For Southeast Asia, 2012 brought both challenges and opportunities to the region – from Cambodia’s chairmanship of ASEAN and further political opening in Burma (also known as Myanmar) to tensions in the South China Sea and the adoption of the ASEAN Declaration of Human Rights (ADHR). But, despite these ups and downs, U.S.-Southeast Asia relations continued to expand and deepen last year.

On his first trip overseas after being reelected, President Obama visited Southeast Asia, where he made history as the first sitting U.S. president to have ever visited Burma and Cambodia. Commemorating 180 years of uninterrupted diplomatic ties, he also visited Thailand. President Obama’s visit to Southeast Asia underscored his commitment to the U.S. strategic “rebalancing” to the Asia-Pacific. The dynamic of this “rebalance” is to downsize the U.S. presence in the Middle East and Afghanistan, and to invest more and pay greater attention to the Asia-Pacific, particularly Southeast Asia. However, given recent violent extremism in Mali and the international hostage crisis ending in bloodshed in Algeria, coupled with the U.S. budgetary constraints and its impact on defense, accomplishing this rebalancing may become a more difficult challenge.

One criticism of the rebalance is that it heavily emphasizes the security aspect of the relationship while not paying greater attention on expanding U.S. trade and investment with the region. With tensions on the rise in the South China Sea, the U.S. has enhanced its military ties with the Philippines and Vietnam. While the U.S. says it does not take sides in maritime territorial disputes, outgoing Secretary of State Hillary Clinton has said that the U.S. has a “national interest” in the freedom of navigation across the western Pacific, including the South China Sea. U.S. officials continue to emphasize to ASEAN nations that the best way to resolve territorial disputes is to develop a formal Code of Conduct in the South China Sea. This has created fears among some in the region that the U.S. may be pursuing a “containment” strategy toward China.

Burma has made remarkable gains over the past year toward greater political liberalization: almost 2,000 political prisoners have been released, peaceful demonstrations have been allowed, and press censorship has been abolished. In addition, ceasefires with most minority groups have commenced and economic sanctions have been suspended, but not lifted, as challenges persist; most notably current fighting between Myanmar’s army and Kachin rebels as well as sectarian clashes in Rakhine state that have left 180 people dead and more than 110,000 displaced since June. National reconciliation is the most critical challenge if Burma is to achieve long-term stability and genuine democratization. Meanwhile, in the Southern Philippines, the signing of the Framework Agreement on Bangsamoro between the government of the Philippines and the Moro Islamic Liberation Front (MILF) looks to cease hostilities where 150,000 people have been killed over the past 40 years.

One of the outcomes around the East Asia Summit held in Phnom Penh in November was the adoption of the ADHR by the 10-member states. While ASEAN hailed it as a “landmark development,” civil society and human rights organizations in the region and globally expressed disappointment that some of the principles and articles in the declaration could erode universal human rights and fundamental freedoms. NGOs particularly objected to the provision that rights could be restricted on the grounds of “national security” and that such rights must be “balanced” subject to “national and regional contexts and different cultural, religious, and historical backgrounds.”  As the ADHR is a declaration, and not a convention, the document is not legally binding. Like many ASEAN declarations, the ADHR seems to be more about aspirations rather than commitments. Taken in this context, it could be viewed as a first step toward greater protection of human rights in the region rather than an end in itself.

To counter criticism that the U.S. was over-emphasizing security in rebalancing its policy in the region, the U.S. announced in Phnom Penh the U.S.-ASEAN Expanded Economic Engagement Initiative (E3 Initiative), designed to expand trade and investment ties and business opportunities among all 11 countries. The E3 Initiative will lay the groundwork for ASEAN countries to adhere to the high standards found in the Trans-Pacific Partnership (TPP), which the U.S. is negotiating with four ASEAN states (Brunei, Singapore, Vietnam, and Malaysia). ASEAN is the U.S.’s fourth-largest export market and fifth-largest trading partner. The TPP is the U.S.’s effort to keep pace with the Regional Comprehensive Economic Partnership that includes all 10 members of ASEAN and other countries in the region, including China and India. The U.S. is also trying to increase its “soft power” through scholar exchanges such as the new U.S.-ASEAN Fulbright Initiative and increasing its foreign assistance by 17 percent to Southeast Asia, with much of this assistance going to Burma.

Despite foreign policy challenges in the Middle East, western Africa, Afghanistan, and elsewhere, the U.S. will continue to sustain and expand its relations with Southeast Asia, particularly through ASEAN. But ASEAN’s centrality is being challenged, in part because the grouping’s practice of making decisions on the basis of consensus among the member states is seen as limiting its effectiveness. Both China and the U.S. have significant interests in Southeast Asia. ASEAN nations value its economic relations with both countries and none want to see any extra-regional power become dominant, and thus do not want to be put into the position of having to choose between China and the U.S. For this not to happen, a more stable U.S.-China relationship will be required.

