A View from Southeast Asia

The 2019 ASEAN-Republic of Korea Commemorative Summit was held in Busan from November 25-26 to celebrate the 30th anniversary of ASEAN-ROK dialogue relations. The summit – a high point of President Moon Jae-in’s New Southern Policy (NSP) since his announcement of the policy in November 2017 – produced several achievements. Many MOUs were signed; bilateral summits were held between the ROK and several key ASEAN countries, including Indonesia, Malaysia, the Philippines, and Vietnam; and perhaps most importantly, the inaugural Mekong-ROK Summit was launched, which marked the institutionalization of South Korea’s increasingly active roles and productive ties with the five mainland Southeast Asian countries of Cambodia, Laos, Myanmar, Thailand, and Vietnam. These outcomes serve to deepen South Korea’s expanding partnerships with Southeast Asia at both bilateral and multilateral levels. All in all, the summit added a feather to Moon’s NSP cap, recording yet another milestone after the president’s successive visits to all ten ASEAN countries the past two years (the first Korean leader to do so).

These accomplishments notwithstanding, the summit is not without limitations. Some critics are quick to point out that despite the bilateral summits and MOUs, there is no signature project that signifies the concrete enhancement of the ROK-ASEAN partnership to another level.¹ While the inaugural ROK-Mekong Summit is a notable development, there is no parallel mechanism involving the maritime Southeast Asian countries. After all, ASEAN is more than Mekong, and most of its core and founding member states are from the maritime part of the region. Moreover, it is difficult to tell if the flurry of projects would mean the elevation of ASEAN’s status to be on par with the ROK’s traditional partners – i.e. the United States, China, Japan, and Russia – as emphasized by Moon repeatedly as a goal of the NSP. Some in the ROK are skeptical about this. Even from the Southeast Asian side, there are analysts who find the goal to be “far-fetched.”² This has led several Korean officials to wonder: is the NSP on one-side wishful thinking, and on the other just an upsurge in traffic?³

The mutual significance of the bilateral-multilateral nexus

We contend that the importance of the ROK-ASEAN partnership is mutual, and that the bilateral-multilateral nexus is the key to understanding the partnership and unleashing the potential of the NSP. By the bilateralism-multilateralism nexus, we refer to the reciprocal connections between the bilateral and multilateral linkages, where an enhancement (or a downgrade) in one link would have a corresponding, often mutually reinforcing effect on the other. Mutual reciprocity is a cyclical process, with some catalytic elements bringing greater impact than the others. Some bilateral links (or multilateral avenues) are more important or instrumental than the others, either because of their relative size or their comparative strength and possession of niche roles, resources, and location. The more significant a bilateral (or multilateral) link is, the greater the impact of the reciprocal process.

A brief overview of the evolution of the ROK-ASEAN relationship is necessary to properly contextualize our argument. These relations have developed incrementally for the past 30 years, with both sides building niches and expanding networks at multiple levels. From dialogue partnership in 1989 to comprehensive partnership in 2010, ASEAN-ROK relations have evolved from limited cooperation to full-scale, multifaceted partnership. Prior to the dialogue partnership, most of the ROK’s relations and exchanges with individual Southeast Asian countries were largely based on legitimacy competition with the DPRK. Thailand, the Philippines, and Malaya (still under British governance) were involved in the Korean War from 1950 until 1953. Indonesia and Vietnam, on the other hand, had established relations with North Korea since 1950, with no official diplomatic recognition of the ROK, which did not happen until 1974 and 1992 respectively.

