The ASEAN Developmental Divide and Timor-Leste’s Accession
For decades, the Association of Southeast Asian Nations (ASEAN) has navigated a complex developmental landscape. Since Cambodia, Laos, Myanmar, and Vietnam (collectively known as CLMV) joined the organization in the late 1990s, ASEAN has grappled with significant disparities in economic strength among its members. These challenges have been collectively termed the “ASEAN developmental divide.”
The Evolution of the CLMV Countries
In recent years, the economic trajectories of the CLMV countries have diverged. Vietnam has seen remarkable economic growth, surpassing the Philippines in terms of GDP per capita and coming close to Indonesia. Meanwhile, Laos and Cambodia, while making progress, still lag behind. Timor-Leste, set to become ASEAN’s newest member, fits into this pattern, with its economy situated between Laos and Cambodia but above struggling Myanmar.
Welcoming Timor-Leste: A New Label Needed?
The addition of Timor-Leste in late 2022 could further widen the developmental gap within ASEAN. To reflect this new reality, the term CLMV may need an update. A more fitting label for the less economically robust members could be CLMT (Cambodia, Laos, Myanmar, and Timor-Leste). This调整 not only acknowledges Timor-Leste’s current economic standing but also maintains a semblance of rhythm with its predecessor.
The Economic Challenges of Timor-Leste
Timor-Leste has made commendable strides since independence in 2002, yet significant development challenges remain. Approximately 42% of its population lives below the national poverty line, and half of the population is classified as multidimensionally poor, facing inadequacies in health, education, and living standards. Child malnutrition rates are alarmingly high, with 47% of children suffering from malnutrition, posing a grave threat to future economic productivity.
Exhaustion of Timor-Leste’s Sovereign Wealth Fund
A major constraint on Timor-Leste’s future stability is the impending depletion of its sovereign wealth fund, expected within a decade. Governments have drawn down on the fund at an unsustainable rate, averaging 2.5 times the recommended withdrawal level. The outcome of negotiations between Canberra and Dili over the Greater Sunrise gas field could provide critical financial relief. However, the processing of the gas remains a contentious issue.
The Role of the Initiative for ASEAN Integration (IAI)
The Initiative for ASEAN Integration (IAI), launched in 2000, aims to reduce the developmental gap among ASEAN members. The IAI implements capacity-building projects and provides funds from wealthier to poorer countries. As Timor-Leste prepares for full ASEAN membership, it should be included in the IAI’s work plan. Vietnam, owing to its economic advancement, might need to graduate from the program.
The Importance of ASEAN Membership
Beyond financial assistance, Timor-Leste’s ASEAN membership will offer several benefits. It will gain access to ASEAN-specific funds like the ADB’s ASEAN Catalytic Green Finance Facility and China’s ASEAN-China Cooperation Fund. Additionally, it will be eligible for programs like the EU-ASEAN Strategic Partnership and benefit from various free trade agreements and market access arrangements.
Administrative Inclusion: Bridging the Geographic Gap
Timor-Leste’s geographic location, bridging Southeast Asia and the Pacific, has often led to administrative challenges and bureaucratic oversight. It has been categorized as both a Southeast Asian and a Pacific nation, depending on the context. Once officially in ASEAN, these categorizations will be aligned, providing the country with focused support and access to relevant resources.
The Road Ahead
While facing numerous challenges, Timor-Leste’s accession to ASEAN represents a crucial step forward. With Malaysia set to chair ASEAN in 2025, there is hope that Dili will receive the necessary support to bridge the developmental divide. Timor-Leste’s future success within ASEAN will depend on effective collaboration and strategic investments from its peers.
Another significant consequence of Timor-Leste’s accession will be its liberation from administrative exile.
As ASEAN continues to address critical issues such as the South China Sea tensions and the ongoing crisis in Myanmar, the inclusion of Timor-Leste will offer new perspectives and opportunities for regional cooperation.
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