Asean

Neutrality and pacifism cornerstones of ASEAN WAY

Editorial by Michelangelo Pipan

Vicepresident - Italy-ASEAN Association

ASEAN countries intend to remain neutral, continuing to pursue balance based on equidistance and proactive economic diplomacy 

In the aftermath of the summit with the US, ASEAN remains reluctant to take sides, to let itself be drawn into geopolitical disputes, faithful to its founding principles as if to extend the Asean Way that accompanied its expansion beyond its borders. The ASEAN countries intend to remain neutral, continuing to pursue equilibrium based on equidistance and proactive economic diplomacy (see RCEP) - which for two years have led them to be China's main trading partner, overtaking the USA, in third place, and the EU, which has risen in second place.

Biden asked the summit to remedy the lack of attention of the Trump presidency. Objective achieved from the formal point of view, without however removing ASEAN from the comfort zone intended not to spoil the friendship with the great powers.The final Joint Vision Statement seems entirely written on the Asian side of the Pacific: repeated references to ASEAN's cornerstones of neutrality, pacifism and the Nuclear Free Zone, to the peaceful settlement of disputes, to the commitment to regional peace and stability. In the chapter on the South China Sea - significantly titled "Promotion of Maritime Cooperation" - China is not mentioned and quietly advocates the peaceful resolution of disputes based on international law. The short section on Ukraine merely reaffirms - specifying: as for all nations - respect for sovereignty, political independence and territorial integrity, calling for an immediate cessation of hostilities. 

In the capitals, ASEAN leaders receive applause: the Association must remain neutral; the RCEP remains the reference context; The Indo Pacific Economic Partnership, not yet better defined as a US initiative, "it is absolutely not comparable".

Europe and Italy have an interest in the consolidation of intermediate powers that contribute to the regular functioning of globalization, which will have to resume along better meditated and governed guidelines. In this context, the ASEAN countries are confirmed - also as a springboard for the other Asian markets - natural interlocutors for Italy. A great opportunity for our country, its industrial districts and its natural export vocation.

Mekong dams: the impact on communities and ecosystems

The Italian Vietnamese Studies Center brings up the debate on the Delta’s development issue. Recently, the Mekong region’s growth has been driven by infrastructural projects that are as ambitious as they are controversial

On Thursday 12 May the Italian Vietnamese Studies Center (CSV) hosted a webinar to explore the environmental, social and legal aspects that revolve around the construction of dams along the Mekong. The area occupies 790,000 km2 and embraces very different countries in terms of government, economy and demographics: all factors that influence priorities (and therefore approaches) to the issue of development. The nine panelists, preceded by greetings from Ambassador Duong Hai Hung, sought to cover all these aspects: among the speakers, experts in Earth sciences, ichthyology, power plants and law.

Ecosystems in danger

As Professor Simone Bizzi explained, the Mekong is a complex, but organized, ecosystem. Each element of the river ecosystem is constantly changing and is self-regulating to maintain its "health". The introduction of alien elements, such as dams and hydroelectric power plants, can have a devastating impact .

The case of the upper Mekong basin’s dams is emblematic of these changes. China is investing huge resources to enhance the development of the area through hydroelectricity. Along the Lancang, a tributary located in Yunnan province alone, 65 plants are operational and Beijing is planning to build another 23 dams. Among the various problems, their presence is "jamming" the transport of sediments, which each year amount to about 160 megatons (thirty times the weight of the pyramid of Giza): the accumulation of sediments causes stagnation upstream, while the nutrients that support biodiversity downstream no longer arrive. A phenomenon that has consequences not only on fish, but also on rice fields and agricultural activities in general.

(Un)sustainable development

Climate change poses a further challenge to the normal functioning of the river ecosystem (and of all the activities that depend on it). The flow of water, already reduced by the presence of dams, is subject to increasingly intense dry seasons. In 2019 the Mekong reached its lowest level in the last 100 years, a record that is turning into normality. Faced with the lack of water, as also reported by the Observatory on dams in the Mekong of the Stimson center, some dams end up further limiting the flow and penalizing the areas of the southern sector. This happens especially in the Chinese section of the Mekong, experts accuse, even when the level of rainfall is sufficient.

However, the projects for the construction of new hydroelectric plants have not stopped. On the contrary: along the tributaries of the Mekong, funding for the construction of new plants continues to increase, thanks to the growing demand for electricity in Laos, Cambodia, Myanmar, Thailand and Vietnam. Some of these countries are highly dependent on hydroelectricity, as evidenced by the Phnom Penh data on the Cambodian energy mix: 55% of electricity production capacity comes from hydroelectric plants. Financial dependence is added to the risk of imbalances in energy supply: whether they are investments by foreign companies or development banks, or the debts accrued to contractors.

Finally, the construction of dams can have immediate or long-term social effects. In the first case, neighboring populations could have their land expropriated - when the project does not directly require the relocation of villages. Secondly, the environmental degradation that follows poor project management reduces the livelihood and development opportunities of those citizens who should benefit from them.

Solutions (or compromises?)

As Professor Massimo Zucchetti pointed out, it happens that after a careful review the plans for the construction of new hydroelectric plants have to be canceled and totally replanned: in the northeastern Indian state of Uttarakhand as many as 23 out of 24 projects did not pass the minimum criteria of sustainability. This sometimes happens due to the lack of involvement of local actors or experts capable of assessing the impact of dams in the context concerned. Solutions to reduce negative externalities exist, and some of these are related to the so-called "nature based solutions". The latter represent a set of measures that are based on respect for the specificities of the territory and require minimal human intervention.

