Global economy, terrorist attacks dictate ASEAN meeting agenda

Global economy, terrorist attacks dictate ASEAN meeting agenda

Bernice Han, Agence France-Presse, Singapore

The Association of Southeast Asian Nations (ASEAN), set up to accelerate regional growth, is having its agenda dictated by events beyond its control as leaders of the 10-nation grouping prepare for their annual summit.

But handled correctly, the twin impacts of an anaemic global economy and the U.S.-led fight against terrorism, can be turned to ASEAN's advantage and enhance the drive for regional free trade, analysts said.

There is no room to revert to protectionist policies at next week's summit in the Brunei capital of Bandar Seri Begawan, they said.

"The ASEAN leaders are expected to address immediate concerns to Southeast Asia such as the twin challenges posed by the global economic downturn and the international fight against terrorism," Brunei's foreign ministry said.

"In dealing with these concerns, the ASEAN leaders are expected to discuss a wide range of topics such as responding to longer term challenges, accelerating regional integration and bridging the development gap."

Critics have written off ASEAN as a "sunset organization", saying it failed to respond adequately to the Asian financial crisis in 1997 and would be tested again by the new economic slump.

ASEAN Secretary General Rodolfo Severino said the grouping must turn global events to its advantage -- using them as a prop to further tear down tariff walls as regional economies bear the brunt of the global slowdown.

"Of course, it has become more urgent because of the developments in the United States," he told AFP.

"We need to do more like eliminating tariffs altogether because what we would like to do is to integrate the ASEAN economies. That is the only way we can compete."

Although many ASEAN economies are either in recession or on the brink of one, Severino said there was no turning back from tariff reduction.

"It's totally illogical to turn protectionist at this point," he said.

The ASEAN Free Trade Area (AFTA) covering the group's six original members -- Malaysia, Thailand, Indonesia, Brunei, the Philippines and Singapore -- is on track for implementation in 2003.

"AFTA is just about done," said Severino.

Newer entries Laos, Cambodia, Myanmar and Vietnam will join between 2006 and 2010.

But with the two groups at different stages of economic development and with varying political systems, they have different perspectives of the risks and benefits of economic liberalization and the free market.

From the former group, Malaysia also has reservations about a no-holds-barred free trade pact.

Analysts, however, said that with regional economies floundering against the backdrop of the campaign against terrorism, they have to push for increased intra-regional economic cooperation at the first summit since Sept. 11.

"Regional economic integration ... that is the key. The process has to be strengthened further," Pradumna Rana, manager of the Asian Development Bank's (ADB) regional economic monitoring, told AFP.

"The 911 (Sept. 11) accident has brought in additional uncertainty. We need lots of these regional efforts."

A senior ASEAN diplomat, who asked not to be named, said any discussions on trade and economic issues would be linked to the terror attacks in New York and Washington "and how the region can cope."

The ADB's Rana said the progress of economic restructuring, an issue that has faded since the region's recovery from the 1997-98 crisis, should also be on the agenda.

"It's still incomplete and that should be carried on," he said.

The painful reforms are crucial in preparing ASEAN economies for the long haul once the U.S. economy starts moving again, said Rana.

The ambitious proposal for a ASEAN-China free trade agreement, first mooted a year ago and aimed at a market of 1.7 billion consumers, will be further discussed in Brunei with added emphasis now that the world's most populous nation is listed to enter the World Trade Organisation on Dec. 10.

But, Severino stressed: "The United States cannot be replaced as a major market for ASEAN."