COVID-19 another chance for ASEAN to deliver on its promise

The ASEAN expert and former bureaucrat on the bloc’s response to the COVID-19 pandemic, and the need for greater public participation in its affairs
An interview with
Chief executive officer at PublicPolicyAsia Advisors

The ASEAN expert and former bureaucrat on the bloc’s response to the COVID-19 pandemic, and the need for greater public participation in its affairs 

ASEAN was one of the first regions outside China impacted by the COVID-19 outbreak. As of 16 June, the region had 120,000 cases with 3,548 deaths, with the ASEAN-5—Indonesia, Malaysia, the Philippines, Singapore and Thailand—accounting for a lion’s share of these numbers. While the pandemic hasn’t had as deadly an impact on the region as it has in other parts of the world such as Western Europe or the US, its socio-economic impact is already immense, with adverse implications on manufacturing, trade and tourism. The varying extents of lockdowns across the region have compounded economic woes, while the number of COVID-19 cases has nonetheless continued to climb steadily.

ASEAN member states have, however, so far largely been in control of the situation, although the lack of sufficient testing in some member states could be a key factor contributing to this view.

In this interview, Unravel managing editor Siddharth Poddar speaks with Pushpanathan Sundram, CEO of PublicPolicyAsia Advisors and former Deputy Secretary General of ASEAN for the ASEAN Economic Community, about ASEAN’s collective response to the ongoing crisis, the region’s learnings from past epidemics such as SARS and the need for the organisation to put its words into action.

Unravel: We’ve seen a global leadership vacuum during the COVID-19 outbreak. We’ve also hardly seen any cooperation between countries, until recently. Why do you think this is?

Pushpanathan Sundram: Yes, I find the whole COVID-19 response globally has been scattered and reactive. Each country has looked inwards to tackle the issue. Even the EU is a good example, with countries more inward-focussed rather than cooperating across the region. It could also be because of key players such as the US, which have been doing the same. China, too, looked inwards and information was not forthcoming in the first few weeks. This could be because it wanted to contain the situation quickly.

This is also not surprising, however. Generally, when a pandemic breaks out, most countries first consider their internal responses because it means dealing with their own people. Governments are mandated to do so. It starts with them looking at it as an internal problem, and finding ways to deal with a pandemic domestically, but pandemics can become bigger and would require regional and global actions based on what we have witnessed for SARS and other infectious diseases.

Similarly, with COVID-19, the external perspective was lacking initially with everyone trying to tackle it at the domestic level. The external dimension did not surface for a long time. The World Health Organization (WHO) too was focused on countries that were already impacted rather than the impending spread of the outbreak, possibly because of a lack of data and understanding of the virus at that point in time.

However, as the outbreak intensified, the need to have a regional and international response to it was made abundantly clear.

Unravel: In your view, how has ASEAN responded to the pandemic?

Mr Sundram: ASEAN’s response has been fragmented. Like elsewhere, governments in the region started responding by looking at the problem domestically, before realising that we need to really collaborate to tackle the issue.

Individually, while countries such as Singapore and Vietnam were proactive at the initial stages of the spread, Indonesia was more reactive to the situation. There was a gap there in terms of responses – but to a large extent, that has been dictated by the capabilities and capacities of the countries and their healthcare systems.

For starters, there’s a wide disparity in terms of the number of doctors. For example, a Singapore has 2.3 doctors per 1,000 people, while an Indonesia only 0.4, and Cambodia even lower. COVID-19 has clearly exposed this disparity in healthcare systems within ASEAN. This presents opportunities for collaboration, but collaboration is difficult because even countries with more resources—such as Singapore and Brunei—are already overstretched.

Similarly, there’s a huge discrepancy in the affordability of healthcare services too. While in a country like Thailand, out-of-pocket expenses account for 12% of healthcare expenditure, the same in the Philippines is 54% and Vietnam 45%. In fact, in all countries besides Brunei and Thailand, the share of out-of-pocket healthcare spend is much greater than the global average. So there’s a clear need to revamp health infrastructure across most ASEAN countries.

Affordability is also something we need to look at because ASEAN’s out-of-pocket expenditure on healthcare is about 34%. But in countries like Cambodia and Myanmar, the percentage is about 60% and 76%. ASEAN really needs to revamp its health infrastructure.

Collectively, there is possibility for collaboration, but there are also limitations.

Unravel: Is the idea of a co-ordinated regional approach possible?

Mr Sundram: At the recent ASEAN special summit, the focus was very much on COVID-19. Commitments were made to keep the regional economy going and to keep supply chains going, both very important. There is also talk of a special pandemic fund, but the question to ask is where the money will come from. The Plus Three can contribute capital, but in keeping with the core tenet of ASEAN Centrality, it is the ASEAN member states that must contribute a fair share.

We did see ASEAN member states take coordinated action in 2009 in the aftermath of the Global Financial Crisis, so yes, it is possible when it comes to coordinating an economic recovery plan. Back then, with the Chiang Mai Initiative (CMI), everyone agreed that we needed a crisis exit plan and that we would coordinate our actions. During that crisis and post-crisis, we coordinated our actions and we came nicely out of the crisis. When I think of a response to this pandemic, we already have good example of the CMI as something that worked. As we now look at exiting the pandemic towards economic recovery, there needs to be greater coordination among the 10 countries in terms of their policies towards travel restrictions, business activities and economic planning.

The main aim at the moment for member states is to focus on ASEAN community building, which is based on open regionalism so that the Plus Three countries and other ASEAN partners will also benefit. This is, however, a perfect opportunity for ASEAN to strengthen cooperation under the various regional arrangements to boost economic activity and maintain its centrality in these arrangements.

