Five ASEAN states: Indonesia, Singapore, Malaysia, Thailand and Vietnam have all expressed interest in an initiative within the region to jointly stockpile gas and oil reserves. This comes after the experienced shocks to the economies of the respective countries stemming from the Middle East crisis—where the vulnerabilities of high dependency and low supply have led to economic downturns, increased costs of living and stagnating growth.
Formation of the ASEAN Region: Centrality on the Global Stage
The ASEAN region was formed to serve as a bloc that pools resources, frameworks, power and responsibility among states found within the Southeast Asian region. The goal is to increase the centrality of the region within the global stage; much like the case for the European Union. Since its inception in 1967 with the founding countries being the Philippines, Singapore, Thailand, Indonesia and Malaysia, it has brought forward frameworks that have homogenized the growth of its partner nations.
ASEAN Charter
The ASEAN charter of 2007 includes three core pillars: that of economic community, of international security, and of socio-cultural acknowledgement. Further frameworks and charters have worked towards improving the individual and collective health of the constituent members—and, as of recently, the collective Gross Domestic Product (GDP) of the ASEAN region stands at 3.6 trillion US dollars.
Insulation from Externalities
More than bringing the ASEAN region to the world stage by increasing its economic relevance, the bloc also recognizes the externalities that affect the region. This is why the framework for the joint stockpiling of gas and oil reserves is being supported—and hopefully, in the works towards being drafted.
Middle East Crisis: Energy Costs, Economy, Missed Opportunities
The Philippines has been hit especially hard by the Middle East crisis. Electricity costs have risen to 14 pesos per kilowatt hour from January’s 12 pesos; diesel now costs 80 pesos per liter; gasoline costs 75 pesos per liter. The bottom line for the Filipino is that of less spare cash for necessities. For the broader economy, this has led to stagnating growth. And for the investors, this has led to flocking to safer alternatives. This means missed opportunities both for the improvement of quality-of-lives for the Filipino, as well as the health of the economy.
Stockpile of Oil and Gas Reserves
Recognizing this, the Philippines is among the first ASEAN countries to rally for the stockpile. Other hard-hit regions such as Malaysia and Thailand have also realized the potential security this will bring. With the current crisis, this—in theory—would lessen the effects of volatility. And with future crises, a dampening of shocks will be expected. Initiatives like this only bolster the spirit of shared responsibility among Southeast Asian countries.
But to circle back to the relevance of the ASEAN bloc, is again, the role of centrality. The bloc is on par with the U.S. in terms of exports; its GDP rivals other unions. With this centrality comes a pool of resources—both geopolitical and economic—that lends hands to those who lag in diplomacy, economy, security, policy, environment, or otherwise.
Importance of the ASEAN Region
One of the founders of the region, Bang Sean, summarized the importance of an ASEAN region, that eventually led to its formation:
“The fragmented economies of Southeast Asia, with each country pursuing its own limited objectives and dissipating its meager resources in the overlapping or even conflicting endeavors of sister states, carry the seeds of weakness in their incapacity for growth and their self-perpetuating dependence on the advanced, industrial nations. ASEAN, therefore, could marshal the still untapped potentials of this rich region through more substantial united action.”
Study Underway
A study by the Economic Research Institute for ASEAN and East Asia (ERIA) is underway for the economic feasibility and viability of the proposal. According to President Marcos, “ERIA has already identified viable models—national initiatives, ticket stockpiling arrangements, and joint stockpiling with crude exporters”.
Plans Have Been Drafted
There is therefore a substantiated set of plans that can be brought up to ASEAN members, pending their approval. However, ERIA states that for the policy to work, this need not unanimous support or participation from all eleven constituent states. It will still work so long as some countries share the responsibility and pooling of resources; where they can benefit from said pool.
Draft Legislation?
The speculation lies in whether the proposal will be formalized into a treaty, a framework or an order within the ASEAN region; or if this proposal will be fragmented or compartmentalized within a few member states. One thing is clear: the logic of the plan is sound. The research has been conducted. It is only up to the member countries to take initiative in forming this into a concrete framework.
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