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Pakistan-ASEAN Economic Integration: An Expert Opinion

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Finally, Pakistan has successfully started its journey towards geo-economy by discarding genie of geopolitics. Actually it has opened new window of opportunity for Islamabad to establish bilateral or trilateral ties with ASEAN member countries in diverse sectors of economy, trade & commerce, joint venture, science & technology, Artificial Intelligence (AI), digitalization, ICT, infrastructural development, banking & finance, FDIs, education and culture.

Historical analysis reveals that ASEAN awarded Pakistan the status of Sectoral Dialogue Partner (SDP) in 1997. It covered the sectors of trade, industry, investment, environment, science and technology, drugs and narcotics, tourism and human resource development.

There have been some serious flaws in our national policy towards ASEAN which needs to be ratified for the further strengthening of trade relations.

Unfortunately, foreign policy of Pakistan has not traditionally been coherent and progressive. Internal compulsions, resolved border disputes, Pakistan obsession towards geopolitics and last but not least, its leading role in the war on terror have been stumbling blocks to form a robust and effective foreign policy by successive governments in the regional and global contexts.

East Asia is still a distant region in Pakistan’s foreign policy. It has become an irrelevant, unproductive, and forgotten initiative. An economically liberalizing Pakistan has not been able to benefit from the ASEAN miracle. This trend needs to be drastically reversed.

Pakistan’s diplomacy with East Asia is similarly lacking. Seeking an FDP with ASEAN is an old cry and yet it has not materialized. In the past few years, there has been no high-level political consultation with ASEAN. Islamabad has virtually ignored South Korea, Japan, and Australia.

Pakistan has weak diplomatic cushions/comforts/concessional mechanism with the ASEAN which has been revolving around the invisible and vague strategic patience. Indian relations with ASEAN are robust, but Pakistan is lagging behind. Despite “Vision East Asia,” the strategy devised in 2003-2004 to activate economic relations with ASEAN, ASEAN-Plus Three, and Oceanic countries, Pakistan’s interactions in terms of institutional arrangements are not increasing to any satisfactory level.

Since the 1990s, Pakistan has made numerous pledges to take Pakistan’s trade with ASEAN to new heights but no concrete measures were adopted and no specific policies were implemented. Rhetoric remained strong, but words have not translated into real actions and policymaking options. Except with China, Pakistan’s trade with East Asia particularly with ASEAN has seen only modest growth for many years.

Unfortunately, due to inconsistence foreign policy options, unnatural regional economic propositions & security partnerships the policy has been stagnated. The government of Pakistan somehow, busy and reoccupied with looking “westwards” for productive and constructive ties with regions such as the Middle East, Europe, and Central Asia. Now there is a chance to further diversify Pakistan’s foreign policy by looking eastward.

Economic stabilization and enhanced politicization and democratization have also enabled Pakistan to form an effective foreign policy to attract investments into the country. It is now getting momentum after the paradigm shift from geopolitics to geo-economy in the country.

Pakistan is now focusing the Muslim connections/communities of Malaysia and Indonesia to secure the support of the two biggest Muslim countries in Southeast Asia. Pakistan has also been courting Singapore its support for Pakistan’s upgrade to full dialogue partnership appears to be lukewarm because of numerous ethnic shadows of Indian hegemony.

There are several other areas for cooperation between Pakistan and ASEAN countries such as, culture, education, transport, energy, communications, intelligence and information sharing, information technology and agricultural research. Pakistan has proposed collaboration in three additional categoriesinformation technology, agricultural research and transport and communication.

Moreover, the CLMV (Cambodia, Laos, Myanmar, and Vietnam) countries have shown some solidarity with Islamabad, as these four countries not least Cambodia appears to be amenable toward supporting Pakistan’s full dialogue partnership with ASEAN. But ongoing tussle between China and ASEAN on the issue of Myanmar somehow slow-down the pace.

The CLMV countries have benefited from the ASEAN-Pakistan Cooperation Fund in aiding their human resources development, including offering scholarships and English language training, which, on the whole, have strengthened the relations between Pakistan and CLMV countries which should be further strengthened from shifting focus from symbolic orientations to strategic actuality.

