ASEAN 9789812307514

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ASEAN

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The Institute of Southeast Asian Studies (ISEAS) was established as an autonomous organization in 1968. It is a regional centre dedicated to the study of socio-political, security and economic trends and developments in Southeast Asia and its wider geostrategic and economic environment. The Institute’s research programmes are the Regional Economic Studies (RES, including ASEAN and APEC), Regional Strategic and Political Studies (RSPS), and Regional Social and Cultural Studies (RSCS). ISEAS Publications, an established academic press, has issued more than 1,000 books and journals. It is the largest scholarly publisher of research about Southeast Asia from within the region. ISEAS Publications works with many other academic and trade publishers and distributors to disseminate important research and analyses from and about Southeast Asia to the rest of the world. The Southeast Asia Background Series is a major component of the Public Outreach objective of ISEAS in promoting a better awareness among the general public about trends and developments in Southeast Asia. The books published in the Southeast Asia Background Series are made possible by a generous grant from the K.S. Sandhu Memorial Fund.

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Southeast Asia Background Series No. I 0

ASEAN

Rodolfo C. Severino

I5ER5

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INSTITUTE OF SOUTHEAST ASIAN STUDIES Singapore

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First published in Singapore in 2008 by ISEAS Publications Institute of Southeast Asian Studies 30 Heng Mui Keng Terrace, Pasir Panjang Singapore 119614 E-mail: [email protected]

• Website: bookshop.iseas.edu.sg

All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, without the prior permission of the Institute of Southeast Asian Studies. © 2008 Institute of Southeast Asian Studies, Singapore The responsibility for facts and opinions in this publication rests exclusively with the author and his interpretations do not necessarily reflect the views or the policy of the publisher or its supporters. ISEAS Library Cataloguing-in-Publication Data Severino, Rodolfo C. ASEAN. (Southeast Asia Background Series) 1. ASEAN. 2. Regionalism—Southeast Asia. 3. Regionalism (International organization) I. Title JZ5333.5 A9S491 2008 ISBN 978-981-230-750-7 (hardcover) Typeset by International Typesetters Pte Ltd Printed in Singapore by Seng Lee Press Pte Ltd

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Contents About the Author

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Beginnings and Expansion

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ASEAN and Regional Security

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ASEAN and the Regional Economy

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Working Together for the Common Good

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Relations with the Rest of the World

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Building a Community

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References

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About the Author Rodolfo C. Severino is a Visiting Senior Research Fellow at the Institute of Southeast Asian Studies, where he completed the book Southeast Asia in Search of an ASEAN Community. Published by ISEAS, the book is animated by the insights gained by the author when he was ASEAN Secretary-General in 1998– 2002 and from his years as ASEAN Senior Official for the Philippines. His last position in the Philippine Government was that of Undersecretary of Foreign Affairs, 1992–97. He had been Philippine Ambassador to Malaysia, among other assignments in the Philippine Foreign Service, which included postings in Washington, D. C., and Beijing. He is a graduate of the Ateneo de Manila University and of the Johns Hopkins University School of Advanced International Studies.

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Chapter 1

Beginnings and Expansion On 8 August 1967, five men representing five Southeast Asian countries signed in the Thai capital of Bangkok a declaration establishing a new regional association — the Association of Southeast Asian Nations. The five men were Adam Malik, Presidium Minister for Political Affairs and Minister for Foreign Affairs of Indonesia; Tun Abdul Razak, Deputy Prime Minister, Minister for Defence and Minister for National Development of Malaysia; Narciso Ramos, Secretary of Foreign Affairs of the Philippines; S. Rajaratnam, Minister for Foreign Affairs of Singapore; and Thanat Khoman, Minister for Foreign Affairs of Thailand. The document that they signed, entitled the ASEAN Declaration and thereafter also known as the Bangkok Declaration, had five preambular and five operative paragraphs. It pledged their governments to seven “aims and purposes”: • • • •

Economic growth, social progress and cultural development; Regional peace and stability; Economic, social, cultural, technical, scientific and administrative collaboration; Mutual assistance in training and research;

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Collaboration in agriculture and industry, trade, transportation and communications, and the improvement of living standards; Promotion of Southeast Asian studies; and Cooperation with regional and international organizations.

