Academic journal article Journal of Southeast Asian Economies

The Impact of the Economic Crisis on ASEAN: A Blessing in Disguise?

Academic journal article Journal of Southeast Asian Economies

The Impact of the Economic Crisis on ASEAN: A Blessing in Disguise?

Article excerpt

The topic of this forum asks the question: What is the impact of the financial and economic crisis on ASEAN?

When the crisis broke into public view, the answer was immediate. The "observers" and "analysts" perennially quoted in the media had their answer: Surely, the ASEAN countries will now retreat into their own nationalistic shells. They will build protectionist walls around them. They will pursue their own national interests. To each his own. Forget ASEAN solidarity. Forget ASEAN co-operation. The "observers" and "analysts", herd-like, concluded: Surely, at the very least, AFTA - the ASEAN Free Trade Area, scheduled for completion in 2003 - is dead.

Now, what is the factual answer, as opposed to gloomy speculation?

In fact, the real impact of this experience on ASEAN has been to pull the ASEAN countries more closely together. It has opened them more widely to one another. It has strengthened ASEAN solidarity. It has intensified ASEAN co-operation. It has hastened ASEAN integration. The result has been the opposite of the public expectation, the outcome contrary to the popular prognosis.

As the "observers" and "analysts" were predicting doom for ASEAN, ASEAN's leaders, meeting in Kuala Lumpur in December 1997, put forth their own vision for the association, their ASEAN Vision 2020. It was a vision of ASEAN "as a concert of Southeast Asian Nations, outward looking, living in peace, stability and prosperity, bonded together in partnership in dynamic development, in a community of caring societies" (italics mine).

Upon the suggestion of the Prime Minister of Vietnam, the leaders directed ASEAN's ministers and officials, committees, and other bodies to draw up programmes of action and specific measures to move ASEAN closer to the realization of ASEAN Vision 2020, the vision of an ASEAN working together in concert, partnership and community. The ASEAN members and sectoral committees and working groups have done exactly that, with the Secretariat in a co-ordinating role. On the basis of their work, the leaders, meeting in Hanoi last December, issued the Hanoi Plan of Action.

Spurring the Recovery

The Hanoi Plan of Action is a set of measures and actions that ASEAN would undertake, in co-operation and solidarity, to respond to the challenges of globalization. For the short term, it would spur ASEAN's economies to recover and seek to protect the poor from the ravages of the crisis. For the longer term, it would preserve the environment, lay the foundations for solid and equitable development, and get ASEAN's work better known in the world.

Some of this work, of course, had already begun even before the Hanoi summit. ASEAN's leaders, ministers and officials had been working out concrete ways to hasten and deepen ASEAN co-operation and integration, in consultation with the business sector and non-governmental organizations.

They took a look at the regional and global financial turmoil and its impact on the lives of the region's people and saw what had to be done. Factories and businesses had to run at full speed again. Investments had to be brought back in. More money had to be put in the hands of people so that they could improve their lives and buy more goods and services. Financial institutions and corporations had to be straightened out in order to foster efficiency and restore confidence in them. Monopolistic practices and favoritism had to be done away with, because the margin for the inefficiency and waste that they had brought about had [to be] considerably reduced. The business of lending and borrowing had to be made transparent and aboveboard. The international investing community had to be persuaded that Southeast Asia remained a good place in which to invest.

Meanwhile, people, particularly the poor, had to be cushioned from the impact of the crisis. They had to have food, medical care and housing. They had to be put back to work as soon as possible. …

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