ASEAN sees strength in unity

ASEAN sees strength in unity

By Robert Birsel

BANGKOK (Reuter): Leaders of disparate southeast Asian countries, divided by language, religion and culture, are pushing ahead with an ambitious plan to integrate their booming economies into one of the world's largest common markets.

Founded in 1967 as a pro-Western bloc in what was then a far- from-stable backwater, the Association of Southeast Asian Nations (ASEAN) today groups some of the world's most dynamic emerging economies.

The seven-member group includes Indonesia, the world's most populous Moslem country, the Philippines, Asia's only predominantly Christian country, and Buddhist Thailand.

The tiny oil-rich sultanate of Brunei, fast-growing, multi- ethnic Malaysia, and the prosperous island republic of Singapore are also members.

Last July communist Vietnam, ASEAN's bogey man for its first two decades of existence, became the seventh member.

ASEAN now has a combined population of some 420 million people and if all goes to plan, in the next few years it will grow to include Myanmar, Cambodia and Laos, and have a population of close to 500 million.

"Wider and deeper" has become ASEAN's rallying cry as leaders call for broader membership and deeper economic cooperation built on the foundation of their ASEAN Free Trade Area (AFTA).

"Our common objectives are clear, all the ASEAN countries have reaffirmed their determination to foster peace and prosperity for the peoples of southeast Asia," Thai Prime Minister Banharn Silpa-archa said in a closing address at the group's fifth summit meeting in Bangkok in December.

"ASEAN has already expanded to cover Vietnam and agreed in principle to expand to cover the other three by the year 2000," Somchai Phakaphasvivat, a respected economist and a professor at Bangkok's Thammasat University, told Reuters.

"We're now going far beyond AFTA which covers trade. We're moving towards the free flow of services and towards more investment cooperation," he said.

"We're also expanding from economic cooperation towards political cooperation as well as cooperation on social issues such as human resources," Somchai added.

At the Bangkok summit the seven leaders agreed in principle to accelerate the launching of the AFTA by slashing tariffs on a broad range of products to zero percent by the year 2003.

But the December meeting also gave a brief glimpse of the depth of potential divisions between the seven, in particular between the larger members who still have large, politically- sensitive agricultural sectors.

Indonesia stunned its colleagues by announcing it was refusing to lower tariff walls on 15 key farm products, casting a pall over the summit and illustrating the fundamentally competitive nature of their economies.

The row was patched up, for the time being at least, with the agreement in principle to cut tariffs on most items to zero percent by the year 2003, but with "flexibility" allowed in the implementation of the cuts.

ASEAN officials say there is likely to be some hard bargaining when it comes to nailing down just how flexible they are going to be in moving towards the removal of protection for sensitive farm products including rice.

"It's the nature of the economies in this region, they're not complementary," Chaiwat Khamchoo, chairman of international relations at Bangkok's Chulalongkorn University, told Reuters.

"On the surface the leaders make a display of unity but in practice they are very competitive with each other," he said.

"I didn't see much in concrete terms (emerge from the December summit) except the display of cooperative spirit. Many things were left open," he said.

But others see ASEAN's flexibility and willingness to compromise to accommodate all as one of its core strengths. "ASEAN is more flexible compared with the European Union and ASEAN has achieved more than promised because of its flexibility," Somchai said. "The dangers are lessened because we have more flexibility."

The seven did agree to open up service industries and an agreement on intellectual property cooperation, including the setting up of an ASEAN patent and trademark office, should spur the development of a high-technology sector in the region.

The leaders also endorsed a proposal by Singapore Prime Minister Goh Chok Tong to introduce cooperation between the group's central banks to withstand currency speculation through repurchase arrangements.

As well as some progress towards greater economic cooperation, the December summit saw the leaders of the seven ASEAN countries, as well as those of the group's three prospective members, signing a treaty turning the whole of southeast Asia into a nuclear weapons-free zone.

ASEAN officials said the nuclear weapons ban, dreamed about for decades, could finally be implemented because of the end of the Cold War and, among other things, the withdrawal of U.S. forces from bases in the Philippines.

But the end of the Cold War has given rise to new security concerns which ASEAN is keen to address.

In July 1993 the group set up the ASEAN Regional Forum (ARF) which is officially billed as a multilateral consultative forum aimed at promoting security in the Asia-Pacific region.

Among those who join ASEAN for the annual ARF meetings are China, Russia, the United States, Japan, the European Union, South Korea, Australia and Canada and New Zealand.

ASEAN officials are reluctant to single out China as the region's looming security worry but two ASEAN members, the Philippines and Vietnam, have potentially serious overlapping territorial claims with China in the South China Sea.

"With the gradual withdrawal of the U.S. from the region we're facing the challenge of a power vacuum," Somchai said.

"We're afraid either China or Japan will fill that vacuum. ASEAN needs a multilateral approach, a united front in political terms to face the vacuum," he said.