Anglo-chinese School
(international)
Joel Nathaniel John Godfrey
Joel Nathaniel John Godfrey
Abstract:
Since this essay will be studying the effects of a trading bloc on its members and vice-versa, this
extended essay will be following the global interactions HL extension of Geography. More
specifically this essay will concentrate on the trade (financial flows), international organizations and
forums (political outcomes) and trading blocs (political outcomes) part of the syllabus.
For nearly as long as Singapore has been an independent state, Singapore has likewise been one of
the first members of ASEAN. Yet ASEAN’s contributions to Singapore and Singapore’s
contributions to ASEAN are not well known.
This essay is based upon two hypotheses, both of which require studying Singapore’s contribution
within ASEAN and ASEAN’s contributions to Singapore’s progress and then evaluating which
contribution is greater. The first hypothesis states that Singapore gains most from having free trade
within ASEAN. This was done by comparing trends between trade with ASEAN and Singapore and
trade with Singapore and the rest of the world, before and after the creation of AFTA. This
hypothesis seemed to be correct. It was clear to see during times where the world economy was
doing well, AFTA created an even more rapid rate of increase in exports from Singapore.
The second hypothesis states Singapore has contributed to political change in other ASEAN
countries, but Singapore has not changed politically because of its membership in ASEAN. This was
tested by researching ASEAN’s involvement in Singapore’s main political problems and Singapore’s
involvement in political problems of other ASEAN nations. It was concluded that ASEAN has had
no visible involvement in Singapore’s politics and Singapore has had both a positive and negative
impute in solving political problems in ASEAN.
(271 words)
1
Joel Nathaniel John Godfrey
Contents:
Introduction…………………………………………………………………….. page
3
Background……………………………………………………………………….page
4
Aims………………………………………………………………………………page
6
Hypothesis………………………………………………………………………..page
7
-
Method of evaluation……………………………………………………………page
9
-
Presentation and analysis of Economic Data………………………………….page
13
-
Presentation and analysis of Political Literature and data…………………..page
25
-
Conclusion and Evaluation…………………………………………………….page
27
-
Biblography……………………………………………………………………..page
28
-
2
Joel Nathaniel John Godfrey
Introduction:
This extended essay aims to find out what impacts ASEAN membership has upon Singapore and
what impacts Singapore’s ASEAN membership has on the rest of ASEAN.
This essay will only be looking at the political and economic impacts of ASEAN on Singapore and
of Singapore on other ASEAN members, not the environmental or social-cultural impacts. The
social-cultural impacts are being ignored because the profits and losses of social change are very
difficult to measure and, furthermore, views and opinions on social change tend to contain a large
degree of bias.
Also the most important parts of ASEAN have been AFTA (ASEAN free trade area), the Zone of
Peace, Freedom and Neutrality (ZOPFAN) Declaration and the ASEAN summits where most of the
issues discussed are not social-cultural issues.
Environmental impacts are being ignored in this essay, because any environmental effects of
ASEAN should only be caused indirectly by the political or economic changes; therefore there is
more room for error if an indirect impact of ASEAN is being looked at instead of a direct impact.
This essay will be studying trade (financial flows), international organizations and forums (political
outcomes) and trading blocs (political outcomes). All of which are part of the IB geography syllabus.
3
Joel Nathaniel John Godfrey
Background:
ASEAN
The Association of Southeast Asian Nations or ASEAN consists of all of South East Asia excluding
Timor-Leste and Papua New Guinea. ASEAN is an international organization which aims to
accelerate the economic growth, social progress and cultural development in the region without
interference in the internal affairs of one another.1
At the moment, this is done by:
-
Creating a free trade area (some of the newer member nations within ASEAN are still
allowed to have tariffs within ASEAN for an extended time period) between ASEAN
members, Australia and New Zealand (ASEAN-Australia-New Zealand Free Trade Area
(AANZFTA)).2
-
Holding summits in which members of parliament of each nation meet together and discuss
issues faced in the region.
-
Letting citizens of one member nation visit another without a visa.
-
The Zone of Peace, Freedom and Neutrality (ZOPFAN) Declaration.
-
Many other minor declarations.
Also one should be aware that there are plans to increase the powers of ASEAN and by 2015
ASEAN will become the ASEAN Community3; however this essay will not look too much into this
future ASEAN Community. Firstly, it would be too theoretical and uncertain to predict its affects in
the future. Secondly, and more importantly, the blueprint for the ASEAN community is too in-depth
and broad this essay could not explain it in 4000 words.
