The Foundation of Regional Governance and Regulatory Regionalism in East Asia

1. The Foundation of Regional Governance and Regulatory Regionalism in East Asia Professor He Baogang, Public Policy and Global Affair Program, the School of Humanities and Social Sciences, Nanyang Technological University

2. Aims • This lecture will examine the foundations of the practice and theory of regional governance and regulatory regionalism with regards to regional public policy in East Asia. • Focus on the intellectual foundation of regional governance • An introduction to and critique of Australian school of new regional governance study

3. Outline • The Idea of Regionalism • The idea of Regional Governance • The idea of Regulatory Regional Governance • The Practice of Regional Governance in East Asia • Four Models of Regional Building: How do we evaluate Asian regional governance? • The Three Determinants of Regional Governance in East Asia • Concluding Remarks

4. East Asian Political Systems, 1200-1900

6. What is regionalism? • Regionalism is an inspirational enterprise in human history. As well as being inspirational we can even say that it is quietly revolutionary since it involves the reorganization of political, economic, cultural, and social lives along the lines of an imagined region rather than according to the standard political unit of the nation-state.

7. The Idea of Regionalism • It is “ism”, a new political ideology; • Inspirational • Innovative • Conflictive • It challenges the traditional conceptions of government;

8. The Essence of Regionalism • The essence of regionalism is a shared community in the sense of at least three components: 1) social networks that bridge national boundaries; 2) strategic thinking that recognizes common security interests; and 3) a regional identity capable of overriding national identities on matters of shared significance.

9. Four Events • In 1968 the Association of Southeast Asian Nations was born. • In 1989 the Asia Pacific Economic Cooperation (APEC) meeting was institutionalized. • In 1997 the ASEAN Plus Three (Japan, Korea, and China) was instituted. • In 2010 the East Asian Summit decided to add the United States and Russia.

10. The idea of Pacific-centric regionalism • It was invented and promoted by the USA and adopted by Australia. Originally the idea of Pacific Rim was geological, then being used in security context in the 1960s. It came into being in the mid-1970s driven by American capitalism and being adopted in Australia and New Zealand in the later 1970s. It was materialized in the form of Asian-Pacific Economic Cooperation.

11. Pan-Asianism • Spiritual Pan-Asianism in India: Togore • Militarian Pan-Asianism in Japan • Sun Yat-sen’s Pan-Asianism

12. Contemporary Asianism • Mahathir’s East Asian Economic Caucus (EAEC) • Hatoyama's proposal of East Asian community in 2009 • South Korea • China

13. Clashing of two versions of regionalism “Asia-Pacific” and “East Asia” are the two core terms around which different regional identities are constructed. Conceptualized as “Pacifism” and “Asianism”, they offer different ideas of regional order and vary in scope, boundaries and directions.

16. Competing ideas of governing regional structure • One single governing structure versus multiple structures (e.g., Rudd’s APC) • see Baogang HE’s “The Awkwardness of Australian Engagement with Asia: The Dilemmas of Australian Idea of Regionalism”, Japanese Journal of Political Science, 12(2):267-285, 2011.

17. Critical questions • How does regionalism lead to the transformation of state power: shift in the location of state power, shift in the kinds of actors exercising state power? Could the idea of a regional government signal the death of the traditional forms of government? Has a regional organization emerged? Has regional dispute mechanism emerged? Has regional decision-making procedure emerged? Has a regional norm or standard emerged and become a part of national norm or standard?

18. The Idea of Regional Governance • Locate regional governance • Why Regional governance (not regional government)? • Features of regional governance in East Asia

19. Locating Regional Governance: Four Multilevel Governance • International Regulatory Agencies (WTO, IMF) • Regional Governance (EU, APT) • National Governance • Subnational (local) Governance • This lecture focuses on regional governance, and the relationship between regional and national governance.

20. Why Regional Governance? • Compare regional government and regional governance • East Asia lacks an effective regional government • E.g., ASEAN as a system of regional governance is still in its embryonic form;

21. Regional Governance and Cooperation • the Comprehensive Plan of Action for Indochinese Refugees (CPA) in 1989 has had the most success in the Asia Pacific region. • an effective means of issue linkage and burden-sharing centred on the screening of refugee genuine status. • Under the provision of asylum seeker processing ASEAN countries (as well as Hong Kong) were not obliged to accommodate refugees long-term. As part of the three way agreement, mainly the US and Australia resettled refugees after the host countries had processed them. The countries of origin, Laos and Vietnam, agreed to take back those whose status was determined not genuine. This went some ways to stem the outflow. The 15 years prior to the CPA host nations had been resettling refugees in ad hoc ways, even resorting to pushing back boats with the mass exodus of peoples arriving from Vietnam after 1975.

