Introduction: ASEAN--Towards Economic Convergence.

AuthorRasiah, Rajah

1. ASEAN: Historical Background and Objectives

The Association of Southeast Asian Nations (ASEAN) was founded in Bangkok on 8 August 1967. It was originally designed as a political entity to establish cooperation among the free market economies of Indonesia, Malaysia, the Philippines, Singapore and Thailand to peacefully resolve several areas of tension among these countries at that time (1) and to combat the communist threat that was looming from Indo-China. North Vietnam had already fallen to communism, while the communist struggle for control of Cambodia, Laos and South Vietnam was ongoing. Although there were hints of communist revolutions in tbe original ASEAN countries, the fall of Cambodia, Laos and South Vietnam did not carry through to them, disproving the then famous "domino theory" that the communist contagion would absorb the other countries in Southeast Asia. Economic reforms in Communist China following the political ascent of Deng Xiaoping in 1978 was the surprise development that largely ended the threat of spreading communism in the region. Hence, apart from attempting to play a foreign policy role through cooperation among members, ASEAN efforts to strengthen cooperation to ward off political threats began to decline since the late 1970s. In fact, the communist economies reverted to introducing reforms to integrate with the global economy since the 1980s. Thus, Vietnam joined ASEAN on 28 July 1995; Lao PDR and Myanmar joined on 23 July 1997; and Cambodia joined on 30 April 1999.

The key agreement that defines the conduct of ASEAN members is contained in the Treaty of Amity and Cooperation in Southeast Asia (TAC) of 1976 (ASEAN 2018). Its key tenets include:

* Mutual respect for the independence, sovereignty, equality, territorial integrity, and national identity of all nations;

* The right of every state to lead its national existence free from external interference, subversion or coercion;

* Non-interference in the internal affairs of one another;

* Settlement of differences or disputes in a peaceful manner;

* Renunciation of the threat or use of force; and

* Effective cooperation among members.

The vacuum created by the fading political interests that resulted with the resolution of intra-ASEAN tensions and the end of the Vietnam War was replaced by a strong surge in economic cooperation. The initial focus was on joint, heavy-industry projects among members, including in the production of fertilizers and chemicals. The Declaration of ASEAN Concord signed in Bali, Indonesia on 24 February 1976, stipulated that member countries shall take cooperative action in their national and regional development programmes, utilizing as far as possible the resources available in the ASEAN region to broaden the complementarity of their respective economies (ASEAN 1983). This was then followed by the Basic Agreement on industrial joint ventures that was signed in Jakarta on 7 November 1983 by the founding members to collaborate for: acceleration of economic growth; promoting greater utilization of regional agriculture and industry; expansion of trade; and improving economic infrastructure for mutual benefit in the region. The most engaging instrument launched was the ASEAN Free Trade Area in 1992 through the implementation of the Common Effective Preferential Tariffs (CEPT) by all the members. Lastly, the ASEAN Industrial Cooperation Scheme (AICO) was launched in 1996, which was aimed at stimulating rapid industrialization in the region through collaboration between two or more members targeted at expanding trade and investment, and for improving the economic infrastructure for mutual benefit of their people (ASEAN 1996).

2. ASEAN, Economic Reforms and Globalization

The move to promote economic integration among members gained momentum when the individual national leaders recognized the traction ASEAN as a whole had received in the international arena. The initial concerns over the emergence of exploitative international economic relations were averted through the recognition that individual members were accorded total autonomy over: first, national sovereignty; and second, the extent and nature of engagement they chose to undertake. As the advantages of trade and investment relations became obvious, many of the least advanced countries within and outside ASEAN began introducing market-oriented reforms to spearhead economic development. Nevertheless, the counter arguments on the shortcomings of free trade were also potent as the dirigistes argued that selective interventions drove the rapid growth experience of Soum Korea, Singapore and Taiwan (see Amsden 1989; Wade 1990; Chang 2003; Reinert 2007; Amsden and Chu 2003). Kim (1997) and Rasiah (1995; 2018) further added that both incremental and radical innovations through a strong focus on adaptations and R&D were instrumental in supporting technological catch up and economic development of these countries. Moreover, dissatisfaction with globalization has taken on new dimensions since the early twenty-first century, with Stiglitz (2002) capturing some of the sources of this discontent. The threat of protectionism and the attacks on multilateralism in recent years are visible signals. ASEAN has, in a sense, shown the way to move forward--while it has kept its objective to promote free trade, it has done so in a concerted and collaborative way.

3. The Arguments...

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