1
http://www.aseansec.org/about_ASEAN.html
http://www.fta.gov.sg/fta_C_aanzfta.asp?hl=47
3
http://www.aseansec.org/about_ASEAN.html
2
4
Joel Nathaniel John Godfrey
Singapore:
Singapore is one of the world's most prosperous countries with strong international trading links (its
port is one of the world’s busiest in terms of tonnage handled) and its per capita GDP (Gross
Domestic Product) is equal/higher to that of the leading nations of Western Europe.4
In addition to this, there are certain things that make Singapore stand out from the rest of ASEAN:
Firstly, Singapore is the only nation in which the majority of residents are ethnically Chinese
(74.1%5 to be exact). This is an important thing to note because in several places in South-East Asia
Chinese residents have faced much discrimination and dislike – particularly in Malaysia and
Indonesia.
Secondly, Singapore is a city state, therefore making it by far the smallest (712.4km2) and most
densely populated of ASEAN nations (7,126 people per km2)6.
ASEAN Statistics:7
Selected basic ASEAN indicators
as of 15 February 2011
Country
Total land
area
km
2
2009
Brunei Darussalam
5,765
1/
Total population
Annual
population
Population
density
1/
tho usand
perso ns per km
2009
2009
406.2
product
Gross domestic product
per capita
grow th
at current prices
at current prices
percent
US$ millio n
1/
2
Gross domestic
2009
70
2.1
2/
2009
10,758.6
US$
2/
US$ P P P
3/
2009
2009
26,486.0
36,177.4
Cambodia
181,035
14,957.8
83
2.1
10,359.2
692.6
1,787.6
Indonesia
1,860,360
231,369.5
124
1.2
546,864.6
2,363.6
4,371.2
Lao PDR
236,800
5,922.1
25
2.8
5,579.2
910.5
2,250.0
Malaysia
330,252
28,306.0
86
2.1
193,107.7
6,822.0
12,353.3
Myanmar
676,577
59,534.3
88
1.8
24,972.8
419.5
1,138.1
The Philippines
300,000
92,226.6
307
2.0
161,357.6
1,749.6
3,591.8
710
4,987.6
7,023
3.1
182,701.7
36,631.2
52,871.8
Thailand
513,120
66,903.0
130
0.6
264,322.8
3,950.8
7,943.5
Viet Nam
331,212
87,228.4
263
1.2
96,317.1
1,119.6
3,123.8
4,435,830
591,841.0
133
1.4
1,496,341.3
2,532.5
4,872.9
Singapore
ASEAN
As stated previously the GDP per capita of Singapore is exceptionally high whether you use real
GDP or GDP ppp (purchasing power parity). The only other nation within ASEAN that has a
comparable GDP per capita is Brunei, but Brunei’s population is too small (small even in
4
https://www.cia.gov/library/publications/the-world-factbook/geos/sn.html
Singapore Census of Population 2010 Advance Census Release
6
http://www.singstat.gov.sg/stats/keyind.html
7
http://www.aseansec.org/19226.htm
5
5
Joel Nathaniel John Godfrey
comparison to Singapore) to have a GDP comparable to the main powers within ASEAN like
Indonesia, whereas Singapore's population and GDP per capita are high enough to have a GDP larger
than the Philippines or Vietnam.
Aims:
-
To investigate what Singapore may have gained from being in ASEAN
-
How ASEAN may have benefited from Singapore’s membership
Map of ASEAN: 8
8
http://www.asean.org/69.htm
6
Joel Nathaniel John Godfrey
Hypothesis & justifications:
1) Singapore gains most from having free trade within ASEAN
Justification:
Singapore is renowned for being a centre of trade and has one of the highest balance of trade (% of
GDP) in the world. Singapore is believed to be the busiest port in the world. This is mainly, because
of Singapore’s trade friendly laws (negligible tariff rates, very little legalisation etc.), strategic
location and high-tech shipping equipment. Consequently having free trade within South-East Asia
will only increase trade in Singapore, leading to an increase of employment and flow of money.
Whereas the rest of ASEAN may have big trading ports (with the exception of Myanmar, Cambodia
and Laos), but none of them can be compared to Singapore’s trading industry. Also Singapore is far
less protectionist than the rest of ASEAN (especially in comparison to Indonesia), therefore the other
nations have far higher tariff rates (which can be used as a source of government income and deter
foreign imports to their nation) than Singapore. Since they have higher tariff rates they will be asked
to give up more.
