F

or many years, especially in the aftermath of the Cold War, the European Union (EU) was a source of inspiration. It inspired other countries around the world to embrace regionalism.

Mark Beeson (2004) argues that regionally based interactions are central components of the international order at the start of the 21st century.

One fundamental reason to pursue regionalism is to enhance economic liberalization. A series of deadlocks in WTO negotiations in the late 1990s motivated nations to think about having more substantially intensive, but more regionally localized, economic blocs.

The EU played a pivotal role in this by successfully constructing a supranational mechanism that integrates economic, social and (to some extent) political supremacies over national existence.

Taking the EU as an example, other regional institutions such as ASEAN, NAFTA, MERCOSUR and the African Union have become better organized and more legally binding over time.

At less than 10 years old, the African Union, for example, has already established a number of official bodies including the African Court of Justice and Pan-African Parliament (PAP).

On the other side of the globe, Southeast Asia is now in a blossoming era of regionalism. ASEAN has established several pivotal instruments aimed at strengthening cooperation ties. While the initial purpose of ASEAN was to create regional stability and peace, over the past decade after Asia’s financial crisis ASEAN has concentrated more on economic issues.

Economic integration has boosted the region’s economy, which is now seen as a large pool of investment and a competitive production base. In 2010, foreign direct investment in ASEAN reached a total of US$75.8 billion, double the amount in the previous year. Furthermore, as ASEAN becomes more integrated, its economies of scale have also increased. Economic growth in ASEAN countries is now at the same level as it was before the 1997 financial crisis.

An interesting question is whether ASEAN will continue to accelerate under the ideals of regionalism, particularly after the EU’s current problems are taken into consideration.

Before the American and European crises, ASEAN was discredited because of its ineffectiveness, lack of commitment to becoming a supranational body and lax rules. But, now ASEAN is praised as a comfort vehicle for regionalism.

At least, powers in the Pacific, including China, Russia and the United States have been committed to the ASEAN-led East Asia Summit (EAS) as a major diplomatic arena in the Pacific.

Recognizing ASEAN’s importance, US Secretary of State Hillary Clinton even confirmed her support for ASEAN’s prioritization of economic integration by stating that “... prosperity and economic stability [should come] first, then ASEAN can push for more democracy...” at the last ASEAN Regional Forum.

Hillary’s statement has its rationale. Economic prosperity (through economic integration) could lead to democratization. Greater economic integration among countries provides not only more business connection and people-to-people contact, but also the exchange of knowledge and ideas, including democratic thoughts.

Integration also requires cross-border policy coordination, something that could be credibly carried out by democratic authorities. Nevertheless, this rationale is challenged by the fact that most Southeast Asian countries are unlikely to move toward democracy.

Harvard professor Danny Roddick explains this phenomenon well as the “political trilemma of the world economy”. Under this scenario, economic globalization/regionalization, political democracy and the nation-state are three irreconcilable things. At most, only two, not all, can work together at the same time.

In that sense, to build up regionalism, the EU deals with this trilemma by radically advancing economic union and democratization, while maintaining the fundamental principles of national sovereignty. European leaders have confirmed that economic integration needs to have a political leg to stand on.

Nevertheless, the economic downturn in Europe could eventually lead to worries over the future of regionalism both in Europe and around the globe.

The EU has been addressing the crisis with all means it has available, but it has found it difficult to find the best coordinated policy. At the last EU Summit in Brussels a few days ago, European leaders struck a deal to provide debt relief to Greece, but analysts criticized the deal as unclear and unconvincing given its lack of details.

At the same time, recently, several political factions in Britain entertained a proposal for a referendum on the country’s continued membership in the EU, which was eventually rejected. Discourse and debate between national sovereignty and collective ideals still exist in various forms in spite of integration, including the rise of right-wing politics in some countries.

We should not undermine the positive results of regionalism in Europe, such as simplified regulation, an integrated monetary system and a tremendous increase in trade between EU states. But the crisis not only has economic implications for the rest of the world, but also potentially evokes political reflection on the world order.

Inspired by what is happening in Europe, clubs of small-and-medium nations, that are long-standing fans of the concept of national sovereignty, could move further away from regionalism.

For the sake of national interests, they would resist calls to share bigger risks with others. They simply do not want to be too dependent on others states.

In ASEAN, where most countries are either undemocratic or semi-democratic, the continuation of regime is sacred and more important than just regional solidarity. ASEAN is likely to continue to develop and play a pivotal role in the Pacific, but it is vulnerably affected by the global situation because of the continuing tug-of-war between regional common goals and the strong presence of nation-states.

As a strong proponent of regionalism, Indonesia has to be concerned with this development. In the coming days, Indonesia will host the ASEAN Summit that will crucially map out the future of ASEAN’s regionalism.

It is in Indonesia’s interests to safeguard ASEAN (and the East Asia Summit), as elements of the emerging regional architecture in Asia. Its progress may be slow and significantly small, and could be slower after learning “signals” transmitted by the EU’s crisis. ASEAN’s role as a symbol for stability and peace is more than crucial.

Now, what is and will be happening in the EU, ASEAN and other places will prove the prospects of regionalism. If regionalism fails, this era will be remembered for its revival of nationalism, or more precisely the birth of “neo-neorealism”.

The writer is a Jakarta-based political analyst and a graduate of the School of Advanced International Studies (SAIS), Washington, DC.