Four Game-Changing Events That Will Affect Indonesia Into the Next Year

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Four Game-Changing Events That Will Affect Indonesia Into the Next Year
Yohanes Sulaiman | December 18, 2012

Some of this year's top events which will impact Indonesia in 2013 include the Asean summit, Bo Xilai, Nicolas Sarkozy and Barack Obama.

With the end of 2012 (and maybe the end of the world) fast approaching, here are four important international events from this past year that will have profound implications for Indonesia in 2013.

Bo Xilai Saga

The arrest and persecution of Bo Xilai, who was once the party leader of Chongqing and seen as a key candidate for membership of the elite Politburo Standing Committee, caused a major ripple within China but also had international repercussions.

Within China, Bo’s arrest put a glaring spotlight on the massive corruption and power abuse by party officials. It also further decreased the public trust in government, which already took a hit after the officials’ botched handling of the Wenzhou train collision in 2011. That was where two high-speed trains collided, leaving 40 dead and almost 200 injured, and the government ordered the media to write “positive” stories about the accident.

The revelations of Bo’s crimes caused further backroom struggles in the months preceding the 18th National Congress of the Communist Party of China, where the country’s leaders for the coming decade were chosen.

The resulting jitters over the scandal and overall public attention focusing on the case caused Chinese officials to take a much harder line in handling international disputes than they otherwise would. Thus, China took a more belligerent stance over the Senkaku/Diaoyu islands dispute between Japan and China and in its South China Sea dispute with — primarily — Vietnam and the Philippines. Now, it has become much harder for China to back down, due to the fear of public repercussions.

It is hoped that the election of Xi Jinping as the general secretary of the Chinese Communist Party will allow China to cool the tension but with so many issues already on Xi’s plate, he might be tempted to keep the tension up as a distraction from growing internal problems.

Asean Summit Failure
Despite Foreign Minister Marty Natalegawa’s efforts, the Association of Southeast Asian Nations was not able to issue a joint declaration at the July summit in Cambodia — a failure that casts a long shadow over the future of Asean.

Not only did the failure to issue the expected joint statement expose the political discord behind the facade of harmony and unison, it also brought into question the commitment of Asean member states to the Asean project. It is now unclear whether the members would put the region’s interests over their own short-term interests, especially in the field of security issues.

The failure also shows Beijing’s growing influence in the region and its willingness to force Cambodia, with whom it has a very close relationship, to advocate its interests to the detriment of Asean unity This allows the United States to continue its policy of increasing its presence in the region to, some say, help contain China.

Brunei, which will assume the chairmanship of Asean next year, will have the unenviable task of trying to patch the broken trust between members, satisfying the competing concerns of Hanoi, Manila, and Phnom Penh, while balancing the interests of the United States and China in the region.

Fall of Sarkozy

Angela Merkel, the chancellor of Germany, and Nicolas Sarkozy, the president of France, might not like each other personally, but they did realize that they both needed each other and were willing to work together to reform both the French and the European economy.

This understanding created the “Merkozy alliance” that further helped calm the jittery market, by giving credibility to any economic decisions made by Brussels, notably the insistence to Greece, Italy and Spain to get their act together. For Merkel, Sarkozy provided the all-important French backing that enabled her to force the three states to reform their economies. At the same time, Sarkozy managed to steer Germany into toning down demands that might be politically unpalatable back home.

Thus, the defeat of Sarkozy in the French presidential election robbed Merkel of a reliable partner and at the same time threatens the important Franco-German unity needed to navigate the European Union further in treacherous economic currents. France is also seen as no longer committed to reforming its dysfunctional economy — hurting its competitiveness — let alone forcing the troubled economies to stick to much-needed reforms.

While Europe might not be as economically important as years ago, it remains a major player in the global economy, and bad news about Europe in 2013 will have global implications.