John J. Brandon is director of Regional Cooperation Programs for The Asia Foundation in Washington, D.C. He can be reached at jbrandon@asiafound-dc.org. The views and opinions expressed here are those of the individual author and not necessarily those of The Asia Foundation.

To paraphrase an expression often used by former President Ronald Reagan, “There they go again.” But in this case, it’s not the political opposition being referred to – it’s the U.S. National Intelligence Council (NIC) in its latest global predictions report.

The World Bank predicts that India will join China as an “emerging economy growth pole” by 2025 and that India’s contribution to global growth in coming years will surpass that of any individual advanced economy except the United States. Photo/Michelle L. Chang

In 2004, the NIC released “Mapping the Global Future,” forecasting what the world order would look like by 2020. In one of its boldest assertions – and historically most audacious – it stated, “The likely emergence of China and India as new major global players – similar to the rise of Germany in the 19th century and the United States in the early 20th century – will transform the geopolitical landscape,” of the 21st century.

Last month the NIC came out with its latest long-range global forecast, “Global Trends 2030: Alternative Worlds.” Perhaps to modest India’s discomfort, the NIC again raised the bar for what can be expected from the soon-to-be world’s most populous nation: “In 2030, India could be the rising economic powerhouse that China is seen to be today.”

In support of this bullish prediction, the NIC called attention to the World Bank’s assessment that India will join China as an “emerging economy growth pole” by 2025 and that India’s contribution to global growth in coming years will surpass that of any individual advanced economy except the United States.

Talk about Dickens’ Great Expectations. Now we know what Secretary of State Hillary Clinton has been drawing on when she says it is in America’s national interest to make a “strategic bet” on India’s rise as a global power, and to pursue our bilateral relations accordingly.

But for India today and its more immediate future, a reference to the opening line in another Dickens’ novel – A Tale of Two Cities – is a cautionary tale,  “It was the best of times, it was the worst of times.” As the NIC report and other publications (including by CSIS) point out, for India to maximize its advantages (including a demographic with a youthful population) it will need “to boost its educational system; make substantial governance improvements, particularly in countering corruption; and undertake large-scale infrastructure programs to keep pace with rapid urbanization.”

How India addresses these three major challenges in 2013 – education, corruption and infrastructure – will say a lot about whether India will be able to achieve the “great expectations” many have for it in this century or find itself facing the title of yet another book by the great English novelist, Hard Times.

This article has been republished with permission from the Center for Strategic and International Studies, where it was originally published on its cogitASIA blog. Asia Foundation trustee Karl F. Inderfurth is the former assistant secretary of state for South Asian affairs and a senior advisor and Wadhwani Chair in U.S.-India Policy Studies at CSIS. The views and opinions expressed here are those of the individual author and not those of The Asia Foundation.

For the past 30 years, Asia has been urbanizing at a faster rate than any other region in the world. In 2011, Asia was home to roughly 61 percent of the world’s population, or 4.2 billion people. More than 40 percent of them now live in urban areas. By 2025, Asia will have 21 of the world’s 37 megacities; over the next 30 years, another 1.1 billion Asians are expected to move to urban centers.

Some Asian city planners have realized the benefits of green growth and have chosen to aggressively embark on making sustainable investments in low-carbon transit systems, energy-efficient buildings, and climate change-resilient infrastructure.

Cities  – though they occupy just 2 percent of the world’s land – consume 75 percent of the planet’s resources and generate a similar percentage of waste. Therefore, “greening” cities can be a very efficient and impactful way to reduce resource use and help the environment. High population densities can make the process of supplying essential municipal services (such as energy, transport, and water) far more efficient and cost-effective. At the same time, if urban development is not sustainably managed, then the growth of cities can instead be a catalyst for sharp rises in air pollution, slum dwellings, widening economic and social inequalities, energy waste, and environmental degradation.

Unfortunately, the majority of Asia’s cities currently represent the latter development path. According to a recent Asian Development Bank report, half of the world’s most polluted cities are in Asia, mainly due to their high rates of greenhouse gas (GHG) emissions from fossil-fuel powered vehicles and coal-fired power plants. More than three quarters of Asian cities (compared to 11 percent of non-Asian cities) fail to meet the European Union’s air quality standard for particulate matter, and air pollution in Asia leads to the death of 500,000 people each year. Between 2000 and 2008, average per capita GHG emissions in Asia increased by 97 percent (as opposed to only 18 percent for the rest of the world). If GHG emissions levels continue to rise unabated in the region, the impact on global health, climate change, and rising sea levels will be extremely detrimental.

