INDONESIA is the world’s fourth most populous nation. With some a quarter of a billion people, its market is much coveted and its human capital, envied. With a changing political landscape — a near-participatory democracy that has witnessed the people’s power jealously guarding against any possible gerrymandering at the recent presidential elections — underscoring the promises of the newly inaugurated president, it looks set to stir economically. Coinciding neatly with the Asean economic community taking shape next year, Indonesia’s seventh president, Joko Widodo, will surely be looking at how his country can leverage on the initiatives taken within the regional grouping. Among them is the proposal for an Asean car to be developed by, principally Malaysia and Indonesia. Naturally, a due diligence will precede any decision to proceed, given Malaysia’s comparative advantage in the automobile industry. How this can be exploited in a win-win move for both countries specifically, and the region generally, is essential.
For Malaysia, Proton is the logical entity to front and execute the proposal, if and when the agreement is inked. Indonesia, for its part, has the manpower. The Asean car’s production has the potential to bring a heavy industry of skilled employment to Indonesia, which is more labour market friendly than, say, its extant aerospace industry. Furthermore, Indonesia as is, without the promised increased in employment, has an automobile market of more than a million units a year. Imagine the potential consumer base when its middle class grows with the aspired for growth of the so-called “Indonesia Baru” promoted by the new president. Proton, as a partner to this national endeavour, can become the regional player that provides the impetus to more than just skilled employment. It will, too, with the Asean car, inject new life into the components industry that is extant in several member states. In short, the Asean car, while driven by Malaysia and Indonesia, will have the desired knock-on effects on the whole region with respect to its production. When on the road, the Asean car will have built the momentum for a zone of prosperity.
More importantly, however, given the priority Malaysia places on developing a regional identity when it assumes the Asean chair, this proposed project can be the vehicle to foster it. A 1Asean identity can only strengthen regional security; the desired objective. What is of utmost urgency, then, is the formulation of the mechanics of cooperation, bilaterally, between Malaysia and Indonesia and, multilaterally, within the regional economic community. Caution against euphoria, though, is necessary. As clearly manifest in the development of the European Union, which started life as an economic community, national economic interests can get the better of harmony. Of course, unlike the EU, Asean is, first and foremost, a successful security cooperation arrangement that is gradually realising the advantages of developing an economic bloc. Another plus to Asean is the development imperative, which should spur collaboration and healthy competition.