Although Pakistan is unlikely to achieve full dialogue partnership anytime soon, but concrete efforts should be pursued. Pakistan’s total bilateral trade with ASEAN of US$ 6.3 billion suggests that there is scope for Islamabad to scale up its economic engagement with ASEAN through its member-states, especially when compared to India, which has a total bilateral trade with ASEAN of around US$200 billion.

Now Pakistan desires to achieve two major objectives in its negotiation with the ASEAN and its member states. Pakistan wishes to have a full dialogue partner and, also a member of the ASEAN Regional Forum (ARF).

It is high time for Pakistan to prioritize Southeast Asia in Pakistan’s foreign policy and, concomitantly, redress the benign neglect in Pakistan-Southeast Asia relations along with rigorous persuasion of Pakistan’s “Vision East Asia Policy” which was formulated in 2003 to look eastwards for achieving greater socio-economic and geopolitical integration and engagement.

Expansion of trade and investment between Pakistan and ASEAN countries is eminently feasible and will be mutually rewarding. There is considerable degree of complementarity between the two sides.

Firstly, Pakistan should initiate the Pakistan-ASEAN Free Trade Agreement (FTA) into realization. In this regard, a joint feasibility study of this FTA was concluded in 2009, there has been little headway made since then and it appears to have faded into oblivion. ASEAN as a collective boasts the 5th largest economy in the world, such an agreement (FTA) would bring huge economic benefits to Pakistan.

Secondly, Pakistan-ASEAN should initiate a joint security forum or mechanism to proceed further. There is an ample opportunity to have close liaison with Pakistan and ASEAN on the issue of security, radicalization and terrorism Islamabad should look to ASEAN as a viable policy option to emphasize to the international community that it is deeply committed to counterterrorism efforts while revamping its image as a country that is moderate, inclusive, and diverse.

Thirdly, Pakistan should remain an active member of the ASEAN Regional Forum and pursue an integrative & holistic policy to the joint declaration for cooperation to combat terrorism which was signed between ASEAN and Pakistan in 2005. Working in partnership with ASEAN on counterterrorism allows Pakistan to boost its chances of becoming a full dialogue partner while also “normalizing” it as a country of repute in the eyes of the international community.

Fourthly, rigorous commercial diplomacy with ASEAN is the need of the hour for policy makers sitting in Islamabad. China’s economic diplomacy with ASEAN has been achieving new skies. ASEAN have jumped to number one trading bloc with China in 2020, with the trade volumes hitting 4.74 trillion yuan ($731.9 billion), a 7 percent growth year-on-year. With the demonstration the huge potential and strong resilience of China-ASEAN cooperation, the achievement has also sent a positive message for the international trade that has been shadowed with uncertainties by the unrestrained global COVID-19 outbreak from last year till now. There is a lesson for Islamabad to forge close bilateral or trilateral relations with ASEAN member countries.

Fifthly, there is need to chalk out an appropriate foreign policy to steam through the historic, traditional, cultural and civilizational hangs-over spirits of discomfort between China and ASEAN countries. Pakistan should take a neutral stance to resolve all these political disputes and try to enhance its own trade relations with ASEAN.

Sixthly, feel good gesture diplomacy with all the ASEAN countries despite any invisible pressure from any regional country. One Belt One Road Initiative and its flagship project CPEC have now further consolidated Sino-Pak relations. Pakistan should remain neutral on the South China Sea dispute so as to remain on good terms with ASEAN members.

Seventhly, policy makers of Islamabad must use announcement of   most recently G7 announced and US sponsored Build Back Better World (B3W) to its own strength for further strengthening of its ties with ASEAN countries. In this connection, Pakistan should take it golden opportunity to diversify its economic ties with ASEAN countries. Chinese hang-over should not be any hurdle to Islamabad to proceed further to consolidate its ties with ASEAN. China being strategic ally of Pakistan should provide special economic free zones for Pakistan to exports into ASEAN countries.

Eighthly, Pakistan should also look for innovative & alternative means to strengthen relations with each of the 10 Southeast Asian countries mainly in the area of trade and investment.

