Centre on Asia and Globalisation
Major Power Relations
Globalisation and Trade
Geopolitics and Technology
International Relations of Southeast Asia

Globalisation and Trade

Viewed as a reversal of global economic integration, geo-economic fragmentation pre-dates the Covid-19 pandemic as growing anti-globalisation sentiments became more prevalent due to rising income inequality and general disenchantment with the skewed distribution of benefits arising from globalisation. The phenomenon has been greatly exacerbated by the intensifying US-China geopolitical competition.

There are considerable economic costs arising from global fragmentation. If left unchecked, it will undermine economic growth, productivity, trade and investment as well as impede progress made in regional economic integration efforts such as the ASEAN Economic Community (AEC). ASEAN policy makers will need to take account of this more hostile economic landscape as they develop a new strategic plan for the AEC beyond 2025. Looking ahead, we plan to explore whether policymakers will need to formulate more inclusive economic policies to reverse the rising trend towards deglobalization.

This is a follow-up from Vol.1 which was published in April 2024. For Vol. 2, we plan to identify emerging trends and issues that should be included in the next strategic plan of the AEC post-2025. A workshop is being planned and an edited volume (Vol. 2), covering topics not covered in Vol.1 such as food security, productivity and innovation, and supply chain resilience will be published.

We also seek to examine the interplay between economic security and economic governance and how they contribute to the development and stability in Southeast Asia. What is the role of institutions like ASEAN in ensuring economic security in the region? Against a backdrop of global fragmentation, does existing economic security policies need a rethink? A workshop or conference will be convened to address these questions, the proceedings of which will be submitted to a journal (as a special issue).

We examine the proliferation of FTAs and other forms of economic partnerships and how they affect trade patterns and regional supply chains. New industrial policies, with a national security focus, will lead to a reconfiguration of global supply chains and possibly more trade diversion. How will this impact Southeast Asia and East Asia? Even as Southeast Asian countries like Viet Nam, Malaysia, and Singapore are being “hailed” as major beneficiaries of the “China+1” supply chain strategy, we need to ask how sustainable is this in the medium to long term? A workshop or conference will be organized to discuss these issues, and the expected outcome is an edited volume or special issue of a journal.

The ASEAN Economic Community (AEC) is at the tail end of implementation of its second Blueprint, the AEC Blueprint 2025, amid times of growing uncertainties and complexities. The open, inclusive, rules-based multilateralism that lay the ground for the previous phases of ASEAN economic integration has been under threat by geostrategic competition and rising protectionism. Furthermore, broader and deeper fragmentation of the global economy poses a real risk to the region’s growth prospects and its citizens’ economic well-being. Against a backdrop of global supply chain reorganisation and pressures from global megatrends such as climate change and digital transformation, the AEC needs to reposition itself more strategically in terms of its role and relevance.

The post-2025 ASEAN visioning process is ongoing. A vision document spanning two decades has been drafted for adoption in 2025. The development of successors to the ASEAN Community Blueprints, including the one for the AEC, is underway. For the AEC, the next strategic plan –likely be named as such – will have a shorter time span of five years, aiming for greater agility in responding to the rapidly changing context.

Supporting this effort, the ASEAN Secretariat has commissioned the end-term review of the AEC Blueprint 2025 and a study on the post-2025 AEC, both slated for completion in 2024 and likely for an internal audience. Consultations on the post-2025 AEC have been conducted with business representatives and think tanks/research institutions. A public survey was also rolled out. All these are notable improvements in both form and scope compared to the stakeholder engagement for the previous round of blueprint development.

However, many of these conversations are still taking place within the internal AEC circle. Additionally, they are often focused on the destination for a post-2025 AEC, rather than addressing the fundamental question of how to get there. Given that the AEC is not short of commitments, strategies, and frameworks, the more urgent challenge is in addressing the issues of prioritisation and the gap in implementation.

Against this backdrop, the Centre on Asia and Globalisation (CAG) initiated a research project in October 2023 to examine the gaps and challenges of the AEC post-2025. The project brings together experts from around the region to initiate and enrich conversations, as well as to generate new ideas on the post-2025 AEC. This edited volume, which is a key deliverable from this project, is intentionally concise and non-exhaustive. It does not aim to offer a comprehensive assessment of AEC 2025 achievements to date. Instead, it seeks to complement the ongoing official work by focusing on a few key themes that a post-2025 AEC should address. This includes a quick assessment of the current situation, the broader challenges faced by the AEC, and – most importantly - concrete recommendations.

This project covers pertinent issues related to digital transformation; institutional readiness to achieve carbon neutrality; narrowing the development gap; expectations of businesses on the AEC; and addressing AEC’s enforcement mechanism. Aimed at ASEAN policymakers and ASEAN stakeholders more broadly, the essays have gone through reality checks from the perspective of practitioners on what can feasibly be considered for action, rather than merely making up a wish list.

Workshop

  • Post-2025 ASEAN Economic Community (AEC) Workshop, February 26, 2024.

Publication

CAG seeks to understand how trade and finance globalisation have impacted differing continents, regions, and major economies, and how globalisation can be supported and/or managed to ensure that it works for everyone. Specifically, how can prevailing trading and financial arrangements be modified so that a new phase of openness, growth, and stability can be achieved? The project will also seek to engage questions relating to the fourth industrial revolution, the future of work, and inequality/inclusiveness.