22. The features of regional governance in East Asia • Relations between regional and national organizations (“regional governance is not simply an agglomeration of national territorial units at a higher regional level”. P. 21) • Public administration in regional affairs, the rotation of chairman, co-chair mechanism • Disputing mechanism and procedure

23. Two models of Regional Governance • EU: Supranational institutions and norms • ASEAN: the development of regional governance within nation-states, e.g., financial surveillance, functional policy network, the growing role of Asian bank in the area of energy and water management.

24. Two Different Theorizations • The Stage Theory: Asia is in an early stage of development; it will follow EU model eventually: it must have a universal law, a supranational organization to enforce the law. Consensus model was operative in UK between 1950-1973. • The Plural Theory: Asia with its different history and diversity of culture and population has a different path, form, process; it will not conform to an European pattern. There are Asian, African and American ways of regionalization. EU is exceptional.

25. The concept of regulatory regional governance • “this regulatory regional governance …encompasses the regulation of a broad area of social and economic life with issues ranging from infectious diseases to environmental governance” (p. 21) • E.g., ASEAN managed the statelessness problem. Recognizing the importance of having a strong legal framework, Thailand amended its Civil Registration Act in 2008. Under the revised law, all children born in the country are entitled to birth registration even if their parents are not Thai nationals – an important step to prevent statelessness, for example amongst the children of refugees. Cambodia said that over last 10 years it has been using mobile registration in remote areas increasing registration rates from 5% to 90%.

26. New Model of Regulatory Regional Governance • Regional governance within the national/subnational policy-making apparatus, or in functionally specific policy regimes (Hameiri&Jayasuriya, 2011: 21) • “the increasing importance of meta-governance in contemporary governance processes has been associated with a realignment of power within bureaucracies, with meta-governance actors gaining power at the expense of other parts of the state apparatus.” (Hameiri and Jayasuriya 2011: 27). • E.g., the Australian government’s decision to grant the Australia Federal Police more power in making foreign policy decisions relating to peacekeeping and capacity-building interventions which in turn reduces the power of the Department of Foreign Affairs and Trade.

27. Jayasuriya’s Idea of Regulatory Regionalism • Governance and administrative processes are no longer the exclusive domain of the state. Regulatory regionalism is being driven by the need for regional cooperation in regards to risk management. • regional risk management in regards to finance, health and international crime by institutions operating separately from state governance. For example the Executives’ Meeting of East Asian and Pacific Central Banks (EMEAP) and the growing role of the Asian Development Bank (ADB) in ensuring financial stability in the region. • Production networks in the region are often operating across multiple countries which has facilitated the development of independent, regional regulators.

28. Hameiri and Jayasuriya • Hameiri and Jayasuriya expand upon Jayasuriya’s earlier work and propose that regulatory regionalism is a process of ‘internal transformation of the state’. This internal transformation occurs through shifts in the national and sub-national policy-making framework as well as in regional policy agreements spanning several governments. • The main argument is that regional governance is formed within the institutional spaces of the state rather than prevailing top down view taken by most literature focusing solely on state governments and regional institutions. • They describe the way in which sub-national economic and political actors are now actively seeking to influence regional issues through influence and power gained at a national level.

29. Meta-governance • Meta-governance is essentially the ‘governance of governance’. It is the idea about “procedures for the regulation of governance arrangements that incorporate non-governmental actors, as well as providing the rules guiding the establishment of complex networked and multi-level governance arrangements” (H&J, p.27). It will allow independent actors to cooperate more effectively at a regional level. • The problem with a reduction in governmental power is that non-state actors could pursue their given role with a narrow perspective and ignore what may or may not be required in the more overarching needs of a national as a whole. For example, the Asian Development Bank’s handling of the Mekong Project has been questioned for the overbearing ways in which it has pushed so-called fragile states into cooperating with its policies. This could be seen as effectively governing a government. • Other examples of meta-governance include the European Union’s open method of coordination (OMC) and the African Peer Review Mechanism (APRM)Ibid., 27.

30. Questioning Hameiri&Jayasuriya’sidea of regulatory regionalism • Is there meta-governance? Regional governance is fragmental and lacks a unitary feature. • Can the Bank been conceptualized as “private”? • Is there only one new model of regulatory governance? There are the variety and complexity of regional governance in practice. • Have regional organizations, regulations and norms emerged above nation-state level (not within states as H&J claim)?

