Noninterference goal fades among ASEAN members

Noninterference goal fades among ASEAN members

HONG KONG (Reuter): The first political victim of Asia's
economic crisis will be the region's rallying cry that countries
do not interfere in each other's affairs, the head of a regional
think tank said yesterday.

"I think this is far and away the most important regional
political implication of the turmoil," said Bob Broadfoot,
managing director of the Hong Kong-based Political and Economic
Risk Consultancy.

"All of Asia now recognizes that there are cross border
linkages that they were tending to ignore before," he told
Reuters.

Thailand pushed the entire region into economic turmoil with
its July 2 managed float of the baht after months of currency
speculation.

Currencies fell and rates soared throughout the region as the
spotlight fell upon current account deficits, rampant asset price
inflation, high foreign denominated debt exposure and
disappointing economic growth.

Although Thailand's situation was considered far worse than
elsewhere, its capacity to catapult the region into a prolonged
period of economic instability forced all Asian nations to
contemplate their interdependence, Broadfoot said.

This issue strikes at the foundation of the Association of
Southeast Asian Nations (ASEAN), whose members have prided
themselves on an ability to speak as one voice on matters of
common interest while respecting each other's national
independence.

But the Asian economic crisis was the second reminder of the
elusiveness of this goal in recent months, falling hard on the
heels of ASEAN's decision in July to delay Cambodia's entry
following a coup by Second Prime Minister Hun Sen, Broadfoot
said.

China's contribution of US$1 billion to the Thai bailout fund
was also significant given ASEAN's wariness of China's growing
regional influence, Broadfoot said.

"Asia needed a voice to position itself against this growing
political and economic clout of China," he said. "But now
governments of Asia putting into bailout funds can twist the arms
of other governments if they perceive domestic policies could get
so out of whack they threaten to have regional repercussions...
"When was the last time China coughed up US$1 billion for
anything?" he asked. "This is new. You now have governments that
are participating in a package to stabilize an economic situation
in another country -- and they're not doing it out of the
goodness of their heart."

Greater regional cooperation, probably through the
"politically correct" front of the International Monetary Fund,
was now more likely in a region characterized by the sort of
authoritarian governments and volatile politics that disrupted
Cambodia earlier this year, Broadfoot said.

"The most important thing to remember is, it always starts
with politics. And now what we have are the economic realities,"
he said. "Now we see very, very clearly that the mismanagement of
one economy, if allowed to go on, can have regional
implications."

The nine member nations of ASEAN are Brunei, Myanmar,
Indonesia, Laos, Malaysia, the Philippines, Singapore, Thailand
and Vietnam.