Security and Economic Development in SE Asia

1. Security and Economic Development in SE Asia Creating a “win-win“ situation for the Czech Republic

2. Growth Drivers in SE Asia • Export-led industrialisation • Growing consumer base and middle class • Integration into global supply chains • Progression up the value chains • High levels of social cohesion + stability due to long history of complex socioeconomic structures, now on the eve of entering the age of modernity

3. Status Quo of the Political-Economic Order • Malaysia: several decades of export-led growth, now a Middle Income economy undergoing sociopolitical modernisation, elites have formed own capital base, now a major overseas investor in SE Asia and Africa. Alongside Turkey, one of the few Muslim-majority countries with a diversified and modern economy. • Singapore: City-state with First World living standards, major wealth centre and reginal financial hub, fully-integrated into global trading patterns, major overseas investor through SWFs Temasek and GIC, strategically-positioned as gateway between East Asia and the West

4. Status Quo of the Political-Economic Order • Thailand: Export-led industrialisation, “Detroit“ of SE Asia, Middle Income country undergoing political-economic transition from old order. • Indonesia: Undergoing transition from political-economic order based on Cold War-era US patronage. Economy characterised by opening up of the provinces. Large, resilient domestic consumer market, own manufacturing base, major resource wealth.

5. Status Quo of the Political-Economic Order • Philippines: Major domestic consumer base, strategically located between SE Asia, Greater China and NE Asia. • Vietnam: Early stages of elite capital formation, large consumer market, similar situation to 1950s/1960s Malaysia/Singapore or 1970s Indonesia. • Cambodia: Early stages of elite capital formation, significant oil reserves, Mekong basin.

6. 2009 in Historical Perspective • Aftermath of the “Credit Crunch” • Accelerated rebalancing of world’s wealth and power away from the West • Declining Western Credibility • Rise of New Players A time of risk and opportunity

7. 2009 in Historical Perspective • Confluence of commodity price, economic and political cycles resulting in a weakening of the existing world political-economic order. Weakened: those over-reliant on financial markets as a source of capital (Iceland, Anglo-Saxon consumers, Hungary, Dubai, Russian oligarchic class) and those reliant on high commodity prices (eg. petro-state governments of Iran, Russia, Venezuela, Nigeria)

8. 2009 in Historical Perspective • The end of an exclusively Western-dominated world order. Post-WWII collapse of European empires saw Japan join the world’s leading nations. Now room must be made for China, India, Brazil, SE Asia. To a certain extent this is reflected in creation of G20.

9. 2009 in Historical Perspective • Those who built their fortunes on not-so-stable foundations must cede their power, influence and assets to those with hard assets. • Those with capital are securing long-term access to energy and raw materials.

10. 2009 in Historical Perspective Chinalco  Rio Tinto takeover bid Shell - $3bn loan to Nigerian govt China  Russia oil-for-loans IOCs  more favourable terms in Iraq Temasek/GIC  Western financial institutions

11. “There are individual men and women, and there are families.” Margaret Thatcher, 1987 “There is no such thing as society…”

12. Infrastructural, Legal and Financial Barriers to Growth in SE Asia • Transport infrastructure bottlenecks: airports, ports, highways, railways need upgrading and interconnections, reorientation towards emerging regional market. • Energy bottlenecks: interconnecting of electricity grids, creation of regional markets in natural gas

13. Infrastructural, Legal and Financial Barriers to Growth in SE Asia • Absence of strategic leadership and vision among SE Asian national elites as well as among external partners. • Need for a new framework to replace the Cold War-era hub-and-spoke policy of the US, Japan and other major powers. • Security and stability as the foundations of prosperity. Managing risks in a systematic manner.

14. Infrastructural, Legal and Financial Barriers to Growth in SE Asia • Need for planning a new strategic framework that addresses SE Asia’s position in the 21st Century. • New macro-level infrastructure, natural resources management needed to build regional resilience. • Examples of post-WWII Europe ECSC-EU, 1990s EU/NATO eastward expansion

15. Infrastructural, Legal and Financial Barriers to Growth in SE Asia • New strategic bargain needed among SE Asian elites. • Linkages between access to resources and capital, conflict and benefits. • Region needs to be analysed through the inter-SEDE model (Security, Economic Development, Environment), its key drivers, and implications for benefit-sharing among members of the political-economic order.

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17. The Challenge: Creating a Win-Win situation for the Czech Republic • A coherent and coordinated engagement that takes into consideration the political, economic, and security realms. • Examples of France, Japan, China, Singapore foreign policy + trade coordination. -China-Africa partnership -la Francafrique -Singapore in Indochina

18. Conclusion: Creating a Win-Win situation for the Czech Republic • Czech Assets include: -comparative advantage in goods and services, esp. engineering expertise -comparative advantage for inter-elite exchange: a relevant historical, intellectual and cultural experience -absence of ulterior motives -CZ as gateway to Europe

19. Possible Frameworks for Engagement • Status Quo • Hub-and-spoke • Regional Forum • Ad-hoc, issue-based partnerships

20. Thank you William K.P. Kucera T: +420 773 134 969 /+65 9860 7215 E: w.k.p.kucera@dundee.ac.uk Candidate for LLM in Petroleum Law and Policy, Centre for Energy, Petroleum and Mineral Law and Policy, University of Dundee www.cepmlp.org Associated Consultant,Mott MacDonald Praha www.mottmac.cz