The problem of managing hydroelectricity in the Mekong Delta is not only ecological, but poses various challenges for the construction of an environmental law capable of protecting local communities. The last part of the meeting therefore focused on legal disputes affecting such a vast area. The growing scarcity of water resources has long been recognized as a factor in accelerating conflicts, and the lack of adequate mechanisms increases the risks of instability (as well as poor adaptation of projects).

The role of transnational organizations

What can ASEAN do in such a complex context that affects more than half of its member countries? According to the panelists, there are many interventions that today remain in the hands of transnational organizations. Most of the hydroelectric projects along the Mekong see the participation of banks of state and private actors, development banks, and research groups. Furthermore, public participation is particularly important for the management of local resources. The different actors also have the capacity to provide the data necessary to understand the reference context - objectives that are still difficult to achieve today.

What can happen thanks to the intervention of non-partisan organizations is the sharing of experiences and virtuous design mechanisms. Furthermore, a group like ASEAN has at times been able to form a common front in front of important players such as China, which in this case is one of the main interlocutors. The other side of the coin, however, offers an overview that is still too attentive to facade sustainability and little to the actual overexploitation of existing resources. On paper, the word "sustainable development" has spread as rapidly as electricity consumption and the emission of greenhouse gasses have increased. Here is the challenge for all the actors involved in the transformations in the Mekong basin: knowing how to innovate while respecting the territory, the ecosystem and its populations.

ASEAN and India, redefining South Asian future energy strategies

By Aishwarya Nautiyal

India and ASEAN showed a willingness in developing another ecosystem as strengthening infrastructure for renewable resources while sharing expertise along with knowledge to its full potential among member nations.

Transition into new synergy with rising demand and advancement in technology is providing a new necessity of alternative and clean energy sources. ASEAN with the high level of potential from technological driven to resourcefulness has been seen by India as one of the major partners whether it is exchange of trade or new potential in innovation towards future energy needs . As the world is dealing with the fluctuating scenarios due to which rising demand of efficient energies and risk oriented dependency has brought a new requirement in exploring future avenues for green and efficient sectors of energy resources. A high level conference between delegates of India and ASEAN in the month of February, 2022 showed a willingness in developing another ecosystem as strengthening infrastructure for renewable resources while sharing expertise along with knowledge to its full potential among member nations.


New energy hubs,capacity building with technical assistance to promote joint initiative in the South Asian region has been prioritized.Initiative by India to welcome experience from ASEAN towards integration of green market is one of the key aspects. ASEAN power grid is one of the key areas of interest and its efficient functioning has brought a phase for integration and adaptation through various infrastructure development projects including strategic cooperation to sharpen the knowledge and expand opportunities in the Indian subcontinent region. India’s willingness to cooperate with Indonesia to facilitate a new dimension of transition in the renewable energy sector. Academic exchanges and providing new ideas for mutual encouragement with effective coordination among researchers and students has also been an important perspective among policymakers from India and ASEAN member nations.


Integration of Grid among ASEAN countries and its project designing new capacity building has been a key area with the welcoming signs . The Ministry of Mines and Energy of Cambodia has highlighted an importance of a unified ambition targeting actions planned for low carbon emissions whereby green hydrogen is seen by India as a new key for decarbonisation driven through intensive training and mutual expertise coordinating with partners from ASEAN grouping. Some recent developments in ASEAN countries have shown a tremendous potential in organizing and implementing new strategies towards transition into Renewable Energy. Indonesia is looking forward to resolving the storage capacity whereas Lao PDR has shown progress in a rise of 89% in new green projects including hydroelectric power generation, solar energy, biomass leading renewable energy generation totaling more than 9100 MW.


Thailand on the other hand has floated a 2700 MW solar plant creating its multi utility inclusive of water pumping. India has recently committed progress in future energy share along with new technological innovation ensuring its cost effectiveness and competitive infrastructure along with ASEAN partners such as Brunei, Philippines and Myanmar. Looking forward towards future challenges with rising opportunities utilizing technological skills of smart intelligence through India’s one of the largest networks of IT industry focusing upon robotic integration for smart engineering can bring a sustainable production to balance the demand for future energy needs in such a huge populated region. Mutual coordination with neighboring ASEAN nations can provide a platform for strengthening bilateral cooperation and sharing bilateral human development.


A response required for new energy security has been kept as one of the high priority sectors by Indian policy makers along with ASEAN promoting biofuels alternatives such as palm oil, sugarcane and coconut has emerged as a major component of alternative for driving future energy production. India produces large amounts of sugarcane in its mainland in the Northern part of its territory whereas coconut production in Southern India complemented by being a largest importer of palm oil from Malaysia and Indonesia showcase an avenue of mutual resource driven by technical cooperation as well as knowledge sharing. According to the Indian Planning Commission a major concern lies for its vast population of 1.36 billion people whose demand is rising due rising standard of living and driving workforce that needs a new kind of security policies ensuring future energy needs.


According to the United Nations Environment Programme, India spent almost USD 10.2 billion alone in 2015 while mitigating the effects of climate change and focusing on new strategies for solar and wind transition which have become a dominating field in India’s new ecosystem of sustainability in energy. New rising challenges in cities struggling with massive level of pollution and urgency of finding new ways through research and mutual confidence in investmenting in infrastructure projects, collaborative vision driven by ASEAN India commitment to succeed beyond single state strategy into integrated unified regional policy by harmonizing through mutual commitments in various steps and aspects with a vision of overcoming a daunting task of difference in national level of targets and commitments which may vary quantitatively due to variation in objectives and its time frame to overcome mechanism of conventional energy sources.