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Underlying these objectives was the common determination of the five countries to live in peace with one another, to settle their disputes peacefully rather than by force, and to cooperate with one another for common purposes. Proclaiming itself in the Bangkok Declaration to be “open for participation to all States in the South-East Asian Region subscribing to (its) aims, principles and purposes”, the new association was the first to seek to bring all of Southeast Asia — the area between the South Asian sub-continent in the west and the Pacific Ocean in the east and between China, Japan and Korea in the north and Australia in the south — into one inter-governmental organization. To be sure, there were existing regional inter-state organizations in Southeast Asia. One was the MAPHILINDO of Malaysia, the Philippines and Indonesia. The other was the Association of Southeast Asia (ASA) among Malaysia, the Philippines and Thailand. However, these were narrow in purpose and limited in base and scope. MAPHILINDO consisted of the three Malaybased populations of Southeast Asia and sought to subsume their conflicting territorial claims and ideological differences. ASA confined itself to economic and cultural purposes and excluded the largest country in the region, Indonesia, and the states of mainland Southeast Asia other than Thailand. Both had rather short lives. MAPHILINDO lasted only from 1963 until ASEAN superseded it in 1967. ASA existed formally from 1961 to 1967, closing down shortly after ASEAN was formed.

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On the other hand, ASEAN imposed no limits on its ambitions and goals as a regional entity and set for itself a comprehensive array of objectives for regional cooperation. As noted above, ASEAN explicitly pronounced itself open to membership to all Southeast Asian nations. Indeed, the ministers of ASEAN’s founding nations had sought the inclusion of Burma and Cambodia as original members. However, both countries turned down the invitations, being anxious to preserve their status as resolutely non-aligned nations and were suspicious of the orientation of the new association in the Cold War, which was then at its height. Subsequently, after the unification of Vietnam and the consolidation of Laos under a new regime in 1975, ASEAN reached out to the Indochinese states, a process cut short by the Vietnamese entry into Cambodia towards the end of 1978. After the settlement of the Cambodian conflict in 1991–93, ASEAN did so again. By 1999, ASEAN had embraced all of Southeast Asia (until the emergence in 2002 of the new nation of Timor-Leste, which has expressed its desire to join ASEAN eventually). Despite periodic predictions of its demise, not only has ASEAN remained alive for more than 40 years; it has constantly adjusted to changing times — albeit not sufficiently, according to its critics — and has served as the hub and manager of a growing number of broad regional enterprises. The major powers, as well as the United Nations and its agencies, have, in a continuing process, sought to broaden and deepen their association with it.

UNPROMISING CIRCUMSTANCES ASEAN was born in the most unpromising circumstances. To begin with, the founding nations were marked by great diversity. The people of Indonesia were overwhelmingly Muslim

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in religion but blessed with a wide variety of cultural traits. Malaysia was made up of the Malay sultanates and the Strait Settlements (Singapore having broken off in 1965) on the Malay Peninsula and Sabah and Sarawak across the South China Sea. It was politically controlled by Malay Muslims but economically dominated by Chinese Malaysians. Thailand was predominantly Theravada Buddhist, and the Philippines Christian. Singapore was a multi-ethnic society built on racial and religious tolerance and equilibrium. The Philippines, Singapore and Thailand had significant Muslim minorities. Not least, ethnic and religious groups straddled national boundaries. The ebb and flow of migrants and traders throughout maritime Southeast Asia had been interrupted by colonial rule — the British in Malaysia and Singapore, the Dutch in Indonesia, and the Spanish and then the Americans in the Philippines. Only Thailand escaped Western colonial rule (but not Western pressure) by dint of astute Thai diplomacy and the unresolved stalemate between the British and the French on mainland Southeast Asia. Their different colonial legacies had drawn curtains of ignorance and separation between the nations of Southeast Asia, cut off thitherto flourishing contacts among their peoples, and established new patterns of trade. Those legacies brought forth a variety of national experiences and produced upon independence a diversity of national institutions. They also shaped divergent strategic outlooks. Malaysia and Singapore had joined Australia, New Zealand and the United Kingdom in the Five-Power Defence Arrangement. The Philippines was formally allied with the United States. Thailand had a defence commitment from the U.S. Indonesia remained non-aligned. From colonial rule and the subsequent formation of new states had emerged a number of territorial and other political disputes among the maritime states of Southeast Asia

