ASEAN seen forging closer security, economic ties

By Alastair McIndoe

MANILA (Dow Jones): Security issues and sustaining Asia's economic recovery are expected to dominate this week's gathering of leaders and ministers from the 10-member Association of Southeast Asian Nations (ASEAN) in Manila.

Tensions in East Timor and Indonesia's Aceh province, coupled with a territorial dispute over the Spratly Islands, a cluster of potentially oil-rich reefs in the South China Sea, mean security issues will likely have a commanding presence at a meeting normally given over to trade and economic issues.

In an early draft of a joint statement, ASEAN leaders, as well as the heads of state of Japan, China and South Korea, who will also attend the summit, recognize the need for closer political and security ties.

The draft also underlines the group's aim to intensify economic cooperation in East Asia, and work more closely in monetary and financial areas. A final version of the draft is to be endorsed by leaders on Nov. 28; it was prepared by the Philippines, which is chairing this year's summit.

ASEAN, formed in 1967 at the height of the Vietnam war, groups Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand and Vietnam.

On the economic front, ASEAN economies have recovered more strongly and faster than expected from Asia's 1997-1998 financial crisis. But some fear the still-shaky banking and corporate sectors in Indonesia, Thailand and Malaysia pose risks for the whole region, while some ASEAN countries may slacken the pace of reforms given the strength of their recoveries.

"ASEAN is trying to ensure that the reforms continue and that there is no repeat of 1997," ASEAN Secretary General Rodolfo Severino said recently. He insisted there was no sign of a slowing of reforms at the national level.

Japan, for one, appears keen to promote closer ties on economic issues. "Since the meeting is taking place against the backdrop of the changed economic situation in Asia, Prime Minister Keizo Obuchi will probably talk about enhancing the dialogue among the ASEAN Plus Three," said Japanese Foreign Ministry spokesman Sadaaki Numata.

For the first time, ASEAN finance ministers will meet ahead of the leaders' summit on Nov. 28 to discuss regional developments, and specifically the latest report of an ASEAN surveillance group formed last year to spot fault lines appearing in the bloc and prevent future crises.

In the draft communique, the leaders agree to "enhance regional monetary and financial cooperation, including the regulatory and supervisory areas".

On economic cooperation, the statement envisages "strengthening efforts in accelerating trade and investment". The draft is thin on detail.

ASEAN's Severino noted the bloc's agenda of liberalizing trade and investment by dismantling tariffs and other protectionist measures has been accelerated to create an ASEAN Free Trade Area. The six early members of ASEAN plan to reduce tariffs to 5 percent or less by 2002, while its poorest members, such as Myanmar and Laos, have until 2008.

Severino said ASEAN supports a new round of global trade talks under the World Trade Organization (WTO), but that industrialized countries are paying insufficient attention to the concerns of developing ones. "The summit should give further momentum to this issue," he said.

Indeed, resistance is growing in some ASEAN countries against further tariff liberalization while the region is still trying to recover from the financial crisis.

Akitaka Saiki, spokesman to Obuchi, said Japan wants East Asia as a bloc to take an active role at ministerial WTO talks which will open in Seattle next month, and this idea would be raised in Manila.

"Japan has to assume a certain amount of responsibility as a leader of this economic region," Saiki said.

The draft offers little insight into how ASEAN as a forum will get to grips with a number of security issues. It envisages "continuing dialogue and cooperation, including addressing transnational issues, to strengthen regional peace and stability".

ASEAN wasn't prominent in the international peacekeeping effort to end the crisis in East Timor, and has firmly opposed developing the group as a military bloc.

But the meeting will be the first ASEAN gathering since East Timor gained its autonomy and the issue of the territory's membership may well be raised.

Meanwhile, other regional disputes continue to brew. A row between Thailand and Myanmar resulted in Yangon closing its boarder with Thailand after gunman seized the Myanmar embassy in Bangkok last month. ASEAN, say some observers, may be asked to take a hand in settling the dispute.

The dispute over the Spratlys, involving territorial claims by China, Philippines, Taiwan, Vietnam, Malaysia and Brunei, continues to simmer -- and occasionally boil. This month, Beijing argued with Manila when a Philippine navy vessel ran aground in the disputed area after responding to a distress signal from local fisherman.

Beyond a vague pledge to strengthen political and security ties, ASEAN leaders are unlikely to grasp the nettle of what one senior ASEAN official terms "preventative diplomacy" to help diffuse such potential flashpoints. "Some countries are more cautious than others on this issue," the official said.

Before the ASEAN Plus Three leaders' summit on Nov. 28, ASEAN finance, economy, trade and foreign ministers will hold various meetings between Nov. 25 and Nov. 27.