLDDQG&KLQDWKH,QGLDQDQG3DFL¿F2FHDQV and the Asian and Australian continents, places it at the core of the region’s political topography. Three crucial international maritime chokepoints (the Straits of Malacca, Sunda, and Lombak-Makassar) lie in ASEAN’s territorial waters. As a grouping of 10 rapidly developing economies, ASEAN has also integrated itself well into the region’s economic architecture, having signed Free Trade Agreements (FTAs) with every country except for North Korea.
The Asian theatre is changing dramatically with the rise RI &KLQD WKH 8QLWHG 6WDWHV¶ 86 µUHEDODQFLQJ¶ WRZDUGV
Introduction
The European Union (EU) and the Association of Southeast Asian Nations (ASEAN) have much in common. For one, they are both regional organisations directed to manage interdependence and deal with security challenges. While their historical background and degree of integration may differ, they correlate as natural partners, as well as regional power centres. Since the establishment of formal WLHVLQELODWHUDOUHODWLRQVKDYHSURJUHVVHGVLJQL¿FDQWO\DQG the partnership has weathered numerous tribulations along the road. The EU has been instrumental in mentoring the ASEAN integration process. Today, EU-ASEAN bilateral ties are thoroughly multi-layered and comprehensive, and cover a wide array of issues, ranging from development to economics, trade and investment, aid, and political and cultural affairs. Since 2012, there has been an increase in high-level bilateral visits and the initiation and completion of various agreements between the EU and ASEAN member countries. The EU is ASEAN’s third-largest WUDGLQJSDUWQHUZKLOH$6($1LVWKH(8¶V¿IWKODUJHVW7KH(8 is also the largest source of foreign direct investment (FDI) and critical development and humanitarian aid to the region. Yet, the importance of the relationship and its potential are underrated.
EU-ASEAN relations:
Time for a strategic partnership
Mapping EU-ASEAN Relations
5
the United States. The ADMM+ is emerging as an important forum for defence diplomacy and cooperation and has a year- URXQG ZRUNLQJ SURFHVV XQGHU ¿YH ([SHUW :RUNLQJ *URXSV (:*VKXPDQLWDULDQDVVLVWDQFHDQGGLVDVWHUUHOLHI+$'5 maritime security, military medicine, counter-terrorism, and peacekeeping operations. ASEAN’s tabletop exercises on disaster management too have been useful in building trust amongst various participant nations and in identifying weak points in their capabilities and level of inter-operability.
ASEAN also sponsors two key regional free trade initiatives, namely the ASEAN Free Trade Area (AFTA) among its member FRXQWULHVDQGWKH5HJLRQDO&RRSHUDWLRQ(FRQRPLF3DUWQHUVKLS 5&(37KHODWWHUZKLFKLVFXUUHQWO\XQGHUQHJRWLDWLRQDLPV WR FRDOHVFH $6($1¶V ELODWHUDO )7$V ZLWK $XVWUDOLD &KLQD India, New Zealand, South Korea, and Japan.
At the same time, ASEAN aims to establish a deeper economic FRPPXQLW\E\7KLVZRXOGEXLOGRQDWULSDUWLWHVWUXFWXUH Asia, and the economic growth of India (despite the current
slowdown) and of most Asian countries. Interconnectivity LQFOXGLQJ LQIUDVWUXFWXUH ÀLJKW FRQQHFWLRQV VKLSSLQJ WUDGH and investment) has reached unprecedented levels amidst the continent’s evolving economic and security landscape. While territorial disputes are escalating in the region, a culture of inclusivity and partnership diplomacy is also developing.
ASEAN is playing an increasingly important role in regional geopolitics by leading efforts to create an architecture of ASEAN-sponsored regional platforms.
These include the ASEAN Regional Forum (ARF), ASEAN 3OXV7KUHH$6($1&KLQD-DSDQDQG6RXWK.RUHD$6($1 3OXV6L[$6($1&KLQD-DSDQ6RXWK.RUHD,QGLD$XVWUDOLD and New Zealand), the East Asia Summit (EAS, including the ASEAN Plus Six as well as Russia and the US), and the ASEAN Defence Ministers Meeting Plus (ADMM+). The ARF brings together foreign ministers of important global actors, including the EU, to discuss critical regional and international issues.
7KH$'00ODXQFKHGLQ2FWREHULVWKHUHJLRQ¶V¿UVW RI¿FLDO IUDPHZRUN WKDW EULQJV WRJHWKHU GHIHQFH PLQLVWHUV RI FRXQWULHV ± $6($1 PHPEHUV SOXV $XVWUDOLD &KLQD India, Japan, New Zealand, Republic of Korea, Russia, and
6
$6($1 &KDLU LQ UHEXIIHG LWV$6($1 QHLJKERXUV RQ any mention of issues regarding Exclusive Economic Zones (EEZ) and the Scarborough Shoal – contentious topics in the FRQWH[W RI WKH 6RXWK &KLQD 6HD GLVSXWH 1RQHWKHOHVV DIWHU intense shuttle diplomacy efforts by Indonesian Foreign Minister Marty Natalegawa, a document entitled ‘ASEAN’s 6L[3RLQW3ULQFLSOHV¶RQWKHLVVXHRIWKH6RXWK&KLQD6HDZDV adopted a week later.
Despite growing political turbulence in East Asia, ASEAN’s UROH LQ WKH UHJLRQ KDV EHHQ VLJQL¿FDQWO\ H[SDQGLQJ RYHU WKH past decade. Today, it helps facilitate dialogue among major SRZHUV&KLQD,QGLD-DSDQDQGWKH86WKURXJKDSROLF\RI leveraged equidistance – all actors have an equal status at the table, no one country drives the agenda, and no countries are singled out or excluded. Maritime security is a particularly serious challenge, not only in South-East Asia, but throughout WKH$VLDQ FRQWLQHQW WRR IURP WKH *XOI RI$GHQ WR WKH (DVW
&KLQD 6HD %XLOGLQJ FRRSHUDWLYH VROXWLRQV WKDW LQFOXGH DOO actors is a key priority for the years to come. ASEAN’s ([SDQGHG 0DULWLPH )RUXP $(0) KHOG IRU WKH ¿UVW WLPH LQ DPRQJVW $6($1 PHPEHUV SOXV $XVWUDOLD &KLQD India, Japan, New Zealand, South Korea, Russia, and the US, IRFXVHGRQWKHUHOHYDQFHRIWKH8QLWHG1DWLRQV&RQYHQWLRQRQ the Law of the Sea and new dispute settlement mechanisms.
Noticeably, the EU was not involved.
a political-security community, an economic community, and a socio-cultural community. By 2015, the ASEAN Economic
&RPPXQLW\ LV H[SHFWHG WR UHVHPEOH DQ (8VW\OH FRPPRQ market, with free movement of goods and services, investment and capital, as well as skilled labour. As of late 2013, over 80 per cent of all action lines directed to building the ASEAN
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RISING AMIDST CHALLENGES
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KRWVSRWV RU LQWHUQDWLRQDO WHQVLRQV VXFK DV WKH 6RXWK &KLQD Sea dispute, which carry growing implications for global affairs. Despite the fact that there are some ASEAN member states involved in the aforementioned dispute, ASEAN as a bloc has made remarkable efforts at peacefully managing the issue, especially through the establishment of a regional code of conduct. Such engagement, however, has sometimes FRPH DW WKH FRVW RI $6($1¶V XQLW\ &KLQD KDV EHHQ DEOH WR FXUU\ IDYRXU LQ &DPERGLD 0\DQPDU WKH /DR 3HRSOH¶V Democratic Republic (PDR) and at times even Indonesia.
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to issue a joint communiqué following a foreign ministers’
meeting in July 2012 in Phnom Penh brought to the fore the H[LVWLQJ GLIIHUHQFHV DPRQJ PHPEHU VWDWHV &DPERGLD DV
Mapping EU-ASEAN Relations
7
ASEAN has sought to assume the role of the region’s peace- builder. As such, ASEAN could become an important gateway IRUWKH(8LQWR$VLD:LWKWKHJURZLQJLQÀXHQFHRI&KLQDLQ the Asian continent and the US rebalancing towards Asia, it is vital for the EU to step up its own engagement in the region.
An upgrade in EU-ASEAN bilateral relations is needed to underpin changing dynamics in a challenging geopolitical and economic environment.
EU-ASEAN relations
The EU-ASEAN relationship is an evolving one, which advances as the two organisations develop. This provides much scope for innovation. The similarities in terms of identity and ambitions between the two parties, as organisations aimed at promoting regional cooperation, has been the foundation on which relations were built. Both intend to enhance security, prosperity, and regional stability, although by following different approaches to regional integration. Being more advanced, the European project has been an inspiration for
$6($1 &RRSHUDWLRQ RQ UHJLRQDO LQWHJUDWLRQ KDV EHHQ WKH bastion of EU-ASEAN ties. The EU has played an important role by mentoring and supporting ASEAN not only through
¿QDQFLDO DVVLVWDQFH EXW DOVR E\ VKDULQJ EHVW SUDFWLVHV DQG experiences, exchanges, and numerous concrete projects.