Crypto Gaming in South East Asia

In recent months, the popularity of play-to-earn games based on blockchain technology has continued to grow. The online video game Axie Infinity, developed by Vietnamese company Sky Mavis, has become a symbol of this trend. However, the race to create a digital universe supported by decentralised transactions may have suffered its first setback. 

"Axie is a digital nation where people globally come together with their Axies to play, earn, and live. Welcome to our revolution." This is how Sky Mavis presents its mission statement. The experiment launched by the Vietnamese startup has created a real player-owned economy, making the possibility of earning thousands of dollars a month by breeding, collecting and trading their unique avatars - digitised as NFTs - a reality for dedicated players. The currency of the exchanges, and the main source of income on the Axie platform, are ERC-20 tokens called Smooth Love Potion (SLP). Until a few months ago, this cryptocurrency could be accumulated indefinitely by completing quests or winning battles and redeemed for new game features, or alternatively converted into real money.

According to Aleksander Larsen, co-founder and COO of Axie Infinity, the secret to Axie's success lies in the substantial monetary incentive offered to users in exchange for the time they spend on the game every day. However, on February 4th, the game's developers decided to take drastic action to balance the system, removing the rewards for 'Adventure Mode' and 'Daily Quest', effectively capping the amount of SLPs issued each day in order to limit inflation. While at its peak, a player could earn up to 150 SLPs per day, worth up to US$54, in December last year the maximum loot was halved to 75 SLPs, worth no more than two dollars. Simultaneously, the base price of Axies dropped from around $300 in August to just $25 in February.

The collapse of the SLP price is said to be explained by the tendency of players to convert tokens into real currency instead of reinvesting them within the game, causing an oversupply: the ways in which SLPs were 'burned' through the breeding of new Axies could not keep up with the speed at which large amounts of tokens were being issued on the market.

Jeffrey Zirlin, another co-founder of the game, was not surprised by these imbalances and compared the volatility in terms of capital flow to that which typically characterises emerging market nations. On the contrary, he emphasised the innovative strength of Axie Infinity, a pioneer in the trend of transforming digital gaming platforms into economies owned by real players that, consequently, often finds itself having to deal with unprecedented challenges.

In fact, it only took the announcement of the updated version - with its associated adjustments in terms of SLP supply - to reverse a long-running downward trend. Within just 24 hours of the launch of 'Season 20', the value of the game's cryptocurrency rose by 40%. In addition, the significant changes made are believed to hint at a number of other benefits, including increased chances that the game's economy can develop in a healthy and sustainable manner over time. "We believe the fastest way to reduce this volatility is for us all of us to come to terms with our collective responsibilities within Axie, and quickly work to build consensus and enable each other’s community efforts," reads the official presentation of the update. "Prosperity amongst a community comes when it collectively creates more value than it consumes."

However, uncertainty in the world of cryptocurrencies does not only depend on market fluctuations. At the end of March, Ronin, the blockchain network that supports the video game, was targeted in a hacking attack during which the equivalent of more than $600 (real) million in Ethereum was stolen from the famous videogame. Larsen reaffirmed the financial strength of Sky Mavis, which has since set about fully compensating players for their losses. However, he told Bloomberg that the partial recovery of stolen funds could take up to two years. It remains to be seen whether the game's popularity will survive this record-breaking theft and whether the Ho Chi Minh-based company will be able to respond promptly and effectively to these unprecedented and unforeseen attacks on its security systems, confirming its position as a leader in the crypto gaming industry.

The post Ukraine of Asian economies

By Lorenzo Riccardi

The war will have a direct effect on the Asian economies that have more trade with the countries in conflict, but it will be extended indirectly to the entire Far East region in relation to the impact on Europe-Asia economic relations

In addition to the suffering of the humanitarian crisis caused by the conflict in Ukraine, the entire global economy will have to face the effects of a direct impact in each region and increasing inflation.

Russia and Ukraine are among the largest producers of commodities, natural gas and oil, as well as accounting for 30 percent of global grain exports.

Russia is the third largest producer of oil, the second largest exporter of natural gas, and among the top producers of steel and aluminum.

Ukraine is one of the top producers of corn, wheat, sugar beet, barley and soybeans; their strategic role is interconnected with many countries and regions of the world.

In recent weeks many reports have been published by major financial institutions on estimates for trade, investment and economic growth, from the International Monetary Fund, to the World Bank all estimates predict a slowdown caused by the conflict.

The war will have a direct effect on Asian economies that have more trade with the countries in conflict but will be extended indirectly to the entire Far East region in relation to the impact on Europe-Asia economic relations.

China, according to official customs data, reported trade volume with Russia to be $147 billion in 2021 with an increase of 36 percent year-over-year, while trade with Ukraine was $19 billion in 2021, an increase of 30 percent on aggregate trade. These figures represent smaller percentages than trade with Beijing's major trading partners, which are the Southeast Asian region, the ten ASEAN economies, the European Union, and the United States.

The immediate effects on the economy could be less due to the fiscal stimulus sought by Beijing to promote the 2022 growth targets and in relation to the fact that trade with Russia amounts to less than 1% of gross domestic product. However, commodity prices and weakening demand in major export markets pose a challenge.

In the face of intensifying sanctions by Western countries, the Russian leadership will increasingly look to Beijing to promote new trade flows and new financial instruments with the CIPS international payments system alternative to SWIFT and the Chinese yuan as a currency replacing the U.S. dollar.