Ninthly, defense cooperation with ASEAN may provide befitting proposition for both the sides. Indonesia and Malaysia have shown great interest to have closer military cooperation with Pakistan.  In this regard, bilateral training facilities and joint defense and military exercises may be initiated as soon as possible. The existing maritime exercises Pakistan conducts with Malaysia, Indonesia, and Singapore should be extended to other ASEAN member countries.

Tenthly, the government must approach to significant Pakistani diaspora of ASEAN countries especially Malaysia and Indonesia etc. The government of Pakistan should step up efforts to court overseas Pakistanis in the hope that they would project a favorable image of Pakistan in ASEAN and also keep a link to their homeland while contributing to the economy back home. Pakistan should also start people and cultural diplomacy with ASEAN countries. The government of Pakistan should also gear up advocacy group to support Pakistan on the issue of Kashmir in ASEAN.

Pakistan’s attempt to diversify its industrial base could find openings in ASEAN markets, and it could also benefit from the experience of some ASEAN countries, like Singapore, Malaysia and Thailand, which have been quite successful in achieving economic progress through industrialization.

In the past, Pakistan desired to boost relations with ASEAN and secured a Full Dialogue Partnership (FDP), which aims at strengthening political, trade, and economic ties with ASEAN member states. Admittedly Pakistan’s trade with ASEAN is below its potential.

Pakistan and ASEAN should share their mutual experiences of successes to move forward. In this regard, some ASEAN countries like Indonesia have valuable experience in tourism, Islamic banking, and insurance, food-processing and fruit-canning which could be of benefit to fruit producers of Pakistan. ASEAN countries may be keen to relocate some of labour intensive industries to Pakistan.

Tourism is another large untapped area between Pakistan and ASEAN. Pakistan has a lot more to offer than many Southeast Asian countries, including Malaysia and Singapore which have yet been able to develop a thriving and profitable tourist trade. The present low level of trade between Pakistan and ASEAN can be expanded if the private sector has access to information about the opportunities in trade and investment and is assisted in making contacts with potential partners.

Pakistan is soon completing a deep water port at Gwadar, which can become a gateway to the land-locked Central Asian states. Pakistan can become a connecting link between South, West and Central Asian states. It may be further used for their exports to ASEAN in the days to come.

The incumbent government has now initiated concrete steps to speed-up bilateral economic cooperation with South KoreaSingaporeJapan, and Malaysia and expressed interest in upgrading Pakistan’s sectoral partnership with ASEAN to full partnership. It hopes that further expansion of economic and strategic ties with ASEAN may help Pakistan to seek more and more FDIs, boost employment opportunities, improve the balance of trade by amplifying exports, and boost Pakistan’s economic clout and regional connectivity.

CPEC may help boost Pakistan’s exports to ASEAN and invite investments if it is branded properly by providing numerous befitting propositions to all the members of the ASEAN.

There is an urgent need to rectify the trade balance favoring the ASEAN partners by increasing the export flow to countries that ease the import barriers like Indonesia, which removed 30 percent of its import duties on 20 of Pakistan’s exports last year.

Pakistan may also exploit the comparative advantage its exports, commonly cotton and textiles, enjoyed in markets in Brunei, Cambodia, Thailand, and Australia. There is also demand for Pakistani arms exports in ASEAN, evidenced by Malaysia’s interest in buying JF-17 Thunder fighter jets and anti-tank missiles from Pakistan.

Pakistan is an important exporter of seafood and raw materials to Thailand, the two countries have been negotiating a FTA. Further, Thai companies are seeking investment avenues in the country as they recognize it as a significant trading partner. Likewise, appreciating the potential of Pakistan’s automotive market, the Malaysian automotive company Proton will open its first South-Asian production facility in Karachi by 2021.

There are certain impediments to have stronger economic ties with the ASEAN. Japan’s Free and Open Indo-Pacific (FOIP) concept, shared by the United States and other regional allies has conflicting chemistry with China’s Belt and Road Initiative (BRI) in the region, Japan strategic ties with India through the Quad and moreover India’s persuasion to “urge” South Korea not to invest into CPEC last year all present element of strategic power politics.