As a result, ASEAN today is arguably the most advanced regional organisation in the world after the EU.
In April 2012, the EU and ASEAN signed in Bandar Seri Bagawan (Brunei) a new 5-year Plan of Action, which provides a political framework to strengthen dialogue. It builds on the ASEAN-EU Plan of Action to Implement the Nuremberg Declaration on an EU-ASEAN Enhanced Partnership (2007–
12). The main gist of the new plan is engagement on a QXPEHU RI LVVXHV EH\RQG WUDGH UHÀHFWLQJ WKH (8¶V LQWHUHVW to collaborate more with ASEAN on political issues. It does not, however, constitute a major leap into completely new areas of collaboration, but is rather an effort at formalising cooperation by enumerating projects and programmes on which both sides can work together in the politico-security DQG VRFLRFXOWXUDO ¿HOGV LQ DGGLWLRQ WR HFRQRPLF DQG WUDGH issues. The partners have also provided for an annual review
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mechanism to be carried out through the ASEAN-EU Joint
&RRSHUDWLRQ &RPPLWWHH -&& DQG WKH $6($1(8 6HQLRU 2I¿FLDOV0HHWLQJ620RQWRSRIWKHDQQXDO(8$6($1 )RUHLJQ 0LQLVWHUV 0HHWLQJ 7KH ¿UVW PHHWLQJ EHWZHHQ WKH (8 DQG$6($1 &RPPLWWHHV RI 3HUPDQHQW 5HSUHVHQWDWLYHV WRRN SODFH LQ )HEUXDU\ LQ %UXVVHOV 7KH %DQGDU 6HUL Bagawan Plan of Action ushers in a new phase in the ASEAN- EU partnership by acknowledging important changes that are taking place on both sides, especially as concerns ASEAN’s UHJLRQDOLQWHJUDWLRQJRDOV±WKH$6($1&RPPXQLW\E\
and beyond.
The EU supports the 3-pillar blueprint that ASEAN aims to establish by 2015. Apart from sharing expertise in several fields (see box 1), during 2007–13 the EU provided around
€70 million to support the ASEAN integration process. Other international actors like the US, Australia, Japan or the Asian Development Bank (ADB) also provide crucial assistance.
+RZHYHUDQGLQVSLWHRI(XURSHDQSROLWLFDOVWUDLQVDQGWKH economic crisis, the EU is the only international actor who can share decades of experience in terms of confidence- building, resource-pooling, and shared decision-making, thereby helping foster regional cooperation within ASEAN.
Working with ASEAN concurrently fulfils two of the EU’s RZQ NH\ DPELWLRQV HQKDQFLQJ LWV SUHVHQFH LQ $VLD DQG supporting regional cooperation and multilateralism at large.
EU support to ASEAN
Examples of EU-funded projects include:
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TRADE AND INVESTMENT
Economics is a key dimension of the EU-ASEAN partnership.
$FFRUGLQJWRWKH(XURSHDQ&RPPLVVLRQLQELODWHUDOWUDGH in goods reached €181.36 billion. The EU is ASEAN’s third- ODUJHVWWUDGLQJSDUWQHUDIWHU&KLQDDQG-DSDQDFFRXQWLQJIRU per cent of ASEAN’s total external trade. With a share of 5.2 per cent of the EU’s total external trade, in 2012 ASEAN was the (8¶V ¿IWKODUJHVW WUDGLQJ SDUWQHU DIWHU WKH 86 &KLQD 5XVVLD DQG6ZLW]HUODQG7KH(8¶VWRS¿YHWUDGHSDUWQHUVLQWKHEORFDUH Singapore, Malaysia, Thailand, Indonesia, and Vietnam.
Singapore accounts for more than 35 per cent of the EU’s total trade with ASEAN and is the only ASEAN member state with which the EU enjoys a trade surplus. Indonesia, which UHSUHVHQWV SHU FHQW RI $6($1 *'3 DFFRXQWV IRU RQO\
7.25 per cent of total EU-ASEAN trade in goods. In terms of services, Singapore is again the EU’s top trade partner within ASEAN, followed by Malaysia, Thailand, Indonesia, and the Philippines (2012). Only Thailand enjoys a surplus in services trade with the EU. From 2010 to 2013, trade in goods with
10
an increasingly prosperous ASEAN market, today the EU SXUVXHV ERWK )7$ DQG 3&$ QHJRWLDWLRQV LQ SDUDOOHO:KLOH the pursuit of bilateral FTAs has been challenging, it will be even more difficult to seam them together given the differing levels of ambition. The most advanced of these agreements is the EU-Singapore FTA.
2QJRLQJ )7$ DQG 3&$ QHJRWLDWLRQV ZLWK $6($1 PHPEHUV KDYHEHFRPHDNH\DVSHFWRI(8$6($1UHODWLRQV3&$VKDYH EHHQ FRQFOXGHG ZLWK ,QGRQHVLD VLJQHG LQ UDWL¿HG E\
,QGRQHVLDLQUDWL¿FDWLRQSHQGLQJE\WKH(83KLOLSSLQHV VLJQHG LQ UDWL¿FDWLRQ SHQGLQJ E\ ERWK VLGHV 9LHWQDP and Singapore, while negotiations with Thailand and Malaysia are ongoing. Meanwhile, the FTA with Singapore was completed in December 2012, although it has not yet entered into force.
FTA negotiations have been launched with Malaysia (in 2010), Vietnam (in 2012), and Thailand (in 2013), and scoping exercises are ongoing with the Philippines, Brunei, and Indonesia.
POLITICAL COOPERATION
Beyond sharing experiences and providing support to ASEAN’s regional integration efforts, the EU has been an important development partner to the bloc. Over decades, EU GHYHORSPHQWDQGKXPDQLWDULDQDLGKDVKDGDVLJQL¿FDQWLPSDFW ASEAN increased by 39.5 per cent and trade in services by 27 per
FHQWGHVSLWHWKHGLI¿FXOWHFRQRPLFFOLPDWH$V/HDVW'HYHORSHG
&RXQWULHV/'&V&DPERGLD/DR3'5DQGUHFHQWO\0\DQPDU EHQH¿W IURP WKH (8¶V (YHU\WKLQJ %XW $UPV (%$ VFKHPH enjoying duty and quota-free access on all exports except arms and ammunition to the European single market.
The EU is the top investor in ASEAN, with an annual €9.1 ELOOLRQRQDYHUDJHRYHU±,QOLJKWRIWKH¿QDQFLDOFULVLV LQUHFHQW\HDUV(8)',RXWÀRZVWR$6($1KDYHEHHQYHU\
YRODWLOH IURP ¼ ELOOLRQ LQ WR OHVV WKDQ ¼ ELOOLRQ LQ ZKLOH)',LQÀRZVIURP$6($1VWRRGDW¼ELOOLRQ In 2010, EU outward FDI stock to ASEAN was €192.7 billion and EU inward FDI stock from ASEAN was €67.9 billion, of which Singapore was the largest source (over 95 per cent).
Following the failure of initial efforts to construct a region- to-region FTA, initiated in 2007, in 2009 the EU decided to pursue a strategy of ‘bilateral building bloc FTAs’ with a set of ASEAN members. This has been criticised as detrimental to ASEAN unity and EU ambitions to foster regional integration. In addition, these negotiations were initially WREHSUHFHGHGE\3DUWQHUVKLSDQG&RRSHUDWLRQ$JUHHPHQW 3&$ WDONV ZKLFK WHQG WR ODVW IRU \HDUV DQG LQFOXGH cumbersome ratification processes by both sides. With a view to reducing the length of the process and tapping into
Mapping EU-ASEAN Relations
11
against the up until recently authoritarian regime in Myanmar, which very much affected EU-ASEAN relations too. Not only did the EU protest against Myanmar’s accession to ASEAN in 1997 by suspending ministerial-level talks with the bloc, but it also refused to attend the ASEM summit if Myanmar were to join. Leading the international estrangement of Myanmar, the EU championed the cause of democracy and its advocates. The EU already holds bilateral local human rights dialogues (at the level RIKHDGVRI(8PLVVLRQVZLWK,QGRQHVLD&DPERGLD9LHWQDP DQG /DR 3'5 *LYHQ LWV UHPDUNDEOH SROLWLFDO WUDQVIRUPDWLRQ such a dialogue could be held with Myanmar in the near future.
While these dialogues have had little demonstrable impact on WKH FRXQWULHV LQYROYHG WKH\ KDYH QRQHWKHOHVV EHQH¿WWHG FLYLO society in countries where civil society groups have been invited to participate.