Also unlike the rest of ASEAN, Singapore does not have a rural area nor many raw materials;
therefore its primary sector is negligible. Without food and raw materials an economy simply cannot
function; therefore Singapore cannot rely on its domestic market alone and needs to trade using
products from other sectors of the economy (secondary goods, tertiary services and/or quaternary
services), so they can buy goods from the primary sector. Whereas the rest of ASEAN have a large
primary sector, therefore trade is not as necessary for them as it is for Singapore.
CEPT (Common Effective Preferential Tariff) planed tariff rates:9
Country
Brunei
Indonesia
Malaysia
Philippines
Singapore
Thailand
Vietnam
ASEAN
9
1996
2.02
11.56
6.11
8.24
0.00
14.14
0.88
7.66
1997
2.02
10.56
5.38
7.50
0.00
12.73
0.88
6.95
1998
1.64
8.80
4.66
6.48
0.00
10.18
0.88
5.75
1999
1.64
7.87
3.92
5.86
0.00
9.31
0.88
5.19
ASEAN reader volume I
7
2000
1.38
5.83
3.23
4.85
0.00
7.03
0.88
4.02
2001
1.38
5.68
3.03
4.37
0.00
6.99
0.88
3.89
2002
1.38
5.00
2.86
4.36
0.00
5.80
0.88
3.47
2003
1.38
4.25
2.58
3.28
0.00
4.62
0.88
2.89
Joel Nathaniel John Godfrey
2) Singapore has contributed to political change in other ASEAN countries, but Singapore has
not changed politically because of its membership in ASEAN
Definition:
Before one looks at the justification of this hypothesis it is important to clarify what an improvement
in politics is, as such a term can be seen as very subjective. Although to some extent the answer to
this question is subjective, most people would agree that there are better ways of running a country
than others. For instance it is generally agreed that a democracy is better than a dictatorship, mainly
because dictators have a tendency to become complacent or corrupt, and the citizens of the country
have less freedom than they would probably have within a democracy.
If a nation increases its ownership of land or raw materials, this can also be considered a political
improvement, since the nation’s government is directly responsible for that land.
Keeping a nation peaceful and safe can also be seen as an improvement politically, as the
government once again is directly responsible for the nation’s security.
Justification:
The rest of ASEAN generally have more territorial disputes than Singapore. For example disputes
over the Spratly islands, Karang Unarang, Prachinburi area etc. That being said, Singapore has had
serious disputes with Malaysia over deliveries of fresh water to Singapore, Singapore's extensive
land reclamation works, bridge construction, and maritime boundaries in the Johor and Singapore
Straits.10 Singapore also has faced issues with the threat of terrorism and has had a problem with
piracy along the Malacca Strait, which also affects Indonesia and Malaysia to. These problems are
not as significant as most of the other ASEAN nation’s political problems.
The Treaty of Amity and Cooperation in Southeast Asia has a policy of non-interference in the
internal affairs of one another 11, therefore ASEAN should not have a great effect on any of the
ASEAN nations’ democracy. Despite this, ASEAN has commented on Myanmar’s political situation
(which is a military junta attempting to become a democracy) mainly due to attention from the mass
media.
10
11
https://www.cia.gov/library/publications/the-world-factbook/fields/2070.html
http://www.aseansec.org/1217.htm
8
Joel Nathaniel John Godfrey
Method of Evaluation:
-
Effects on Economy:
The AFTA (ASEAN Free Trade Area) was established on 28 January 199212 in which no ASEAN
nation was allowed to impose a tariff greater than 20% between another ASEAN nation and by the
year 2008 the tariffs between two ASEAN nations must be below 5% (with the exception of new
members like Cambodia and Myanmar).
To find out who benefits from AFTA, the contrast between imports and exports (better known as the
balance of trade) after the creation of AFTA (1992) needs to be studied. If the value of exports is
greater than imports then the nations should gain from increase in trade, as more money is coming
into the economy than going out. In fact, people’s standard of living should increase, whereas if the
value of imports is greater than exports then the nation would make a loss from increasing trade as
money is being leaked out of the economy, and therefore either people's real wages will decrease or
people will lose their jobs - either way the standard of living goes down.
Needless to say, there are other factors that could affect the balance of trade between two nations
apart from changes in tariff rates, one being a general increase/decrease of import or exports:
Assuming Citrus Paribas, the only things that will affect the change in exports to the rest of ASEAN
from Singapore is the change in Singapore’s total exports to the world and the change in tariff rates
caused by AFTA. Since this essay is looking at the effects of AFTA on trade, it is necessary to
integrate the change of Singapore’s total world exports to the change in exports to the rest of
ASEAN. According to conditional probability (form of mathematics) the effects of the tariff will be
seen by the difference in percentage change of exports from Singapore to ASEAN over time and
percentage change of exports from Singapore to the world over time, multiplied by the value of the
original export to ASEAN, Visa-versa for imports. The reason for this is that if there was no AFTA
or other outward factors, percentage change of the world trade with Singapore should be equal to
percentage change of ASEAN trade with Singapore.