The ROK’s bilateral relations with most of the individual Southeast Asian countries, in short, had a longer history than the ASEAN-ROK multilateral relations.⁴ The NSP is regarded as a mechanism to further develop each bilateral relationship while advancing and institutionalizing their multilateral exchanges to a new level. Accordingly, we further argue that the NSP’s goal of elevating ASEAN’s status to the level of the relations with the four major powers (ROK’s traditional partners) is desirable, mutually beneficial, and potentially transformative to both Seoul and ASEAN. In the face of the increasingly uncertain regional environment, there is a growing convergence of interests between the ROK and Southeast Asian states. Specifically, in light of the growing unpredictability surrounding the US commitment and China’s intentions, the medium- and small-sized countries have all sought to further diversify their strategic and prosperity linkages beyond their traditional circles of allies and partners.⁵ Both the ROK and ASEAN want to maintain productive relations with the United States and China simultaneously but without siding with either power; both sides want to promote maritime safety and security but without being associated with the Quad version of the “free and open” Indo-Pacific strategies; both want to tap into the developmental opportunities of power shifts but without becoming dependent on any power. Against this structural backdrop, further elevating the ROK-ASEAN partnership would allow both sides to expand their mutual external space and potential.

Unlike the ROK’s traditional partners, which are vital to Seoul because they are the major powers capable of influencing the course of the Korean Peninsula, ASEAN’s importance is not related to Northeast Asia per se. Rather, ASEAN matters for the ROK because it offers an avenue for Seoul to explore and expand its statecraft beyond its traditional sources of security, economic and diplomatic partnerships. This is not so much because ASEAN is geographically outside of Northeast Asia, but chiefly because ASEAN as a regional body and Southeast Asia as an aggregation of ten individual countries within the shared East Asian neighborhood provide a region-wide platform, a chain cluster of opportunities for South Korea to pursue a more balanced external policy and strategic diversification beyond Northeast Asia over the long run. In addition to seeking to reduce its dual reliance on Washington and Beijing, the NSP – by focusing on Southeast Asia and India – enables Seoul to pursue its proactive “middlepowership” in a broader international scope, on domains deemed crucial to the ROK’s long-term security and growth. This aspiration can be observed through the 3Ps of the NSP, namely peace, prosperity, and people.

The ASEAN-based regional multilateral forums, in particular, may serve as an indispensable platform for South Korea to pursue its more balanced external policy. They create the institutionalized space and possibilities that would be difficult for Seoul to acquire from any of its traditional partners. ASEAN-based multilateralism can be instrumental for the ROK’s aspirations to play a greater role in promoting regionalism because of three institutional attributes: a) multi-layered memberships (the ASEAN + 3 involves 13 countries from East Asia; the East Asia Summit and the ASEAN Defence Ministers’ Meeting Plus encompass 18 countries from the Asia-Pacific and Indian Ocean regions; and the ASEAN Regional Forum consists of 27 countries across the two ocean regions, including the DPRK): the ROK is a founding member of all of these ASEAN-based institutions; b) their multi-domain scope (covering economic, diplomatic, functional, and security cooperation); and c) their inclusive, consultative, and progressive norms. These attributes allow ASEAN states and dialogue partners to explore greater collaboration (e.g. the Regional Comprehensive Economic Partnership, or RCEP) even or especially when the regional environment is becoming more uncertain.

The significance of the enhanced ROK-ASEAN partnerships is mutual. Just as the ROK’s expanding bilateral and multilateral partnerships with Southeast Asian countries and the ASEAN as a group are likely to extend Seoul’s external space beyond Northeast Asia, the partnerships may benefit Southeast Asian nations on strategic, developmental, and other fronts. Regionally, greater participation and support by South Korea in ASEAN-based multilateralism would serve to strengthen ASEAN centrality, increasing the regional body’s leverage in dealing with other powers and players. Bilaterally, the enhanced partnerships would allow individual Southeast Asian countries to benefit from greater ROK-ASEAN connectivity and collaboration along the prosperity, peace, and people domains.

Although the partnerships will not evolve into the principal pillar of either side’s external policy, it will provide both sides with additional layers of leverage and capacity to pursue their respective interests. As the ROK seeks to strengthen its role in promoting regionalism in East Asia, its continuous and consistent effort in strengthening ASEAN-ROK relations would be the key to elevate ASEAN’s status incrementally for the long-term.