Obama’s Re-election

The good news about Barack Obama’s re-election as president of the United States, is that the country will surely pay more attention to Asia in the next four years. This means stronger military and economic engagements with Indonesia and its neighbors, and more pressure on China to temper its belligerent stance.

However, Obama’s re-election means that the US is on course to implement the controversial Obamacare health package, which many argue will hurt still-struggling US businesses and US economic growth. With the US no longer able to provide an engine to pull the global economy from its slump, coupled by the systemic weakness of the European Union and the rising concerns about the Chinese economy, 2013 might not be a good year for global economy — and emerging nations like Indonesia.

2011 Is Here and Gone, but Eight Stories Will Live On in Indonesia in the New Year

Eight most important stories of 2011. The last choice, I admit, is controversial. Still, I think it helped destroying Marzuki Alie's plan to build a new building and to put a spotlight on many money-wasting activities of the DPR.

A companion article could be found here at the Center for World Conflict and Peace.

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2011 Is Here and Gone, but Eight Stories Will Live On in Indonesia in the New Year
Yohanes Sulaiman | December 30, 2011

The Democratic Party’s former treasurer, Muhammad Nazaruddin, has leveled several accusations at fellow party members during his ongoing corruption trial for alleged bid-rigging. (JG Photo/Afriadi Hikmal)

With the year drawing to a close, here are eight developments in 2011 that will have important implications for Indonesia in 2012.

Troubles in Europe

This will be remembered as an annus horribilis for the European Union. The facade of European unity was finally shattered by its currency crisis. The crisis laid bare the fact that regardless of all the talk about equality among nations, in the end the marching orders were issued from Berlin and Paris — though it took so long that a spooked market ended up exacerbating the crisis.

Even if the EU survives, Europe may face a long recession. That will have an impact on the global economy, especially in China, one of Indonesia’s top trading partners.

Chinese obstacles
While China seems to have been able to weather the economic crisis so far, the deadly high-speed train crash in July and the incompetent handling of the crisis highlighted flaws in an economic model that focus more on exports and infrastructure and less on domestic consumption. The accident brought into question growth that is the result of poorly built, state-driven projects, while also exposing the reality that state-owned companies are prone to corruption.

None of this bodes well for China’s economy in the new year. Its export-oriented economy remains exposed to the global slowdown, with local consumption unable to pick up the slack.

And as China is the biggest consumer of Indonesia’s energy products, any slowdown there will hit Indonesia’s budget hard.

US deadlock
The year 2011 saw the Democrats and the Republicans deadlocked, unable and unwilling to compromise to create a coherent plan to fix the US economy in order to end the recession. Both parties are trapped by their core constituents: the Republicans have to pander to the tax-cutting, budget-slashing Tea Party, while the Democrats are cajoling the spend-to-grow labor union and anarchist Occupy movement, whose demands aside of taxing the rich remain unclear.

Expect to see more partisan sniping and deadlock in the United States in 2012 as the presidential race heats up. The uber-partisanship will further prevent the United States from being a global engine of growth, which could have repercussions for the Indonesian economy, especially if China experiences a slowdown.

Arab Spring
While the long-term effect of the Arab Spring remains unclear, its short-term impacts were spectacular: causing the downfall of dictators in Tunisia, Yemen, Libya and Egypt; threatening the regimes of King Abdullah of Jordan and Bashar al-Assad in Syria and arguably inspiring various protest movements from the Occupy Wall Street in the United States to the anti-Putin campaign in Russia.

In Indonesia, the impact so far has been minimal. Even though Sondang Hutagalung’s action was presumably inspired by Mohamed Bouazizi’s self-immolation act that spurred the Arab Spring in Tunisia, the lack of a compelling narrative to accompany Sondang’s act and the relative prosperity of Indonesians meant his death failed to resonate and gain traction widely. Still, should the global economy remain bad and Indonesia’s economy start to worsen, expect to see more Arab Spring-inspired protests in 2012.

