Duterte's Asean vision: Stability, peace, prosperity

Asean foreign ministers during the photo shoot at their retreat on the Philippine resort island of Boracay in February. The regional grouping is seeking to raise its profile as it marks its 50th year.
Asean foreign ministers during the photo shoot at their retreat on the Philippine resort island of Boracay in February. The regional grouping is seeking to raise its profile as it marks its 50th year.PHOTO: REUTERS

Philippine leader aims to also deliver binding deal with Beijing on South China Sea issue

President Rodrigo Duterte of the Philippines may seem like everything an Asian diplomat is not. At times brash and often outlandish, he finds the rituals of diplomacy too rigid, even superficial. His mercurial, unpredictable streak has got everyone wondering: Is Asean, under his stewardship, up for a wild ride?

The short answer: He isn't planning any surprises; nothing provocative or unexpected, even as his own foreign policy, marked by a pivot to China, is upsetting the fulcrum on which the current regional security architecture balances.

This is not to say that Mr Duterte, 72, is not out to make a splash, especially as this year marks Asean's 50th anniversary. When he hands over the chairmanship of Asean to Singapore next year, he hopes to have already bagged something that has eluded Asean for over a decade: a binding deal with Beijing to keep the peace in the South China Sea that may, in turn, help guarantee uninterrupted prosperity across South-east Asia.

Mr Duterte in January said he intended to build on the "enduring ties" that bind Asean, "affirm shared cooperations" and "secure Asean's future". He listed six themes: peace and stability; maritime security and cooperation; inclusive, innovation-led growth; Asean's resiliency; a people-oriented and people-centred Asean; and Asean as a model of regionalism and a global player.

 
 

He and his top aides have since been elaborating on these points, beginning with where he intends to take Asean by year's end.

Philippine Defence Secretary Delfin Lorenzana said Mr Duterte, in keeping with his tough-guy persona, believes Asean should not be made a "proxy" for rivalries among the world's superpowers.

He said Mr Duterte believes Asean should stay above the fray, even as it continues to engage the rest of the world on an equal footing. Asean has, after all, overwhelming leverage when it acts as one - with an economy valued at US$2.3 trillion (S$3.2 trillion) and a single market of 624 million.

Mr Duterte's centrist leanings have allayed concerns that he may take the group with him in his ebullient slide towards China and Russia, and alienate the United States and Japan, sowing disagreements rather than building consensus.


Asean foreign ministers during the photo shoot at their retreat on the Philippine resort island of Boracay in February. The regional grouping is seeking to raise its profile as it marks its 50th year. PHOTO: REUTERS

So far, two of the major meetings held under the Philippines' stewardship of Asean - those of the region's foreign and finance ministers - have been a reflection of Mr Duterte's directions: building on consensus, rather than needling on unresolved conflicts, so that the Asean Economic Community (AEC) can flourish.

The region's foreign ministers are now on the home stretch of their efforts to conclude a "framework" on a code of conduct (COC) meant to serve as a mechanism to prevent conflicts in the contentious South China Sea.

China's claim to nearly all of the this vital waterway has led to tensions with three Asean member states: the Philippines, Vietnam and Brunei, which have their own claims. Taiwan is also a claimant.

Philippine Foreign Secretary Enrique Manalo is hopeful Asean and China can reach a deal at meetings set in Beijing in May, and that the framework can be signed by June.

This framework will likely spell out broad statements reaffirming principles outlined 14 years ago in the "Declaration on the Conduct of Parties in the South China Sea", including an agreement to "exercise self-restraint" to prevent actions that could "complicate or escalate disputes".

Its significance is that it marks the first big leap in years since Asean first set out to try and adopt a COC in 2002. That, in turn, is seen as providing "a certain momentum, a certain confidence… going into the really big challenge, which is actually to settle the legally binding COC", said Singapore's Foreign Minister Vivian Balakrishnan.

"We can't control the agenda of the superpowers. But we do need to make sure, to the best extent possible, that we maintain an oasis of peace and stability in this part of the world," said Dr Balakrishnan.

  • INSIGHTS INTO DUTERTE'S PLANS

  • • Philippine President Rodrigo Duterte hopes that Asean can sign a binding deal with Beijing to keep the peace in the South China Sea.

  • • He wants to ensure that Asean is not made a ''proxy'' for rivalries among the world's superpowers.