The EU has actively sought to broaden the political dimension of its relations with ASEAN. Today, a number of initiatives, especially in the security sector (both traditional and non- traditional security), have helped up the ante on the EU’s political engagement with the bloc. The partners cooperate on large sections of ASEAN society and in strategic areas like
poverty alleviation, elevating local standards of living, support to farmers and small industries, health and education, law enforcement, government reform, mine action, and focused support for vulnerable sections of society. From 2007–12, the EU extended around €2 billion to individual ASEAN member states and €70 million was offered to the ASEAN Secretariat, in addition to sums granted by individual EU member states. EU emergency assistance and disaster relief aid too have been crucial, especially in a region that for the past 30 years has suffered most of the world’s fatalities arising from QDWXUDO GLVDVWHUV WKH $VLD 3DFL¿F UHJLRQ KDV HQGXUHG RYHU 90 per cent of global natural disaster fatalities in the same period, according to the United Nations Economic and Social
&RPPLVVLRQ IRU$VLD DQG WKH 3DFL¿F ± 81(6&$3:LWKLQ WKHODVWWZRGHFDGHVWKH(XURSHDQ&RPPXQLW\+XPDQLWDULDQ 2I¿FH(&+2KDVFKDQQHOOHGDURXQG¼ELOOLRQWRYLFWLPV RIFRQÀLFWDQGGLVDVWHUVJOREDOO\DVLJQL¿FDQWSHUFHQWDJHRI which has been directed towards South-East Asia.
EU engagement has not eschewed involvement in domestic politics in ASEAN countries, seeking to support institution- and FDSDFLW\EXLOGLQJDQGGHPRFUDWLFWUDQVLWLRQV*RRGJRYHUQDQFH respect for human rights, and democracy have consistently been mainstreamed into EU-ASEAN cooperation and dialogue. The hallmark of such engagement has been the EU’s strong stand
12
$VVLVWDQFHRQ'LVDVWHU0DQDJHPHQW$+$&HQWUHKDVDOVR been instrumental.
In 2013 the EU contributed with €30 million to ethnic peace processes in Myanmar, in addition to €700,000 as start-up IXQGV WR WKH 1RUZHJLDQIXQGHG 0\DQPDU 3HDFH &HQWUH LQ Yangon. The EU is also extending support to the South- (DVW$VLDQ &KHPLFDO %LRORJLFDO 5DGLRORJLFDO DQG 1XFOHDU
&%51&HQWUHRI([FHOOHQFHHVWDEOLVKHGLQWKH3KLOLSSLQHV in 2013, as well as engaging on mediation consultation with the ASEAN Institute for Peace and Reconciliation.
The EU participates in a series of ASEAN-sponsored and other regional politico-security oriented fora. It has been a UHJXODU SDUWLFLSDQW VLQFH WKH WHQXUH RI +LJK 5HSUHVHQWDWLYH Javier Solana, who maintained frequent contacts with Asian governments. Following a lull in attendance to the region’s fora and in bilateral visits, the years 2012 and 2013 witnessed D PDUNHG ULVH LQ YLVLWV E\ WRS (8 RI¿FLDOV 3UHVLGHQWV 9DQ 5RPSX\ DQG %DUURVR +LJK 5HSUHVHQWDWLYH $VKWRQ DQG several commissioners), as well as EU member states’ leaders and ministerial delegations. The EU has also expressed much interest in cooperating with the US in Asia following Washington’s rebalance towards the region, as can be seen in a joint statement issued on 12 July 2012 in Phnom Penh,
&DPERGLD(QVXULQJVXVWDLQDEOHVWDELOLW\LQ$VLDHVSHFLDOO\E\
on issues such as disaster preparedness, mediation and reconciliation, migration and mobility, border protection, maritime issues, climate change, energy, counter-terrorism, preventive diplomacy, crisis management and response, DQG FRXQWHUWUDI¿FNLQJ ,Q D IHZ PRQWKV DIWHU WKH
%DOLERPELQJVWKDWFRVWWKHOLYHVRI(XURSHDQFLWL]HQVWKH (8 DQG$6($1 VLJQHG D -RLQW 'HFODUDWLRQ RQ &RRSHUDWLRQ WR &RPEDW7HUURULVP DW WKH th Ministerial Meeting. While operational cooperation remains limited, consultations have increased. Together with Singapore, Norway, and contributing
$6($1 PHPEHU VWDWHV WKH (8 DOVR GHSOR\HG D &RPPRQ 6HFXULW\DQG'HIHQFH3ROLF\&6'3PRQLWRULQJPLVVLRQLQ Aceh, Indonesia (Aceh Monitoring Mission), which lasted from September 2005 to June 2012.
A new comprehensive ASEAN-EU Migration and
%RUGHU 0DQDJHPHQW 3URJUDPPH ¼ PLOOLRQ ± KHOSV LQFUHDVH ERUGHU FRQWURO HI¿FLHQF\ LQ WKH $6($1 region, as well as intra-regional connectivity. With Myanmar, WKH(8LVFRFKDLULQJDQ$5)LQWHUVHVVLRQDOJURXS,6*RQ
&RQ¿GHQFH %XLOGLQJ 0HDVXUHV DQG 3UHYHQWLYH 'LSORPDF\
7KH¿UVWPHHWLQJZDVKHOGLQ'HFHPEHULQ<DQJRQDQG WKHQH[WLVVFKHGXOHGWRWDNHSODFHLQ%UXVVHOVLQ$SULO(8 support to the implementation of the ASEAN Agreement on Disaster Management and Emergency Response (AADMER) DQG WKH $6($1 &RRUGLQDWLQJ &HQWUH IRU +XPDQLWDULDQ
Mapping EU-ASEAN Relations
13
disaster relief, military medicine, or counter-terrorism is WKH PRVW VLJQL¿FDQW IHDWXUH RI WKLV IRUXP ZKLFK ¿OOV DQ important void in the region’s security architecture. The EU should endeavour to seek membership of the ADMM+, which would allow it to show its commitment and further contribute to regional stability while it awaits membership to the EAS.
This could also provide the basis for future cooperation, LQFOXGLQJWKURXJKWKH&6'3
Asia’s regional architecture is becoming increasingly special- ised and issue-focused. To this extent, in order to engage in the region’s dialogue on maritime issues, the EU should also seek to be included in the ASEAN Expanded Maritime Forum.
GLOBAL GOVERNANCE ISSUES
The population of the EU and ASEAN combined surpasses 1.1 billion people. Both have an important stake in global affairs and in building an organised multipolar world. Indonesia DQGWKH$6($1&KDLUDVREVHUYHUSDUWLFLSDWHLQLPSRUWDQW empowering ASEAN, is a priority for the EU. To this extent,
the Union has voiced concerns over rising insecurity and backs
$6($1¶VSURSRVDOIRUDFRGHRIFRQGXFWLQWKH6RXWK&KLQD Sea, as well as a peaceful resolution of the dispute.
But the EU could do more to strengthen its political presence in the region. Much cooperation on political issues such as maritime security, counter-terrorism, cyber-security, WUDI¿FNLQJ DQG FRQ¿GHQFHEXLOGLQJ KDV EHHQ OLPLWHG WR conferences and workshops, visits to EU institutions, FRQVXOWDWLRQV RU MRLQW VHPLQDUV &RQFUHWH FDSDFLW\EXLOGLQJ could be expanded in some areas or started for example on the issue of maritime security. Enhancing the capability and UROH RI UHJLRQDO LQLWLDWLYHV OLNH WKH 5HJLRQDO &RRSHUDWLRQ
$JUHHPHQW RQ &RPEDWLQJ 3LUDF\ DQG $UPHG 5REEHU\
DJDLQVW 6KLSV 5H&$$3 ± DQ HIIHFWLYH FOHDULQJKRXVH RI information – could be a valid option. The United Kingdom, WKH1HWKHUODQGVDQG'HQPDUNDUHPHPEHUVRI5H&$$3DQG the EU should consider applying for membership.
The ADMM+ has emerged as an important security IUDPHZRUN ZKHUH GHIHQFH RI¿FLDOV PHHW UHJXODUO\ GXULQJ the course of the year and the region’s militaries have the opportunity to cooperate in a multilateral setting. The conduct of joint country military exercises involving 18 countries in areas such as maritime security, humanitarian assistance,
14
a regional platform that aims to enhance inter-institutional FRRUGLQDWLRQRQFOLPDWHDFWLRQ7KH$6($1:RUNLQJ*URXS RQ&OLPDWH&KDQJH$:*&&ZDVVXEVHTXHQWO\HVWDEOLVKHG WRLPSOHPHQWERWKWKH$&&,DQGWKH$FWLRQ3ODQ
ASEAN has also established a multi-sectoral framework on FOLPDWHFKDQJHDQGIRRGVHFXULW\$)&&WKDWIRFXVHVRQWKH use of natural resources, extreme events, energy, transport, and sustainable cities. It represents a comprehensive approach to tackle the impact of climate change in three VHFWRUV DJULFXOWXUH ¿VKHULHV DQG IRUHVWU\7KH EOXHSULQW RI WKHHQYLVDJHG$6($1&RPPXQLW\E\VHWVWDUJHWVXQGHU the forestry sector to support global and regional initiatives to reduce emissions from deforestation and forest degradation.
Under its Vision 25/25 (the government’s energy strategy), Indonesia, one of ASEAN’s largest economies, targets a 25 per cent renewable share in its energy mix by 2025. Indonesia LVHVWLPDWHGWRKROGSHUFHQWRIWKHZRUOG¶VWRWDOJHRWKHUPDO energy (sustainable energy generated and stored in the Earth) potential, but so far has harnessed only a tiny fraction of it.
