Negotiating Better Governance: Jurisdictional Arbitrage Within ASEAN

Abstract

The notion that business people should serve the national interests of their country of origin is widely held but also ahistorical, nowhere more so than in Southeast Asia. From the myriad ports of the archipelago, traders have always done business with the wider world and mingled with ‘foreigners’ from more far-flung places with other languages and religions. The internationalism of commerce was epitomized in the great entrepot of Malacca, whose role eventually passed to Singapore. The European powers seized territories that they consolidated into colonies: in due course these became nation-states in their own right with inherited colonial systems of law and administration and fairly arbitrary peoples and borders. These new nations were not foundational but overlays, albeit intrusive and disruptive. Quite apart from the natural rejection of colonial rule, the timing of independence in the 1940s and 1950s following upon the 1930s world depression and then Japanese occupation, meant that the new nations of Southeast Asia began with a defensive posture towards the world economy. The domestic market had to be protected against ‘foreign’ imports, exports were begrudged as a loss of resources, and foreign investment was a mode of neocolonialism. Even business itself was often seen as a morally dubious activity. All these views are now widely rejected as not just silly but actually harmful to economic prosperity. Nevertheless, the view that companies should remain loyal to their original national jurisdiction still holds popular sway. The ASEAN single market is a decisive step away from such navel-gazing but there is still residual prejudice that international business, even regional business, should be regarded with suspicion.