Diplomatic Pouch / November 5, 2015
By Larry Luxner
It sure hasn’t been an easy year for Malaysia’s top diplomat here, Awang Adek.
The embassy in Washington was still reeling from the disappearance of Malaysia Airlines Flight 370 on March 8, 2014 — and the shootdown of MH17 over Ukraine just over four months later — when one of Adek’s predecessors, Tan Sri Jamaluddin Jarjis, died in a helicopter crash this past April.
The 63-year-old parliamentarian, who had served as Malaysia’s ambassador to the United States from 2009 to 2012, was the focus of a moving video tribute during the Oct. 22 gala dinner held to celebrate Malaysia’s chairmanship of the Association of South East Asian Nations (ASEAN).
Despite the multiple tragedies, however, Malaysia is doing well economically as it prepares to host the 27th ASEAN Summit, scheduled for Nov. 18-22 in Kuala Lumpur. Per-capita income for its 30 million citizens exceeds $12,000, and its commodities-driven economy is expected to grow by just over 5 percent in 2015.
“We believe there are good reasons to hold celebrations for ASEAN — not because Malaysia is the chair, but because 2015 is a historic year as we usher in the ASEAN Economic Community,” said the ambassador. “This is perhaps the single biggest achievement of ASEAN since its formation 48 years ago.”
Adek said the 10 member nations which make up ASEAN constitute the seventh-largest economy in the world. By 2050, ASEAN will rank as the world’s fourth-largest economy, according to the Organization for Economic Cooperation and Development.
“While that’s impressive, ASEAN’s future should be even more promising, on account of its internal dynamics and external forces,” he continued. “Internally, the process of integration has resulted in greater inter-ASEAN trade. Foreign and domestic companies are taking advantage of the integrated market. The region is now an operations base for many multinationals, creating employment opportunities for our young people.”
The dinner at which Adek spoke followed an all-day conference on Islamic finance at the Malaysian Embassy that attracted several hundred people. While the two events were technically not related, Adek pointed out that three of ASEAN’s 10 members — Brunei, Indonesia and Malaysia — are Muslim-majority nations, with large numbers of Muslims also living in Singapore, southern Thailand and the southern Philippines.
“Given that 40 percent of the total ASEAN population of 635 million are Muslims, this means the demand for Islamic finance will only be on the increase,” Adek told dinner guests as they feasted on lamb stew, hard-boiled eggs with Malaysian sauce, ayam goring halia (stir-fried chicken with ginger and mixed vegetables, jelatah (cucumbers, pineapples, onions and lime juice), beef black pepper and rice.
Southeast Asia is currently enjoying a surge in prosperity, with ASEAN member states seeing an average 5.2 percent in annual GDP growth this year. Per-capita GDP has skyrocketed from $2,647 in 2008 to $4,130 in 2014 — with especially impressive gains for the club’s four newest members: Cambodia, Laos, Myanmar and Vietnam.
Meanwhile, he said, inflows of foreign direct investment (FDI) have jumped from $49.7 billion in 2008 to $136.2 billion last year — surpassing even FDI to China.
Thanks to improvements in customs procedures and trade facilitation, he said, the cost of commerce among ASEAN member countries has fallen by more than 15 percent, and between ASEAN and the rest of the world by around 8 percent.
That’s helped push the bloc’s external trade volume up by 30 percent in the last six years, from $1.9 trillion in 2008 to $2.53 trillion in 2014. Over the same period, intra-ASEAN trade has risen from $470 billion to $608 billion.
Southeast Asia stands to become even more prosperous once the controversial Trans-Pacific Partnership takes effect, said the ambassador. TPP, which links the economies of the United States and 11 other countries, also includes four ASEAN members — Brunei, Malaysia, Singapore and Vietnam — and could help Malaysia overtake neighboring Thailand next year in terms of FDI inflows.
“A study by Credit Suisse found that Vietnam will benefit the most from TPP, with Malaysia coming in second,” Adek said, estimating that over the next 10 years, Vietnam will see an additional 11 percent GDP growth thanks to TPP, while Malaysia will get an additional 5 percent growth. “This will, in turn, create multiplier effects for the entire ASEAN region.”
Adding to the alphabet soup is the proposed Regional Comprehensive Economic Partnership (RCEP), which consists of the 10 ASEAN members plus Australia, China, India, Japan, New Zealand and South Korea.
“The motivation for RCEP is to harmonize existing FTAs with each of the six partners into a mega-FTA covering 16 countries,” said Adek, estimating that RCEP will represent 3.5 billion people and a combined GDP of $21.5 trillion. “Of course, it won’t be as sophisticated as TPP as a 21st-century trade agreement, but all the same it will enhance economic growth in the ASEAN region.
Sponsors of the ASEAN gala dinner included Maybank, Emirates Airlines, the Asian-American Chamber of Commerce and The Washington Diplomat.
The audience also enjoyed a fashion show by women representing ASEAN’s 10 member states and heard presentations by Asian American LEAD — a youth leadership and empowerment organization representing 18 Asian countries that last year supported 460 young people in the United States, 82 percent of them from low-income households.