This process will take time. It will certainly not happen over a two-day summit. Rather, it will take years and decades to evolve; the direction, pace, and scope of which will be determined, among others, by the presence of certain substantive and even catalytic elements. It is perhaps in this regard that the bilateral-multilateral nexus matters the most. To better illustrate the potential impact of the nexus, the following pages focus on Indonesia-ROK and Malaysia-ROK relations. Both bilateral relationships are among the key partnerships under the NSP; both affect South Korea’s interests in maritime Southeast Asia; and both are key to South Korea’s capacity to shape regionalism.    

Indonesia-ROK relations

Among the NSP target countries in Southeast Asia, Indonesia is no doubt the chief focus of Moon’s signature policy. This is evidenced by the leader’s unveiling of the policy in Jakarta, as well as the appointment of the first ROK special envoy to ASEAN in light of the NSP. This is not surprising. After all, Indonesia is the biggest country in the region; and its capital is where the ASEAN Secretariat is located. Jakarta thus houses two ROK missions, namely the ROK embassy in Indonesia and the ROK mission to ASEAN. These features underpin the bilateral-multilateral nexus of Indonesia-ROK relations under the NSP.

Due to Indonesia’s considerable size and influence within the ASEAN community, South Korea has seemed to prioritize the country in promoting various NSP-related policy initiatives. At the 2019 summit in Busan, Indonesia and the ROK concluded negotiating a bilateral Comprehensive Economic Partnership Agreement (CEPA), making Indonesia the first ASEAN country to conclude such an agreement with South Korea.

The ROK-Indonesia economic partnership has its roots in earlier decades. Their bilateral trade has been dynamic. The investment links are also longstanding, taking roots before the establishment of diplomatic relations. The investment boom in the 1980s contributed to massive growth of manufacturing sectors in the country.⁶ It also led to the setting up of many Korean expat communities and even villages in and around Jakarta. Most of the Korean companies were in manufacturing industries such as shoes, textiles, and electronic components, ranging from the conglomerates to the small and medium enterprises. The first overseas branch of the Korea International Cooperation Agency (KOICA) was set up in Jakarta in 1991, the same year the KOICA was set up. Even before the establishment of diplomatic relations, the Korea Trade Promotion Corporation (now known as Korea Trade-Investment Promotion Agency, or KOTRA) had already established a branch in Jakarta in August 1964. Some of the early Korean investment projects have continued until today.

South Korea has been involved in Indonesia’s infrastructure construction and energy sectors. The projects include highway construction, oil and gas, plant construction, and a subway system. Lotte Chemical is currently constructing the biggest plant in Indonesia, a petrochemical plant in Banten Province.⁷ In addition, Hyundai Motor is going to invest $1.55 billion in the first Indonesia car plant, in the city of Bekasi (east of Jakarta), revealed during the Jokowi-Moon summit at the time of the Busan Summit.⁸

Indonesia-ROK people-to-people connectivity has grown side by side with bilateral trade and investment ties. The past decades witnessed the creation of Korean international schools in Indonesia, the establishment of Bahasa Indonesia departments in Korea, as well as the founding of Korean Studies departments at Universitas Indonesia, Universitas Nasional, and Universitas Gadja Mada. At present, most prominent universities offer opportunities to study Korea. The International Association of Korean Studies in Indonesia (INAKOS) was established with the support of the Korea Foundation and KOICA.

There are unique interactive processes between Korean firms and Indonesian rights advocacy groups. The presence of Korean investment and companies have in some ways strengthened Indonesian trade unions, as they learn from Korea’s strong labor movement culture especially after Korean democratization. The Korean Chamber of Commerce and Industry Indonesia (KOCHAM) contributed to the labor issues by being vocal about the need to change Korean management style and treatment of workers. It also played a role in protecting Korean investors’ capitalist solidarity in the face of labor resistance, a financial crisis, and the challenges of Indonesia’s turbulent transition to democracy in the late 1990s.⁹