To illustrate this process; in 1999 recorded exports from Singapore to ASEAN were valued at
$S49,484 million. Whereas exports to the world were valued at $S194,290 million. The next year
exports to ASEAN were valued at $S64,386 million and exports to the world were valued at
$S237,826 million.
12
http://www.asean.org/17500.htm
9
Joel Nathaniel John Godfrey
If E is the increase of export from Singapore to ASEAN due to AFTA;
E = (∆% of exports to ASEAN - ∆% of exports to the world) x original value of export to ASEAN
E=(
64386 − 49484
49484
−
237826−194290
194290
) x $S49,484,000,000
= (30.11% - 22.41%) x $S49,484,000,000
= $S3,814,000,000
All the values of percentage change of exports to ASEAN v exports to world after 1992 (creation of
AFTA) will be added up to find the effect of AFTA. The same will be done for imports.
In reality Citrus Paribas would not apply, so other trade agreements of Singapore that could affect the
world trade with Singapore will be investigated. Other causes of changes to ASEAN trade with
Singapore and changes to Singapore’s trade outside of ASEAN will have to be ignored.
To find facts and statistics on trade between nations it is best to use official Singapore statistics, both
of which are seen as reliable and credited sources.
10
Joel Nathaniel John Godfrey
Effects on Politics
To evaluate how Singapore’s ASEAN membership affects Singapore’s politics, we will look for
any evidence of ASEAN taking any form of action to help Singapore in any of its major
publicized politic issues. These would include:
- Helping Singapore by increasing its freedom of speech
- Help in the land and water disputes with Malaysia (in which Singapore threatened to use force)
- Finalize maritime boundaries in the Johor and Singapore Straits
- Support Singapore in continuing its land reclamation plans (which Indonesia and Malaysia have
tried to stop)
It would be redundant to investigate any contributions ASEAN has made to decreasing terrorism
or piracy within the region, because this would probably benefit other countries within ASEAN
equally as much as it does Singapore. ASEAN’s attempts to contain the spread of communism
will also not be evaluated, for the same reason.
To evaluate how Singapore being a member of ASEAN improves politics in other nations of
ASEAN, this essay will look at any attempts ASEAN has made to help in the main disputes that
other ASEAN members have. This would include:
- Brunei’s claim to Limbang corridor
- Cambodia and Thailand disputed sections of boundary and the ownership of the ruins of Preah
Vihear temple
- Cambodia and Vietnams dispute over off-shore islands
- Delimiting Indonesia’s and Timor-Leste’s land (which was once part of Indonesia)
- Indonesia’s conflict with Timor-Leste
- Laos’ journey to democracy
- Myanmar’s move to democracy
- Delimiting the Vietnam-China boarder boundaries
11
Joel Nathaniel John Godfrey
- The Spratly Islands claims13.
If ASEAN did have any involvement in these issues we will next look at specifically Singapore’s
stance.
Many of these issues are disputes of ownership between ASEAN nations that could have or have
led to conflicts; therefore we are not specifically evaluating ASEAN’s ability to decide who gets
what (either way an ASEAN nation benefits from ownership), but its ability to stop conflicts with
in the region.
The ASEAN website is the best source for researching ASEAN involvement (if any) on these
issues, as ASEAN is a fairly reliable and credited source, although there are still other sources
that can be used.
13
https://www.cia.gov/library/publications/the-world-factbook/fields/2070.html
12
Joel Nathaniel John Godfrey
Presentation and analysis of Economic Data:
List of Free trade agreements Singapore has made after AFTA14:
Singapore-NZ (2001)
Japan-Singapore(2002)
Singapore – Australia (2003)
Singapore – EFTA (2003)
Singapore – US (2004)
Singapore – Jordan (2004)
Korea – Singapore (2006)
Singapore – India (2007)
Singapore – Panama (2007)
GCC (Gulf Cooperation Council) – Singapore (2008)
Singapore – Peru (2009)
Singapore – China (2009)
14
Asia’s free trade Agreements- How is business responding?
13
Joel Nathaniel John Godfrey
Tables of trade in Singapore15:
In these trade statistics, Imports are valued at CIF (Cost Insurance and Freight), that is, the value of
goods at the frontier of the exporting country plus the cost of insurance and freight and any other
charges when sold for export to Singapore. In short the money that is taken from the Singapore
economy.