The Nazaruddin show

If economy does not sink President Susilo Bambang Yudhoyono’s popularity, scandals will. While the Bank Century case was too technical with its arcane language of economics and unclear “heroes” and “villains,” and while the Nunun Nurbaeti case was a symbol of the government’s lack of seriousness in tackling corruption, the Muhammad Nazaruddin scandal is a straightforward tell-all scandal that attracted the public’s undivided attention.

It generated enough outrage that it most likely did in the presidential ambitions of Anas Urbaningrum, grievously damaged the Democratic Party’s brand and sent the president’s popularity plunging.

Ahmadiyah and GKI Yasmin

The slap-on-the-wrist punishments for those who attacked Ahmadiyah followers and the government’s effeminate response to the mayor of Bogor’s blatant disregard of the rule of law bring into question Yudhoyono’s commitment to protect religious freedom. At the same time, the central government’s lack of spine has emboldened the country’s religious fanatics. A Catholic church in Bogor is still under siege. Not surprisingly, the human rights watchdog Setara Institute awarded West Java the dubious honor of being the “least tolerant province.”

With both economic downturn and election season on the horizon, expect more incompetent officials and politicians pandering to religious fundamentalists for support.

Police brutality

This year also saw the police using unnecessary and excessive violence against demonstrators that left many dead and injured. The end-of-year mayhem in Bima and recent revelations of brutality in Lampung sent a misguided signal to many people that the police were in cahoots with big industry. Sadly, legitimate industries will have to pay the price through more red tape and more social resistance, which will lead to reduction in capital investment.

The government would be wise to remember that it was police misconduct that led Bouazizi’s self-immolation in Tunisia, not just social inequality or corruption in high places.

Commission VIII

Few people probably remember a trivial and yet important incident that happened in May, when legislative members from Commission VIII on religious and social affairs were grilled by Indonesian students in Australia. The lawmakers’ feeble answers elicited guffaws. While there had previously been criticism of the costs of House members’ international excursions, the incident was the breaking point when Indonesians finally saw the uselessness of such trips. The incident further brought into question the quality of legislative members and made it all the easier to oppose House Speaker Marzuki Alie’s white-elephant project to build an expensive new building for the House.

One hopes that lawmakers will be wiser in the year ahead.

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trueblue

2:54pm Jan 1, 2012

@yohannes.Two brief comments. A few days ago the respected DrDez bemoaned the fact that the Indonesian media had not extensively reported the Arab Spring. You have at every opportunity raised this issue, and have been fearless in the potential domino. Can we have a piece reflecting entirely on this issue? A comprehensive op-ed would be enlightening. With respect to US/China, I would suggest that the US$ reserves now held by China and increasing quarterly by billions is of a greater economic threat than a resources slowdown. North Korea is also a loose cannon.

New year greetings.

DrDez

5:40pm Jan 1, 2012

Trueblue
Yohannes is an excellent commentator on home affairs, and if I feel one of only a few who seem to grasp the issues that threaten our medium term prosperity. The fallout from what will be the Arab winter is yet to be understood and I am yet to see anything that can give an overall picture or direction. My own view is that the Arab nations are screwed and screwed by a mix of Islam and political/military greed.
With respect to China the reality is their own internal debt issue is at least as bad at the US. The US on the other hand do not have to ensure 1 billion mouths are fed to stave of a revolution. The US debt issue is in many ways unimportant - China cannot afford to call them in because the US will just impose an import tax (rather like we do) and the reduction in Chinese purchases would devastate the Chinese economy within months.
2012 ... phew what a year in prospect

Yohanes-Sulaiman

6:22pm Jan 2, 2012

Dear DrDez & Trueblue:

Merry Christmas and Happy New Year to both of you and other readers. Thank you for your kind responses and my apology for unable to reply until today due to my internet-free vacation (yeah, I cheated as I twitted).

