Towards One Southeast Asia

Article excerpt

Embracing an "open-regionalism" approach to economic co-operation through the ASEAN Free Trade Area and other initiatives, ASEAN is now expanding membership ultimately to include all of Southeast Asia: Vietnam joined in 1995 and Laos and Myanmar in 1997. This ASEAN enlargement should create important advantages for ASEAN countries, not only because of the inherent economic complementarities between the acceding and existing members states, but also because of the positive implications for regional political stability and international affairs. Nevertheless, great efforts will be needed to integrate Laos and Myanmar into ASEAN. The role of scholars in helping provide information, analysis, and recommendations regarding ASEAN economic deepening and widening will continue to be important in addressing these issues.

It gives me great pleasure to contribute to this Special Anniversary Issue of the ASEAN Economic Bulletin in celebration of the Thirtieth Anniversary of ASEAN. I believe that the flexible and open exchange of ideas between academicians and professional economists on the one hand, and policy-makers on the other, is valuable for both sides. Policy-makers learn from economic theory and apply the lessons distilled from the work of academicians to real life problems. The complications thrown up by the real world, which policy-makers have to grapple with, in turn become the fodder that further sharpen economic theory.

This symbiosis between academicians and policy-makers has been apparent to us in ASEAN for quite some time now. The ASEAN countries have taken this lesson in comparative advantage to heart. We have been exceptional among developing countries embracing liberal trade policies. We have kept our markets relatively open and, as a result, our tradable sector has become a major source of growth in the past quarter of a century. The desirability of free trade is a policy lesson that is almost two hundred years old. The idea received its most forceful treatment in David Ricardo's classic theory of comparative advantage, which was in turn developed in response to a real life policy dilemma in nineteenth century England: the corn laws.

Another instance in which the work of academicians has proved invaluable to our work is in the area of regional integration. In 1992, ASEAN agreed to create a free trade area in the region. We have now advanced the timetable for the creation of the ASEAN Free Trade Area (AFTA) to the year 2003. Academicians, starting with Jacob Viner, have cautioned policy-makers that there are both welfare enhancing ("trade-creation") and welfare reducing ("trade-diversion") effects of regional trading arrangements (RTAs). Again we in ASEAN have taken this important caveat on

RTAs to heart and have consequently adopted the principle of "open regionalism" and have encouraged ASEAN countries to continue with their MFN liberalization on a unilateral basis.

The Challenges of ASEAN Enlargement

Now ASEAN is embarking on another important journey for which it will require the intellectual labours of the economics profession. ASEAN will soon realize its long cherished dream of bringing all Southeast Asian nations under one roof. Vietnam joined ASEAN in July 1995 as its seventh member. At the first informal summit of ASEAN leaders in Jakarta in November 1996, the leaders "reaffirmed their strong commitment to the speedy realization of an ASEAN comprising all ten Southeast Asian countries". Laos and Myanmar have already been admitted to ASEAN while Cambodia is bound to join in due course.

ASEAN's vision of uniting all ten Southeast Asian states was proclaimed nearly thirty years ago when ASEAN was established. The ASEAN Declaration signed in Bangkok on 8 August 1967 stated that " the Association is open for participation to all States in the Southeast Asian region subscribing to the aims, principles and purposes (of ASEAN)." Although it has taken ASEAN at least thirty years to realize its dream, the achievement is no less remarkable. …