The overall economic costs and risks to human security associated with environmental degradation, growing slum areas, and lack of investments in proper infrastructure – especially in coastal and large river basin areas – make Asia’s cities some of the most vulnerable to natural disasters in the world. Rising Asian urban populations mean that over 400 million people may be at risk of coastal flooding and roughly 350 million at risk of inland flooding by 2025 (with Bangkok, Dhaka, Manila, Jakarta, and Shanghai among the metropolises at highest risk).

By contrast, sustainable urban economic growth has the potential to improve living standards and bring millions out of poverty. Some Asian city planners have realized the benefits of green growth and have chosen to aggressively embark on making sustainable investments in low-carbon transit systems, energy-efficient buildings, and climate change-resilient infrastructure. By building on the science and technology advancements in other regions in the world and adapting it to their own urban development models, these new “smart cities” or “green cities” are beginning to crop up across the continent, employing innovations in renewable resources, green space, recycling, energy-saving buildings, and other environmentally friendly measures.

Songdo International Business District, 40 miles from South Korea’s capital, Seoul, is a prime example of a “smart city” that brings together the world’s best technologies, building design, and eco-friendly practices to create the ultimate green lifestyle and work experience. Songdo, which opened in 2009, was built over the last decade from scratch on reclaimed mudflat lands. Cisco Network and Gale International companies invested more than $40 billion in ICT networks that help regulate electricity and water use in all of the city’s buildings, curbing waste and cutting operating costs and reserving almost 40 percent of land for green space. About 125 miles southeast of Beijing, Caofeidian is another pilot “green city” currently being developed from the ground up by the Swedish firm SWECO with specific environmental goals, such as ensuring that 60 percent of all trips in the city are conducted through public transport, and that average water use is capped at 180 liters per person daily (in comparison to other Asian cities that use on average 278 liters per person of water per day).

Other, more nuanced illustrations of already existing green solutions in Asian cities (primarily to reduce air pollution and energy waste), include low-cost electric vehicles in the Philippines, urban metro rail systems in Vietnam, inland waterway transport in China, and bus rapid transit (BRT) systems in Bangladesh, China, and Mongolia. The BRT in Guangzhou, China, for example, has successfully increased bus speeds by 30 percent, saving about 6.63 minutes per trip, and customer satisfaction has risen by 36 percent. Singapore’s water conservation program demonstrates how a tiered tariff that charges heavy water users a higher rate and imposes a water conservation tax has managed to cut domestic water consumption from 165 liters a day per person in 2003 to 154 liters a day per person last year.

A rapid scaling up of investments in these types of green approaches are what’s needed to reduce energy use in cities, as well as other undesirable impacts associated with dirty energy production, and could prevent the region’s environment from further deterioration. Asia is in a unique position to take advantage of its “late-comer” developing economies status by embracing green technology transfers from countries that are pioneering sustainable urban growth and design, as well as fostering new technological innovations that are adapted to Asia-specific vulnerabilities. To achieve this, Asia must begin to more efficiently and effectively manage its urbanization process in terms of city form, design, development density, industry, and logistics systems.

In March, The Asia Foundation and the Korea Development Institute (KDI) will co-host the ongoing dialogue series on Asian Approaches to Development Cooperation, which will focus on providing essential knowledge exchange on climate change, low-carbon growth, and green urbanization in the region. Read more.

Kourtnii S. Brown is a program officer for The Asia Foundation’s Environment Programs in San Francisco. She can be reached at kbrown@asiafound.org. The views and opinions expressed here are those of the individual author and not those of The Asia Foundation.

Over the last several decades, Asia has become increasingly integrated with the rest of the world, its rapid development driven largely by exports to the United States and European Union. Yet, as the world’s main economic arteries shift eastward, intra-regional integration within Asia still lags behind. The recent global financial crisis and economic fall-out is quickly changing that dynamic, however. Indeed, as strong, stable economic growth in the West, particularly in the U.S. and EU, remains elusive, regional markets are becoming more attractive among Asian countries, highlighting the importance for enhanced integration. Despite challenges, this trend toward regional integration should continue in 2013.