La posizione della Cina non è né di condanna né di supporto verso la Russia, si è però espressa a gran voce contro le sanzioni, ritenendole inefficaci per la risoluzione del problema.  Questa posizione è diffusa in quasi la totalità dell’Asia Pacifico con l’unica eccezione per Giappone, Sud Corea, Singapore e Taiwan in Asia e Australia, Micronesia, e Nuova Zelanda nel Pacifico; che sono stati inseriti da Mosca in una lista di paesi e territori ostili per aver aderito alle sanzioni.

For the ASEAN bloc, trade with China accounts for 20 percent of international trade according to 2021 data compared to 11 percent with the United States and 8 percent with the European Union, so some analysts are estimating a possible increase in intra-regional economic interaction in the Far East. The volume of trade with countries at war will be strongly impacted but among Asian economies only Vietnam and Japan have a surplus in the trade balance with Russia and Ukraine and in general the weight of the volume of trade with these countries occupies smaller shares of the local gross domestic product. 

Asian countries have various levels and types of exposure to the Russian and Ukrainian economies, with greater criticality given by the increase in prices in the energy and food sectors as well as shocks to the manufacturing supply chain that will have a different impact on countries in the region.

Russia is a major energy exporter, but the direct exposure of ASEAN member countries in this regard is quite limited. ING Bank has issued a report estimating the impact of the war on Asian economies with indicators related to trade, exports, oil and gas supplies and food price increases and with a ranking of the most affected Asian countries in order of importance: Vietnam, Thailand, Japan and South Korea.

According to the Asian Development Bank, the main impact of the conflict on the economies of Southeast Asia will not be on growth, but rather will affect the inflation rate. According to the World Bank, the countries in the region that will see the most growth will be the ones that have the highest rate of inflation.

In its April outlook, the International Monetary Fund predicted a slowdown in the global economy due primarily to conflict. The IMF report forecasts a change in global growth from +6.1 per cent in 2021 to + 3.6 per cent in 2022, with effects also on the emerging Asia region, which will go from an increase of 7.3 per cent in 2021 to a performance of 5.4 per cent in 2022.

L’autore

Lorenzo Riccardi teaches at Shanghai Jiaotong University and is managing partner of RsA Asia (rsa-tax.com). He has been living in China for 15 years where he follows foreign investments in the Far East and has held roles in the governance of the largest Italian industrial groups. In January 2020 he completed a project to travel to every country in the world collecting economic trends and data from Shanghai, in every region, along the new silk routes (200-economies.com).

 

 

East Timor – a post-electoral overview with ASEAN on the horizon

Citizens of the youngest Asian democracy have chosen Ramos-Horta as their new leader. This is a return for the Nobel laureate who wants to join the Association of Southeast Asian Nations

East Timor has chosen its President: José Ramos-Horta, Nobel Peace Prize winner in 1996 and a key figure in the Indonesian resistance to occupation (1975-1999). Former president between 2007 and 2012, Ramos-Horta challenged the incumbent president Francisco “Lu Olo” Guterres to the second round of elections. It is the fifth election for one of the youngest democracies in Asia, and the first in the post-pandemic era. Therefore, the challenges that the new administration will have to face are not few, amidst the economic crisis and new political turbulence in the region.

Elections in East Timor: an overview

East Timor, also known as Timor Leste or Timor Lorosa-e, is the first Asian democracy to enter the 21st century. The Portuguese colonial rule lasted about 400 years until independence, declared in 1975. An independence lasted only few weeks, until 7th December of the same year. The emerging political leadership had gradually formed around the socialist independence forces. Enough to justify Indonesian President Suharto’s order to invade the country to fight Communism, which led to the violent oppression of the local population. In 1999, a referendum supervised by the United Nations confirmed the demand for autonomy by the citizens of East Timor. It was only in 2002 that official independence came, after almost three years of repercussions by the occupation forces.

The twentieth anniversary of independence - May 20, 2022 - will be the day of the beginning of the new presidency. The election of Ramos-Horta confirms the prevalence of key figures of the Resistance in the political landscape of East Timor. An interesting outcome in country where only about 33% of the population is over 30 years old. In fact, most of the 1.3 million citizens have only a limited experience of the violence of the occupation years. Much more familiar to many East Timorese is a stagnant economy and a challenging labor market. Living conditions have slowly improved over the last decade, but 42% of the population still lives in a state of poverty. The economic system is exposed to external shocks as it rests on a few vital sectors. Outside of international aid, most of the revenue depends on gas and oil, which make up 90% of total exports (and involve Italian companies such as Eni). Coffee is also a commodity that brings wealth to the country, but not enough to stabilize a labor market largely linked to the informal economy.

The future of East Timor and ASEAN

At the dawn of the election as the new president of East Timor, José Ramos-Horta referred to the goal of East Timor's entry into the Association of Southeast Asian Nations (ASEAN) by 2023. A promise made for the first time over ten years ago during the first mandate, when Dili's candidacy for joining the group was officially submitted. Next year, the current presidency will pass to Indonesia and, as the newly elected president says, joining ASEAN on this occasion "would be a highly symbolic gesture". East Timor’s entry into the bloc has been postponed several times because some member countries consider its economy still "too underdeveloped".

The ASEAN countries that have most intertwined relations with Dili are Cambodia and the Philippines. Manila is often associated with East Timor as the "big sister" among the (few) realities of the Catholic faith in Asia. The Philippine armed forces have also been involved in East Timorese affairs since the transition to an independent republic and contribute to the training of the army, along with Portugal, Brazil and - to a small extent - the United States. Phnom Penh has a partial influence on East Timorese foreign policy: in recent years Dili has sought the favors of Cambodia in view of the ASEAN presidency in 2022, but also the common bond with China has often favored the alignment of the two countries in different international issues (most recently, Phnom Penh pushed for Dili's abstention from the UN vote to condemn the coup in Myanmar).