Actually, I have discussed a bit about the implication of the Arab Spring, though not in this revered publication, but in my friend's blog (Center for World Conflict and Peace). Still, I am kinda tempted to write an anniversary piece on Arab Spring, especially its implication on Indonesia -- why it failed to catch fire here, regardless the fact that back in March (I believe) even Sultan Hamengkubuwono X had raised the threat of Arab Spring in Indonesia and the Sondang's incident, as I mentioned in this piece, also failed to catch the imagination.

I will look at it. Maybe I should make it this week's topic, as I am still groggy from vacation and my mind is currently blank thus too lazy to think of new topic.

Yohanes-Sulaiman

6:28pm Jan 2, 2012

One more thing about US-China: it is interesting that very few people actually realize that China dug a deep hole by getting US debt. You see, logically, when you keep exporting goods and others keep importing it, sooner or later, your currency should be stronger and others' get weaker. Yet, China tried to negate this by buying US debt, and thus making US$ unable to depreciate that would make China's export to be expensive. At the same time, as China's currency was artificially depressed, the Chinese population was, to some degree, subsidizing the US' imports, thus China was taxing its own people, and depressing the local demands (and thus local consumption).

Of course, as the international economy is going kaput and Chinese consumers unable to pick the slack due to this "involuntary tax," then China is put in a major bind, that its economy is dependent on the US.

Thus, this year will be a very interesting year for Chinese economy. I'd advise to pull out from Yuan.

DrDez

5:36am Jan 3, 2012

Yohanes
Happy New Year to you & your family - may it be filled with peace for us all. May our authorities start accepting their responsibilities & apply the law equally. May the silent majority remove their head from the sand.
Re China - huge internal debt is also a major challenge. As % of GDP it is suggested that they have more debt than the US..Al J last year
If you do write an Arab Spring article here I would implore you to look at the situation in Syria. It seems to be the forgotten conflict and yet there are an estimated 16000 political prisoners and maybe as many as 10,000 dead and 40,000 wounded.** The Arab League are simply embarrassing as are the Muslim Groups (cannot blame the West so they are silent). It is open conflict and will I fear spread. Iran is using Assad for sure to create mass instability. I am certain they actually want a war & the consequence would be global.
**outcry when an Israeli shoots a Palestinian burglar. Silence when Assad kills 10,000... :) amazing

An Asian Euro?

This article is memorable because it led to a very funny back-and-forth discussion between me and my editor on the context of the term "ugly girl" and how to tweak the ending to make it better. Unfortunately, that ending ended up jettisonned.

Ben: In your article you say that Lasker disliked the imperial system, implying that the "ugly girl" is the system. From a very quick search online, I take it that the ugly girl isn't the system, but Bavaria -- seen then by Lasker and many others as backward and quaint. Thus, the ugly girl today is profligate states, not the EU. Sound about right?

Me: Actually, I got my quote from George G. Windell, "The Bismarckian Empire as a Federal State, 1866–1880: A Chronicle of Failure," Central European History, Vol. 2, No. 4, Dec 1969. Page 381:

Many liberals in the North German Reichstag bitterly criticized Bismarck's further appeasement of particularism. Some indeed would have preferred to meet the issuehead-on in the Reichstag itself, but in the end they could not bring themselves to vote against the treateis, and thereby assume responsibility for what others would have regarded as sabotage of naitonal cause. The great National-Liberal Eduard Lasker, stated their viewpoint most succinctly in the phrase, "The Girl is ugly, but we must marry her anyway."

ON second look, probably you are right. I haven't read this article in ages, but I still remembered that quote, so I might have forgotten the context. Dunno why, but I cannot find the full article now, had to rely on google. I really miss my university's subscription of JSTOR.

Ben: Mm.. it would appear here that they were opposed to "particularism." Whether that means Bavaria or imperialism, I can't say...

Me: I really hate it when I forgot the context of a quote. I've been trying to find the original paper, thought I had it on my hard drive (I downloaded TONS of academic papers when I graduated) but I could not find it. I think we better go with your first interpretation, though the first and final paragraph would probably need a bit tweakings.

