CHALLENGES OF THE NEW GROWTH AREA:
EAGA INTO THE NEXT DECADE

Dr. Pushpa Thambipillai,
Senior Lecturer,
University of Brunei Darussalam

Technological advances and the interdependent nature of political and economic needs had rendered societies into borderless entities. While sovereignty governs the will and rights of states, more and more areas of national interest have to be weighed in tandem with other states, near or distant. It is quite infrequent that a state can effectively adopt unilateral measures and it is becoming a norm that states will have to act in concert proactively or in reaction to a particular issue. For instance, a civil or military disturbance in a neighbouring state or an economic crisis in the region or elsewhere may activate concerned states into a bilateral or multilateral forum. On the other hand, states may not just respond to crisis, but prepare medium- or long-term strategies through shared regimes.

The concept of economic growth areas may be viewed from these desires to understand external relations. Spillover of national decision-making into the external environment is pursued in order to enhance domestic requirements. Growth areas are designed to collectively enhance each partner’s needs in meeting shortcomings, be it in capital, land, labor, technology, natural resources, or markets which are ingredients for a positive approach to realizing national development objectives. While regional cooperation, as in the case of ASEAN, may entail broader, multifunctional approaches to political and economic cooperation, growth areas are specifically targeted at developmental issues -- how to promote the welfare of the population through shared goals and policies.¹

EAST ASEAN GROWTH AREA

While each of the four participating countries - Brunei, Indonesia, Malaysia and the Philippines - were influenced by the overall interest in economic development, each had its own agenda in seeking its neighbors’ close participation through subregional cooperation. Brunei has, since the late 80s emphasized its intentions towards a national diversification policy, to realign its economy away from dependence on the oil and gas industry, and to expand its people’s employment opportunities within an expanded private sector. This twin-pronged objective would be difficult, if not slow, to realize without the extension of some of its national activities across borders through regional cooperation.

Indonesia, with its vast spread of archipelagic territory, saw the benefits through close links with its neighbors. Its association in the Southern Growth Triangle and especially with Singapore over the development of Batam gave it new ideas: why not more Batams? Hence, Indonesia was keen to seek and be linked with other foreign territories so that its vision of more Batams springing up would be a reality and make its task of bringing development to its people in the far reaches of its archipelago a reality.² Through bitter domestic experiences, for example, in several parts of Sumatra, Java, and Irian Jaya, the Indonesian government has realized the urgency of development and distribution as crucial ingredients in national unity and stability.³ Hence, in addition to national programmes, it has embarked on rigorous cooperation with its neighbours in advancing its objectives. According to some reports, a majority of its 27 provinces, except those on Java, will gradually be linked up in growth areas for maximizing development opportunities.

Malaysia, which had often neglected the eastern states in relation to major development policies, and which had already promoted two growth triangles comprising parts of western Malaysia, saw the advantage in pushing for a collective approach for Sabah and Sarawak and at the same time legitimize its ambitions for turning the free port of Labuan into a financial hub south of Hong Kong.⁴ Thus, when the proposals for a growth area including its eastern states were floated, Malaysia was only too keen to be a party. EAGA would not of course have materialized, if not for the vision and active dedications of the Philippines’ President Ramos.

In President Ramos’ scheme, the concept of a growth area provided a means to develop and eliminate the economic and political problems confronting southern Philippines, in particular, Mindanao. The newly elected President, (who assumed office in mid-1992), saw it as one of his political priorities to integrate Mindanao into the mainstream of socio-economic development. He also realized that one of the causes for the political instability caused by secessionist movements and rebel activity was poverty and alienation. Although the Philippine government itself was trying to uplift Mindanao’s economic growth potentials, it could not allocate adequate resources for the south. While it was a distant three hours away from Manila, centers in the south were only about an hour away from the nearest neighboring countries’ airports. Thus, seizing the socio-economic links that had already sprung up informally between Mindanao and its neighbors, especially with Sabah and Sulawesi, President Ramos proposed the concept of the growth area for the subregion of eastern ASEAN.

