People or Profit, a Hazy Outlook for Newly Launched Asean Economic Community

BY SHERIDAN MAHAVERA
The Malaysian Insider
Published: 23 November 2015 7:00 AM

The Asean Economic Community (AEC) launched with much fanfare yesterday seeks to offer prosperity to its 625 million people, but a civil society leader cites the region's annual smoke problem as a symbol and test of whether it can live up to the promise. 

Kuala Lumpur and much of Malaysia and Singapore were enveloped in thick
smoke last month due to forest fires started by big plantation companies in
Indonesia. The new Asean Economic Community must stop the recurrence
of the problem if it is serious in its objective, activists say. – The Malaysian
Insider file pic, November 23, 2015

Jerald Joseph, the head of local rights group Dignity International, part of the Asean People's Forum (APF) 2015 attended by the region's biggest civil society organisations last April, cited the smoke problem as an example when talking about AEC. It is a symbol because it is the by-product of what AEC plans to achieve on a grander scale: allow Asean businesses the freedom and ease to set up shop in any of the ten member countries to take advantage of cheaper labour and untapped resources

It is also a test in that Asean has so far failed to ensure that companies do not profit at the expense of everyone else. The profit, at the cost of clean air, goes to oil palm plantation companies while everyone else suffers the consequences. So as political and business leaders in Asean announced the birth of AEC on November 22, critics and civil society groups warn that just like the smoke caused by forest fires in Indonesia, the union could end up benefitting the region’s elites, not the masses. One community AEC seeks to turn the region into a single borderless economic bloc, much like the European Union (EU), minus a common currency, with the official catch phrase "One Vision, One Identity, 

One Community

It wants to tap a huge regional market of consumers and businesses, which according to a Reuters report, would make AEC the world’s seventh largest economy. Political and business leaders behind AEC say the wealth it hopes to generate will be “people-centred”. Semi-skilled and skilled workers, money and businesses can move freely between member states. Countries also promise to integrate their economies, improve transport, banking and communication links, as well as boost growth driven by the private sector. This will be done by removing tariffs and barriers such as duties, taxes and visas. Professional standards will also be streamlined such as in accounting, engineering and architecture among member countries.

N. Gopal Kishnam of the Malaysian Trades Union Congress (MTUC) said AEC would also allow semi-skilled workers to move around for jobs. Citizens of a member state, for instance, can seek employment in any of the other member countries without the need for complicated visas, said Gopal. Large national firms too can open branch offices in other Asean countries with little hassle. Freedom without protection It all looks good on the surface, but according to APF, these freedoms don’t come with adequate protections for workers or the communities impacted by businesses. “The liberalisation of the labour market has increased the number of precarious jobs and will continue to adversely impact the rights of workers, especially women, locals and migrants,” said a statement by APF on AEC last April. Gopal, whose organisation MTUC is the umbrella group of Malaysian private sector unions, said lack of rules for minimum wages, working hours and collective bargaining would drive down working conditions everywhere. For instance, since the ringgit is still worth more than many of its poorer Asean neighbours, Malaysia will still be attractive to young graduates in accounting, banking and business from the region. “Since these workers will be willing to work for less pay compared to Malaysians, it will suppress wages for everyone in Malaysia. “So Malaysian graduates may have to go overseas to look for work,” said Gopal, who was also involved in the APF summit in Kuala Lumpur. 

People or profit? 

APF’s Joseph (pic left) said AEC lacked many of the rules and mechanisms to ensure investment and business are done accountably and transparently, and that there is no corruption. “There are no governance mechanisms for communities to seek redress, no measures to ensure that the courts in all countries are independent and credible when something goes wrong,” said Joseph. APF said the lack of protection meant more resources and land, especially those owned by indigenous groups, would be plundered in the name of national development. The annual pollution is the perfect example of that, said Joseph, where foreign oil palm companies and local smallholders slash and burn vast tracts of ecologically sensitive land in Indonesia. “You have all these big companies going in and exploiting land for profit without having to follow minimum environmental standards.”

Even when the culprits are identified, it is somehow difficult to prosecute offenders despite the smoke problem posing a huge health crisis regionwide, said Joseph. Whether or not the problem is resolved, and whether those companies will be sanctioned, will be a huge test as to whether AEC can live up to its promise of bringing prosperity to Asean. “In their minds, Asean leaders think that free flow of investment will have a trickle-down effect that will help all our societies.” But without regulations, strong institutions, democratisation, and with corruption still rampant, Joseph warned that crony capitalism that many Asean countries are known could be replicated on a larger scale.