STANDING SENATE COMMITTEE ON FOREIGN AFFAIRS AND INTERNATIONAL TRADE SECURING CANADA’S PLACE IN ASIA-PACIFIC: A FOCUS ON SOUTHEAST ASIA June 2015 Ce rapport est aussi disponible en français. Des renseignements sur le comité sont donnés sur le site : www.senate-senat.ca/AEFA.asp. Information regarding the committee can be obtained through its web site: www.senate-senat.ca/AEFA.asp. TABLE OF CONTENTS TABLE OF CONTENTS ........................................................................................................... i ACKNOWLEDGEMENTS ..................................................................................................... iii THE COMMITTEE .................................................................................................................. v ORDER OF REFERENCE ..................................................................................................... vii LIST OF ACRONYMS ............................................................................................................ 1 EXECUTIVE SUMMARY ...................................................................................................... 3 RECOMMENDATIONS .......................................................................................................... 7 INTRODUCTION .................................................................................................................. 11 PART I: CANADA AND THE ASIA-PACIFIC ................................................................... 15 A. A Vibrant and Diverse Region ................................................................................ 15 B. Economic Context ................................................................................................... 16 C. Growing Regionalism ............................................................................................. 17 D. Socio-Economic and Governance Challenges ........................................................ 18 E. Security Context...................................................................................................... 20 China and India Five Years After the Committee’s 2010 Reports ......................................... 21 Canada’s Engagement in the Asia-Pacific Region ................................................................. 26 A Whole of Country Effort ..................................................................................................... 39 PART II: CANADA AND SOUTHEAST ASIA ................................................................... 43 The Rise of Southeast Asia ..................................................................................................... 44 A. Economics and Trade .............................................................................................. 45 B. Development and Governance ................................................................................ 46 C. Security ................................................................................................................... 47 Association of Southeast Asian Nations ................................................................................. 48 A. The “Asean Way” ................................................................................................... 49 B. Tensions within ASEAN......................................................................................... 50 C. External Engagement .............................................................................................. 51 Increasing Canada’s Engagement with ASEAN..................................................................... 52 Indonesia case study ............................................................................................................... 54 A. Introduction ............................................................................................................. 55 B. General Overview ................................................................................................... 55 i Opportunities and Challenges for Canada .............................................................................. 57 A. Trade and Investment .............................................................................................. 57 B. Security ................................................................................................................... 60 C. Development Cooperation ...................................................................................... 62 D. Diplomacy ............................................................................................................... 63 Burma Case Study................................................................................................................... 65 A. Introduction ............................................................................................................. 65 B. General Overview ................................................................................................... 65 Opportunities and Challenges for Canada .............................................................................. 68 A. Trade and Investment .............................................................................................. 68 B. Security ................................................................................................................... 70 C. Development Cooperation ...................................................................................... 71 D. Diplomacy ............................................................................................................... 72 E. People-to-People Ties ............................................................................................. 72 Singapore Case Study ............................................................................................................. 73 A. Introduction ............................................................................................................. 73 B. General Overview ................................................................................................... 74 Opportunities and Challenges for Canada .............................................................................. 76 A. Trade and Investment .............................................................................................. 76 B. Security ................................................................................................................... 78 C. Diplomacy ............................................................................................................... 79 D. People-to-People Ties ............................................................................................. 80 Philippines Case Study ........................................................................................................... 80 A. Introduction ............................................................................................................. 80 B. General Overview ................................................................................................... 81 Opportunities and Challenges for Canada .............................................................................. 82 A. Trade and Investment .............................................................................................. 82 B. Security ................................................................................................................... 85 C. Development Cooperation ...................................................................................... 86 D. Diplomacy ............................................................................................................... 88 E. People-to-People Ties ............................................................................................. 89 CONCLUSION ....................................................................................................................... 93 APPENDIX A – WITNESSES ............................................................................................... 95 APPENDIX B –FACT-FINDING MISSION TO ASIA (INDONESIA AND SINGAPORE) . ...................................................................................................................................... 103 ii ACKNOWLEDGEMENTS As this study went to print, international headlines announced that Asia had overtaken Europe as the world’s second-richest region. According to the reports, the Asia-Pacific region, excluding Japan, held $47 trillion in private wealth in 2014, thanks in part to a growing number of millionaires in India and China. While North America remained the world’s richest region, predictions were that it would be overtaken by Asia in 2016. By 2019, Asia will hold 34% of global wealth. These numbers are undeniably striking, but they may come as little surprise to those who, in recent years, have followed the gradual eastward shift in global diplomatic, security and economic centres. Recognizing the need to ensure that Canada’s foreign and international trade policy is adequately prepared for these changes, the Standing Senate Committee on Foreign Affairs and International Trade first examined the rise of China and India in its reports tabled in 2010. The present report finds that the conclusions of those earlier studies continue to hold true, then orients its focus on a region offering further opportunities for Canadian commercial and foreign policy interests. The