  • • The President aspires to level as many speed bumps slowing the march as possible, to fully
    realise the promise of Asean integration

In Mr Duterte's calculations, that is the key to unlocking Asean's full economic potential.

Sources inside his government say he has been leaning on Manila's new rapprochement with Beijing to coax it into negotiating with a more reasonable stance. His decision to set aside an international tribunal's ruling striking down China's claims to the South China Sea and to take it out of Asean's agenda altogether, for instance, was seen as key to breaking a long-running impasse between Asean and China over items to be included in the COC.

Mr Duterte's goal, some analysts say, is to level as much as possible the speed bumps slowing the march to fully realise the promise of Asean integration.

Very little progress has been made since the AEC kicked off on Dec 31, 2015.

An HSBC research note said intra-Asean trade had even contracted at nearly the same rate as that of total Asean exports to the rest of the world. Trade within the economic bloc fell by 3.5 per cent in the first nine months of last year since the AEC's implementation, matching the 3.9 per cent slump in regional exports in the same period.

Banking integration has also been off to a slow start.

In early April, the Philippines, Malaysia and Thailand firmed up agreements to open up their banking sectors, in line with the Asean Banking Integration Framework.

The target year is 2020, for a project that began in 2014. It is still a long way off, and there are a lot of loose ends to tie up.

Banks in the Philippines, for instance, are taking a cautious approach.

"All other banks are considering investing and expanding, but we're also being careful… We always walk before we run," said BDO Capital & Investment president Eduardo Francisco.

It is the size that concerns many banks. Mr Francisco said that even when combined, the Philippines' three largest banks will still be smaller than most commercial banks in Malaysia. "Why would they deal with Filipino banks? They have Maybank and CIMB (in Malaysia)," he said.

But Philippine Finance Secretary Carlos Dominguez believes Asean is ripe for an investment boom.

"The AEC provides a strong market of 600 million people. Our 300 million-strong labour force is young, talented and dynamic. Our governments are convinced that globalisation is the way to progress. Our economies have much headroom for rapid expansion, beginning from a massive infrastructure build-up that will bring our region increased efficiency," he said.

Still, challenges lie ahead.

Asean deputy secretary-general Lim Hong Hin said hopes for growth across South-east Asia "must be viewed against the backdrop of uncertain times, with the rise of populism and protectionism sentiment posing a challenging context to the region's integration agenda".

US President Donald Trump, for one, is proving to be a conundrum for Asean. He has withdrawn the US from the Trans-Pacific Partnership (TPP) trade deal, leaving the China-initiated Regional Comprehensive Economic Partnership (RCEP) as Asean's option for now.

Mr Duterte had criticised the TPP as "restrictive" for a nation like the Philippines, as he backed RCEP. But that position has been more in line with his own foreign policy than a consideration of what will be best for Asean.

Mr Trump has also instructed his administration to study the causes of US trade deficits and clamp down on countries that abuse trade rules in two executive orders he said would open a new chapter for US workers and businesses.

Again, Mr Duterte has yet to respond to that on behalf of Asean.

Issues such as the TPP-RCEP divide and Mr Trump's brand of protectionism, and Asean's response to them, are likely to spill over to Singapore's chairmanship of Asean next year.

For political analyst Richard Javad Heydarian at De La Salle University, Mr Duterte's "focus on areas of presumed consensus", such as concluding the COC framework, fighting terrorism and transnational crime, as well as thrashing out long-term economic goals, may not be as uncontentious as he assumes.

He has to realise, for instance, that he cannot keep sweeping under the rug discussions on China's massive land reclamation project in the South China Sea, said Mr Heydarian.

At the meeting of foreign ministers on the resort island of Boracay in February, then Foreign Secretary Perfecto Yasay was forced to express concerns from "two or three" Asean states over Beijing's efforts to militarise the South China Sea.

Mr Duterte may also be missing out on opportunities for greatness by being placid. Even as he refuses to confront China, he can still begin the process of overhauling Asean's notoriously slow decision-making process where unanimity is a prerequisite for every joint action.

He should, for instance, be proposing a two-tiered process, where some decisions that do not directly involve all member states can be made via a simple majority.

"He should be striving for something historical, instead of just being typical," said Mr Heydarian.

A version of this article appeared in the print edition of The Sunday Times on April 23, 2017, with the headline 'Duterte's Asean vision: Stability, peace, prosperity'. Print Edition | Subscribe