Ben: I tweaked things a bit and I think it looks OK. The biggest thing was recognizing that the marriage had already taken place, and so this is a decision to remain committed to it -- rather than a decision to marry.

Me: That's case for the European Union, but ASEAN has not tied the "knots" yet. Whether it will be the knot on the neck depends on how prepared they will be, which I really pessimistic, because they are all not that forthcoming to each other.

BTW: I really appreciate you trying to track down the quote to make sure it is still in context. From what I rememberd, Lasker disliked the imperial system, so that might be what threw me off.

Ben: That's right. The only other things was that I liked the sound of the final paragraph, but I couldn't quite make sense of it. The girl can wait (the Bavaria-like nations), but the groom must be ready (the "superior nations"). In fact, though, the girl has to have her fiscal house in order before the groom can accept her... so it could actually be that the groom has to wait for the girl to be ready. (Or it could be as you wrote it: look before you leap.)

Trying saying that ten times really fast.


Me: A middle ground will be that the ugly girl needs to get her house in order or learn how to cook well (the girl is ugly, but at least she can cook), and the groom needs to accept her unconditionally till death do them part.  Gosh, I just realize it, but don't we sound very sexist tonight? LoL

Don't tempt me to say that 10 times....


Ben: Yes. All we can say is that the metaphor wasn't ours. Although it would appear we're taking ownership quite well.


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An Asian Euro?
Yohanes Sulaiman | November 11, 2011

Facing the prospect of a united German empire under Kaiser Wilhelm I in the late 1860s, the northern lawmaker Eduard Lasker, who supported a united Germany but disliked the ways of the Bavarian south said something to the effect of “The girl is ugly, but we must marry her anyway.”

That seems to be the feeling nowadays in Berlin and Paris. Both German Chancellor Angela Merkel and French President Nicolas Sarkozy have been frustrated and angered by the unwillingness of both Greece and Italy to pursue economic reforms.

This long-running drama holds several lessons for Southeast Asia — in particular the member states of Asean as they embark on the road toward greater economic integration.

For Greece and Italy, the political costs of reform are great. Their labor unions oppose cuts and threats to their privileges. People are protesting the harsh austerity policies call into question the future of sacred social welfare perks. Politicians, after spending decades hiding the true cost of the welfare state, are afraid to push for reform.

Patience is wearing thin in Berlin and Paris. Last month, both Merkel and Sarkozy demanded that Italian Prime Minister Silvio Berlusconi get his country’s economy in order. Last week, they told Greek Prime Minister Papandreou, after he had announced a referendum to decide whether Greece would accept the austerity policy, that the question should be “Do you want to stay in the euro zone or not?”

Both Merkel and Sarkozy knew they had to act vigorously, as the taxpayers of France and Germany — not to mention other wealthy Northern European countries ­— were angry, unwilling to support what they saw as profligate countries of Southern Europe spending their hard-earned tax money. In essence, both were afraid that the European currency would collapse, and with it, the European Union.

Thus the paradox: On one hand, they disliked what they believed to be irresponsible behaviors of Italy and Greece. On the other, they had to stay married to the “ugly girls” in order to save the union. The problem is that the market today no longer believes that the rich Northern European countries are committed to the marriage.

Asean should take warning from the EU’s dilemma. Unlike the EU, Asean does not have a single currency. Its institution is not as strong as the EU, since it remains content with working relationships in various sectors, notably the economy and social issues.

At the same time, there is a desire for stronger economic integration in order to boost regional economic growth, with the final goal of a single currency. Already there are plans to integrate regional economy by 2015.

The question is whether the commitment will remain strong when bad times arrive. There is still much distrust among Asean countries, with conflicts flaring up regularly along borders. Because of Asean’s ineffective arbitration systems, countries like Malaysia have resorted to taking cases to the International Court of Justice instead of trying to solve problems bilaterally or regionally.