Yet, despite the similarities in aims and ambitions, the EU and ASEAN have so far failed to join forces at the global climate change conferences. There is, however, budding recognition of the scope for the two blocs to align positions WRDGGUHVVFOLPDWHFKDQJH7KH¿UVWPHHWLQJRIWKH$6($1 (8'LDORJXHRQ&OLPDWH&KDQJHWRRNSODFHLQ
JOREDO SODWIRUPV OLNH WKH * 7KH (8 DQG $6($1 ¿QG themselves on similar wavelengths on a number of critical international issues, where the EU often faces resistance from some of its so-called strategic partners.1&OLPDWHFKDQJHDQG non-proliferation are two such examples.
While the EU has led international efforts for concerted action to counter climate change, ASEAN as a group has also sought to reach a comprehensive multilateral agreement.
ASEAN countries are acutely vulnerable to climate change.
A 2009 Asian Development Bank (ADB) report states that South-East Asia ‘is likely to suffer more from climate change than the rest of the world, if no action is taken’. While ASEAN member states have distinct national positions, there is a shared understanding at the regional level on this issue.
The 2011 statement of ASEAN leaders on climate change explicitly recognises the region’s acute vulnerability to climate change, and has been implemented through an ASEAN
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Mapping EU-ASEAN Relations
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&%51 LVVXHV DUH DQRWKHU DUHD ZKHUH LQWHUHVWV FRLQFLGH DQG concrete bilateral cooperation can be developed, in particular at the multilateral level. EU and ASEAN member states are signatories of both the Nuclear Non-Proliferation Treaty 137 DQG WKH &RPSUHKHQVLYH 7HVW %DQ 7UHDW\ &7%7 and are strong proponents of non-proliferation. In addition, ASEAN countries signed in 1995 the Bangkok Treaty, PDNLQJ 6RXWK(DVW $VLD D QXFOHDU ZHDSRQV IUHH ]RQH $V large regional blocs, the EU and ASEAN together can make D VHULRXV FRQWULEXWLRQ WR JOREDO HIIRUWV WR FRPEDW &%51 ULVNVDQGWKUHDWV,QWKH8QLRQODXQFKHGWKH(8&%51
&HQWUHVRI([FHOOHQFHLQLWLDWLYHLQFRRSHUDWLRQZLWKWKH8QLWHG 1DWLRQV ,QWHUUHJLRQDO &ULPH DQG -XVWLFH 5HVHDUFK ,QVWLWXWH 81,&5,7KHLQLWLDWLYHLQYROYHVPRUHWKDQFRXQWULHVDQG aims to facilitate cooperation and coordination of national and regional efforts and to develop national response plans according to international standards. The EU-sponsored 6RXWK(DVW $VLDQ &%51 &HQWUH HVWDEOLVKHG LQ 0DQLOD LQ 2013, could prove effective in developing and coordinating national response plans within ASEAN and enabling regional coordination.
On the international level, EU-ASEAN ties could reverberate deep. Their shared interests on global security and peace, in particular on counter-terrorism, rule of law, management of
shared commons, economic stability, and climate change action provide the fabric for stronger mutual engagement in reforming and supporting global governance.
Prospects for the
ASEAN-EU partnership
ASEAN and the EU represent major opportunities for each RWKHU $FFRUGLQJ WR ,+6 *OREDO ,QVLJKW E\ WKH \HDU ASEAN may have a $10 trillion economy. Taken as a bloc, it would eclipse Japan’s economy and become one of the world’s WRS¿YHHFRQRPLHV$FFRUGLQJWRWKHVHSURMHFWLRQVOHVVWKDQ 1 per cent would live in extreme poverty, per capita income would be as high as $12,000 and 65 per cent of ASEAN’s population would belong to the middle class (up from the FXUUHQW SHU FHQW RU DQ LQFUHPHQW RI DERXW PLOOLRQ +RPH WR D SRSXODWLRQ RI PLOOLRQ SHRSOH E\ ZLWK
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IRUFH DQG VWUDWHJLF ORFDWLRQ EHWZHHQ &KLQD DQG ,QGLD 7KH International Monetary Fund (IMF) has forecast Myanmar’s HFRQRPLF JURZWK DW SHU FHQW LQ ZKLOH WKH $VLDQ 'HYHORSPHQW%DQN$'%SUHGLFWVDSHUFHQW*'3JURZWK annually for the next two decades if the country’s political and economic reforms continue. According to McKinsey
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D IROG ULVH ZLWK PLOOLRQ PLGGOHFODVV FRQVXPHUV million today) and a threefold rise in consumer spending from $35 billion to $100 billion.
+RZHYHU WKH UHTXLUHPHQWV IRU WKH XUEDQLVDWLRQ DQG infrastructure development of ASEAN countries are VLJQL¿FDQW :KLOH HVWLPDWHV IRU WKH EORF DV D ZKROH KDYH not been drawn, according to McKinsey just Myanmar would need around $650 billion in investments to achieve its growth potential by 2030. Released in 2011, Indonesia’s infrastructure master plan for economic development through 2025 (called MP3EI) envisages eight infrastructure projects LQFOXGLQJ NP RI UDLOZD\V NP RI URDGV NP RI EULGJHVDQGQHZDLUSRUWVDQGDQLQYHVWPHQWUHTXLUHPHQW of nearly $500 billion, a third of which would come from the government, and the rest from the private sector. The inadequacy of infrastructure in ASEAN member countries impedes the integration of the South-East Asian market and reduces the overall competitiveness of the bloc against favourable demographics, ASEAN will be at the core of the
fastest growing region on the planet. Aside from Singapore, the current tier of more prosperous ASEAN member states including Indonesia, Vietnam, Philippines, Malaysia, and Thailand represent a new generation of high-growth emerging economies.
Indonesia’s rise stands out. According to the National ,QWHOOLJHQFH &RXQFLO¶V *OREDO7UHQGV 5HSRUW E\
Indonesia may become the seventh-largest economy in the ZRUOG RYHUWDNLQJ WKH 8. DQG *HUPDQ\ DQG UDQNLQJ IRXUWK LQ WHUPV RI FRQVXPSWLRQ SRZHU DIWHU ,QGLD &KLQD DQG WKH US. Its rise would be supported by its robust potential for growth, with a favourable age structure (70 per cent of its by then 289 million strong population would be between 15–69
\HDUV RI DJH DQG SHU FHQW EHWZHHQ ± D FRQVXPHU FODVVRIPLOOLRQXSIURPPLOOLRQWRGD\DQGDUDSLG urbanisation rate (71 per cent of the population living in cities DQGSURGXFLQJSHUFHQWRI*'3
The less-developed ASEAN members, including Lao 3'5 &DPERGLD DQG 0\DQPDU KROG WKH PRVW SURPLVH LQ terms of expected growth rates and largest (in relation to their population) increment of the middle class. Myanmar in particular holds much potential for rapid growth and development given its rich natural resources, abundant labour
Mapping EU-ASEAN Relations
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PDMRUUHJLRQDOSDUWQHUV,QGLDDQG&KLQD*LYHQWKHSHFXOLDU geographical location of ASEAN, scattered over water bodies and international maritime bottlenecks, connectivity within the bloc will be critical in order to ensure growth as a regional organisation and an economic entity.
Prospects for ASEAN growth up to 2030 represent major opportunities for the EU to generate prosperity, growth, and jobs back home. The EU is best placed to create a continental level platform for European companies investing in South- East Asia, for example in the infrastructure construction sector.
McKinsey notes that Indonesia’s path to modernisation and urbanisation alone ‘could create a $1.8 trillion private-sector business opportunity by 2030’. Urbanisation partnerships with ASEAN countries can become a building-bloc of forward-looking relations in a domain where the EU has much expertise, in particular as concerns connectivity. The recent normalisation of relations between the EU and Myanmar RIIHUVD¿OOLS,QDGGLWLRQWKH(8FDQSOD\DUROHLQKHOSLQJ
$6($1WRDGGUHVV¿QDQFLDOVHFWRUGHYHORSPHQWFRRUGLQDWH macro-economic policies, and enhance rule-making capacity and transparency at a supranational level.
The EU-ASEAN relationship must now move to the next level and both sides need to make efforts to underpin a changing SDUWQHUVKLS*OREDODQGUHJLRQDOFKDQJHVKDYHJLYHQ$6($1
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extended almost $20 billion in aid to ASEAN countries aimed at development and disaster preparedness, to be delivered in WKHQH[W¿YH\HDUV:KLOHKDVEHHQGXEEHGWKHµ$VLDQ 6HPHVWHU¶LQWHUPVRIWKHIUHTXHQF\RIWRS(8RI¿FLDOV¶YLVLWV to the region, the EU needs to sustain the momentum. Unlike established global powers, the EU’s ever changing, complex, sui generis structure means that it has constantly to engage external partners in order to improve their understanding of its functioning and objectives, including vis-à-vis ASEAN.