ASEAN, China, India, and Japan are all advancing a range of connectivity projects across Asia. The Centre will study the major initiatives with the view to analyse the goals and motives of the key actors as also the economic, political, social, and diplomatic consequences of the projects. Asian connectivity has been described as an alternative or supplement to trade and financial globalisation. The project will also therefore seek to answer the question of how this enormous effort will affect existing trading and financial structures.

Working Papers

The failure to reform the hegemony of Bretton woods institutions such as the World Bank and the International Monetary Fund (IMF) owing to the strong opposition by the US Congress has lead China and other emerging market economies (EMEs) to establish the New Development Bank (NDB) and the Asian Infrastructure Investment Bank (AIIB).

How do these newly established institutions reshape the established order by the US and Japan in governing finance and investments in Asia Pacific? What are the economic ramifications? How should the EMEs best align their economic interests? How can the financial system in Asia Pacific be redesigned to maximise the growth potential of the region?


Principal Investigator

  • Tomoo Kikuchi

Collaborators


Research Assistants

  • Han Huynh
  • Li Jie
  • Takehiro Masutomo

In March 2010, a new research project began at the Centre on Asia and Globalisation at the Lee Kuan Yew School of Public Policy, National University of Singapore, under the title ‘New Approaches to Building Markets in Asia’. The project takes seriously the notion that ongoing efforts by state, private and non-governmental entities are shaping the world like never before, often in coordinated, trans-boundary and multi-scalar ways in the interests of constituting idealised forms of ‘market society’. Market society demands the adoption of particular codified standards (ISO, the Equator Principles, EITI etc.), regulatory consistency (the ‘enabling state’ advocated by the World Bank, for example), and the extension of market discipline (through public private partnerships and new financialisation measures), all ostensibly with the purpose of ensuring global competitiveness and integrity under late capitalism. While such efforts are not reducible to a monolithic super-structure (such as a transnational/supranational state), a discernible structure is perceptible and worthy of analysis, especially in a region such as Asia – home to sixty percent of the world’s population and central as it is within global production and consumption chains.

Capture

The project has three core components, each focusing upon a particular set of institutions/stakeholders involved in and/or impacted by market building measures: public organisations; private organisations and citizens. While the project is heavily influenced by extant political economy approaches, it is interdisciplinary in nature and seeks to include perspectives of a theoretical and empirical nature from a diverse set of researchers.

Since the project’s launch in 2008, it has brought together scholars from Asia, Europe, and North America to investigate how basic questions about sovereignty and institutional diversity in world affairs are being addressed in two key issue areas: Global Health Governance (GHG), Global Energy Governance (GEG). Apart from this, the study groups included research on the Concepts of Global Governance. Under this project, CAG also convened a conference on the Environmental policies in Asia and Global Economic Governance.

This project probes the growing crisis in global governance. The shortfall in global governance reflects both the complexity of the issues and the inadequacy of existing institutions. The global agenda and rules of globalisation have so far been set primarily by Europe and the United States, reflecting the distribution of power and capacity that existed at the end of World War Two. The formal organisations these countries have developed – the UN, WTO, the IMF and the World Bank – do not fully address the concerns of the 21st century and do not possess the global legitimacy needed to serve as the fora within which the world can tackle its most pressing problems. Other existing institutions – the G8 and other G-groups, networks of regulators, private-public partnerships, and transnational civil society coalitions – remain underdeveloped and/or generally unrepresentative.

It is clear that in order to make the significant strides needed to improve effective decision making for the global agenda, we need new approaches to global governance. In response to this compelling need, in January 2008 the Lee Kuan Yew School of Public Policy and its Centre on Asia and Globalisation launched the three-year S.T. Lee Project on Global Governance. The project brings together top thinkers and practitioners from Asia and West to develop insights and recommendations on how to govern a world that includes a rising Asia.

The project addresses two key sets of questions:

  • How can states, the private sector and civil society better organise to address the deficiencies in global governance? In a world of emerging multipolarity and deepening globalisation, how can the international community take effective collective action?
  • What is Asia’s role in dealing with these issues? How can, and should, Asia translate its emerging economic clout into positive political influence that will strengthen global governance?

The economy is a subset of the natural ecosystem. The ecosystem acts both as a source and a sink. Economic growth cannot go on indefinitely unless protection is rendered towards the ecosystem. Economic growth has brought about degradation to the environment and prompted an exploration of energy sources beyond traditional means. Hence, policy options should be developed to address the Economic Growth and Ecosystem Preservation nexus.

Economic Growth

An economy cannot grow forever without any consideration to the ecosystem. For sustainable economic growth, there must be a balance between economic growth and ecosystem utilization.

Moderated economic growth and regular maintenance of the ecosystem allow natural resources to realize its full economic potential. A slower rate of economic growth relative to the rate of environmental degradation ensures a balance between economic growth and environmental sustainability.

Ecosystem Preservation

Preservation of the ecosystem can be examined from the consumer and producer. Consumers could delay present consumption for future which reduces the demand from the environment. Producers could engage green production methods which are less taxing to the environment.

The ecosystem could also be preserved with sustainable initiatives which enhances its source and sink capacity.

Policy Options

Development of policy options requires an appreciation that energy and environmental policies be considered in tandem in order to achieve sustainable growth.

Cases

The cases which have been studied include resource rich economies (Australia and Canada); Asian economies (China and Korea); and city states (Singapore and Taiwan).

Principal Investigators

Seck Tan