Decentralizing the ‘ASEAN Way’ through Local Paradiplomacy
Roseno Aji Affandi, Faculty Member, Department of International Relations, BINUS University
The Association of Southeast Asian Nations (ASEAN) stands at an economic crossroads. Despite possessing the third-largest population globally in 2022, the region struggles with a low rate of intra-trade activity, which has remained stagnant between 21 to 22 per cent for decades.
This low internal cohesion pales in comparison to the European Union (EU), where intra-trade activities reach a minimum of 60 per cent. While ASEAN leaders seek ways to “jumpstart the region’s economy” and achieve the goals of the ASEAN Economic Community (AEC), efforts often fail to translate into substantial results on the ground.
The core dilemma lies in ASEAN’s governing philosophy. Regional integration efforts have historically been characterized by an elitist approach, being overly reliant on the central government, which significantly reduces the necessary participation of subnational actors (cities and provinces).
To overcome this “capital consensus” and achieve genuine regional integration, ASEAN must strategically embrace “local paradiplomacy”, shifting governance power downwards to empower subnational actors who can drive grassroots economic and social coherence.
The Constraints of the Centralized “ASEAN Way”
ASEAN’s integration ethos, often referred to as the “ASEAN Way,” is fundamentally built on principles of consensus and non-interference, which creates a predominantly intergovernmental framework. This centralized, state-centric approach grants national governments significant control over policies, constraining the ability of subnational actors to influence market integration or international engagement.
This centralized model generates critical structural challenges:
Bureaucratic Hurdles: Structural challenges, such as unfriendly bureaucratic, actively hinder regional governments from participating effectively in international relations. Bureaucratic and complex governance structures impede communication and resource reporting necessary for collaboration.
Implementation Gaps: Agreements and initiatives established at the regional level, when implemented nationally, often fail at execution to the local government level due to the deeply centralized government structures in place in many ASEAN Member States (AMS).
Elite Reliance: The focus on macro-level national interests means subnational engagement is often minimized. This centralized governance poses a challenge for local actors to go beyond national cooperation, even when promoting financial interests on the global stage.
Therefore, while the political will for integration exists at the centre, the mechanisms for implementation at the periphery are weak, creating a disconnected interlink between regional and central government when implementing regulations and policies.
The Paradiplomacy Bridge: Decentralization through Local Action
Paradiplomacy defined as subnational actors (at the province or municipal level) engaging in international relations offers a potent solution by creating new organizational forms like micro-regionalism and micro-diplomacy.
This approach can be analyzed through two crucial dimensions of paradiplomacy:
Intergovernmental Dimension: This assesses the often disconnected interlink between regional and central governments, especially in ASEAN Member States (AMS) where federalism and decentralization remain complex challenges. Strengthening these intergovernmental relations is crucial because they facilitate capacity building, friendly cross-border cooperation, and policy coherence among subnational actors.
Global Economy Dimension: This focuses on how subnational actors impact international trade and foreign trade policy dynamics. It acknowledges that the economic incentives of paradiplomacy can promote the political willingness of regional governments and help regions pursue their financial interests on the global stage.
Historically, Southeast Asia provides a strong precedent for this approach. In the pre-colonial era, many coastal and port cities operated as centres for trade, allowing local merchants to connect different regions without strong attachment to a central government.
Post-colonial nation-building shifted control to the central governments, but the potential for subnational cooperation persists as a vehicle for economic integration and developing more rural regions.
ASEAN has attempted to promote subnational collaboration through several initiatives, but many have produced unsatisfactory results, indicating critical gaps in structure and commitment such as Meeting of Governors and Mayors of ASEAN Capitals (MGMAC), Sister Cities and The ASEAN Smart Cities Network (ASCN)
The Limitations of the MGMAC
The Meeting of Governors and Mayors of ASEAN Capitals (MGMAC) was initiated in 2013 to promote subnational involvement in ASEAN agreements. Since its establishment, MGMAC has addressed vital agendas, including public safety, health, education, and culture.
