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Asean Affairs   14 November  2014

Malaysia Steps into Spotlight as ASEAN and East Asia Summit Chair

By Phuong Nguyen, (@PNguyen_DC), Research Associate, Sumitro Chair for Southeast Asia Studies (@SoutheastAsiaDC), CSIS

Expectations for this week’s East Asia Summit and related meetings have been rather modest given the increasing complexity of issues facing countries in Asia and the limited capacity of Myanmar as host. To be clear, Myanmar has done a commendable job given this is its first time chairing ASEAN and hosting other regional meetings.

But a number of key tests lie ahead for ASEAN. These include regional economic integration in preparation for the launch of the ASEAN Economic Community (AEC), China’s growing assertiveness and tensions in the South China Sea, and questions about whether ASEAN will have the ability to navigate a new geopolitical era in the region in the coming years.

This makes the role of Malaysia as next year’s ASEAN chair all the more critical. As chair, Malaysia will be responsible for keeping the region’s political and economic agenda on track. Also on display will be whether its quiet diplomacy and resilient ties with both the United States and China could hold the key to the future of ASEAN’s balancing act, including on problems regarding the South China Sea. For Washington, it will be a test of the newly elevated U.S.-Malaysia partnership, and an opportunity to deepen U.S. engagement in Southeast Asia.

President Barack Obama’s administration has identified Malaysia as one its priorities in the rebalance to Southeast Asia. The United States and Malaysia enjoy strong commercial ties and longstanding military-to-military cooperation. Malaysia is a member of the Trans-Pacific Partnership (TPP) free trade negotiations, and President Obama and Prime Minister Najib Razak in April announced the upgrading of bilateral relations to a comprehensive partnership.

This foundation should allow Malaysia and the United States to cooperate more effectively on both bilateral and regional issues. Yet Washington and Kuala Lumpur are still trying to work out the components of the comprehensive partnership, while U.S. officials have expressed concerns that Kuala Lumpur may not be as ambitious or forward-leaning as Washington is in taking the relationship to the next level.

By working together and consulting early with Malaysia on issues high on the agenda for 2015, the United States can help drive progress in the bilateral relationship as well as reaffirm its leadership role in the region. The past year has shown that the Asia-Pacific region continues to face persistent security and economic challenges, and the competition between U.S.-led and other models of development and integration has only just begun.

For Malaysia, working to make sure the AEC credibly comes into effect by the end of 2015 will be one of its top priorities. ASEAN members have adopted more than 80 percent of all measures required for AEC integration, according to their own score cards, but the tasks of addressing nontariff barriers, implementing the free flow of skilled labor, coordinating among the ministries of 10 member governments, and maintaining harmony among member countries with varying levels of development will be difficult and time-consuming.

Logistics aside, Kuala Lumpur will likely want to use the opportunity to develop a new strategic vision and priorities to guide ASEAN after 2015 once the AEC has begun to be implemented. Like some of its neighboring Southeast Asian countries, Malaysia understands that keeping ASEAN autonomous and relevant in regional affairs will give it added leverage and a better security environment.

Prime Minister Najib has said that ASEAN needs to consider ways to streamline and bolster the relatively weak and underfunded ASEAN Secretariat in Jakarta. He has proposed a few ideas such as urging member countries to double their contributions from the current $1.7 million per year per country or allowing more developed member countries to voluntarily increase their contributions to provide the secretariat with more resources.

But while ASEAN has steadily advanced its regional profile, its members do not always agree on where the grouping should stand vis-à-vis outside powers, most notably the United States and China, or even how to deal with internal issues facing member countries. Finding a strategic balance with which all of its ASEAN peers can be comfortable will weigh heavily on the minds of officials in Malaysia.

Being the ASEAN chair next year has a special meaning for Malaysia, as it was in Kuala Lumpur that the East Asia Summit (EAS) was founded 10 years ago. Together with the ASEAN Defense Ministers’ Meeting Plus, the EAS has emerged as a premier venue for the region’s leaders and symbol of ASEAN’s by-now widely accepted centrality. This means that while there will no doubt be tension at these meetings—at least on the security front—Malaysia has an interest in making sure the agenda is not dominated by heated rhetoric surrounding territorial conflicts in the East and South China Seas.

At the same time, the United States should use this opportunity to work with Malaysia and ASEAN to further institutionalize the EAS. Prime Minister Najib has suggested that the EAS needs to think about adopting a mechanism through which the leaders of the grouping’s 18 members can implement ideas they discuss at their annual summits.

Malaysian officials reportedly were not enthusiastic about the proposal for a freeze in construction in the South China Sea floated by the United States and the Philippines in August at the ASEAN Regional Forum, and close coordination with Kuala Lumpur in the area of maritime security will be critical.

On the South China Sea, Malaysia will likely seek to work closely with both its ASEAN peers and China. A claimant in the South China Sea, Malaysia has long preferred quiet diplomacy over confrontation with China, as the two countries enjoy close political and economic ties.

But increasing instances of Chinese ships entering Malaysia’s exclusive economic zone, especially their activities at James Shoal, and China’s deployment of an oil rig off the coast of Vietnam earlier this year have prompted Kuala Lumpur to reassess its security outlook. While it will tread carefully as it seeks to gain the trust of ASEAN, China, and other stakeholders, Malaysia will likely highlight the importance of completing negotiations between China and ASEAN on a code of conduct for parties involved in the disputes and will express support for the use of peaceful means to resolve conflicts.

Amid all these delicate tasks, Malaysian officials will also have to work on overcoming domestic opposition in controversial areas such as state-owned enterprises and government procurement to complete the TPP. Here, too, U.S. officials will have the chance to work closely with their Malaysian counterparts and, once the TPP is concluded, provide support for much needed economic reforms in Malaysia.

The year 2015 will be a milestone for both Malaysia and ASEAN’s standing, be it as a relevant economic player or credible partner for the United States. With the 2014 EAS having just concluded in Myanmar, it is time for Washington to begin investing in next year’s ASEAN and EAS processes, beginning with regular and serious high-level interactions with Kuala Lumpur.

Courtesy: This post originally appeared on the Center for Strategic and International Studies, Washington D.C. cogitASIA blog

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