Editor's note: Parag Khanna is a Senior Research Fellow at the New America Foundation and Senior Fellow at the Singapore Institute of International Affairs. His books include "The Second World," "How to Run the World," and "Hybrid Reality."
(CNN) -- Over the past year I've
revisited a host of Southeast Asian countries I first began traveling in more
than a decade ago. The region's progress has been remarkable both in terms of
overall economic growth and the promising opening of formerly isolated nations
like Myanmar. With China's slowing growth and rising wages, investors and
exporters are searching for new long-term opportunities and sites of
production. The time of the Association of Southeast Asian Nations (ASEAN) has
come.
Last month in Laos, I met a Malay-Laotian
couple with modest backgrounds who met while on fellowships in Japan. After
their respective graduate degrees, they reunited in Vientiane where they advise
government agencies, donors and NGOs. Their cross-border mobility is a symbol of
an entire new generation of upwardly progressive Southeast Asians who view
their success as intimately connected to the broader region rather than their
smaller home nations alone. While much attention is paid to President Xi
Jinping's articulation of a "China Dream," quietly an "ASEAN
Dream" is also being born.
While obviously far from integrated in the
ways the European Union is, ASEAN now has a momentum that Europe's regional
project lacks. Despite their historical differences and rivalries, ASEAN countries
have been pushing forward rapidly with cross-border investments, commercial
integration, and intra-regional trade that has kept them growing fast --
averaging more than 5% -- even as the major export markets like Europe lose
steam. With about 600 million people, ASEAN has only half of India's population
but already a larger GDP. Research firm IHS projects that ASEAN's GDP will
reach $4.7 trillion in 2020, not far off where Japan is today.
Strategic location
ASEAN countries have strategic geography on
their side as well. The region forms the crossroads of China and India, with
deep infrastructural links re-emerging gradually through Myanmar. It is also
the main conduit, via the Straits of Malacca, for most of the world's oil flows
between the Near East and Far East.
Now is the time for ASEAN to move from size
to coherence. Over the past 50 years, Southeast Asia has experienced colonial
liberation, the traumatic Vietnam War, internal rivalries between Indonesia and
Malaysia, various forms of strongman rule, and diplomatic self-isolation
through non-alignment. Today the region can be considered largely stable save
for the simmering South China Sea dispute.
This is ASEAN's chance to assert its
collective voice, with American backing, vis-à-vis China and ensure that no
single power dominates these crucial waters. The same applies to the issue of
China's rampant upstream damming of the Mekong River, which threatens the
stability of downstream flows on which ASEAN's heavily agricultural nations
depend.
Continued economic integration is also a
strategic imperative. ASEAN is expected to launch an Economic Community (EAC)
by 2015 that can either boost the region's growth potential or reveal deeper
protectionist firewalls in both strong and weak economies. As much as Vietnam
and Thailand stand to gain from even greater access to Myanmar, Cambodia, and
Laos, a community worth its name needs a vision to help develop its poorest
members.
The top priority both to promote
integration and assist weaker ASEAN nations must be infrastructure investment.
Besides Singapore, which has already become a first world city-state, only
Vietnam and Malaysia have significantly invested in nationwide infrastructure.
Coupled with significant political and regulatory reforms, their second wave is
under way. Other major ASEAN countries such as Indonesia, Thailand and the
Philippines are finally ramping up in terms of allocating greater shares of the
national budget and overall GDP to infrastructure.
Crucial gateway
Far too often flooding and other mishaps
take critical sectors of their economies offline. Indonesia is now focused on
roads, Thailand on railways, and the Philippines on ports. If they execute on
these critical projects, the current growth rates will be far more resilient in
the years ahead. Furthermore, with their high savings rates, dynamic private
sectors, and growing interest from international markets, much more indigenous
and foreign capital can be allocated towards public-private investment pools
that can finance long-term infrastructure needs.
We should remember that ASEAN's integration
and development is as fundamentally a social as an economic or political issue.
Around the world, urbanization is bringing never-before-imagined opportunities
to more than 50 million people per year who move into cities -- but it has also
exacerbated inequality, fueling unrest from Sao Paulo to Istanbul.
For inclusive growth to occur, urbanization
must be strategically conceived as a vehicle for employing -- and training --
tens of millions of youth in construction, hospitality, healthcare, education,
and other services. Furthermore, the large rural poor populations of Myanmar,
Cambodia and Indonesia need the basic health and education systems, as well as
more advanced agricultural equipment that open borders can bring.
For decades ASEAN has been thought of as a
second-tier regional body. Now it has a chance to be the crucial gateway
between powerful regions, a network of sustainable cities, and a thriving
pillar of the century of Asia.