There are also still questions of whether members are honest in their bookkeeping and in reporting their economic indicators. The root of the European crisis was because Greece had been cooking its books, misstating its economic indicators and in turn misrepresenting its budget deficit. Can Asean countries be trusted in their bookkeeping, especially when many of its governments remain unaccountable to their people?

Moreover, there is the question of whether Asean could act decisively in time of crisis. The Asean bureaucracy grinds slowly and there is potential for a crisis of confidence in crucial times. Powerhouses France and Germany display economic leadership in times of crises that is clearly accepted by the EU members, but Asean has no such members than can step up to the plate.

These problems are not deal-breakers for Asean, but they should be considered as it pursues its path to greater economic integration. Rather than aiming for an unrealistic target with a short time frame, Asean should instead first strengthen itself as an institution, giving it power to solve problems when troubles arise.

The devil is always in the details, and Asean should take care to find any skeletons that might be hiding in its closets. Otherwise any effort to increase Asean economic integration is doomed from the beginning

Economic Caveats

This article is posted not chronogically relative to the other articles in the list, because this article is behind TEMPO's paywall and I want to allow people to read my article in entirely. There are some editings that they made especially on the first two paragraph to introduce me as the author. Not sure why they cal me an economist, though from this article, I guess nobody can tell.

The Indonesian version of Tempo does not include neither my article nor the ASEAN report.

Off topic: dunno if I should trust this but apparently this version vanished from stands and at every hotel in Bali. It is said that foreign delegates took them all. Most likely to help them through the meeting, to whittle away those boring hours.

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November 16, 2011
Economic Caveats

Should everthing go as planned, by 2015 ASEAN will be launching its ASEAN Economic Community (AEC) set of principles, in which economies of ASEAN states will be more integrated. Are there lessons to be learned from the European Union case? Economist Yohanes Sulaiman, a lecturer at the Indonesian National Defense University sounds out some caveats.

The ASEAN Secretariat recently declared that  "the elimination of tariffs, free movement of professionals, freer movement of capital, and a streamlined customs clearance procedure" were elements of a regional economic community. In fact, the AEC aims to "transform ASEAN into a single market and production base that is highly competitive and fully integrated into the global economy." Eventually, it even wants to establish its own single currency.

If this scheme is successful, this might signal the coming of ASEAN as a new economic powerhouse. Similar to the European Economic Community that ended up becoming European Union, the ASEAN Economic Community would increase interdependence among member states and thus integration among member states into one cohesive bloc that could compete competitively in the global market thanks to its economic of scale. For instance, even in 2009, the combined ASEAN GDP was US$ 1.5 trillion, far ahead of India's US$ 1.2 trillion and Republic of Korea's US$ 833 million, though it was still below China's US 5 trillion.

Indeed, this will be a huge transformation from the current associative-like structure, where the main goal is to simply improve communication and to reduce tension among member states and to promote a mutually beneficial cooperation, without trying to interfere in domestic policy-making. By aiming to establish a single currency, ASEAN would have to interfere in its members' economic policies, in order to maintain the credibility of its currency.

So far, the economic indicators are encouraging. The average tariff on import from ASEAN nations is steadily declining from between 4-5% in 2000 to 1.05% in 2010. The reduction in tariff in turn helps fostering more intra-ASEAN trade, and in turn bolstering the region's economy.

The impact of the reduction in trade barrier is evident in the statistical data: the value of intra ASEAN trade has been steadily growing, except in the year 2009, when the global economic crisis started. By 2009, intra-ASEAN trade comprised 24.5% of total ASEAN's trade as noted in the following table:

Indicator	Unit/Scale	1998	2000	2003	2007	2008	2009
Intra-ASEAN Trade (export and import)	Value (US$ million)	120,918	166,846	206,732	401,920	470,112	376,207
	Growth (%)	-19.4	25.8	29.3	13.9	17	-20
	Share to total trade (%)	21	22	25.1	25	24.8	24.5

Source: ASEAN Trade Statistics Database (September 2010)

Yet the improvement in data could not paper over the underlying problem within the scheme, notably the significant differences in the GDP, population and the quality of population itself, poverty rate, bureaucratic hassles, and more importantly the creation institution that will manage the community.