While seeking an equal partnership with the EU beyond the traditional donor-recipient angle, ASEAN should make pro- DFWLYH HIIRUWV WR GHYHORS D PXWXDOO\ EHQH¿FLDO UHODWLRQVKLS In this regard, facilitating the EU’s engagement in its own region and regional formats would be an effective option. By supporting the EU’s EAS bid, ASEAN stands to gain a like- minded partner and a deeper partnership.
18
the highest-level meeting between the two sides is the ASEAN-EU Ministerial Meeting. Summits can often provide a very important political impetus to bilateral relations and, if carried out well, can present an opportunity to craft strategic SULRULWLHV 7KH FKDQJLQJ JHRSROLWLFV LQ WKH $VLD 3DFL¿F requires even closer coordination amongst partners. Summits could also bring much-needed coverage to the relationship and could help raise the visibility of the EU and ASEAN in each other’s regions.
There is no individual EU Ambassador or Special Representative assigned to ASEAN, nor is there an ASEAN Ambassador to the EU. The EU Ambassador to Indonesia also serves as an Ambassador to ASEAN (and Brunei Darussalam).
,Q DGGLWLRQ (8 PHPEHU VWDWHV KDYH DFFUHGLWHG WKHLU ambassadors to ASEAN. The 10 Ambassadors of ASEAN member countries to the EU engage on ASEAN-related matters with the EU while representing their nations. The US has assigned a separate Ambassador to ASEAN since 2011 in recognition of the growing importance of the organisation, as well as the need to increase engagement with the bloc.
The creation of equivalent posts between the EU and
Conclusion
The EU-ASEAN relationship contains many ingredients of a VWUDWHJLFSDUWQHUVKLSJURZLQJSROLWLFDOZLOODQGLQVWLWXWLRQDO capacity and a wealth of ideas and initiatives to develop. Both partners can do a lot to achieve respective strategic needs.
EU-ASEAN relations have grown in parallel to both regional blocs’ integration and future relations hold further potential.
By acknowledging each other as strategic partners, the EU and ASEAN would send a strong signal to one another and the rest of the world regarding the importance they attach both to bilateral relations and to the notion of regional integration.
Such an upgrade in relations would also facilitate Europe’s engagement in the broader Asian theatre. While the EU has DFFHGHG WR WKH 7UHDW\ RI $PLW\ DQG &RRSHUDWLRQ 7$& LQ South-East Asia, its membership of the EAS remains pending until it can demonstrate a stronger commitment to the region and Asian countries are persuaded of the added-value that the Union could bring.
The EU and ASEAN have a multi-layered relationship, but there is no bilateral summit mechanism at the highest level of OHDGHUVKLSWRGLVFXVVWKHWRSLVVXHVRQWKHDJHQGD&XUUHQWO\
Mapping EU-ASEAN Relations
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ASEAN could enhance diplomatic relations by facilitating communication, increase the focus on the relationship, and send a signal regarding the strategic significance of the bilateral relationship for both sides.
The 2012 Bandar Seri Bagawan Action Plan has set an important roadmap to strengthen cooperation and dialogue EHWZHHQ WKH (8 DQG $6($1 IRU WKH QH[W ¿YH \HDUV EXW relations need to be underpinned by a stronger political endorsement that upgrades the 2007 EU-ASEAN Enhanced Partnership to a strategic partnership. Q
Brunei
EU-Brunei Darussalam relations were established through WKH (&$6($1 &RRSHUDWLRQ $JUHHPHQW DIWHU
%UXQHL MRLQHG WKH UHJLRQDO JURXSLQJ LQ IROORZLQJ LWV independence from the UK. A micro nation of around half a million people on the island of Borneo, Brunei is the fifth- ULFKHVW FRXQWU\ LQ WKH ZRUOG LQ WHUPV RI *'3 SHU FDSLWD A Muslim Sultanate, Brunei’s economy grew by 56 per cent between 1999–2008 (thanks to crude oil and natural JDV SURGXFWLRQ DFFRXQWLQJ IRU SHU FHQW RI LWV *'3 DQG nearly 95 per cent of exports), transforming the country into a developed, industrialised nation. Brunei ranks second on WKH +XPDQ 'HYHORSPHQW ,QGH[ +', LQ 6RXWK(DVW $VLD after Singapore.
The last four years have seen an intensification of the relatively limited bilateral relations between the EU and Brunei. For a period of three years starting in July 2009 Brunei was the country-coordinator for ASEAN-EU relations and in 2013 it held the ASEAN chairmanship. EU +LJK 5HSUHVHQWDWLYH &DWKHULQH $VKWRQ WUDYHOOHG WZLFH WR Brunei in the past two years. In April 2012, she attended the EU-ASEAN Ministerial Meeting, where she also met 6XOWDQ +DVVDQDO %RONLDK DQG VHQLRU PLQLVWHUV7KH %DQGDU
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France, and Belgium. Overall, the EU is Brunei’s fifth- largest trading partner after Japan, South Korea, Singapore, DQG&KLQD-DSDQ6RXWK.RUHDDQGRWKHU$6($1FRXQWULHV are the key consumers of Brunei’s principal exports of natural gas, crude petroleum, and refined products. The EU is also the largest investor in Brunei, with almost 70 per cent of foreign direct investment (FDI) into the country, most of which comes from the UK and France. The UK in particular LVWKHVHFRQGODUJHVWLQYHVWRULQ%UXQHLDIWHU&KLQD
EU member states’ economic diplomacy has been strong in Asia, including in Brunei. Other priorities of the relationship include cooperation on natural disasters, the prolonged WUDQVERXQGDU\ KD]H SUREOHP GXH WR VPRNH IURP ILUHV burning across the border in Indonesia and affecting Brunei, Seri Bagawan Action Plan to Strengthen the ASEAN-EU
Enhanced Partnership (2013–17) was also signed at the meeting. During the same visit, the EU and Brunei decided WR ODXQFK QHJRWLDWLRQV RQ D 3DUWQHUVKLS DQG &RRSHUDWLRQ
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towards a Free Trade Agreement (FTA) with the EU, but which will also allow both sides to strengthen cooperation in areas like climate change, sustainable development, culture, and education. The fourth round of negotiations was completed in November 2013 and the next round is VFKHGXOHGIRUWKHILUVWKDOIRI*LYHQWKDW%UXQHLLVQR ORQJHUHOLJLEOHIRUWUDGHEHQHILWVXQGHUWKH(8¶V*HQHUDOLVHG 6FKHPH RI 3UHIHUHQFHV *63 DV RI -DQXDU\ DQ )7$
would also help the EU tap into the full economic potential of the EU-Brunei relationship.
Trade between the EU and Brunei is very small, with just
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since 2008 and more than doubled in one year, from
€599 billion in 2011. Bilateral trade consists of mainly merchandise, motor vehicles, and chemicals. The UK is an important trade partner for Brunei, accounting for the PDMRULW\RI(8WUDGHIROORZHGE\*HUPDQ\WKH1HWKHUODQGV
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opportunity, whereas the US provides security cooperation.
Still, Brunei is interested in developing political relations with the EU, especially in order to diversify its foreign SDUWQHUV*UHDWHUSROLWLFDOHQJDJHPHQWEHWZHHQWKH(8DQG Brunei would fare well for the region, which welcomes the EU’s presence, and would enhance the Union’s role and visibility. O
Malaysia, Singapore, Indonesia, and Southern Thailand), DQG HGXFDWLRQ UHIRUP +XPDQ ULJKWV LVVXHV LQFOXGLQJ caning, lack of free media, freedom of peaceful assembly and association, political rights, religious freedom, and /*%7OHVELDQJD\ELVH[XDODQGWUDQVJHQGHUULJKWVZLOO EH FRQWHQWLRXV GXULQJ 3&$ QHJRWLDWLRQV ZKLFK LQFOXGH D human rights clause.
The EU has no permanent representation in Brunei and the EU Ambassador to Jakarta and ASEAN oversees relations with the country. Brunei officials note that the EU became a more visible partner only after the 2011 announcement of the US pivot to Asia, when bilateral and inter-regional relations appeared to have shifted gear. The US has been increasing its political investment in Brunei. Former Secretary of 6WDWH &OLQWRQ YLVLWHG WKH FRXQWU\ WZLFH DQG WKH 2EDPD administration is seeking to enhance cooperation, especially in the education sector. Brunei has also received a number RI KLJKOHYHO YLVLWV IURP &KLQD ± LWV ODUJHVW LQYHVWRU NH\
trading partner, as well as disputant concerning the South
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reduction and rural development, with a political dimension that emphasises democracy, human rights, fundamental freedoms, rule of law, and good governance. The Paris Peace Accords of 23 October 1991 opened the door to cooperation EHWZHHQWKH(XURSHDQ&RPPXQLW\DQG&DPERGLDDQGVLQFH then the EU has been an integral partner in the country’s GHYHORSPHQW SURFHVV 7KH &RRSHUDWLRQ$JUHHPHQW VHW WKHIUDPHZRUNIRUELODWHUDOUHODWLRQVDQGLQ&DPERGLD MRLQHG WKH (&$6($1 &RRSHUDWLRQ $JUHHPHQW $ MRLQW FRPPLWWHH PHHWV HYHU\ WZR \HDUV DW VHQLRU RI¿FLDOV¶
OHYHODQGGLVFXVVHVWKHHQWLUHVSHFWUXPRIWKH(8&DPERGLD relationship, including human rights issues.