ASEAN countries must ensure they work towards economic sustainability, which means keeping trade and economic activity going through this crisis. They must also ensure the unfettered movement of essential goods and services, and not only medical supplies. Food and agricultural supplies, for example, are critical. We have an ASEAN Integrated Food Security Reserve, but it is more to do with rice at present. We need to build on this rice reserve to ensure we are food-secure in the future when another crisis breaks out. This can be extended to medical supplies and other agricultural produce as well.

Discussions have been ongoing in ASEAN on the need to invest more in pharmaceuticals research and production within the region. This is a good initiative, and we must look at research into pharmaceutical drugs because this is not going to be the only pandemic we will see; there will be pandemics in the future too. In addition to looking at how to invest in R&D, we must also consider intellectual property rights protection because we will otherwise not see investments in pharmaceutical production. This is something ASEAN should remain committed to. Meanwhile, it is important to keep supply chains for imports of pharmaceuticals and disinfectants open so that the ASEAN population will have ready supply during this crisis.

And of course, another important consideration is how the region will relax travel restrictions as the lockdowns are eased.

Unravel: What are some other areas of cooperation/ coordination important at this point?

Mr Sundram: The other big issue for ASEAN member states, in my view, is going to be increased public debt and debt servicing costs due to stimulus packages and/ or increased spending to tackle the pandemic while providing tax waivers. As ASEAN member states look to fight COVID-19 with increased spending on healthcare facilities and infrastructure, their economies are likely to be in a prolonged slump. This is likely to result in an increase in public debt levels, and an increase in associated debt servicing costs. ASEAN must find a way for collective action to help revive the economies of the member states with appropriate policies and actions to support trade, investment and business activities.

ASEAN member states need to collaborate, share their experiences and coordinate policies for economic recovery, and work in unison to manage the second wave that most seem to think will come.

Of course, trade is particularly important. The region must keep its supply chains open. And in addressing the implications of COVID-19, ASEAN should not neglect the Regional Comprehensive Economic Partnership (RCEP). They are looking at signing off in December 2020 and this will be important as it will ensure ASEAN centrality is protected. ASEAN will need to enhance its other bilateral FTAs too, as well as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), which a number of ASEAN members are party to.

But most importantly, ASEAN member states need to collaborate, share their experiences and coordinate policies for economic recovery, and work in unison to manage the second wave that most seem to think will come. This is particularly important vis-à-vis international travel in the region, as the economies gradually emerge from COVID-imposed lockdowns. As such, the economic recovery must go hand in hand with a continued emphasis on public safety.

Unravel: Are there any indications yet what the COVID-19 ASEAN Response Fund is going to be about?

Mr Sundram: I think the fund will basically help out during the crisis in terms of helping procure crucial medical equipment and supplies to combat the spread of the pandemic. There could be other initiatives that may come out of the crisis, particularly for the region’s less developed countries.

While Singapore, Malaysia, Thailand, Vietnam and Indonesia have set aside clear sums to support their economies, the other regional economies have not been able to announce stimulus packages to support their economies.

I hope the fund will be focused on helping countries develop their capabilities to handle the crisis and ensure experts and medical supplies are available. It is a useful endeavour, but there needs to be a clear indication of what exactly the funds will be available for.

Unravel: Changing track. With the ASEAN-led RCEP and the Chiang Mai Initiative Multilateralization (which is a multilateral currency swap arrangement between ASEAN+3 members) are we seeing a broader ASEAN+3 grouping start to take shape?

Mr Sundram: We’re not – the main aim at the moment for the member states is to focus on ASEAN community building, which is based on open regionalism so that the Plus Three countries and other ASEAN partners will also benefit. This is, however, a perfect opportunity for ASEAN to strengthen cooperation under the various regional arrangements to boost economic activity and maintain its centrality in these arrangements.

ASEAN+3 institutionalisation is not on the agenda. Cooperation will be strengthened but it would not mean greater institutionalisation.

Unravel: We talked about governments and government action. What can a common man—a citizen of an ASEAN country—expect from ASEAN as a grouping?

Mr Sundram: The common man will not expect much from ASEAN, because he/ she has little knowledge of ASEAN initiatives. For example, not many people will know of ASEAN’s efforts in keeping the regional supply chains open through various trade arrangements.

Many initiatives benefit the region’s people, but they are not aware of ASEAN’s contribution. This has been a perennial issue since my days at ASEAN. There is definitely a need for greater awareness around how ASEAN is helping citizens in the region. The focus has, perhaps understandably, always been on macro developments. This has always been a missing link. This is something for people to look at. We need to tell the ASEAN story better in terms of its contributions to the people of the region.

And finally, I think ASEAN can make a difference to the people in the region if there is more public participation in its activities, especially in pandemic situations like COVID-19. The involvement of experts, volunteers, academics, businesses and others will add greater value to ASEAN’s efforts in addressing issues of concern to the people. This requires coordination among member states, ASEAN institutions/networks and the ASEAN Secretariat. This is the essence of a community, I believe.

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Sundram
Chief executive officer at PublicPolicyAsia Advisors

Pushpanathan Sundram has more than three decades of experience working in the highest levels of government, international organisations and the private sector. He was the Deputy Secretary General of ASEAN (Deputy Minister) for the ASEAN Economic Community (AEC) from 2009 to 2011. He also served in several senior positions in the ASEAN Secretariat from 1997-2008 which included Principal Director of the Bureau of Economic Integration and Finance; Director of External Relations and Special Assistant to the Secretary General of ASEAN. He was instrumental in the development and implementation of the first AEC Blueprint and the first Master Plan on ASEAN Connectivity.

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