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— between Malaysia and Indonesia, between Malaysia and Singapore, between Malaysia and the Philippines. Indonesia had just abandoned its policy of “confrontation” against Malaysia and Singapore. Malaysia and Singapore had undergone an acrimonious separation. The Philippines continued to lay claim to the North Borneo territory that had joined Malaysia as the state of Sabah. In the broader region of Southeast Asia, the Vietnam conflict was raging, dragging in Cambodia and Laos, threatening Thailand, and upsetting the stability of the region as a whole. Feeling besieged by the Soviet Union in the north and the United States in the south, China was explicitly hostile to the Southeast Asian states, including post-Sukarno Indonesia, and to the alliances that most of them had with the West. The excesses of the Great Proletarian Cultural Revolution in China had spilled over to its south, exacerbating the mutual hostility between China and ASEAN’s founding nations, which, moreover, felt threatened by communist insurgencies and subversion. The Cold War was at peak intensity. It was in these unpromising circumstances that ASEAN was born. Paradoxically enough, it was also these circumstances that impelled the founding states, in their wisdom, to establish ASEAN. They did so in order to be able to manage their disputes amicably and prevent them from developing into conflict. It was to transcend their ethnic, cultural and religious differences in the pursuit of their common interests. It was to bridge the gaps of ignorance and alienation between them. It was to dissipate the mutual suspicions among them. It was also to keep Southeast Asia from being an arena for the quarrels of the strong. At the same time, there was hope — vague at the time — that regional cooperation, as well as regional stability, would help in advancing national development.

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ASEAN was to be the venue and process in which common interests would be identified and pursued in cooperative ways. One interest was in the peaceful management of disputes and problems between Southeast Asian countries. This was to be ensured by developing networks of leaders, ministers and officials and a culture and habits of consultation and dialogue. Another interest was in insulating the region, to the extent possible, from the conflicts and tensions of the Cold War. At the same time, ASEAN was to engage the major powers in benign and constructive ways in the affairs of the region — first in its economic development and, eventually, in consultations and dialogue on regional security and stability. Another interest was in healing the divisions of Southeast Asia when global and regional conditions permitted it. Another was the mutual reassurance that no member-state would interfere in another’s domestic affairs, such as, for example, by exploiting ethnic, racial and religious divisions and other problems within its neighbours in order to advance its own national agenda. Another would be in the cooperative development of the regional economy. Underlying all this would be the cultivation of national and personal stakes among the states and peoples of Southeast Asia in regional cooperation and consensus.

THE FIRST SUMMIT After nine years of feeling their way in regional cooperation and building relationships, ASEAN’s founding states took a major step forward by holding its first summit meeting in Bali in February 1976. At that first summit, the ASEAN leaders — Soeharto of Indonesia, Hussein Onn of Malaysia, Ferdinand Marcos of the Philippines, Lee Kuan Yew of Singapore, and Kukrit Pramoj of Thailand — codified the regional norms for

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inter-state relations in the region. As laid down in the Treaty of Amity and Cooperation in Southeast Asia, these norms were: • • • • • •

Respect for the independence, sovereignty, equality, territorial integrity and national identity of all nations; Freedom from external interference, subversion or coercion; Non-interference in the internal affairs of one another; The peaceful settlement of disputes; Renunciation of the threat or use of force; and Effective cooperation among themselves.

Fourteen nations outside ASEAN have subsequently acceded to the treaty. The summit also established a rudimentary central secretariat and formalized the ministerial forum for economic cooperation.

HEALING THE DIVIDE From the beginning, ASEAN’s founding nations envisioned all of Southeast Asia within the association, the region’s Cold-War and Vietnam-War divisions healed. Accordingly, ASEAN reached out to a unified Vietnam and a consolidated Laos after the Indochina conflict had come to an end. However, this process was interrupted when Vietnam invaded Cambodia and, at the beginning of 1979, seized Phnom Penh. Although the purpose of the action was to overthrow the genocidal Khmer Rouge regime in Cambodia and to end its depredations against the Vietnamese communities in the Vietnam-Cambodia border areas, ASEAN resisted it, feeling threatened by a perceived Vietnamese expansionism and concerned over the possible spread of Soviet power, the Soviet Union being perceived as Vietnam’s principal supporter.