From the Joint Declaration on “Strategic Partnership” in 2006, the relationship between the two countries has been redefined as a “Special Strategic Partnership.”¹⁰ High-level exchanges have occurred regularly since the 1970s, including reciprocal visits by generals. Military cooperation is sustained through consistent renewal of commitment, including the MOU on Defense Industry Cooperation in 1995, and agreement for developing and manufacturing the KFX/IFX jet fighter in 2010. The year 2011 is extraordinary as both signed an MOU for a defense industry committee and launched major defense industrial cooperation, making Indonesia the first country to procure Korean jet trainers (T-50) and submarines.¹¹ Out of three submarines for the TNI-Angkatan Laut (naval force), the third would be a joint production between PT.PAL and DSME Korea.¹² The joint development projects are not without problems, with the Korean side acknowledging the budgetary constraint of Indonesia to complete the project, and a sudden ban by the United States on sharing its military technology, including that supplied to Korea. In response, Indonesia has passed the Indonesia-Korea Defense Cooperation Law in July 2018, an unusual move in legalizing defense cooperation which signals the country’s strong will on this and on continuing joint military projects with Korea for the long run.

Malaysia-ROK Relations

Because of Malaysia’s relatively limited size and trade-dependent economy, the country has pursued an active external policy that is characterized by economic pragmatism, inclusive diplomatic engagement, and persistent activism in promoting regionalism within and beyond ASEAN. Such policy thrusts have been pursued with an eye to cultivating a favorable regional environment – including deepening East Asian integration – for serving domestic and developmental needs. Malaysia has thus viewed South Korea as an important regional partner, concomitant with Seoul’s growing economic strength. Although Mahathir’s Look East Policy during his first tenure (1981-2003) was targeted more on Japan than other parts of Northeast Asia, the policy has over time paid increasing attention to South Korea. This trend is likely to continue under the Mahathir 2.0 administration (May 2018-present).

Malaysia’s development pragmatism and its broader regionalist activism, accordingly, are policy modes that converge with the direction of NSP. Indeed, recent developments suggest that economic pragmatism has been the key driver of Malaysia’s response to the NSP, especially under the current Mahathir-led Pakatan Harapan government. Since returning to power, the 94-year old leader has encouraged local business to be more outward-looking, including reaching out and embracing opportunities from South Korea. A trade-investment mission of 90 representatives of Malaysian companies followed the government delegation to Seoul in October 2018, focusing on technologically-driven industries.¹³ There are other emerging sectors in Malaysia-ROK economic cooperation. Thanks in part to its geographical centrality in the Southeast Asian region, Malaysia is developing its niche in transport and physical connectivity. AirAsia X, a long-haul Malaysian budget airline, became the only airline to operate direct flights to Jeju from Kuala Lumpur, beginning in December 2017.¹⁴ Other areas of promising collaboration include automobiles, defense, and science and technology R&D. Negotiations are underway to enhance Malaysia-Korea defense industry cooperation.

Malaysia-ROK economic ties can be traced back to the 1970s, when Park Chung-hee demonstrated successful economic reform and achieved rapid economic transformation that was export-oriented and industrialization. The bilateral trade volume increased more than 80 times by the end of 1979, comparing to the volume in 1970. Tun Razak’s New Economic Policy and Park’s Saemaul Undong reflected common interests in expanding trade and transforming rural development. Trade agreements signed in the 1980s marked a crucial turning point in bilateral economic relations. Significant growth in bilateral economic ties cemented South Korea’s place as a top market for Malaysia throughout the 1990s, while securing a place in Mahathir’s Look East Policy. Malaysia also supported strongly Korea’s application to be ASEAN’s dialogue partner.

