Page 4 - Diplomatic Voice 2014 Vol 1

FORUM Prosper Thy Neighbours: Malaysia’s Economic Diplomacy Role in the AEC Contributed by Dr. Sufian Jusoh INTRODUCTION ASEAN leaders then agreed to the home country’s external domestic AEC Blueprint at the 13th ASEAN interests.” 1 The Association of Southeast Asian Summit held in Singapore in 2007. It Nations (ASEAN) is an important consists of four key pillars that is, In other words, the practice of eco- region in Asia and the world. It single market and production base; a nomic diplomacy means “diplomatic consists of ten nations with different highly competitive economic region; a official activities that are focused on levels of economic development, with region of equitable economic develop- increasing exports, attracting foreign a combined market of more than 600 ment; and a region fully integrated into direct investment and participating in million people. With this vast intra-re- the global economy. Therefore, 2015 is work of the international economic gional market that attracts both the an important year for Malaysia, not organisations i.e. the activities con- domestic and foreign direct investors, just because it is the year to realise the centrated on the acknowledgment of ASEAN is gearing towards a higher AEC, but also the fact that Malaysia is economic interests of the country at level of integration, with the aim of going to chair ASEAN. the international level”. There are at 2 achieving the ASEAN Economic Com- least two flaws in this definition. One is munity (AEC) in 2015. Challenges of AEC that some countries may use eco- nomic diplomacy in the promotion of This article intends to explore Malay- One of the key challenges to the the countries’ investment in a foreign sia’s potential role in assisting the realisation of the AEC is the prepared- country, either for market seeking, newer ASEAN Member States, namely ness of some of the ASEAN Member resource seeking or efficiency seek- Cambodia, Lao PDR and Myanmar to States in the implementation of their ing. Thus, to say that economic diplo- achieve and implement domestic national policies, i.e. to be in full macy relates to export or attracting targets towards realising the AEC in compliance with the vision, mission foreign direct investment is not neces- 2015. Malaysia as a more developed and objectives of the AEC. The other sarily accurate. member of ASEAN could use eco- key challenge is the preparedness of nomic diplomacy in the quest to assist the public at large, including the Thus, I would define “economic diplo- such ASEAN Member States such as business communities to utilise macy” in the modern world as “diplo- in the fields of liberalisation of domes- opportunities arising from the imple- matic practices that involve represen- tic markets for a freer flow of capital, mentation of the AEC. tation, negotiation, communication thus enhancing intra-ASEAN invest- and other means involving one state ment. At the same time, the AEC will mean over another state or international the opening of more liberal markets in organisation with the aim of promoting The ASEAN Economic Community goods and services, and the liberalisa- and protecting the former economic (AEC) tion of investment, which leads to interests.” certain forms of inexplicable anxiety The AEC, mooted by the ASEAN over whether businesses and ASEAN AEC Scorecard leaders at the ASEAN Summit in Bali in Member States are prepared to 2003, is an important element to reduce non-tariff barriers to their According to the AEC Scorecard 2012, realise the ASEAN Vision 2020, agreed market. ASEAN has implemented 65.9% of by the ASEAN leaders at the ASEAN measures relating to single market and Summit in Kuala Lumpur in 1997. In Economic Diplomacy production base, 67.9% of measures accelerating ASEAN’s transformation relating to making ASEAN as a into an economically stable region, Before discussing the options for competitive economic region, 66.7% ASEAN leaders agreed at the 12th Malaysia to assist the neighbouring on measures relating to the equitable ASEAN Summit in 2007 in The Philip- countries in the implementation of economic development scorecard and pines, to the Cebu Declaration on their market liberalisation policies, the Acceleration of the Establishment of article will first define the term “eco- ....................................... an ASEAN Community by 2015. The nomic diplomacy”. 1 Kishan Rana and Bipul Chatterjee, The Role Cebu Declaration commits ASEAN of Embassies, Economic Diplomacy, India’s Member States “to hasten the esta- For a start, there is no precise defini- Experience, CUTS International 2011. blishment of the ASEAN Economic tion of what is meant by “economic 2 Pavol Baranay, Modern Economic Diploma- Community by 2015 and to transform diplomacy”. Nevertheless, the term cy, www.dec.lv; see also Lichia Yiu and ASEAN into a region with the free “economic diplomacy” may simply Raymond Saner, International economic diplomacy: Mutations in post-modern times, movement of goods, services, invest- mean, which may be subject to debate Discussion Papers in Diplomacy, No. 84 (The ment, skilled labour, and the freer flow and interpretations, “a plural set of Hague: Netherlands Institute of International Relations ‘Clingendael’, 2003). of capital.” practices all aimed at advancing the ....................................... 4 bulletin@idfr.gov.my