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Meanwhile, Brunei Darussalam had joined ASEAN on 7 January 1984, six days after achieving independent nationhood. After the withdrawal of Vietnamese forces from Cambodia in 1989, the 1991 Paris settlement of the Cambodian problem, and the establishment of an elected Cambodian government in 1993, the way was clear for the membership of Vietnam, Laos and Cambodia, as well as of Myanmar (as Burma had been in the meantime renamed). The only conditions were that the prospective members were to adhere to ASEAN’s “aims, principles and purposes” and that they would accede to all ASEAN agreements. Thus, after a brief period as observer, Vietnam was admitted into ASEAN on 28 July 1995. Laos and Myanmar followed on 23 July 1997. Cambodia was to have been admitted on the same occasion. However, factional fighting within the Cambodian government earlier in July delayed its ASEAN membership. Following the agreed redistribution of political power in Phnom Penh, Cambodia finally gained admission into ASEAN on 30 April 1999. With that, all of Southeast Asia had come into the ASEAN family, closing the divisions between ASEAN and non-ASEAN and between maritime and mainland Southeast Asia. This has since been regarded as a major contribution to regional peace and stability. Regional peace and stability, the calculation goes, would be better served by a Southeast Asia together within ASEAN than by a region split into ASEAN and non-ASEAN. To be sure, the entry of four new members increased both ASEAN’s political, economic, cultural and historical diversity and the complexity of ASEAN’s decision-making processes. Moreover, all four were making transitions, each in its own way, from centrally planned to market economies and were suffering

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from shortages of human skills and institutional weaknesses. Yet, this diversity and the new members’ needs had made it all the more necessary to bring the entirety of Southeast Asia into ASEAN, with all countries in Southeast Asia taking part in the regional consensus, having a stake in regional peace, stability and solidarity, and benefiting from regional economic and social cooperation.

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Chapter 2

ASEAN and Regional Security Of the ASEAN Declaration’s seven “aims and purposes”, only one refers to regional peace and security. The rest have to do with economic, social, cultural, training, technical and scientific cooperation, and the promotion of Southeast Asian studies. The downplaying of political and security matters was deliberate. ASEAN’s founders wished to avoid the impression that the new association would serve as a defence pact or military alliance or that it would favour one side or the other in the Cold War. They did not want ASEAN to be perceived as a threat to anyone or to continue being an arena — actual or potential — for the quarrels of the strong. Yet, it is clear that, from the beginning, ASEAN’s larger purposes had to do mainly with regional peace and security — although, emphatically, solely through the use of non-military means. In The ASEAN Reader (K. S. Sandhu et al, compilers, Singapore: Institute of Southeast Asian Studies, 1992), Thanat Khoman, who, as Thailand’s foreign minister, was one of the signatories to the Declaration that established ASEAN, looked back to the association’s founding and wrote: But why did this region need an organization for cooperation? 11

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The reasons were numerous. The most important of them was the fact that, with the withdrawal of the colonial powers, there would have been a power vacuum which could have attracted outsiders to step in for political gains. As the colonial masters had discouraged any form of intraregional contact, the idea of neighbors working together in a joint effort was thus to be encouraged. Secondly, as many of us knew from experience, especially with the Southeast Asia Treaty Organization or SEATO, co-operation among disparate members located in distant lands could be ineffective. We had therefore to strive to build co-operation among those who lived close to one another and shared common interests. Thirdly, the need to join forces became imperative for the Southeast Asian countries in order to be heard and to be effective. This was the truth that we sadly had to learn. The motivation for our efforts to band together was thus to strengthen our position and protect ourselves against Big Power rivalry.