Compared to strides made among Southeast Asian countries to increase intra-regional trade, progress in South Asia through SAARC remains relatively slow. Photo/Conor Ashleigh

Currently, over half of world trade takes place between members of regional trade agreements, and Asia is no exception. However, in Asia, as in other parts of the world, regional integration is uneven. While Southeast Asia is shoring up its economic integration efforts through the Association of Southeast Asian Nations  (ASEAN) Economic Community Blueprint for 2015, with plans to continue attracting foreign direct investment, capitalize on the growth of its neighbors (mainly China and India), and accelerate the pace of its trade facilitation measures through a single market strategy, South Asia remains weakly integrated through the South Asian Association for Regional Cooperation (SAARC) both economically and politically.

Regionalism, not Protectionism, Can Help Mitigate Global Uncertainty

In fact, Asia has reason for optimism about the capacity of regional trade to compensate for weak markets in the U.S. and the EU and to reduce vulnerability to external shocks. In 2012, opinion leaders in Southeast Asia said that they were most positive about the ASEAN Economic Community compared to all other regional trade agreements in Asia. Indeed, while East Asian economic cooperation has mostly been driven by market forces, Southeast Asia has taken significant strides in formalizing its region as a single market and production base through ASEAN. Intra-regional trade and trade with China now accounts for more than 37 percent of ASEAN’s total trade, up from 26 percent in 2000. At the same time, trade with the U.S. has fallen from 20 percent in 2000 to 10 percent in 2011, and trade with the EU from 15 percent to 11 percent in the same period.

On the other hand, progress on SAARC’s goal of a South Asian Economic Union by 2020 remains relatively slow. Though intra-regional trade in South Asia recently surpassed $2 billion following the full implementation of the South Asia Free Trade Agreement, it represents only 5 percent of the region’s total trade volume, compared to ASEAN’s 22 percent and the EU’s 55 percent. However, South Asia has made strides integrating with the rest of Asia. For example, while only 1.3 percent of South Asia’s parts and components are traded within the sub-region, 56.3 percent go to East Asia. This represents the enormous potential that exists for South Asia’s future trade among its own region.

Such economic integration in the region is becoming increasingly important to help stave off and overcome global economic shocks. Prior to the last-minute resolution that saved the U.S. from falling off the “fiscal cliff,” the UN Social Commission on Asia and the Pacific warned that if the U.S. were to fall, it would have dire consequences for Asia, decreasing growth by as much as 2.2 percent. To reduce their dependency on developed countries’ economies, Asian countries need to diversify their export markets and take advantage of the efficiencies and growing demand that regional trade offers.

Avoiding the Middle Income Trap

While trade is an important part of regional economic integration, it remains only one piece of the puzzle. To avoid the dreaded “middle-income trap” (where countries attain a certain level of income but remain stuck there), Asian nations must prioritize other aspects of regional integration, including:

• Investment in infrastructure. Infrastructure development is essential to Asia’s economic and political development. In order to address this issue, ASEAN has recently set up the ASEAN Infrastructure Fund, financed by member nations as well as the Asian Development Bank and private equity, to mobilize resources for critical infrastructure development.

• Increased cooperation in education and skill development. A recent publication by the Asian Development Bank stated that “a deeper level of economic integration, which is required for sustainable development, calls for regional cooperation in skills development.” Such cooperation could take the form of regional and sub-regional “technical and vocational education and training” (TVET) strategies, such as creating regional and national qualifying frameworks and encouraging national commitments to invest in critical areas like high-skilled manufacturing.

• Cooperation in technological innovation and research. ASEAN member nations have taken steps toward such cooperation through the Krabi Initiative, which encourages collaboration across the region on a host of issues, from green technology and food security, to exploiting new technologies such as digital media and social networking for development and innovation.

Addressing Socioeconomic and Environmental Challenges

Regional cooperation in Asia should not be considered solely as a means to accelerate economic growth, but also as an effective way to address broader socioeconomic and environmental issues facing the region. It will, for instance, play a key role in women’s economic empowerment in the region. Women business owners and managers in Asia often do not have the same access to business opportunities as men. However, through groups such as the ASEAN Committee on Women, the South Asia Women’s Entrepreneurship Symposium (SAWES), they are able to form regional networks that provide a platform for them to access information and contacts essential to running a business and advocate for change in areas that are stifling their potential. (Read about The Asia Foundation’s support for these networks.)

Regional cooperation will also be integral to managing the impact of environmental issues, such as water scarcity, energy production and distribution, urbanization, climate change, and disaster recovery and management. Establishing and implementing fair and practical water-sharing and conservation arrangements is critical, with river systems like the Mekong, Indus, and Ganges all crossing national borders and essential to local livelihoods. Over the last couple of years, the Asia-Pacific has experienced 70 percent of the world’s natural disasters. This has led to a stronger push toward regional forums and programs to prepare for and manage disasters through information-sharing, as well as collaborative disaster-management planning efforts. Data management and sharing and the use of innovative ICT tools to provide more timely and accurate predictions, communications, and responses are also being explored regionally to minimize the impact of such disasters.