31. Practice of Regional Governance • ASEAN • Chiang Mai Initiative • ASEAN plus 3 Civilian Nuclear Energy • Regional cooperation on the statelessness • ADMM-Plus • The Council for Security Cooperation in the Asia Pacific

32. The Governance Mode of the APT Financial Cooperation • Two levels of decision-making body in the CMIM, namely Ministerial Level Decision-Making Body (MLDMB) and Executive Level Decision-Making Body (ELDMB); • the establishment of single contractual agreement in managing regional pooling fund; • the creation of regional surveillance unit as a part of CMIM decision-making support arrangement; • the involvement of non-state actors;

33. CMIM Contribution, Purchasing Multiple and Voting Power

34. The Case of Indonesia • To proceed the CMIM agreement into Indonesian regulatory framework, the MOF coordinated with two other relevant authorities, the Ministry of Foreign Affairs (MoFA) and the Ministry of Law and Human Right (MoLHR). • the legal process in transforming the CMIM agreement into Indonesian regulatory system

35. Ratification issue • Ratification is a part of regulatory regionalism process. The transformation of regional arrangement into national system may utilize ratification as formal procedure. • the Indonesian financial-monetary authorities signed the agreement; • different from Thailand that was through parliamentary approval before joining the CMIM. • Indonesian system will apply ratification if such international agreement needs to do so (Article 9 Law No.24/2000). In CMIM case, the agreement did not require ratification.

36. Sovereignty question • no particular financial institution in Indonesia asks about the sovereignty issue regarding decision-making process in CMIM. • By joining the CMIM, Indonesia has to comply with several conditions as stated in the CMIM agreement. • the voting mechanism of CMIM potentially outstrips the voice of the smaller contributor. With only 4.3 per cent of total voting rights, Indonesia has very limited power in CMIM.

37. IMF and Regional Governance • the CMIM continues to adopt global governance in finance, such as IMF governance on credit lines, • the initiative indirectly transmits IMF governance into domestic policy making. • Benefits: IMF governance and activities gain negative stigma from the public, the transformation of the IMF governance through the CMIM helps the IMF to keep promoting its programs to Indonesia. At the same time, this mode of governance also eases Indonesian financial authority to maintain alternative financial assistance from international institution in the mid of domestic public opposition toward IMF.

38. Independent Surveillance Unit • ASEAN+3 Macroeconomic Research Office (AMRO) as independent surveillance unit in 2011. • Located in Singapore, AMRO was designed to monitor and assess the macroeconomic condition and financial robustness as well as assessing the possible occurrence of macroeconomic and financial problems of the APT member countries. • Also to detect potential risks, provide effective responses, and contributing to decision-making process of CMIM. • Indonesia established a national surveillance unit, and a potential to standardise or harmonize the operational procedure for surveillance process.

39. Four Models of regional building: A Plural Assessment of Regional Governance

40. Three Determinants of Existing regional Governance Structure and Pattern • The idea of regionalism: Asianismv.s. Pacificism • Power Relations • The idea and practice of sovereignty (In EU nationalism is associated with war and is not regarded as a driving force for regionalism. In Asia, nationalism is seen as a positive force. see Baogang’s “East Asian Ideas of Regionalism: A Normative Critique,” Australian Journal of International Affairs, Vol. 58, No. 1, March 2004, pp. 105-125.

41. the power rivalry • the rivalry between Japan and China: e.g., the director of AMRO • the rivalry between USA and China (see Baogang He’s “A Concert of Asian Power and Hybrid Asian Regionalism”, Australian Journal of Political Science, Vol. 47, No. 4, pp. 677-690, 2012.

42. Clash between China and USA on regionalism • China was determined to pursue regionalism that excluded the United States in 2003-05 in the background of the backlash against the Bush administration’s unilateralism and obsession with the war against terror. It created an image as an supporter of ASEAN-centered regionalism.

49. ASEAN-Led Regionalism • Ideally both the US and China should take a step back and make more space for ASEAN. Both should give up the role of leadership over Asian regionalism. Both must agree to let the ASEAN countries play a leadership role. This is one aspect of the democratization of Asian international relations. It is the middle powers that have driven regionalization in Asia.

50. The Centrality of ASEAN? • The outgoing SG, SurinPitsuwan, emphasized, ASEAN must maintain its centrality because of shifting power dynamics interest in region particularly now that it is attracting greater interest from external powers which could sabotage the spirit of ASEAN.