THE EXPANDING EAGA

EAGA was conceived to promote subregional trade, tourism, and investments that would in turn promote infrastructure development and industries using local resources. From the rudiments of the proposal first articulated by President Ramos in late 1992 to the actual birth of the grouping in March 1994, the membership had swelled to nine component territories: Brunei, West and East Kalimantan, North Sulawesi, Sabah, Sarawak, Labuan, Mindanao and Palawan. It was not so much the size of the population involved (just over 30 million) but rather the stretch of land and sea that purportedly came under the so-called growth area. Unlike the Southern Growth Triangle, after which other growth triangles aspired, the East ASEAN Growth Area stretched to more than a thousand miles east to west or north to south. In fact, it takes thrice as much time to fly from Pontianak to Manado, (disregarding the change of carriers), than it is to travel from Pontianak to the Indonesian capital, Jakarta. Nor is there any simpler way of flying from any point within Mindanao to Palawan, yet both are in the Philippines and within the same designated growth area. Mindanao itself is not an administratively single entity like Sabah or North Sulawesi, thus adding to the political and economic differentiations and diversity within the same components of the growth area.⁵

Perhaps the planners did have a grand design in mapping out such a spread for their new growth area; it would necessitate the rapid establishment of air and sea links among the various points within the growth area to meet the demands of regional interactions. While still trying to cope with giving each of the nine members a stake in the growth area’s activities, the fifth ministerial meeting held in July 1996 in Davao, decided to include an additional seven Indonesian provinces under EAGA’s designation: Central and South Kalimantan, North, South and Southeast Sulawesi; Maluku; and Irian Jaya. While it seemed appropriate to include the whole of Borneo and Sulawesi rather than just parts of the two islands, the inclusion of the other two areas does seem to raise various questions. It has extended the boundaries of EAGA further east, almost to the edge of ASEAN. How effectively the policies and programmes of EAGA can be felt over such an extensive area is left to be seen.

VISION AND REALITY

Several areas of cooperation had already been identified at EAGA’s inception. Four were classified as “fast track” and their coordinating countries identified: expansion of air linkages (Brunei), expansion of sea transport and shipping (Indonesia), joint tourism development (Malaysia), and expansion of fisheries cooperation (Philippines). Other areas of cooperation were in telecommunications, environmental management, forestry, people mobility, capital formation and financial services, human resources development, agro-industry, and construction. These were decided upon based on the collective need to meet the objectives of EAGA -- to extend development away from the capital areas and improve the welfare and incomes of the peoples in the outlaying regions. The interests and extent of involvement of a particular member state determined which member would act as coordinator of the activities in the identified sectors.

Blueprints for cooperation and strategies for development will remain as mere designs if they cannot be implemented. The political basis for intra-state cooperation first needs to be firmly established. Beyond that, it is crucial for participating members to adopt pragmatic means to achieving their objectives. Within the EAGA framework, three vital factors may be identified for the success of current and future endeavors:

1) Leadership: Government leaders, both at the central and local levels who are committed to the growth of their respective areas, play important roles. Government support is unequivocally necessary even though growth areas are deemed as private sector-led. The successful approach of SIJORI lends weight to the argument that political and governmental endorsements as well as participation are basic requirements in any intra-border cooperation.

2) Entrepreneurship: While the business sector is identified as the backbone of the growth area, no ordinary businessmen can be successful regionally, without the proper skills -- the special business acumen. National entrepreneurs who would capitalize on the prevailing economic climate and harness both domestic and foreign partnership to integrate into the larger business environment are essential for successful regionalism. Failing that, the private sector will lag behind the hype generated by the policymakers.