The relationship with China is one of the keys to understanding the importance of Dili on the Asian chessboard. Like other small economies in the region, investments from Beijing represent a key growth opportunity. Opportunity that part of the ASEAN bloc itself would favor in order not to bear the costs of East Timor's development. However, the situation is much more complex due to the PRC increasingly approach towards small and poor-stricken countries in the area. A signal, according to analysts, that may trigger a security dilemma in the region. China was the first country to initiate diplomatic relations with the country in 2002 and has since contributed largely to the investments needed for economic recovery. Much infrastructure in East Timor is the work of Chinese companies (including government buildings and some military structures). And the opportunities did not end with the reconstruction: the entire port system must be strengthened to open the country to international trade, while there are still many oil and gas basins that have not yet been discovered and exploited. Finally, an increasingly determining factor in East Timor's fate will be climate change. The country is subject to extreme climatic phenomena which are intensifying over the years. The government alone does not have the resources to prevent and repair the damage that floods, earthquakes and landslides cause to the economy and society. Three quarters of the population depend on subsistence agriculture: this will therefore mean greater vulnerability to the limits of survival. And, therefore, growing risks in terms of economic and political independence.

India - ASEAN cooperation: Regional Implications

The possibilities for cooperation between New Delhi and Southeast Asian countries are numerous. So is the potential for deepening the relationship.

By Aishwarya Nautiyal

With the emergence of Indian economic development and influence, one of the major focus of the policy makers has been on “Look East Policy” in which ASEAN has become a primary collaborative organization for implementing India’s trade, security and economic interests. One of the major agreements was the “Free Trade Agreement” which was signed by India and ASEAN in 2009, in Bali Indonesia. Changing global dynamics and the growing importance of the Indo-Pacific region brings this partnership as a core central focus point for stability and building sustainable coordination in a globalized world. A group of ten nations with variation in economic growth and abundance of resources have paved a way with 90% of tariff liberalization making it one of the largest FTAs in the world inclusive of some privileged products like palm oil, tea, coffee.

With India’s forecast of exporting 46$ billion in Financial Year 22 which is among the largest trading regions in meeting its target of 400$ billion globally. The main cooperation comes from the field of engineering where ASEAN holds 15% of share in Indian engineering exports which was recorded at 35.3$ billion in 2021 and with a new fiscal target of 105$billion in 2022. In the global scenario this cooperation is becoming an important value supply chain focused upon mutual partnership and export markets. ASEAN itself is positioned with the third largest exporting partner to India and fifth biggest trade partner. While looking at the rising interaction between two partners some alarm bells have been raised among Indian policy makers where it has been seen as tariff reduction is bringing larger participation of ASEAN in Indian markets compared to India’s participation in competitive markets of ASEAN economies. This is due to some of the major countries like Singapore, Malaysia & Indonesia being export driven economies with competitive advantage with higher export GDP ratio.

Kerala is one of the major exporters including domestic exports of plantation products. Rubber, coffee, fish being the largest source of income whereas lower productivity due to rising imports at competitive pricing is affecting its farming industry. One of the major hindrances can be seen with cheaper import of fish, rubber & palm oil from Malaysia & Indonesia which has already impacted local production and decline in its demand. Rising competition with the ASEAN imports has brought up certain challenges to the governance where they find it a mammoth task to keep the balance between local cultivation and trade liberalization. Another major challenge lies towards variation in ASEAN economic and political stability. Myanmar, which has seen a prolonged political turmoil and its borders with India have brought up new challenges concerning an alarm in New Delhi’s vision in South East Asia.

Another challenge that this cooperation has faced is the boycott of Malaysian palm oil export to India by traders which brought a huge concern among the member nations. Malaysia was seen by Indian policymakers with deliberate interference to its domestic affairs when the government of India revoked Kashmir’s special status in 2019. During this period Malaysian Prime Minister’s Mahathir Mohamad statement opposing the revocation brought a new rift due to which India imposed restrictions on palm oil imports from Malaysia. These political dynamics and certain flare up issues highlights one important aspect to be focused upon where large diplomatic coordination to implement major confidence building measures. Nevertheless, challenges and strategic interests have emerged and negotiations with multilateral dialogues are making sure new setups are placed to deal with such issues. Increasing importance of ASEAN and Indian Ocean brings up new avenues where disputes in the Pacific can be seen as a new focal point of enhancing strategic partnership and rectifying security dynamics.

The Malacca dilemma is one of the core aspects in which the Andaman & Nicobar islands (India) is placed strategically near the major trading route of Strait of Malacca sharing its geographic location with the key economies such as Thailand, Malaysia, Singapore and Indonesia, this makes India having maritime boundary with neighboring ASEAN countries. In recent years mutual cooperation has emerged in various fields of defense sectors including military exercises, defense technological development, arms trade and mutual infrastructure development. Malacca strait being one of the important trading routes which is located under supervision of regional states where mutual collaborations are promoted to ensure free navigation of international trading in accordance with international laws, also to promote and explore new business avenues in changing and challenging geopolitical scenarios. On the other hand India’s defense cooperation with Vietnam and first sale of supersonic Brahmos missiles to Philippines with participation of Tejas fighter jets for Malaysian Air Force is looked upon building trust in various dynamics of strategic and security cooperation sharing mutual concerns over regional disputes.