In the first place, ASEAN was conceived to ensure that the many disputes between Southeast Asian countries would be resolved by peaceful means. This, in turn, would create the environment for the development of the nations in the area. The change of regime in Indonesia in the mid-1960s, from Sukarno to Soeharto, had led to a sharp break with the policies of the past — to the end of economic neglect at home and the abandonment of “confrontation” abroad. ASEAN would lock in Indonesia’s new policies of accommodation and cooperation with Jakarta’s neighbours. The Southeast Asian countries would have such deep stakes in ASEAN that they would not allow their disputes, like the Philippines’ claim to Sabah, to erupt into violent conflict. They rejected outside attempts to interfere in their affairs, as some former colonial powers had tried to do in

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the early years of the Southeast Asian countries’ independence and as China was perceived as doing. Nevertheless, it was made clear that the association and its members were open to constructive relations with the rest of the world; indeed, they would actively seek the engagement of countries important to them. At the same time, ASEAN members gave mutual reassurance that they would not interfere in one another’s internal affairs or threaten or use force against one another. They committed themselves to the peaceful management and settlement of disputes between them. Not least, they made it clear that the association was open to membership of all countries in Southeast Asia, signifying their commitment to reconciliation and eventual solidarity among them all. Addressing a seminar on ASEAN in Jakarta in August 1996, Ali Alatas, Indonesia’s long-time foreign minister, declared: (I)t was undeniably the convergence in political outlook among the five original members, their shared convictions on national priority objectives and on how best to serve these objectives in the evolving strategic environment in East Asia, which impelled them to form ASEAN.

THE ZONE OF PEACE, FREEDOM AND NEUTRALITY In November 1971, ASEAN had issued a declaration proclaiming Southeast Asia as “a Zone of Peace, Freedom and Neutrality, free from any form or manner of interference by outside Powers”. With the Cold War having ended, the reference to “neutrality” in the ZOPFAN Declaration may seem outdated and irrelevant today. However, it continues to be valid if it is regarded as a commitment by ASEAN to seek friendship with all and to be hostile to none, a commitment that has since

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characterized ASEAN’s stance towards the rest of the world, even as it continues to reject “interference by outside Powers” in its affairs.

THE SOUTHEAST ASIA NUCLEAR WEAPONS-FREE ZONE An “essential component” of ZOPFAN has been the treaty on the Southeast Asia Nuclear Weapon-Free Zone (SEANWFZ). In that treaty, the regional states reassure one another that they will not “develop, manufacture or otherwise acquire, possess or have control over nuclear weapons; station or transport nuclear weapons by any means; or test or use nuclear weapons” in the region. They also undertake not to allow any other state to do any of those things except for the matter of transport, an exception that was a concession to those with military or ship-servicing arrangements with nuclearweapon states, specifically the United States. Through the treaty, the Southeast Asian states seek to prevent the introduction of nuclear arms into the region. Signed by the leaders of Southeast Asia in 1995 and having entered into force in March 1997, the SEANWFZ treaty is ASEAN’s contribution to the global nuclear non-proliferation regime. It is one of several such nuclear weapons-free zones in the world, the others being in Antarctica, Latin America and the Caribbean, the South Pacific, and Africa. ASEAN is currently negotiating with four of the five recognized nuclear-weapon states — France, Russia, the United Kingdom and the United States — the terms of the protocol through which those states would respect the provisions of the SEANWFZ treaty. China has expressed its readiness to sign the protocol.

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In the face of looming energy shortages and rising energy costs, heightened consideration is now being given to nuclear power as a source of electricity in the future. Indications of this are media reports about plans by Indonesia, Malaysia, Thailand and Vietnam to harness nuclear energy for the generation of electricity. In this light, beyond abjuring nuclear weapons ASEAN must pay attention to the possible diversion of enriched uranium or plutonium to military purposes, the safety of nuclear facilities, and the disposal of nuclear waste. ASEAN would also do well to look beyond nuclear weaponry to other weapons of mass destruction, specifically, biological and chemical arms.

TREATY OF AMITY AND COOPERATION On 24 February 1976, the Presidents or Prime Ministers of the then-five ASEAN countries signed the Treaty of Amity and Cooperation in Southeast Asia. In the treaty, ASEAN laid down its norms for inter-state relations: • • • • • •

Respect for the independence, sovereignty, equality, territorial integrity and national identity of all nations; Freedom from external interference, subversion or coercion; Non-interference in the internal affairs of one another; The peaceful settlement of disputes; Renunciation of the threat or use of force; and Effective cooperation among themselves.

Each party pledged to refrain from participating “in any activity which shall constitute a threat to the political and economic stability, sovereignty, or territorial integrity” of another.