Exports are valued at FOB (Free On Board), that is, the value of goods to the purchaser abroad up to
the point where the goods are deposited on board the outgoing vessel, aircraft or vehicle. In short the
money that is put into Singapore’s economy.
15
Singapore yearbook of statistics 1983-19
14
Year
Exports from Singapore ($S Million)
Exports to Brunei Exports to Cambodia Exports to Indonesia Exports to Laos Exports to Malaysia Exports to Phillipines exports to Thailand Exports to Vietnam
1983
746 8121
890
1995 1984
627 8324
441
2458 1985
638 7787
479
2093 1986
684 7245
539
1788 1987
708 8560
877
2554 1988
833 10721
1045
4311 1989
903 11915
1294
4806 1990
978 12449
1215
6310 1991
956 15236
1176
6401 1992
1080 12925
1317
6442 1993
1025 16942
2214
6805 1994
1246 29090
2411
8189 1995
2077 32125
2733
9672 1996
2412 31743
3238
10006 1997
2067 32405
4382
8532 1998
1028 27999
4120
7037 1999
818
582 57
32164
4795
8536
2532
2000
838
735 52
43190
5838
10122
3611
2001
735
663 47
37821
5516
9487
3769
2002
814
630 47
39003
5438
10214
3729
2003
805
536 35
39672
5636
10711
4194
2004
826
589 65
46073
6618
13073
5367
2005
826
505
36817
67
50612
6970
15662
7364
2006
911
730
39504
65
56372
8067
17945
8665
2007
1048
661
44320
59
58100
9224
18653
9803
2008
1228
734
50299
36
57639
10265
18612
12280
2009
1258
1038
37858
53
44809
7313
14613
10114
2010
1286
3000
44984
31
57114
9775
17284
10061
Joel Nathaniel John Godfrey
15
Year
Imports to Singapore ($S Million)
Imports from Brunei imports from Cambodia Imports from Indonesia Imports from Laos
1983
404 1984
415 1985
537 1986
298 1987
277 1988
225 1989
146 1990
234 1991
321 1992
433 1993
350 1994
319 1995
317 1996
290 1997
271 1998
293 1999
261
198 2000
456
129 2001
325
98 2002
381
150 2003
304
130 2004
262
82 2005
248
167
17400
2006
349
178
23426
2007
212
128
22068
2008
268
164
24828
2009
135
614
20659
2010
178
217
22937
imports from Malaysia imports from Phillipines imports from Thailand imports from Vietnam
8639
271
1068 9180
395
1351 8301
437
1196 7403
402
1607 9477
376
2137 12929
529
2386 12784
531
2443 14964
567
2974 17383
475
3629 17287
517
4365 22670
813
5676 25600
1193
7471 27285
1558
9097 27808
1960
10117 29548
2954
10080 26252
4002
8118 29283
4974
8889
888
39399
5794
10009
1413
35975
4573
9243
1526
37951
4481
9677
1677
37528
4921
9587
1785
42202
7138
11330
2369
2
45527
7742
12516
3026
1
49481
8967
13856
2622
2
51809
8756
12797
3224
1
53814
6929
15923
3360
0
41336
7475
11907
3299
4
49490
12523
14001
2193
Joel Nathaniel John Godfrey
16
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
Year
64386
58038
59875
61589
72611
118821
132259
141867
151093
117055
143536
218026
223901
251096
303476
382532
431559
450628
476762
391118
478841
40936
147327
237826
26986
119473
49484
21764
103351
194290
23769
101880
40184
20952
95206
183763
18918
87117
47386
16910
79051
185613
12699
60266
47399
10256
48986
176272
10997
50179
46607
11850
51340
167515
11752
total Exports to ASEAN
46155
Total Exports to the world
Exports from Singapore ($S Million)
0.84%
-7.20%
-6.74%
23.82%
33.16%
11.87%
10.75%
13.45%
-8.44%
23.99%
51.69%
13.85%
1.70%
-0.03%
-15.20%
23.14%
30.11%
-9.86%
3.17%
2.86%
17.90%
63.64%
11.31%
7.26%
6.50%
-22.53%
22.62%
11.23%
-2.26%
-2.38%
23.03%
31.17%
10.20%
9.29%
7.01%
1.44%
15.60%
23.31%
13.70%
5.23%
5.30%
-1.00%
5.73%
22.41%
-8.33%
2.69%
12.15%
20.86%
26.05%
12.82%
4.42%
