This week marks the first year of Russia's invasion of Ukraine. The biggest war in Europe since World War II will continue as nobody knows when, or if ever, Russia or Ukraine will be defeated. Certainly, the US and Europe, or rather Nato are confident that more military hardware support to Kyiv is the only way to bleed Russia dry. Recent rhetoric from the West at the Munich Security Conference last week has already raised the spectre of a long war, perhaps short of a nuclear war. Obviously, that has the potential to drag other European nations into the conflict, which is already a proxy war. Belarus has allowed Russia to use its territory to wedge war against Ukraine. Even if the war ends -- it is a big if -- the dire repercussions will continue for generations.
Looking back, it is perhaps fortunate that the Russia-Ukraine conflict occurred at a time when Southeast Asia has been enjoying stability and prosperity despite the economic slowdown due to the three-year Covid-19 catastrophe. Under the umbrella of Asean, the grouping showed its diplomatic finesse in navigating the geopolitical tsunami brought about by Russian aggression and subsequent Western sanctions.
The Asean position on the Russia-Ukraine war has been greatly criticised by Western countries, which have called for maximum condemnation and stringent sanctions.
However, Asean made it very clear in all three separate statements and the annual Asean joint communique last year that it was deeply concerned and called on the two conflicting parties to exercise maximum restraint. The bloc also reiterated the importance of mutual respect for sovereignty, territorial integrity, and equal rights of all nations. Throughout the conflict, Asean's attitude has been consistent that there should be an immediate ceasefire and deliveries of humanitarian assistance for suffering civilians. In a nutshell, Asean and its individual members do not want to be pawns in the current great geopolitical game.
Under the Indonesian chair, Asean will continue to pursue its outward-looking, inclusive, and non-discriminatory approach. Asean will also reach out to potential partners in all four corners of the world, especially the Middle East and the South Pacific. But this must be based on mutual interests, constructive engagement, respect, and benefits.
Earlier last year, despite a deep fear of disruptive consequences of the Ukraine crisis impinging on their summits, Cambodia, Indonesia and Thailand managed to engage with major powers with flying colours. Cambodia showed how a small country could play a crucial role during a crisis in easing superpower tensions. As the 2022 chair of the G20, Indonesia persuaded all members to agree on the Bali Leaders' Declaration, which was considered an impossible task at the time. Jakarta's international profile has therefore been bolstered.
Two days later, the much-needed conducive atmosphere rendered positive vibes for Thailand, the host of Apec 2022, to sustain the hard-gained consensus on the Ukraine crisis and other sensitive issues. At the Apec leaders' meeting in Bangkok, participants from 21 economies agreed on all key documents, including the 2022 Leaders' Declaration, and pledged to work closely to achieve sustainable economic growth and a green economy which is urgently needed in this fragile and fragmented world.
However, these days, frequently asked questions are whether similar key international economic and strategic summits this year will yield as positive results as in 2022. After all, Japan is hosting the powerful G7 summit in May in Hiroshima while India takes up the G20 chair succeeding Indonesia. The G20 and Asean-related summits will be held early back-to-back in September. In more ways than one, these three specific summits could probably forge a consensus on broad issues, but the Ukraine crisis will remain challenging and divisive.
For Asia, Japan will be first in a series of summits to lay out the trajectory of the global trend later this year. Japanese Prime Minister Fumio Kishida has maintained a hard-line stance against Russia's aggression in the past year. The G7 will certainly reflect Tokyo's concern about the current Ukraine crisis. Both the G20 and Asean-related summits, which have Russia as a member, should be able to proceed due to the neutral position held by India and Indonesia over the Russia-Ukraine war. However, there is a possible glitch regarding the US chair of Apec 2023.
Given the present standoff in Ukraine, the US has a Herculean task to work collaboratively with all economies. At this juncture, it is highly unlikely for the US to be able to issue a leaders' declaration at the November meeting in San Francisco. Different scenarios could play out such as a boycott by Russian diplomats if there is some recalcitrance from the host about protocols. Russia was absent at a recent Apec Business Advisory Council meeting. Again, the Western members of Apec could issue a separate statement condemning Russia as they did in Thailand last year. Unless there is a dramatic turnaround on the battlefield in the weeks and months to come that could lead to a ceasefire and subsequent dialogue for peace, the US and its Western allies will continue to double down their efforts to help Ukraine win this war.
This year, the US has very high stakes in promoting its footholds in Southeast Asia, especially in economic matters. First, Washington wants to ensure that the so-called Manoa Agenda will be accepted and endorsed at the Apec summit. The agenda contains priorities set forth by Washington on the theme of "Creating a Resilient and Sustainable Future for All". The agenda has been circulated only recently for comments ahead of the first Apec senior official meeting in Palms Spring next week. At this juncture, it is still too early to gauge the reactions of Apec members. Unlike the US, Thailand informed all Apec members as soon as it took up the chair about its priorities and the objective of the key document, the Bangkok Goals on the Bio-Circular-Green Economy. At the moment, the proposed US agenda is still thin in detail. For the rest of Apec members, especially Thailand, Washington must show a commitment that it can build on the BCG model and move forward.
At first glance, several elements of the proposed agenda are closely linked to the Indo-Pacific Economic Framework (IPEF), which was proposed by the US in September last year, especially on clean energy and the green economy. When Vice President Kamala Harris attended the Apec event in Bangkok last November, she made clear the importance of the Indo-Pacific strategy in the overall scheme of things that the US will engage with the region in the years to come. In other words, Washington would like to align the IPEF principles and norms with the broad existing Apec frameworks. The Palms Spring meeting will determine the trajectory of the US chair for the rest of the year.
Seven of the ten member Asean countries were among the 14 founding signatories of the IPEF, mainly focusing on regulatory and governance reforms. Although the ongoing discussions are focused on economic matters, the IPEF members understand that without tariff reductions and access to the market, the negotiations will be considered a political process designed to strengthen US ties with the countries in the Indo-Pacific region. Washington can be more flexible as the IPEF does not require Congressional vetting and approval.
Looking ahead, both the Ukraine crisis and the US-China rivalry will intensify this year following the Chinese balloon incident. The latter will further accelerate the decoupling of the US and China, making it harder for international business transactions between the world's two largest economies. Given this circumstance, Asean's economies will stand to gain as they continue to welcome trade and investment from all major powers without prejudice. Maintaining the grouping's centrality and neutrality will be essential to attract foreign capital and increase trade.
For Thailand, the Ukraine crisis has impacted the overall economic performance in a marginal way. Trade volume with Ukraine remains insignificant. The supply and value chain has not broken down as earlier feared. As one of the world's largest food-producing countries, Thailand has been spared the food crisis experienced by some Asean countries. Along with Asean, Thailand will continue to push forward the peace agenda for Ukraine.