The two countries’ economies are mutually complementary, and their partnership experienced rapid growth during their emergence as Asian Tiger economies in the 1980s and 1990s. Korea-Malaysia trade began mostly in natural resources and raw materials from Malaysia (such as petroleum, natural gas, wood, rubber, and palm oil), and intermediate goods from Korea to support the industrialization drive in Malaysia. The Korean presence was most visible in the construction sector, including the Penang Bridge by Hyundai, the Menara Maybank building, and one of the Petronas Twin Towers, iconic architecture of Malaysia. The ten biggest chaebols of Korea have had projects in Malaysia.¹⁵

By the 2010s, Korean companies became the second largest source of investment in Malaysia, with the investment and economic cooperation going both ways. Lotte Chemical Titan, set up in Pasir Gudang, Johor in 1988, together with the state-owned oil and gas producer, Petronas, are the leading Malaysia-based petrol chemical players.¹⁶ Nevertheless, certain Malaysian investments did not work well in Korea, in part because of lack of implementation of agreements under the Najib administration.¹⁷

The convergence of interests and outlooks between Malaysia and ROK is not confined to economics and the prosperity domain. Throughout the post-Cold War era, the two medium-sized countries have shared an aspiration of promoting East Asian cooperation and integration. Both countries have led separate efforts to advance East Asian integration process at different critical junctures of the new era. In response to the Asian financial crisis in the late 1990s, Malaysia played an instrumental role in creating and institutionalizing the ASEAN + 3 (APT) cooperation. The inaugural APT Summit was held in Kuala Lumpur in 1997. South Korea, on the other hand, pushed the effort to establish the East Asia Vision Group (EAVG), a Track-2 mechanism consisting of experts from all 13 APT member countries to discuss the future of East Asian cooperation. The EAVG, an initiative by President Kim Dae Jung, was supported by a secretariat run by the Korea Institute for International Economic Policy (KIEP). In 2001, the EAVG submitted a report to the 5th APT Summit, putting forward a number of recommendations that included the evolution of the APT Summit into an “East Asian Summit.” In 2005, Malaysia hosted the inaugural EAS in Kuala Lumpur. In 2010, the ROK proposed setting up the EAVG II. In 2012, its report recommended measures to further expand and deepen APT cooperation in the next 15 years, including the goal of realizing an East Asia Economic Community. While Seoul’s EAVG efforts are not part of the NSP, the directions are parallel; and both goals could leverage the stronger ROK-ASEAN ties and ROK-Malaysia relations. Some observers have identified middle-power activism as a potential area of cooperation between the two countries.¹⁸ These enduring and emerging niche areas underpin the bilateral-multilateral nexus of Malaysia-ROK relations.

Conclusion

The immediate outcome of the Busan Summit is the obviously heightened expectation of deepening cooperation between the two sides, bilaterally and multilaterally. There were a lot of preparatory meetings, forums, and conferences organized among the ASEAN countries leading up to the Busan Summit. Some may dismiss these and the commemorative summit itself as for show. However, the diplomatic officers from the Korean Ministry of Foreign Affairs’ ASEAN and Southeast Asian Division conducted a postmortem of the summit by visiting and getting in touch on the ground in Southeast Asia, eager to learn the public perceptions and receptiveness to the summit and the NSP from their counterparts and also from the Track II network in the region. This is a commendable and encouraging sign of sincerity and commitment at the working group level, with strong signals that the NSP will not be forsaken even if the government has changed(the most cited reason by skeptical observers within and outside of the region). Continuity and earnest implementation by governmental ministries and agencies are crucial for the NSP to be a long-term strategy benefiting both the ROK and ASEAN member states.

A middle power like South Korea has aspired to play the role of “early mover,” bridge, coalition coordinator, and norm diffuser.¹⁹ By identifying niches for enhancing ROK-ASEAN relations and networks of existing and potential bilateral and multilateral linkages within ASEAN, both sides can transform the current partnership to enhance inter-regional connectivity. With the present Korean government interest in elevating ASEAN’s status in foreign policy and the heightened awareness with the launch of the NSP, the Moon government has opened a new page in ASEAN-Korea relations, and set forth a foundation for bilateralism to flourish between the ROK and all Southeast Asian countries.

* These National Commentaries were prepared in collaboration with the East-West Center in Washington.