Strengthening multi-faceted relationship from political and security cooperation to social, cultural and lingual participation includes India’s new vision of “Act East Forum” for its north eastern states and its infrastructure development with the help of Japanese investments targeting its connectivity to neighboring ASEAN countries. Sittwe port in Rakhine province of Myanmar which has been developed aiming at infrastructure and transportation development and access to Bay of Bengal for landlocked North Eastern state of India of Mizoram and further inland. Another trilateral highway project connecting Moreh (India) via Mandalay (Myanmar) to Mae Sot (Thailand) is an example of India- ASEAN connectivity project with future plans to expand it to Laos, Cambodia and Vietnam. These projects have shown some interesting development from the Bangladesh government seeking an opportunity in India-ASEAN infrastructure development connecting Dhaka to boost connectivity, whereas it can also provide access to landlocked countries like Nepal and Bhutan to ASEAN members via North East India. Recognizing potential for mutual development can deepen and strengthen new avenues for the region, ensuring strong historical cultural linkage between regional partners and their rich mutual shared history.

First steps in the management of plastic waste

By 2024, the UN and Asian countries want to achieve the first world treaty on the containment of plastic waste

80% of the world's plastic waste originates in the Asian continent and more than a third comes from the Philippines. To counter the phenomenon, the major plastic producers in Asia - from China to India, from Saudi Arabia to Japan - have participated, within the United Nations, in the drafting of a plan for the realization of the first world treaty on containment of plastic waste by 2024.

The agreement reached on March the 2nd by the UN Environment Program was defined as "a historical moment". Although the skeptics did not fail to underline the criticalities of this agreement. In fact, the treaty focuses mainly on the recycling of single-use plastics, but environmental experts continue to insist that, in order to have a significant impact, it is also necessary to deal with the limitation of the production of plastic products. A prospect that does not appeal to the governments of those nations with an economy based on the petrochemical industry.

The agreement, however, is more complex: the countries have agreed on a resolution that provides for the monitoring of plastic pollution along the entire production chain, from creation to disposal. Special attention will be paid to the Asian countries considered to be the main culprits for the dispersion of plastic waste in the environment, especially the Philippines. Malaysia, a favorite destination for many other nations for the disposal of plastics, will also be at the center of attention. 

According to some experts, making the disposal process more expensive is the only way to incentivize nations to recycle. Not surprisingly, most plastic waste comes from Southeast Asian countries, where waste disposal policies are far too lax and concentrations of plastic end up mostly burned in landfills or, directly, in the oceans.

This situation, in addition to being harmful to the environment, also translates into a substantial economic loss. A series of studies conducted by the World Bank confirms that in Thailand, Malaysia and the Philippines over 75% of the material value of recyclable plastic - the equivalent of six billion dollars a year - is lost when used only once. According to the UN Environment Program, between 6 and 19 billion dollars a year are spent globally on cleaning up the dirt that results from plastic pollution.

A possible solution, advocated by experts, could be the creation of recycling centers at an international level, where plastic waste can be collected. Another area of ​​interest, which the treaty should take into consideration, concerns the coordination of the strategy between different countries and regions, to smooth out the discrepancies in anti-pollution actions. Not to mention that the effects of pollution are manifested above all in the most backward geographical areas. This means that, even though this treaty has already been crowned "the greatest agreement since Paris," there is still a long way to go. 

ASEAN history and politics

The first course directed by the Italy-ASEAN Association, “ASEAN History and Politics”, has begun

The first course entirely in English on "ASEAN History and Politics", organized and directed by the Italy-ASEAN Association, began last Wednesday, March 23rd, at the Italian Institute of Oriental Studies of the Sapienza University of Rome. The cycle of lectures will continue until the beginning of June and is part of the degree program in Global Humanities of the University of Rome. In the coming months, about 70 students from all over the world, from Indonesia to Japan, Africa and Europe, will address the most important issues concerning Southeast Asia: from historical to economic and geopolitical aspects, from human rights to international trade, including the digital and sustainable transition of the region. During the first lecture, the Vice President of the Italy-ASEAN Association, Professor Romeo Orlandi, made an overview of the history of the Association, from its foundation to the challenges of the pandemic and those we will face in the next years, making a thorough analysis of the peculiar aspects in each country. In the next lectures, students will have the opportunity to listen to the testimonies of some of the ASEAN Ambassadors to Italy as well as several analysts from the Southeast Asian region; they will also discuss the main topics concerning Southeast Asia through workshops and presentations that will allow them to observe firsthand the heart of the problems. This course will be another important opportunity to improve the degree of knowledge and perception of ASEAN in Italy. The Italy-ASEAN Association has been working towards this goal since its foundation and believes it is essential to better raise public awareness in universities and decision makers on a region of the world with which we share many common interests.

Femtech: a rising trend in ASEAN

Femtech — a category of software, products or services that use technology to improve women's health — was born as a response to the conscious need for information, specific treatments and health support of women around the world. In the Asia-Pacific region, where often topics such as abortion, period and menopause are still considered taboo, this sector is growing rapidly, with Singapore leading the trend.

Women account for half of the world's population, yet technology companies that cater to their specific health needs cover just a tiny share of the global tech market. Yan Li, professor of Digital Transformation at the ESSEC Asia-Pacific Business School in Singapore, argues that women's health has historically been disregarded not only by governments but also by the medical industry. In an interview to Nikkei Asia, she said that "women's healthcare is considered a niche industry. Many drug studies are not even tested on female subjects so women are more likely to suffer an accidental overdose." Yan Li's claims are also reflected in a study published in the British Journal of Clinical Pharmacology in 2018: women make up for only 22% of subjects involved in Phase 1 drug trials.

