ASEAN Pushing Itself Away from the US

In the 42^nd ASEAN summit held in Indonesia in May, the group decided to “not become a proxy for anyone.” This was with reference to the increasing pressure the group on the whole is currently facing from the US to counter and contain China in the Indo-Pacific region. This comes on top of the idea that Malaysia’s Anwar Ibrahim recently floated to create the Asian Monetary Fund alongside a regional payment mechanism that promotes the use of local currencies. This, in a nutshell, is a step towards the de-dollarisation of ASEAN – a move that effectively shows how ASEAN as a region is resisting becoming a pawn in the US geopolitics of building a global coalition against China. In fact, the move shows how ASEAN is pushing itself away from the US-led great game.

This growing thinking is thus markedly different from what was said during the US-ASEAN special summit held in May 2022. The summit was the first time the US hosted ASEAN leaders in Washington as, perhaps, an indication of the US seriousness vis-à-vis the region. But, more importantly, the Biden administration’s goal was to secure ASEAN support for the US Indo-Pacific Strategy, which saw US ties – or competition – with China as a Zero-Sum game. In November 2022, in another summit held in Cambodia, the US delivered yet again a wrong message – a message that hardly anyone from Biden’s audience from Southeast Asia wanted to hear. Biden, while emphasising the need for avoiding a war with China, still reinforced the idea of tackling China to guarantee the so-called open, free and rule-based run Indo-Pacific. The same summit also saw the US-ASEAN ties getting an upgrade into a “comprehensive strategic partnership.”

But despite this upgrade, ASEAN has now doubled down on non-alignment with the US. While ASEAN isn’t interested in aligning with China at the expense of its ties with the US either, its decision to not support the US against China has the effect of rolling back proactive diplomacy the Joe Biden administration seemed to bring to the region immediately after Biden’s election in 2020.

In fact, it is blowing back. ASEAN’s decision – reached in the 42^nd summit – to make an agreement to start using local currencies to boost trade within the block is an outcome of an increasing worry within the bloc about the role the US dollar plays in sanctions. The US sanctions on Russia and the latter’s exclusion from the SWIFT system have had a boomerang effect insofar as it seems to have pushed many other countries to contemplate alternative arrangements. ASEAN is, therefore, making its own preventive moves. The region expects that it might end up facing similar sanctions if, in a future conflict between the US and China, it refuses to support Washington.

As it stands, trade in local currencies is already happening in the region, and the 42^nd Summit’s decision merely reflects that. As reports show, the central banks of the Philippines, Indonesia, Malaysia, Singapore, and Thailand have already begun using contactless QR code payment systems for goods and services between the countries. By using this method of payment to settle transactions, these countries are not only promoting greater financial inclusion but also insulating themselves, although partly so far, against the geopolitical uncertainties involving possible future sanctions.

The move also shows to the US very clearly once again that ASEAN countries cannot be, and must not, be forced into taking a pro-US position on keeping a “rule-based order” – which is nothing short of a proxy for containing China, i.e., the country supposedly violating the so-called “rulers” set by the US – intact.

In fact, the US is using the narrative built around the idea of a “rule-based system” from the Cold War playbook. During the Cold War, the US divided the world into “free” and communist blocs. Today, the US divides the world into countries (e.g., the US and its allies) that follow the rules and countries (e.g., China) that do not. Accordingly, instead of promoting trade and connectivity, the US is militarizing – and even nuclearizing via such treaties as the AUKUS – the Indo-Pacific region to maintain and protect the “rule-based” order.

But this strategy is unlikely to yield positive results. Even according to the March 2023 report of the United States Institute of Peace, the US, by mindlessly following this strategy,

“ … may once again end up alienating some countries in the region or even driving them into China’s embrace. In other instances, insisting on greater alignment with the United States will lead to a loss of American credibility. Ultimately, there is little that Washington can do that would significantly reduce China’s already deeply entrenched economic and political presence in the region. Indeed, it can be destabilizing and even dangerous given the high level of interdependence that already exists. Insisting that Asian leaders follow the guidance that they are likely to reject will only highlight the limitations of American power and influence.”

The 42^nd ASEAN summit manifests this US failure in so many ways. Instead of endorsing the US rhetoric of ‘Cold War 2.0’, the ASEAN summit statement reinforced “multilateralism” and “regionalism” in ways that “no one is left behind” i.e., not even China.

There is far from an ambiguous message. Given the clarity and the way ASEAN has repeatedly refused to become, on the whole, an ally of the US against China, there is little denying that the US must review its policy fundamentally. Where it can hope to really compete with China and where it can really hope to elicit genuine support from ASEAN is in the field of trade and economy rather than war, arms race, ballistic missile build-up, and nuclearization. In the absence of an effective economic policy, the US has – and will continue to – receive only superficial support from ASEAN, mostly confined to occasional summits producing nothing tangible.

Salman Rafi Sheikh, research-analyst of International Relations and Pakistan’s foreign and domestic affairs, exclusively for the online magazine “New Eastern Outlook.“

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