3) Human resources: Both the public and private sectors which are propelling the concept of the growth area need the solid basis and supporting pillars for implementing the programmes. These cannot be achieved without the appropriate human resource input, from the highly skilled to the less skilled. Manpower planning and training then becomes an urgent agenda, not just at the national level but also at the subregional scale, as we are addressing not only domestic issues of development but also collaborative schemes. Just like the circulation of capital across borders, peoples’ mobility also becomes a component feature of the dynamic growth area, attracting labor to areas of demand from sources of excess supply. With the movement of peoples and ideas emerges the need for “networking” to study the fabrics of an emerging EAGA society. Investment in and policy support for research in the human resource sector would become essential in EAGA if the contributions of human capital were recognized.⁶

BORDERLESS HUMAN MOVEMENT

Human resource is irreplaceable in any endeavour. Capital and economic incentive alone are not adequate to propel development. Be it near the urban centre of EAGA, like Labuan, or in the outskirts of Irian Jaya, a well-placed labor force will be as attractive as any other factor in luring productive investments. A good source of well-trained and motivated labor would be a necessary factor if the East ASEAN Growth Area is to achieve some of its medium- and long-term objectives. Thus, one of the main challenges for EAGA in the coming years is to ensure the availability of the appropriate human resources to support its strategies.

Some of EAGA’s identified areas for cooperation are in highly skilled sectors (e.g. telecommunications, transportation, agro-industry) which are labor intensive. There would be an increasing requirement for human resources at all levels of economic activity. Some areas would need special training, for instance, in tourism and service related industries, that are presently witnessing the largest increases in productivity. Brunei, in particular, has to prepare itself with adequate human resource skills if it wants to partake in the regional emphasis on tourism and other service industries that are new in its national policies.

Human resource is in demand by both the public and private sectors. The supply of trained and well-equipped human resource is in most part the responsibility of the public sector, either in providing it entirely by itself, or in encouraging others to be involved in the process. While private sectors adjust faster to changing economic environments, the public sector, including those involved in the training of human resources, is slow in meeting the changing demands of society. Here lies the major task for the public and private sectors to have an open dialogue and interaction on the crucial factor of human resources for mutually desirable development. As borderless regions creep in, issues of human resource will become part of the regional agenda. Need, supply, and demand do not remain a domestic issue. With mobility widely becoming a norm, the less prepared entities will lose out to the attractive centers for labor employment, further creating problems in the home state that will increasingly need skilled labour.

Based on preliminary assessment, EAGA has identified 13 areas for collaboration, with member partners identified to chair the various committees. Has each member given adequate consideration to its human resources and to its education and training programmes? Is there communication between the framers of the EAGA concept and the policymakers in training and human development? Is there room to accommodate new areas of teaching and research to meet the new agenda of the growth areas? Some of the member states may already have some of the answers, but in general, human resource development and its implication in the EAGA region may not have been seriously addressed.

Thus, one of the areas to be studied in depth and integrated with the rest of the policy areas is the role and contribution of the human factor in national and regional development. The other related factor is the increasing acceptance of the concept of the borderless region and cross border trade and investment flows. However, to what extent is the issue of people mobility actually supported across borders? Stringent rules and procedures are still adhered to and there is no indication that those would be foregone. Experiences of countries like Malaysia would in fact influence the size of foreign workforce which any one country would want to permit within its borders, for political and socio-cultural reasons. Thus, to what extent do growth areas like EAGA, have to take into account shared concerns on human resource development?

INTO THE FUTURE

ASEAN has helped to set the regional political stage for EAGA to take an easy ride. But it still has to contend with issues of domestic politics and instability that may momentarily upset the equilibrium. Within EAGA, the uncertainties brought about by insurgency or social unrest is a factor of consideration for investors and tourists -- the two targets that EAGA has identified.⁷ Inflation, corruption, and other issues affecting economic progress could be drawbacks in regional cooperation. Availability of information and hard data are also other spheres of mutual concern. But like all other growth areas, EAGA’s mission will be protected and promoted by their respective governments as the commitment has been laid down in paper. It is at the nongovernmental levels that the major action of EAGA will be determined, and that is where the governments ought to be able to project and provide needed assistance, either in the form of conducive policies or in taking the lead in creating a trained and motivated workforce.

Two Asian states, Taiwan and South Korea, are worth considering. They did not spare any effort in addressing their domestic human environment within their development planning. In less than a generation they could achieve the status of a “tiger” economy based, in a large part, on employment generating growth strategies, and on policies that progressively improved the quality of their human resources. EAGA has ample opportunities to learn and follow the steps taken elsewhere if its ambitious goals are to bear fruit.

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