After a long history of repression, especially under the Khmer 5RXJH UHJLPH &DPERGLD KDV VXUIDFHG LQWR D G\QDPLF DQG vibrant emerging Asia. Between 1991 and 2001, the EU H[WHQGHG DURXQG ¼ PLOOLRQ LQ DVVLVWDQFH WR &DPERGLD in addition to approximately €600 million from various EU member states through cooperation programmes. The EU and its member states also played an important role in the rehabilitation and reintegration of around 375,000 former UHIXJHHV$IWHUWKHFRXQWU\¶V¿UVWHOHFWLRQVZKLFKZHUHKHOG
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at the national and local levels. The EU is the world’s largest donor of Trade-Related Assistance (TRA) through the multi- donor Enhanced Integrated Framework (EIF) for TRA to /'&V 7KH (8 ERWK ELODWHUDOO\ DQG WKURXJK PHPEHU VWDWH FRRSHUDWLRQ KDV DOVR DVVLVWHG &DPERGLD EHWWHU WR LQWHJUDWH into the world trading system, contributing in particular to capacity-building measures to meet the obligations under the World Trade Organisation (WTO).
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± RQH RI WKH ZRUOG¶V WRS IDVWHVWJURZLQJ countries) despite a record low of 0.1 per cent in 2009, and the JRYHUQPHQW ZDV FRQ¿GHQW WKDW WKH HFRQRP\ ZRXOG JURZ DW SHUFHQWLQ7KH&DPERGLDQSULYDWHVHFWRUHVSHFLDOO\
the textile and tourism industries) has been the key driver of HFRQRPLFJURZWKDQGSRYHUW\UHGXFWLRQ7RXULVP&DPERGLD¶V fastest-growing industry and one of the main pillars of the country’s economy, grew dramatically from 219,000 tourists in 1997 to 3.58 million foreign tourists in 2012, generating
$2.2 billion in revenues.
3ROLWLFDOO\ WKH (8&DPERGLD GLDORJXH KDV IRFXVHG PXFK on governance reform and human rights. Despite the limited LQ WKH (8¶V 5HKDELOLWDWLRQ 3URJUDPPH IRU &DPERGLD
3(5& ZDV ODXQFKHG ZLWK D WRWDO EXGJHW RI ¼ PLOOLRQ The EU also provided €135 million from 2002–6 for rural development, social programmes (especially women, urban youth, child care, and development), trade sector development HVSHFLDOO\ VXSSRUWLQJ VPDOO DQG PHGLXPVL]HG HQWHUSULVHV LQ WKH DJURLQGXVWU\ SXEOLF ¿QDQFH PDQDJHPHQW UHIRUP and the promotion of human rights, democratisation, and good governance. In 2007–13, the EU provided €76 million IRU &DPERGLD¶V 1DWLRQDO 6WUDWHJLF 'HYHORSPHQW 3ODQ IRU SRYHUW\ UHGXFWLRQ DQG EDVLF HGXFDWLRQ ZKLFK DLPV WR IXO¿O WKH0LOOHQQLXP'HYHORSPHQW*RDOV0'*V
$V D /HDVW 'HYHORSHG &RXQWU\ /'& &DPERGLD EHQH¿WV from the Everything But Arms (EBA) framework, the EU’s most extensive trade preference system. Although relatively VPDOO LQ (8&DPERGLD WUDGH VWRRG DW ¼ ELOOLRQ having almost quadrupled from €588 million in 2008. The (8LV&DPERGLD¶V¿IWKODUJHVWWUDGLQJSDUWQHUDIWHU7KDLODQG 9LHWQDP &KLQD DQG WKH 86 ZLWK D SHU FHQW VKDUH RI
&DPERGLD¶VWRWDOH[WHUQDOPHUFKDQGLVHWUDGH7UDGHDQGWUDGH VHFWRUUHVWUXFWXULQJDUHFUXFLDOIRULQWHJUDWLQJ&DPERGLDLQWR the global economy and pushing through governance reforms
Cambodia
26
including corruption, lack of transparency, land-grabbing, political oppression, and freedom of expression. This makes the case for greater EU engagement on democracy and good JRYHUQDQFHHVSHFLDOO\LQOLJKWRIWKHFRXQWHUYDLOLQJLQÀXHQFH of other actors.
5HJLRQDO DFWRUV OLNH &KLQD -DSDQ DQG7KDLODQG DUH SOD\LQJ LQFUHDVLQJO\ LPSRUWDQW UROHV LQ &DPERGLD -DSDQ LV WKH FRXQWU\¶V ODUJHVW GRQRU RI RI¿FLDO GHYHORSPHQW DVVLVWDQFH 2'$7KDLODQGLV&DPERGLD¶VODUJHVWWUDGLQJSDUWQHUDQGD JURZLQJLQYHVWRU&DPERGLDDOVRKDVDWHUULWRULDOGLVSXWHZLWK 7KDLODQGRYHU*XOIRI7KDLODQGZDWHUVXQGHUZKLFKODUJHRLO and gas reserves have been recently discovered. While Thai-
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especially within ASEAN, trade has grown by almost 60 per FHQWLQWKHSDVWWZR\HDUVDORQH&KLQDLVWKHODUJHVWIRUHLJQ LQYHVWRU LQ &DPERGLD EHVLGHV EHLQJ D PDMRU DLG GRQRU DQG D NH\ WUDGLQJ SDUWQHU 7KH &RXQFLO IRU 'HYHORSPHQW RI &DPERGLD QRWHV WKDW IURP WR WRWDO &KLQHVH LQYHVWPHQW LQ &DPERGLD UHDFKHG ELOOLRQ &KLQD¶V DLG has played a positive role in the country through the creation of rural employment, hydropower development projects, and infrastructure projects (roads, buildings, bridges, etc) that have KHOSHGGHYHORSWKHHFRQRP\<HW&KLQD¶VµQRVWULQJVDWWDFKHG¶
SROLWLFDO VSDFH DOORZHG GHPRFUDF\ LQ &DPERGLD KDV EHHQ slowly developing. Over the years, the EU has positively contributed to this incremental progress. The EU has sent various election observer missions to the country and has DVVLVWHG &DPERGLDQ RI¿FLDOV DQG WKH HOHFWRUDO FRPPLVVLRQ on capacity-building and democracy consolidation at the local level. An EU aid package of €10.75 million for the 1998 national elections provided for a new electoral register, D 1DWLRQDO (OHFWLRQ &RPPLWWHH¶V PHGLD FHQWUH D PHGLD monitoring unit, and a European observation unit. The EU (OHFWLRQ2EVHUYDWLRQ0LVVLRQWRWKH)HEUXDU\&RPPXQH
&RXQFLO (OHFWLRQV ZKLFK SDYHG WKH ZD\ IRU &DPERGLD¶V HIIRUWV DW GHFHQWUDOLVDWLRQ ZDV WKH ¿UVW PLVVLRQ VHQW E\ WKH Union to observe local level elections in the country. The EU also contributed to various polling and training material in addition to technical assistance and expertise.
Despite the government’s authoritarian style of governance DQG WKH ORQJ WHQXUH RI 3ULPH 0LQLVWHU +XQ 6HQ VLQFH
&DPERGLD KDV UHJLVWHUHG VRPH QRWDEOH SURJUHVV LQ WHUPV RI building democratic institutions and practises, the emergence of a strong civil society and a strong opposition party, the
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aid has exacerbated the country’s social, environmental, and political problems, in particular by increasing corruption levels and deteriorating labour conditions, governance and KXPDQ ULJKWV QDWXUDO UHVRXUFHV DQG ELRGLYHUVLW\ &KLQD has also used its aid for political reasons, by strong-arming
&DPERGLDLQWDNLQJLVVXHZLWKRWKHU$6($1PHPEHUVRQWKH 6RXWK&KLQD6HDLVVXH,QDV$6($1&KDLU&DPERGLD UHIXVHG DQ\ PHQWLRQ RI WKH 6RXWK &KLQD 6HD LQ WKH JURXS¶V foreign ministers’ meeting in July in Phnom Penh, resulting LQWKHIDLOXUHIRUWKH¿UVWWLPHLQ$6($1¶V\HDUKLVWRU\WR issue a joint communiqué.
7KHUH LV D QHHG IRU JUHDWHU (8 HQJDJHPHQW ZLWK &DPERGLD both economically and politically. In economic terms, aid and investment remain crucial. Augmenting trade is important.