5.80%
-17.96%
22.43%
-10.40%
-4.94%
-4.36%
0.79%
1.99%
1.67%
1.47%
6.43%
-9.88%
8.39%
28.38%
0.15%
-3.53%
-5.33%
-14.20%
17.41%
7.71%
-1.53%
0.47%
-9.28%
-2.96%
37.59%
-1.51%
2.85%
0.70%
-4.56%
0.19%
percentage change of exports to ASEAN percentage change of exports to the world percentage change ASEAN exports v world exports
annual percentage cange of exports from Singapore
Joel Nathaniel John Godfrey
17
Year
Imports to Singapore ($S Million)
percaentage change of imports to Singapore
Total world imports total ASEAN imports percentage change of ASEAN imports percentage change of world imports
ASEAN imports v world imports
1983
59504
10383
1984
61134
11341
9.23%
2.74%
6.49%
1985
57818
10471
-7.67%
-5.42%
-2.24%
1986
55545
9709
-7.28%
-3.93%
-3.35%
1987
68415
12266
26.34%
23.17%
3.17%
1988
88227
16069
31.00%
28.96%
2.05%
1989
96864
15904
-1.02%
9.79%
-10.81%
1990
109806
18739
17.82%
13.36%
4.46%
1991
114195
21807
16.38%
4.00%
12.38%
1992
117530
22603
3.65%
2.92%
0.73%
1993
137603
29509
30.55%
17.08%
13.47%
1994
156396
34583
17.20%
13.66%
3.54%
1995
176314
38257
10.62%
12.74%
-2.11%
1996
185183
40175
5.01%
5.03%
-0.02%
1997
196605
42853
6.67%
6.17%
0.50%
1998
169864
38665
-9.77%
-13.60%
3.83%
1999
188142
44493
15.07%
10.76%
4.31%
2000
232175
57200
28.56%
23.40%
5.16%
2001
207692
51740
-9.55%
-10.55%
1.00%
2002
208312
54317
4.98%
0.30%
4.68%
2003
222811
54255
-0.11%
6.96%
-7.07%
2004
276894
63383
16.82%
24.27%
-7.45%
2005
333191
86627
36.67%
20.33%
16.34%
2006
378924
98879
14.14%
13.73%
0.42%
2007
395980
98995
0.12%
4.50%
-4.38%
2008
450893
105286
6.35%
13.87%
-7.51%
2009
356299
85426
-18.86%
-20.98%
2.12%
2010
423222
101542
18.87%
18.78%
0.08%
Joel Nathaniel John Godfrey
18
19
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
Total (after AFTA)
Total (before AFTA)
Year
-10.40%
-4.94%
-4.36%
0.79%
1.99%
1.67%
1.47%
6.43%
-9.88%
8.39%
28.38%
0.15%
-3.53%
-5.33%
-14.20%
17.41%
7.71%
-1.53%
0.47%
-9.28%
-2.96%
37.59%
-1.51%
2.85%
0.70%
-4.56%
0.19%
6.49%
-2.24%
-3.35%
3.17%
2.05%
-10.81%
4.46%
12.38%
0.73%
13.47%
3.54%
-2.11%
-0.02%
0.50%
3.83%
4.31%
5.16%
1.00%
4.68%
-7.07%
-7.45%
16.34%
0.42%
-4.38%
-7.51%
2.12%
0.08%
percaentage change of Sinagpore trade
ASEAN exports v world exports
ASEAN imports v world imports
23132
-565
228
-6896
998
3764
-1791
27295
-1826
-5558
273
-988
3814
6998
-6730
-2525
-1644
62
7658
1827
-2348
1348
277
283
253
81
-480
-585
-1222
value of change in Sinagpore trade ($S Million)
ASEAN exports v world exports
ASEAN imports v world imports
674
-255
-351
307
251
-1738
709
2320
159
3045
1044
-730
-6
200
1641
1668
2294
572
2423
-3843
-4041
10357
362
-4335
-7437
2228
71
2466
5122
Joel Nathaniel John Godfrey
Joel Nathaniel John Godfrey
As expected trade with Singapore and the rest of ASEAN had a very similar gradient to Trade
between Singapore and the rest of the world:
20
Joel Nathaniel John Godfrey
21
Joel Nathaniel John Godfrey
From the last table we can see that the estimated increase of exports from Singapore to ASEAN due
to AFTA (calculated by the process shown on pages 10-11) is $S22,610,000,000. Whereas the value
for imports from ASEAN due to AFTA is estimated at $S5,670,000,000. If this process is correct,
then my hypothesis is proven correct as Singapore seems to have increase its trade balance because
of AFTA, although this process can only give an estimate of the effects of AFTA.