However, the substantive results of these annual meetings have been limited. A critical flaw is that MGMAC is not an official, integrated initiative but rather an independent forum outside the regional body.
The lack of institutionalization hinders top-down implementation. Furthermore, the outputs of the forum are non-binding, which creates a loophole for actors to avoid commitments.
Sister City Agreements: Symbolic over Substantive
Sister City agreements involve formal arrangements to promote cultural and economic ties, often utilizing a grassroots approach through citizen and cultural exchange. Examples include partnerships between Jakarta and Bangkok (focusing on tourism and trade) and Jakarta and Hanoi (focusing on infrastructure development and knowledge transfer).
While these agreements can substantially benefit tourism-reliant economies like Thailand, Singapore, and Indonesia, they often prioritize cultural exchange and non-economic collaboration. Consequently, sister city relationships are frequently regarded as symbolic relations, lacking success in realising economic efforts and undermining the potential benefits subnational actors might derive.
The ASEAN Smart Cities Network (ASCN) Disparity
The ASCN, established to promote sustainable urbanisation, is a comprehensive platform involving both central and local governments. Despite its detailed framework, its success rate remains minimal.
The mechanism suffers from a lack of sufficient capacity and a knowledge gap among local governments, often leading to inconsistent participation. There is a pronounced disparity in development progress and technological readiness across AMS cities; for instance, Singapore takes the lead, while developing economies like Cambodia and Laos lag behind.
This reveals that the ASCN structure is currently underutilised, calling for a collective focus on capacity building for local governments to improve governance quality and competence.
The Grassroots Template: Success of Micro-Regionalism
In stark contrast to the symbolic or constrained top-down efforts, genuine, decentralized cooperation has proven highly effective. The historical success of micro-regionalism, particularly between geographically close subnational governments, provides a necessary template.
The Singapore-Johor Bahru-Riau (SIJORI) growth triangle, which evolved into the Indonesia-Malaysia-Singapore Growth Triangle (IMS-GT), is often cited as one of the most successful cross-border cooperations in ASEAN. Crucially, the factors leading to its success include its reliance on a bottom-up approach and informality in cooperation.
The use of private actors as proxies for international cooperation allows local governments to circumvent the central government’s influence in their projects. This strategy has led to tangible outcomes, such as significant contributions to industrial development (e.g., Batam’s 62.9% contribution) and increases in international visitors and revenue for the region.
These micro-regional examples show that delegating the role of trade project development to subnational actors can be a major boost to economic integration, particularly by acknowledging the disparity of economic and infrastructure development between member states.
Decentralizing the ASEAN Way: Strategic Pathways Forward
To transition from the limitations of the “capital consensus” to tangible grassroots impact, ASEAN must adopt strategies that institutionalise paradiplomacy and empower local actors:
Institutionalise Local Forums: The most significant step is the institutionalisation of MGMAC into the official ASEAN framework. This effort would solidify intergovernmental relations between central and local governments and facilitate interactions among business actors and local government.
Focus on Capacity and Competence: Capacity building for local governments must be heavily promoted to increase the viability of trade and competence. Maximizing the utilisation of platforms like ASCN for resource, technology, and knowledge transfer is crucial to narrow the knowledge and competence gap between local and central government.
Promote Complementary Micro-Trade: Subnational trade should be amplified by establishing smaller-scale trade agreements between cities. This requires decentralized communication between governments to ensure that economic activity is complementary rather than competitive, mimicking the successful approach of the golden triangles. This shift encourages economic relations that diversify focus industries and strengthen local government budgets.
By fostering wider community involvement and strengthening the capacity of subnational actors through structured platforms, ASEAN can effectively move beyond symbolic diplomacy and central reliance.
Empowering cities and provinces to become strategic players in integration is not just about boosting trade volume; it is about building the institutional competence and policy coherence needed for a resilient, people-centered ASEAN community.
(RHZ/QOB)