Being prominent regional expert of china & ASEAN I suggest that Pakistan should create its own way into the ASEAN markets in which “innovative diplomacy” may be useful. Pakistan could help Japan address its Hormuz Dilemma concerns over the secure passing of energy supplies through the strait and assist Tokyo’s mediation efforts in the Middle East, leveraging it to advance ties with Japan. Likewise, enhancing engagement with Southeast Asia will expand Islamabad’s economic footprint and political clout in the region, ultimately adding to its regional connectivity pursuits.

It is suggested that trade volumes between Pakistan and ASEAN may be increased through trade via the Chinese ports which provides shortest trade route resulting in less transit time and lower costs. China has granted Nepal access to some of its ports; a similar agreement could be drafted with Pakistan.

Pakistan’s Gwadar Port has enhanced China’s access to its west, Northwestern Chinese Ports, for example Qingdao port, can supplement Pakistan’s access to Northeast Asia. For instance, while it can take over twenty days at sea for Pakistani exports to reach Port Busan in South Korea from Karachi, it could take thirteen days if trade is done via land.

The Special Economic Zones (SEZs) Pakistan under flagship of CPEC is important for inviting foreign investments. Pakistan has offered SEZ’s tax exemptions and other special incentives to Singapore. The Singaporean, Indonesian and Malaysian private companies have shown interest in investing in CPEC projects which should be accommodated as soon as possible.

People-to-people contacts such as academic exchanges and cultural programs should be promoted between Pakistan and ASEAN countries. Formation of Corridor of Knowledge is the need of the hour. In this regard, The Center for Global & Strategic Studies (CGSS) has been striving hard to have close ties with all the ASEAN countries. It has already proposed many meaningful proposals to further strengthening of relations.

Establishment of ASEAN Center at University of Punjab, ASEAN Cultural Center at Islamabad, ASEAN Agricultural Center, permanent student exchange program, Joint Chamber of Commerce (Pak-ASEAN), feasible formation of “Start-ups”, people-to-people, business-to-business and government-to government integrative mechanism would bring new imputes to Pakistan-ASEAN relations in the days to come.  There is an urgent need to form a genuine joint think tank between Pakistan and ASEAN in which expertise of the CGSS would be terminal.

Small is still beautiful. Small mutual projects in organic foods, music, films, tourism, education, SMEs, artificial intelligence, digitalization,  Micro-financing etc. should be initiated as soon as possible.

To conclude, there is an urgent need to start journey from cosmetic orientations to true spirits of cooperation, coordination and collaboration because rigorous commercial diplomacy may provide vital strategic cushion and geopolitical maneuverability to Pakistan to pursue its derailed Vision East Asia.

It is time to wake-up from deep slumber of years to devise a progressive and pragmatic foreign policy and economic strategy to have friendly, healthier, productive and contributory bilateral and trilateral relations with ASEAN without omitting any strategic ally. Diversification of economy and security options should be convergent and divergent trends should be discarded.

 

Dr. Mehmood Ul Hassan KHAN
Dr. Mehmood Ul Hassan Khan was born on September 11, 1969 in Lahore, Pakistan. After finishing Primary and Secondary School in his hometown, in 1992 he entered the Faculty of Public Administration, University of Punjab, Lahoer. He has specialties in management, marketing, economics and governance. He has also master degree in Development with specialization in Diplomacy and Public Relations. He has degrees in International relations and basic Law too. He completed his M.Phil. leading to Ph.D. in 2010 from University of Punjab, Pakistan in Development. He has vast experience in serving different departments of the Federal Government. He has also a rich experience in research, peace and conflict resolution and defence issues. He has been in this profession for more than 25 years. He worked in BBC Asia Network as regional expert on Afghanistan and Middle East in 2004. He worked as regional expert in USGAM, Turkey and had a great experience while interacting with TRT too. Transparency International UK selected him “peer Viewer” from Pakistan in 2015. His research and comprehensive articles have already been published in China, Uzbekistan, Iran, Turkey, Azerbaijan, USA, South Korea, UAE and Kuwait too. He has great experience in the socio-economic, geo-politics and geo-strategic issues of Central Asia, Caucasus and Middle East. He is a famous expert on CIS and Caucasus in Pakistan. Member Board of Experts: CGSS, Islamabad. Ambassador at large at IHRFW.