To evaluate the effects of AFTA even further, we can also look at the changes within trade in a graph
to see any trends:
AFTA is signed
Exports to Cambodia, Vietnam
and Laos are recognised as ASEAN
EFTA – Singapore FTA
FftaFFTAFTAAFTFTAFT
AFTA
US – Singapore FTA
Judging by this information, before the Signing of AFTA the difference between percentage increase
and decrease of exports to ASEAN was fairly similar to exports to the world. After the creation of
AFTA, for two years there was a significant increase in exports to ASEAN which grew a lot faster in
percentage than exports to the rest of the world. Also when the rate at which exports to the world
22
Joel Nathaniel John Godfrey
decreased, the rate at which Singapore exports to ASEAN decreased was even more rapid - so much
so that the percentage change of ASEAN exports against world exports can become minus. This
pattern repeats itself two times again. Imports to Singapore don’t seem to follow a pattern as clearly
as the Export graph:
The most likely reason for AFTA having had this effect, is when AFTA was created it not only
helped make Singapore’s exports cheaper and more appealing to consumers in other ASEAN nations
but, it also made all of the other ASEAN nation’s exports cheaper and more appealing to each other.
Singapore’s
exports
are
mainly machinery
and
equipment
(including
electronics
and
telecommunications), pharmaceuticals and other chemicals plus refined petroleum products4. With
the exception of pharmaceuticals, these are all high order goods and therefore not necessities.
Whereas what most of the other ASEAN nations trade in are low-order goods; therefore when a
country in ASEAN’s economy is booming and trade is high, demand is high for both high–order and
low–order goods, but when the economy is at a bust, consumers will buy more low-order goods
regardless of the price of high-order goods. In Singapore’s case demand for its exports in ASEAN
23
Joel Nathaniel John Godfrey
decrease more than it would for its other trade partners of Singapore like Europe or US who are more
likely to buy high-order goods even within an economic bust.
Since Singapore’s tariff rate was already near to zero before the creation of AFTA, therefore judging
by the graph there is not a clear difference to how the ASEAN imports v world imports line moves
before and after the creation of AFTA.
24
Joel Nathaniel John Godfrey
Presentation and analysis of Political Literature and data:
ASEAN’s political impacts on Singapore:
There has been no evidence of ASEAN acting or commenting on Singapore’s freedom of speech
(because of the non-interference policy), the land and water disputes between Singapore and
Malaysia, Singapore’s reclamation plans, therefore it seems that ASEAN has no direct political
benefits to Singapore. One might point out that Singapore and Malaysia belonging to the ZOPFAN
Declaration may have been a reason why they did not get into a serious conflict, but Singapore and
Malaysia are also part of the FPDA which in its self should be able to stop conflict.
ASEAN and Singapore’s impacts on the rest of ASEAN’s political issues:
ASEAN has also shown no evidence of getting involved in many other ASEAN nations’ political
issues, namely Brunei’s claim on Limbang corridor, Cambodia and Vietnam’s dispute over off-shore
islands, Laos’ journey to democracy and delimiting the Vietnam-China border boundaries.
However, there is evidence of ASEAN getting involved in Cambodia and Thailand’s territorial
conflicts, as ASEAN released this statement: “Dr. Surin Pitsuwan also called both (countries) to
allow ASEAN to help them bring some form of a temporary truce and cool down the emotions and
temper so that a higher interest of both peoples and that of ASEAN can be protected and
enhanced….. Surin's wishes would be materialized soon as Indonesia, the current Chair of ASEAN,
steps up its diplomatic efforts to help the two sides arrive at a temporary solution so as to allow
bilateral mechanisms between them to accomplish their objectives of border demarcation and general
peace in the areas.”16 Despite ASEAN’s help, it was specifically Indonesia who tried to get involved
in the situation - not Singapore.
ASEAN has also encouraged Myanmar’s path to democracy; “We underlined the need for the
involvement of all strata of Myanmar society in the on-going National Convention. We encouraged
all concerned parties in Myanmar to continue their efforts to effect a smooth transition to
democracy.”17 Singapore has shown involvement in helping improve Myanmar’s economy18, but has
not shown much evidence in helping politically, therefore suggesting that Singapore sees ASEAN as
a means to boost economic activity not political reform.