+HOSLQJ WKH FRXQWU\ RQ LQIUDVWUXFWXUH SURMHFWV FRXOG IXUWKHU enhance the economy and generate employment, especially in rural areas. Energy is another area for cooperation and while
&DPERGLD LV LQYROYHG ZLWK LWV QHLJKERXUV RQ UHJLRQDO ZDWHU management initiatives, there is space to broaden cooperation ZLWKWKH(8LQWKLV¿HOGWRRHVSHFLDOO\RQDOWHUQDWLYHHQHUJ\
sources. Politically, the two partners should look for common grounds to address governance challenges. Failure to resolve governance issues is a key obstacle to poverty reduction,
growth, and aid effectiveness. The EU should seek to play a greater role in promoting democracy and fundamental freedoms LQWKHFRXQWU\HVSHFLDOO\YLVjYLV&KLQD¶VJURZLQJLQÀXHQFH in Asia and the allure of the success of an authoritarian style RI JRYHUQDQFH &DPERGLD DOVR SUHVHQWV LPSRUWDQW DYHQXHV for EU-US cooperation in areas such as governance reform, development, security, education, and capacity-building.
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should also be explored. O
Cambodia
Indonesia
EU-Indonesia relations date back to 1967 and were formalised un- GHUWKH(&$6($1&RRSHUDWLRQ$JUHHPHQW:KLOHFRRSHUD- tion takes place mainly under the EU-ASEAN Dialogue umbrella, the bilateral relationship framework does support a number of po- litical and economic dialogues. An annual ministerial meeting takes SODFHDORQJVLGHDVHULHVRIVHQLRURI¿FLDOV¶PHHWLQJVWKURXJKRXWWKH
\HDU7KH(8,QGRQHVLD3DUWQHUVKLSDQG&RRSHUDWLRQ$JUHHPHQW 3&$VLJQHGLQZLOOHVWDEOLVKDPRUHVWUXFWXUHGIUDPHZRUN IRUELODWHUDOGLDORJXHRQFHWKHUDWL¿FDWLRQSURFHVVLVFRPSOHWH7KH priorities of the relationship include trade and investment, tourism, agriculture, environment, as well as research and technical issues.
Indonesia is the EU’s fourth-largest trading partner within ASEAN and 29th overall with a 0.7 per cent share of the EU’s total trade. The EU is Indonesia’s fourth-largest trade partner JOREDOO\DIWHU-DSDQ&KLQDDQG6LQJDSRUHKROGLQJDQSHU cent share of Indonesia’s external trade. In 2012 bilateral mer- chandise trade stood at €25 billion, while trade in commercial VHUYLFHVDPRXQWHGWR¼ELOOLRQLQDFFRXQWLQJIRU per cent of total trade. EU exports have doubled in the last VL[\HDUVUHDFKLQJRYHU¼ELOOLRQLQZLWKWUDGHGH¿FLW stabilising at around €5.7 billion. The EU’s key imports from Indonesia include agricultural products (mainly palm oil), fu- HOVDQGPLQLQJSURGXFWVWH[WLOHVDQGIXUQLWXUHPHDQZKLOH(8
ABRAHAMARTHEMIUS / FLICKR
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LVRQO\DURXQGSHUFHQWRIWRWDO(8WUDGHZLWK$6($16LQJD- pore, and not Indonesia, emerges as the EU’s main foreign direct investment (FDI) partner among ASEAN member countries. The 3&$VLJQHG¿YH\HDUVDJRKDVVWLOOQRWEHHQUDWL¿HG$Q(8,QGR- nesia Free Trade Agreement (FTA) could unlock much potential, but is still in the early stages of scoping. With Indonesia having JUDGXDWHGRXWRIWKH(8¶V*HQHUDOLVHG6FKHPHRI7UDGH3UHIHU- HQFHV *63 LQ -DQXDU\ WKH )7$ FDQ VLJQL¿FDQWO\ ERRVW WUDGH)RUDFRXQWU\ZLWKDQLQFUHDVLQJUHJLRQDODQGJOREDOSUR¿OH like Indonesia, the lack of a regular bilateral summit meeting af- fects the EU’s visibility in Jakarta.
Indonesia is a religiously- and ethnically-diverse, democratic coun- try, which embodies the EU’s catchphrase of ‘unity in diversity’.
It is a promoter of closer regional integration within ASEAN and since 2002, it has been an advocate of democracy within the bloc DQGWKHZLGHU$VLD3DFL¿F,QGRQHVLDLVDOVRDVXFFHVVIXOPRGHO of governance that has reconciled Islam, democracy, and develop- ment. Bilaterally, the EU and Indonesia have shared interests in particular in countering terrorism, combating radicalisation, and
¿JKWLQJRWKHUQRQWUDGLWLRQDOVHFXULW\WKUHDWVLQFOXGLQJWUDI¿FN- ing (drugs, humans), piracy, natural disasters, serious communi- FDEOHGLVHDVHVOLNH$YLDQLQÀXHQ]DLOOHJDOLPPLJUDWLRQ¿QDQFLDO DQGHFRQRPLFVHFXULW\DQGLQIRUPDWLRQVHFXULW\*OREDOO\WKH(8 exports to Indonesia consist largely of machinery and transport
equipment, chemicals and other manufactured goods.
The EU is the second-largest investor in the country. Around 700 European companies have more than €50 billion worth of invest- ments there, contributing to the creation of around half a million ORFDOMREV*HUPDQ\DQGWKH1HWKHUODQGVDUHWKHWRS(8LQYHVWRUV in Indonesia. EU bilateral aid to the country for the period 2007–13 DPRXQWHGWR¼PLOOLRQ7KHUHZLOOEHQRIXWXUHELODWHUDODLGSUR- JUDPPHV XQGHU WKH 0XOWLDQQXDO )LQDQFLDO )UDPHZRUN ± JLYHQWKDW,QGRQHVLDD*PHPEHUZLWKDODUJHHFRQRP\LVFRQ- VLGHUHGWRKDYHJUDGXDWHGXQGHUWKH$JHQGDIRU&KDQJHSULQFLSOHV1 +RZHYHU LPSOHPHQWDWLRQ RI RQJRLQJ SURJUDPPHV ZLOO FRQWLQXH XQWLO7KH(8KDVDOVREHHQDFWLYHLQWKH¿HOGRIGLVDVWHUUH- sponse (Aceh Multi-Donor Fund and Java Reconstruction Fund). In WKHDUHDRIKHDOWKWRJHWKHUZLWK*HUPDQ\DQG)UDQFHWKH(8FRQ- WULEXWHVVXEVWDQWLDOO\WRWKH*OREDO)XQGWR¿JKW$LGV7XEHUFXORVLV and Malaria – a challenge of particular relevance for Indonesia.
But economic ties remain far below potential. While Indonesia DFFRXQWVIRUSHUFHQWRI$6($1*'3(8WUDGHZLWK,QGRQHVLD
& I]Z6\ZcYV[dg8]Vc\Z^hi]ZWajZeg^ci[dg:JYZkZadebZcieda^XnVcYV^Yegd\gVbb^c\aVjcX]ZY
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Indonesia
30
Myanmar in particular has been crucial, by supervising and con- stantly encouraging Naypitaw to reform its authoritarian system.
Indonesia is a model for democratic governance in the sub-region.
The Bali Democracy Forum is the only ministerial-level meeting in Asia focused on democracy promotion. It is also an integral part of the region’s many other politico-security frameworks, most of which are ASEAN-centred. As ASEAN’s largest economy, Indo- QHVLDZLOOEHDPDMRUSOD\HULQWKH$6($1(FRQRPLF&RPPXQLW\
by 2015. Its economy is deeply entangled within the noodle-bowl of Asian FTAs (with 21 FTAs in total, either proposed, signed RU XQGHU QHJRWLDWLRQ *LYHQ WKDW WKH 7UDQV3DFL¿F 3DUWQHUVKLS (TPP) does not include all ASEAN members, Jakarta is boosting the group’s efforts to create a Free Trade Area of the Asia Pa- FL¿FWKURXJKWKH5HJLRQDO&RPSUHKHQVLYH(FRQRPLF3DUWQHUVKLS 5&(3LQLWLDWLYH
,QGRQHVLDKDVDJURZLQJJOREDOSUR¿OHRQHQYLURQPHQWDOLVVXHV too. The country is highly vulnerable to the effects of climate FKDQJHDQGLWLVVLJQL¿FDQWO\ULFKLQQDWXUDOUHVRXUFHVLWVELRGLYHU- VLW\LVVHFRQGRQO\WR%UD]LO¶V,QGRQHVLDQRWRQO\KDVWKHZRUOG¶V second-largest tropical forest, but it is also the greatest repository of marine biological resources. Indonesia is the second-largest ex- SRUWHURIWKHUPDOFRDODQGKDVVLJQL¿FDQWFUXGHRLOQDWXUDOJDV DQGJHRWKHUPDOUHVRXUFHV+RZHYHULWLVWKHWKLUGODUJHVWHPLWWHU and Indonesia have a shared belief in constructive multilateralism,
global governance, and regional institutions. Indonesia looks to the EU as a partner in shaping a rules-based world order.