The term 'femtech' was first coined in 2016 by Ida Tin, founder of Clue — an ovulation and period-tracking app — and indicates any software, product or service that uses technology to improve women's health. It is a response to the conscious need for information, specific treatments and health support of women around the world.

In 2019, the femtech industry generated $820.6 million in global revenues and received $592 million in venture capital investments according to PitchBook, a financial research and data company. A large number of apps and tech companies have entered the market to address women's specific needs, including menstrual and fertility monitoring, solutions for pregnancy, breastfeeding and menopause, as well as developing specific programs for diagnosing and monitoring illnesses such as breast or cervical cancer.

In May 2021, a New York Times article was titled Is 'Femtech' the Next Big Thing in Health Care?. In fact, the FemTech Analytics report already counted 1,550 femtech companies worldwide last year: 51.9% are located in North America, 23.5% in Europe, 13.9% in Asia, 4.7% in Australia, 4.4% in South America and 1.6% in Africa.

However, FemTech Analytics predicts that the Asia-Pacific will be the world’s fastest-growing region in the development of women's health apps by 2026. In Southeast Asia, topics such as abortion, birth control and even period have always been taboo. "There are several reasons why women's health issues are not properly addressed in this region of the world. However, the first is undoubtedly the lack of sex education, which prevents women from knowing and seeking better care of their bodies," Yan Li explained in an interview to TechWire Asia. To this day, it is a common practice for local women to stay hidden during their menstrual cycle. For example, in some communities in Laos, Nepal or Indonesia, menstruation is considered impure or dirty; this makes it difficult for women to go to school or carry out daily chores, and virtually impossible to receive proper assistance when in need. 

But we must make a virtue out of necessity. To date, according to the latest Femtech Analytics report, there are 24 femtech companies in Singapore, 6 in Thailand, 3 in Indonesia, Vietnam and the Philippines and 2 in Malaysia. Sehati, founded by Indonesian Anda Waluyo, is based on the IoMT (Internet of Medical Things) and aims at providing fetal monitoring and access to specialist consultations for expectant mothers through the app; EloCare, founded in Singapore by Mabel Yen Ngoc Nguyen, monitors and collects data related to menopausal symptoms via wearable devices; ZaZaZu, also founded in Singapore by Jingjin Liu, is a platform that offers education, products and digital services related to female sexuality.

Femtech is a flourishing sector and Asian women are very enthusiastic about the birth of FemTech Asia, "a job search platform founded by young women who wish to develop their careers in Asian technology markets."

Decoding ASEAN military spending

The Asia Pacific area is the new center of global dynamics, and greater interests result in greater responsibilities: an overview of security perception in the region 

The Philippines has been trying to defend sovereignty over the South China Sea since 2013. In that year, Manila officially filed a lawsuit against China in the Permanent Arbitration Court in The Hague and 3.38$ billion was expended for defense. It is one of the archipelago's largest investments in the military sector of the last decade, which peaked in 2017, when the perception of Chinese assertiveness in the region began to become more evident. But the goal was not just a preemptive move for a hypothetical conflict in the South China Sea: President Rodrigo Duterte's "war on drugs" had turned into a massive and indiscriminate campaign against organized crime, and there was a lack of means to manage it. While the international community was witnessing an escalation of violence in the country and trying to distance itself, it was the People's Republic of China who supplied the Philippines’ army.

It is not easy to analyze a state's military spending, how it is managed and what conditions it can create in foreign policy. Governments often enter arms contracts with countries that could be the very reason for improving the military arsenal and showing themselves "ready" in the event of a conflict. But there is no lack of internal reasons for not letting our guard down. This is what has been happening in Asia from the beginning of the 2000s to today, in a region that is increasingly characterizing international dynamics and interests. In this scenario, the game is being played between the major global powers, and the countries of the area can only respond by taking preventive measures: arm themselves, modernize and integrate themselves into the most advantageous dynamics of globalization. And the crises of recent years have contributed to increasing the perception of insecurity.

The Sipri report

According to the 2019 report by the Stockholm International Peace Institute (Sipri) dedicated to Southeast Asia, it is in this region that the purchase of arms and defense spending have reached the greatest surge in the last twenty years, surpassing the trends of other areas. Among the causes identified by analysts, the rise of Chinese power, but also internal conflicts or tensions along the borders. But the alarming element, the report highlights, is another: in Asia the mechanisms for managing armed conflicts and territorial disputes are lacking - or are unclear. Both the “Asean way” in international affairs and Chinese foreign policy contribute to creating this pattern, both characterized - often - by attempts to avoid direct confrontation and implicit and often cryptic attitudes. The most exemplary case remains precisely that of the South China Sea, where not only the movements of military vehicles, but also the exploration of gas and mineral deposits, or illegal fishing, take place indiscriminately despite the countries having ratified the United Nations Convention. on the Law of the Sea (UNCLOS) - and despite the promise of a "code of conduct" soon.

Going into detail, the military spending of the ten ASEAN countries increased by 33% between 2008 and 2017, even if the reasons behind this choice are different. The countries involved in the territorial disputes in the South China Sea are the ones that have increased investments the most: a response to the unilateral actions considered "suspicious" by Chinese ships and planes. In the other cases, however, the concern and uncertainty towards the neighborhood and the porosity of the borders, which favor the movement of rebel groups, are no less evident: this is what is declared in most contracts for the import of arms, citing the fight against terrorism, organized crime and the transfer of advanced technologies to improve the quality of military operations. Recent cases of inefficiency of military assets, such as the dramatic loss of the crew of the Indonesian Indonesian submarine KRI Nanggala-402, have also raised concerns over equipment modernization.