16
http://www.aseansec.org/25822
http://www.aseansec.org/16265.htm
18
http://www.channelnewsasia.com/stories/singaporelocalnews/view/1179855/1/.html
17
25
Joel Nathaniel John Godfrey
ASEAN has likewise made attempts to improve relations between Indonesia and Timor-Leste (also
known as East Timor) as is shown in many ASEAN statements: “The Foreign Ministers commended
Indonesia for all its efforts in resolving the East Timor issue, and noted the key role of the United
Nations Transitional Administration in East Timor (UNTAET) in ensuring the territory’s smooth
transition to fall independence. They reaffirmed ASEAN’s support for and encouraged the
international community to remain engaged in, the process of reconciliation, rehabilitation and
reconstruction that is essential for a peaceful and stable East Timor.”19 Despite this effort to increase
sustainability between Indonesia and Timor Leste, there is evidence that Singapore has worsened the
problems, because Singapore rejected East Timor's candidature (to join ASEAN) but Mr RamosHorta (president of East- Timor) believes other member countries of ASEAN did not agree with
Singapore's decision20. By doing this Singapore has opened up the possibility of Indonesia and East
Timor having a conflict. Since Timor Leste’s membership was probably rejected because of Timor
Leste’s poor economy, this backs up the theory that Singapore sees ASEAN sole as an organization
made for economic purposes not political.
Perhaps the only positive action Singapore has made in improving politics within ASEAN is
regarding the claims on the South-China Sea. In a statement, Singapore's foreign ministry said:
"We... think it is in China's own interests to clarify its claims in the SCS (South China Sea) with
more precision, as the current ambiguity as to their extent has caused serious concerns in the
international maritime community.”21 Although this may not seem very important, Singapore is a big
trade partner with China and Hong Kong, and due to its large Chinese population are recognised as a
friend of China, therefore they have and may be able to continue to help arbitrate the South China
Sea dispute in a peaceful manner. Also Singapore has experience as a mediator with the ChinaTaiwan relationship; hence it may play an even more important role in the South China Sea conflict.
19
http://www.aseansec.org/13413.htm
http://www.radioaustralianews.net.au/stories/201105/3221647.htm?desktop
21
http://www.bbc.co.uk/news/world-asia-pacific-13838462
20
26
Joel Nathaniel John Godfrey
Conclusion and Evaluation of Essay:
Hypothesis 1: Singapore gains most from having free trade within South-East Asia
From both looking at the table and the graph, it is quite apparent that Singapore gains a higher trade
balance from the creation of AFTA, therefore my hypothesis is shown to be correct. There is also
evidence to indicate that the percentage change of Singapore’s total exports to the world and the
creation of AFTA are two major factors that have caused a change in Singapore’s exports to the rest
of ASEAN (therefore suggesting that the process used to measure the increase of exports to ASEAN
due to AFTA to be correct): On the graph of Singapore exports, exports to ASEAN and the world
follow a very similar pattern apart from the world line being steeper. Regarding the percentage
change of the exports from Singapore graph, the percentage change of ASEAN exports v world
exports clearly became more exaggerated after the creation of AFTA. On the other hand the
percentage change of imports from ASEAN were fairly proportional to the percentage change of
imports from the world, but was not clearly affected by AFTA.
Despite the evidence to suggest the above research process worked, it is certain there are many other
factors that affect the change of exports and imports between Singapore and ASEAN. These were not
taken into consideration; therefore this conclusion could be incorrect.
Hypothesis 2: Singapore has contributed to political change in other ASEAN countries, but
Singapore has not changed politically because of its membership in ASEAN.
ASEAN has shown no evidence of working on improving Singapore politically, probably because of
the non-interference policy and perhaps Singapore does not want ASEAN to get involved in its
politics. Whereas Singapore has made some negative contributions to ASEAN’s politics and some
positive ones. These sources have also given the impression that Singapore sees ASEAN as a tool to
improve the economy not politics.
The method used to test this hypothesis worked well, although there is a possibility the sources sited
were incorrect or that there was research that was missed out.
27
Joel Nathaniel John Godfrey
Bibliography:
The official website of ASEAN
<www.asean.org> last accessed 12 July 2012
CIA world factbook
< https://www.cia.gov/library/publications/the-world-factbook> last accessed 12 July 2012
Department of Statistics Singapore
<http://www.singstat.gov.sg> last accessed 12 July 2012
ASEAN reader volume I
< http://www.aseansec.org/9103.htm> last accessed 12 July 2012
Asia’s free trade Agreements- How is business responding? Edited by Masahiro Kawai and
Ganeshan Wignaraja © Asian Development Bank and Asian Development Bank Institute 2011,
Edward Elgar Publishing Limited
Download <http://www.adbi.org/book/2011/01/31/4345.asia.free.trade.agreements>
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