While greater intra-regional trade and investment represent a logical “next door” opportunity for Asian economies, this shift doesn’t come without challenges. To lessen reliance on shrinking U.S. and EU markets, Asia will need to modify the structure of its regional trade from a focus on raw materials or semi-finished products to those higher up the value chain. Another challenge will be to ensure that smaller, poorer Asian countries also benefit from increased regional interaction. Finally, intra-regionalism can only be successful if the regional entities nurture their links and cooperation with other regions.

But, the most important challenge of all remains making regional cooperation work for the people of Asia. The political will and institutional commitments to regional integration relies on the capacity and interest of individuals, civil society, and businesses to take the lead and give life to the concept.

Véronique Salze-Lozac’h is The Asia Foundation’s director for Economic Development Programs based in Bangkok, Nina Merchant-Vega is associate director, Katherine Loh is a senior program officer, and Sarah Alexander is a program fellow for the Economic Development Programs. Salze-Lozac’h can be reached at VSalze-Lozach@asiafound.org.

Last November, when a new leadership team stepped forward in Beijing, they confronted a very different set of challenges than their predecessors had faced. Among the most urgent of these is the challenge of providing adequate basic social services for all of China’s 1.3 billion people, many of whom remain relatively disadvantaged, even as the country’s wealth continues to increase dramatically.

While the Chinese government remains a formidable actor in the country’s social sector, the practical limitations of government service provision have also taken hold. Photo/flickr user John Williams – IDEAS Project

A 2011 survey conducted by China’s Southwestern University of Finance and Economics found that China’s wealthiest 10 percent of households control as much as 56 percent of the country’s disposable income, making China’s wealth distribution more unequal than some of the least developed nations in Africa. Those at the bottom of the spectrum suffer from poor access to health care and education, and live without the social security nets needed to remain upwardly mobile.

While the Chinese government remains a formidable actor in the country’s social sector, the practical limitations of government service provision have also taken hold. China’s new leaders are searching for alternative solutions, and are increasingly turning to third-party actors to support them in providing critical services for everything from school nutrition programs to HIV/AIDS patient support.

Within this environment, the charitable sector has emerged as a new and important partner for supporting China’s most vulnerable populations. Public recognition of nonprofits was widely bolstered by their unprecedented and highly visible role in the 2008 Wenchuan earthquake disaster relief and reconstruction efforts. Since then, the government has not only begun to publically support the growth of the charitable sector, but is increasingly tapping charitable organizations to provide much-needed services, such as care for the elderly. The Beijing municipal government alone has increased its budget for nonprofit-delivered services from just $640,000 in 2006 to $12.8 million in 2011.

Individuals are also turning to nonprofits and philanthropic giving as a way to contribute to their communities. As internet and social networking sites such as Sina Weibo, China’s equivalent to Twitter, have brought individual and local issues instantly to a national audience, millions have been spurred to donate or volunteer. According to national statistics, in just five years, personal donations have risen from $1.6 billion in 2005 to $8.5 billion in 2011. High net worth individuals – the Bill Gates and Warren Buffetts of China – are also jumping on the bandwagon by establishing large private foundations to carry out their philanthropic visions. In 2012, 259 new private foundations were registered, creating a total of 2,936 foundations now in existence across China, up from just a few hundred prior to 2005.

The potential for the charitable sector to assist in alleviating some of China’s greatest challenges, including equitable development, is enormous; however, the rapid pace of its expansion has caused stumbles along the way. Scandals have wracked the sector, as organizations struggle with inexperienced staff, competing standards, and underdeveloped regulations. In 2013, we will likely see charitable organizations continue to become more productive and efficient, aided in part by increased collaboration with international partners and the adoption of some international nonprofit standards in governance and transparency. Hong Kong, with its vibrant charity sector, offers many tangible best practices.

Toward this end, The Asia Foundation is launching the Mainland-Hong Kong Charity Platform later this month to allow key government and private sector stakeholders to strengthen the charitable sector through mutual learning via joint research, discussion, and cooperative projects. Such investments will be necessary over the long run, and despite inevitable challenges, the growth and development of China’s charitable sector will remain one of the most exciting trends in the coming years, as Chinese citizens are empowered to take on growing roles in providing vital public services and protecting poor and marginalized populations.

Emily Weaver is a program advisor for The Asia Foundation in China. She can be reached at eweaver@asiafound.org. The views and opinions expressed here are those of the individual author and not those of The Asia Foundation.