Brunei and Singapore have the highest GDP per capita in the region at US$ 37,000, while in contrast, both Myanmar and Cambodia have the lowest GDP per capita at respectively US$ 446 and US$ 837. There is also difference in the number of population below the poverty line: Laos and Cambodia have a significant majority of their population living under poverty line.

Country	GDP (2008) In US $Billion	GDP per Capita (2008) in US$	Population (2008) in million	Human Development Index	Poverty head count ratio (%)	Regulatory Quality Rank	Ease of Doing Business Rank
Brunei	14.6	37,053	0.4	0.9	N/A	75.8	14
Cambodia	9.6	651	14.7	0.6	68	34.3	22
Indonesia	514.4	2.254	228.3	0.7	54	45.4	19
Laos	5.2	837	6.2	0.6	77	9.7	24
Malaysia	194.9	7,221	27	0.8	8	60.4	4
Myanmar	26.2	446	58.8	0.6	N/A	1	N/A
Philippines	166.9	1,847	90.3	0.8	45	51.7	21
Singapore	181.9	37,597	4.8	0.9	N/A	99.5	1
Thailand	260.7	3,869	67.4	0.8	12	59.9	3
Vietnam	90.7	1,052	86.2	0.7	48	32.4	13

Note:

• Regulatory Quality Rank reflects the ability of the government to provide sound policies and regulations that enable and promote private sector development.
• A high ranking on the "Ease of Doing Business" index indicates that the regulatory environment is conducive to the operation of business.

Source: Hall Hill and Jayant Menon, ASEAN Economic Integration: Features, Fulfillments, Failures and the Future (Asian Development Bank, December 2010)

Of course, for an associative organization such as ASEAN, such stark economic differences don't really matter. Yet, in a much stronger union with free flowing capital and trade and not to mention a common currency, such economic disparity will make it very difficult to create an agreed economic policy, due to the different economic needs of each member, even though a common economic policy is the foundation for a successful economic and currency union.

At the same time, there are problems with the bureaucracy and regulations. Singapore is the region's best place to do businesses with streamlined bureaucracy and business-friendly regulations, while in Indonesia, decentralization process that started after the fall of Suharto in 1998 made it very difficult to conduct business due to the patchwork of local regulations that sometimes contradicts the central government's directives, with little legal recourse available.

This in turn brings into question the implementation of the economic agreements that usually requires economic reforms and austerity programs especially in time of crisis. Will there be a political will from the governments of poor states that usually also have corrupt legal system to conduct much needed economic reform? More importantly, will there be an institution that will enforce the agreed agreements, not unlike the European Union bureaucracy in Brussels? All of these questions will matter when the good times are over and economic difficulties begin.

The ASEAN Economic Community Blueprint unfortunately does not address those worst case scenarios. Rather, it punted by simply stating that "Ministers-in-Charge of Economic Integration in the Council of ASEAN Economic Community shall be accountable." Meaning, that the community will rely on self-policing and more consultations, which is the hallmark of the current ASEAN institution.

The problem is that as evident in the current turmoil in the European Union, the market simply won't wait during an economic crisis. It took a long time for consensus-driven European Union to get a rescue plan on the table and by then, the crisis had spread from Greece to Italy, creating a crisis of confidence, a much larger problem that even threatened the European Union itself.

Therefore, it might be wise to rethink the idea of 2015 ASEAN Economic integration. Rather than focusing on lofty goals, ASEAN should instead focuses on ironing the nitty-gritty, crafting a strong economic institution that can be used as a pillar of stability in times of trouble. While the current "consultative" style may be appealing to interference-averse nations, in times of troubles, when decisive actions are needed, it will be the straw that breaks the camelback.