Exporters and importers

After an initial phase of dependence on the US, Russia, or China, in recent years Asian countries have begun to diversify their suppliers of weapons and military technologies. Today, Sipri data confirm, a significant part of the arms trade flows to Asian markets. This is where 37% of exports from the US, the largest arms exporter in the world, come in, as well as 55% of those from Russia, albeit in decline. Other important exporters are Japan and South Korea, while India occupies a small share of the Burmese market - which with the arrival of the military junta in power seeks to reduce the dependence it has matured towards Beijing.

In Malaysia, in addition to Korea, arms imports from Spain and Turkey play an important role. France does not represent a key player as an arms exporter but, with the growth of international interests in Asian waters, seeks to play a role in monitoring and exercise operations: the latest case dates to the 2021 operations in the Indian Ocean as part of the of the Quad chord. The fledgling alliance desired by the Biden administration is, however, fragile: an element that contributes to influencing the perception of security in Asia.

Cold tensions and new threats

Although Asia has a low percentage of conflicts, concentrated mainly within the countries themselves, there is no lack of conditions for an escalation of tensions in some hotspots of the region. To name a few: the dispute between Malaysia and Brunei over exploitation of the common stretch of sea, the claims of Cambodia and Thailand along the border and the claims of the Philippines on the (now Malaysian) district of Sabah.

Finally, with a view to renewing the defense, the role of global crises is no less important. One such factor is the growing presence of Washington and allies in the Pacific to monitor the region as China's containment practice. The conflict in Ukraine also raises new questions (or rather concerns) on the evolution of global relations: on the one hand, sanctions against Russia represent an unexpected event for countries that receive assistance and weapons from Moscow (such as Vietnam and Myanmar), on the other, Kiev itself exports a small part of weapons (in particular, missiles) to Vietnam and Thailand. Ultimately, the diplomatic impasse and the violence of the conflict could not only increase uncertainty about one's own military capabilities and resources, but also open up the possibility of the international community’s powerlessness to intervene on the ground.

Record drought in the Mekong basin: how to mitigate environmental risks

The Mekong is one of the longest rivers on the Asian continent and represents not only a vital source of livelihood for the populations living in its basin area, but also an object of contention between local governments. ASEAN can play a key role in promoting regional cooperation and dialogue with China.

The Mekong originates on the Tibetan plateau in China and winds for more than 4000 kilometers through Myanmar, Laos, Thailand, Cambodia and Vietnam before flowing into a large delta in the South China Sea. The river plays a key role in the South-East Asia region: not only the livelihood of over 60 million people, but also regional geopolitical balances are dependent on its water.

For the fourth consecutive year, the region is facing a water emergency that, in addition to suffering from the worsening climate crisis, reflects the conflictuality characterizing the policies of flow management. The Mekong River Commission (MRC) - an intergovernmental organization that brings together Laos, Thailand, Cambodia and Vietnam, the four countries of the lower river basin – has mentioned "regional low flows, water fluctuations, and droughts" among the risks that local authorities are called upon to address urgently. The Cambodian government has announced that rainfall in the rainy season "will not be enough to meet the immediate needs" and has recommended a thrifty use of valuable water resources, especially in rural areas.

As highlighted in the latest report of the Mekong River Commission published in early January, the significant anomalies that have affected the hydrological regime since 2015 are the result of the dangerous combination of natural hazards and anthropic pressure. The scarcity of rainfall is added to the intensive exploitation of water, exacerbating the devastating impact on ecosystems, economic activities and the livelihood of local populations.

According to a joint study carried out by the Stimson Center and the research company Eyes on Earth, in some areas of the Mekong basin "the impoundment of water and unnatural releases from dams have entirely altered the natural flow of the river". Water is in fact retained by storage systems during the wet season, while flows increase relatively in the dry season, when the water level is too low to make a difference.

The competition for the control of the flows of the Mekong is made manifest by the number of dams that continue to arise along its path: eleven main ones, most of which are located in Chinese territory, to which must be added the hundreds of minor buildings built along the tributaries and used for fishing and agriculture. Since the 1990s, Beijing has been engaged in an ambitious hydroelectric project that has resulted in the construction of dams and power plants along the upper reaches of the river in the southern province of Yunnan. In addition, through the granting of substantial funding, the Chinese authorities have supported the ambitions of the Laotian neighbour, which has not made a secret of wanting to focus on hydropower to become the "battery of Asia" and relaunch its economy.

In response to the increasing risks - with river levels reaching the lowest levels ever recorded in the last 60 years - the Mekong River Commission invites the six countries involved "to take bold actions" and suggests the establishment of a common notification mechanism on abnormal water level fluctuations and a coordinated system for the management of reservoirs and dams.

Although China has denied the allegations of taking advantage of the strategic position upstream of the river to unilaterally capitalise common waters and exert political pressure on neighbouring countries, the reluctance to share data on the management of dams and the same absence within the Mekong River Commission highlight the persistence of political and diplomatic tensions that undermine regional cooperation on resource management.

According to experts from the Stimson Center and Eyes on Earth, the best solution would be an international water sharing agreement that guarantees "a baseline level of flow from upstream dams during periods of drought” with the aim of averting future crises and simultaneously mitigating distrust of China. In this context, closer synergy between the MRC and ASEAN secretariats is needed. In fact, the Organization can contribute to giving greater centrality to the project of sustainable and coordinated management of the Mekong within the regional political agenda. At the same time, the role of ASEAN in promoting a shared and sustainable development path with the participation of China remains crucial. Hopefully, Beijing will not remain indifferent for a long time to the mutual advantages that a peaceful coexistence along the most productive river in the region could offer.