Indonesia is strategic to the EU’s interests for a number of rea- sons. As a global middle power and regional pivot, it belongs to WKHVHFRQGJHQHUDWLRQRIHPHUJLQJFRXQWULHVDIWHUWKH%5,&6±
%UD]LO5XVVLD,QGLD&KLQDDQG6RXWK$IULFD±JURXSLQJ:LWK the fourth-largest population worldwide, Indonesia is also the world’s most populous Muslim nation and the third-largest de- mocracy after India and the US. Nearly 250 million people live on its 17,500 islands. It is the 16th largest economy in the world, and one of the fastest-growing consumer markets, with a rapidly bur- geoning middle class. By 2020, 8-9 million people are expected WRWUDQVLWLRQWRWKHPLGGOHFODVVHDFK\HDU7KH0F.LQVH\*OREDO Institute projects the island-nation to become the seventh-largest ZRUOGHFRQRP\E\DKHDGRIERWK*HUPDQ\DQGWKH8.
Indonesia plays an important role in its sub-region. It is a driving force within ASEAN and has historically pushed for deeper inte- gration of the bloc. When the group failed to issue a joint commu- niqué at the foreign ministers meeting in 2012, in the face of pres- VXUHIURP&KLQDRQWKH&DPERGLDQKRVWSRZHUIXOGLSORPDF\E\
Indonesia helped deliver an accord. Indonesia’s role in integrating
31
RIJUHHQKRXVHJDVHV*+*LQWKHZRUOGDIWHUWKH86DQG&KLQD and has a highly accelerated deforestation rate.
,QGRQHVLDFDQEHVLQJXODUO\LQÀXHQWLDOLQJOREDODFWLRQDJDLQVWFOL- mate change. Jakarta has been a constructive actor in South-East
$VLDZLWKLQWKH*DQGRWKHUIRUDLQSURPRWLQJEHWWHUFOLPDWH action. The country has unilaterally undertaken an ambitious tar- get of 25 per cent emissions’ reduction by 2025, and has envis- DJHG UDLVLQJ LW WR SHU FHQW GHSHQGLQJ RQ LQWHUQDWLRQDO DVVLV- tance. There is large scope for the EU to engage constructively with Indonesia on energy and climate change issues.
,QJHRSROLWLFDOWHUPV,QGRQHVLD¿QGVLWVHOISOD\LQJDGLI¿FXOWEDO- DQFLQJDFWEHWZHHQJOREDOKHDY\ZHLJKWVVXFKDVWKH86&KLQD Japan, and India. Indonesia employs a strategy of dynamic equi- OLEULXPLQRUGHUWRDYRLGDUHJLRQDOFRQÀLFWRUDSRZHUVKDULQJ arrangement among major powers. In this sense, the notion of ASEAN centrality has become a cornerstone in Indonesia’s for- eign policy, and Jakarta endeavours to promote ASEAN initiatives within the region. Indonesia’s role extends well beyond regional ERUGHUVKRZHYHUPDLQO\WKURXJKLWVPHPEHUVKLSRIWKH*DQG RI WKH 2UJDQLVDWLRQ RI ,VODPLF &RXQWULHV 2,&7KH FRXQWU\ LV also an active contributor to UN peacekeeping operations, with over 1,500 personnel deployed in 2012.
Indonesia’s strategic location in particular makes the country an important partner on maritime security. Indonesia separates the ,QGLDQDQGWKH3DFL¿F2FHDQVDQGLVKRPHWRFUXFLDOLQWHUQDWLRQDO FKRNHSRLQWVWKH6WUDLWVRI0DODFFD6XQGDDQG/RPERN0DNDV- sar. More than half of global trade passes through Indonesian wa- ters, making the country a key player in maritime transport. While ,QGRQHVLDKDVQRWHUULWRULDOFODLPVLQWKH6RXWK&KLQD6HDGLVSXWH it has engaged in promoting a peaceful settlement, in particular through ASEAN efforts to establish a code of conduct.
There is scope to raise the level of EU political engagement with Indonesia and develop a dynamic foreign and security policy dia- logue. An annual summit between the two partners could help up- grade the partnership. There is an urgent need to commence FTA negotiations to tap into the opportunities that Indonesia presents and to deepen relatively shallow bilateral investment ties. Among RWKHUVHFWRUVDQXUEDQLVDWLRQSDUWQHUVKLSFRXOGKHOSWKH(8VHL]H VLJQL¿FDQWRSSRUWXQLWLHVZKLOHKHOSLQJ,QGRQHVLDDWWDLQLWVXUEDQ development goals. O
Indonesia
Lao PDR
Development cooperation has provided the foundation of the EU-Lao People’s Democratic Republic (PDR) relationship, which in recent years has focused on economic liberalisation and Lao PDR’s integration into the wider world economy.
%HJLQQLQJ LQ WKH V WKH UHODWLRQVKLS ZDV UHDI¿UPHG WKURXJK D &RRSHUDWLRQ $JUHHPHQW VLJQHG LQ ZKHQ /DR PDR joined ASEAN. In 2000, the country acceded to the 1980 (&$6($1 &RRSHUDWLRQ $JUHHPHQW WKXV DOORZLQJ LW WR participate in region-to-region cooperation programmes. The 1997 agreement has provided the dialogue and cooperation structure of the relationship. While development cooperation has been the mainstay of the partnership, political engagement and economic exchanges – also thanks to the EU’s Everything But Arms (EBA) scheme – have been crucial components.
The EU has worked closely with Lao PDR’s government on the national reform agenda, economic liberalisation, poverty reduction and in raising the standard of living of the population, as well as on better integrating the country into the international arena. Today, Lao PDR is part of the World Trade Organisation (WTO), ASEAN, the East Asia Summit (EAS), La Francophonie, and the Asia Pacif- ic Trade Agreement, amongst many other frameworks. Lao PDR is DOVRDFWLYHO\HQJDJHGLQWKH*UHDWHU0HNRQJ6XE5HJLRQLQLWLDWLYH
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agenda under the national development strategy – the National Socio-Economic Development Plan (NSEDP) –, helping to DFKLHYH WKH 0LOOHQQLXP 'HYHORSPHQW *RDOV 0'*V 6LQFH KXPDQLWDULDQDLGKDVDOVREHHQH[WHQGHGWKURXJK(&+2 DQG LWV GLVDVWHU SUHSDUHGQHVV SURJUDPPH ',3(&+2 ZLWK
¼PLOOLRQLQUHVSRQVHWRQDWXUDOGLVDVWHUVDQG¼PLOOLRQIRU GLVDVWHUSUHSDUHGQHVV(&+2DOVRDVVLVWHGSRSXODWLRQVDIIHFWHG E\ÀRRGVLQZLWK¼PLOOLRQDQGFRQWULEXWHG¼LQ response to the malaria outbreak in 2012.
Funding from the EU and its member states makes up a quarter RI WRWDO RI¿FLDO GHYHORSPHQW DVVLVWDQFH 2'$ ORDQV DQG JUDQWVWR/DR3'5ZLWK)UDQFH*HUPDQ\6ZHGHQ%HOJLXP and Luxembourg amongst the top EU donors. Japan is the largest bilateral donor to Lao PDR, providing around $100 million each
\HDU LQ DVVLVWDQFH DQG JUDQWV PDLQO\ WR ¿QDQFH LQIUDVWUXFWXUH projects in the energy and transport sectors. Japanese ODA represents nearly half of total bilateral assistance given to the FRXQWU\&KLQDLVDIDVWJURZLQJHFRQRPLFSDUWQHUDQGLQYHVWRU accounting for around 15 per cent of total ODA to Lao PDR, mainly through involvement in major infrastructure projects including roads and dams. Australia, the Asian Development Bank (ADB), and the US are other important donors.
$V D ODQGORFNHG GHYHORSLQJ FRXQWU\ /DR 3'5 GHSHQGV ¿UVW DQG IRUHPRVW RQ LWV QHLJKERXUV 0\DQPDU &KLQD 9LHWQDP
&DPERGLD DQG 7KDLODQG 1RQHWKHOHVV WKH (8 KDV EHHQ DQ important international partner, especially in terms of poverty reduction. A third of Lao PDR’s 6.5 million people still live under the international poverty line. Lao PDR aims to leave WKHJURXSRI/HDVW'HYHORSHG&RXQWULHV/'&E\)URP 1993 to 2013, the EU provided approximately €170 million in development aid. During the same period, Lao PDR also ben- H¿WHGIURPRWKHU$VLDZLGHSURMHFWV¿QDQFHGE\WKH(8(XUR- pean development assistance to the country has mainly focused on, and has made an important contribution to, agriculture and rural development, trade and economic development, public
¿QDQFLDOPDQDJHPHQWHGXFDWLRQDQGKHDOWKUHGXFWLRQRIWKH Unexploded Ordnance (UXO) threats, good governance and human rights, and climate change.
In recent years, the EU has shifted its approach to development cooperation towards sustained, longer-term budget support, which underpins closer engagement and policy dialogue with the government, structural reforms and aid effectiveness. Fifty-eight per cent of total EU support under the EU’s Strategy Paper for 2007–13 (€69 million) was allocated to the government’s reform
