Wednesday, August 8, 2018

The US gives more to Asean than China does. Asean just needs to know it

David Shambaugh, South China Morning Post; original article contains links, additional images, and a video

Image from article, with caption: US Secretary of State Mike Pompeo (centre) waves while posing for a group photograph with his fellow ministerial delegates during the Asean Regional Forum retreat at the Asean Foreign Ministers' Meeting in Singapore on August 4.

David Shambaugh says while China may get all the attention, thanks to its proximity and economic strength, US investment in Asean is still consistently higher, and its assistance goes beyond economics into security, culture and education. The US needs a public education campaign to highlight its contributions

US Secretary of State Mike Pompeo’s recent diplomatic tour through Southeast Asia – visiting Indonesia, Malaysia and Singapore – was a useful opportunity to begin resetting the regional narrative about America’s roles in the region. Unfortunately, Pompeo’s “parachute diplomacy” through three of the 10 Asean states is likely only to further fuel the entrenched perception of the United States as an episodic actor that has no real strategy for the important region.

Meanwhile, regional media and governments lavish attention on China – and most Asean states have drawn increasingly close to China over the past two years. The exceptions are Vietnam – which casts a wary eye towards its northern neighbour while still engaging it – and Malaysia since Prime Minister Mahathir Mohamad returned to office and began to freeze multiple Belt and Road Initiative projects. Yet, despite the review and likely renegotiations (which Mahathir will discuss with Chinese leaders in Beijing in mid-August), Malaysia is unlikely to alter its long-standing close relationship with China.

Despite the region-wide gravitation towards China, and the pervasive pro-Beijing regional narrative, the empirical reality is that the US offers the region more than does China. The US maintains a comprehensive and robust presence throughout Southeast Asia. But most Southeast Asian governments are reluctant to recognise or publicise the US presence or contributions to regional security, stability and growth.

The US presence has deep roots, dating back to the post-second world war period, which have grown dramatically since the 1980s, covering commerce, security, education and diplomacy, among other domains. America’s strengths lie in both hard and soft power, and the US economic footprint is both broad and deep.

US trade in goods with the member states of the Association of Southeast Asian Nations reached US$273 billion in 2015, and the US’ cumulative direct investment is US$226 billion (more than China, Japan and South Korea combined). Annual direct investment from US entities reached US$13.64 billion in 2015 (US$4 billion more than China). From 2007 to 2012, US investment flows to Asean countries totalled US$96 billion – nearly four times China’s US$23 billion.

At the end of the day, America’s regional competition with China may be won or lost in the information domain

Over 4,000 US companies now operate throughout Asean. The 2018 American Chamber of Commerce Asean Business Outlook Survey, based on the annual survey of companies, is quite bullish about opportunities for US businesses in the region: the vast majority of respondents (87 per cent) expect their companies’ level of trade, investment, and profits in Asean to increase over the next five years.

Vietnam, Indonesia, Myanmar, Singapore and Thailand are identified as the fastest-growing markets with greatest growth potential for American business expansion. Increasingly, US business in Southeast Asia has shifted away from manufacturing towards diverse services and “soft” industries – including financial services, multimedia, information technologies, consumer retail, e-commerce and pharmaceuticals.

All in all, the American commercial presence in Southeast Asia has never been stronger, and is set to grow. One reason is because of the continuing difficulties being experienced by US and Western firms in China. Most are now practising the “China plus” strategy – maintaining (but lowering) their production footprint in China while diversifying it in other countries. Southeast Asia has thus been a major beneficiary of this diversification process.

While not receiving much media publicity or attention, American culture remains extremely popular across the region – sports, film, tourism and public diplomacy [JB emphasis] programmes all contribute a great deal to America’s “soft power” appeal throughout Southeast Asia. US higher education also remains a big draw – 56,000 Southeast Asians studied on American campuses in the last year, according to the International Institute of Education.

Perhaps the strongest component of American engagement in Southeast Asia lies in the security sphere. Almost all Southeast Asian militaries have extensive ties with the US military. The security/defence relationship is closest with Singapore, growing much stronger with Indonesia, quietly effective with Malaysia, improving significantly with Vietnam, deepening with Brunei and weathering strains with allies Thailand and the Philippines.

In all of these cases, there is extensive training and professional military education exchanges, equipment transfers and sales, joint exercises, high-level leader engagement and service-to-service exchanges.

Thus, America has an important story to tell in Southeast Asia.

Of course, China is also an important actor and partner for Asean and its member states, but the public narrative seems very unbalanced – certainly when one empirically catalogues and compares the US footprint in the region to that of China. China remains a considerably one-dimensional power – economic – whereas the US brings multiple tools and displays comprehensive power throughout the region.

Moreover, many Southeast Asian countries distrust China and are deeply uncertain of its goals in the region. These perceptions have long-standing historical roots. As China’s Belt and Road Initiative continues to be rolled out across Southeast Asia, China will very likely encounter growing difficulties with Asean states and societies. Beijing may well overstep – and step on others’ feet in the process. If and when it does, Southeast Asian countries will look to the US and regional middle powers (Japan, India, South Korea and Australia) for support and as economic alternatives.

In these circumstances, the best American strategy towards Southeast Asia is simply to remain steady, engaged and a predictable partner. As US-China competition escalates throughout the Indo-Pacific, Southeast Asia will increasingly become the epicentre of growing major power competition between Washington and Beijing.

To compete effectively, the US should play to its strengths and work on fixing its weaknesses. This includes mounting a major public diplomacy campaign to publicise and educate people in Southeast Asia about the value of the US to the region. At the end of the day, America’s regional competition with China may be won or lost in the information domain.

The US needs to do much better in telling its own story – and Southeast Asian governments and media need to do much better in recognising the enduring importance of the US to the region’s continuing dynamism, growth, security and stability.

David Shambaugh is a professor at George Washington University and senior visiting fellow at the Institute of Southeast Asian Studies in Singapore, is writing a book about the United States and China in Southeast Asia

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