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The ASEAN countries’ adherence to these norms, together with the network of personal relationships that ASEAN has fostered, has helped to stabilize the relations among them and reduce the possibility of violent conflict between any two of them. The treaty also provides for a ministerial-level High Council that would “take cognizance of the existence of disputes or situations likely to disturb regional peace and harmony” should the parties directly concerned be unable to resolve a dispute through negotiations. If necessary, the High Council would “recommend appropriate measures for the prevention of a deterioration of the dispute or the situation”. Thus, contrary to the belief of many, the High Council is not a dispute-settlement mechanism in the sense of having the authority to issue binding decisions. Even this limited role of the High Council has not been activated, with ASEAN countries preferring to submit their legal disputes to the International Court of Justice in The Hague or to the International Tribunal for the Law of the Sea in Hamburg. Indeed, ASEAN apparently did not expect the High Council to be used soon after its establishment, as the ASEAN foreign ministers did not adopt its rules of procedure until July 2001. However, the very existence and availability of the High Council, as well as ASEAN countries’ willingness to submit their legal disputes to international adjudication, underscore ASEAN’s commitment to the peaceful settlement of disputes. Brunei Darussalam acceded to the treaty in June 1987. In December of that year, the treaty was amended to allow accession by non-regional states. A non-regional party to the treaty can participate in the High Council only if it is “directly involved in the dispute to be settled through the regional processes”.

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Subsequently, Southeast Asian countries seeking admission into ASEAN first acceded to the treaty, just as they had to sign on to other, mostly economic, ASEAN agreements. Papua New Guinea, an observer in ASEAN, signed the treaty in 1989 as a non-regional state. More recently, after ASEAN adopted the High Council’s rules of procedure in 2001, other non-regional states acceded to it: China and India in October 2003, Japan and Pakistan in July 2004, the Republic of Korea and Russia in November 2004, Mongolia and New Zealand in July 2005, Australia in December 2005, and Timor-Leste in January 2007. With President Jacques Chirac having personally signed the instrument, France completed the formalities of her accession in the January 2007 ceremony at which the Timor-Leste foreign minister signed his country’s instrument of accession. Accession was particularly critical for Australia, which had been reluctant to join the treaty. However, Canberra had to sign on after ASEAN made accession to the treaty one of three requirements for participation in the East Asia Summit, convened for the first time in December 2005. Sri Lanka and Bangladesh acceded to the treaty in August 2007. Thus, an ever-widening circle of countries has been adopting ASEAN’s norms for inter-state relations both as an expression of policy and as a way of linking themselves more closely to ASEAN. The European Union has apparently decided to seek accession to the treaty as a group. The United Kingdom has indicated its intention to accede to the treaty. Despite some misgivings, the United States is reported to be considering doing so. The norms for inter-state relations codified in the Treaty of Amity and Cooperation have served as ASEAN’s guiding principles in the political and security sphere. Not only have ASEAN countries refrained from the use or threat of force

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against one another, they have also stood together in upholding those norms with respect to the actions of others within the region.

SOLIDARITY ON THE CAMBODIAN PROBLEM ASEAN gained international prominence when it led the diplomatic resistance to Vietnam’s incursion into Cambodia in the late 1970s and its subsequent occupation of that country for almost all of the 1980s. Although the Vietnamese action overthrew the murderous Khmer Rouge and sent them fleeing out of Phnom Penh and other heavily populated areas of the country, ASEAN, flexing the diplomatic muscle of its political solidarity, opposed it on the ground that changing another country’s regime by force was unacceptable. The strategic consideration underpinning the application of this ASEAN principle was the notion that Vietnam’s westward military move threatened Thailand and the region’s power balance. There was also the perception that Vietnam’s advance would enlarge the influence of the Soviet Union, Vietnam’s principal backer at the time, and thus upset the regional balance. In this, ASEAN had the support of China, the United States, Japan, most of Western Europe, and the majority at the United Nations General Assembly, where ASEAN led the campaign to keep Cambodia’s UN seat for the Coalition Government of Democratic Kampuchea, the resistance coalition against the Vietnamese-installed regime in Phnom Penh. At the same time, ASEAN led the search for a political settlement of the Cambodian problem, which involved the participation of all the contending factions in Cambodia and eventually of the five permanent members of the UN Security Council. A settlement was finally arrived at in 1991 through a series of conferences

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in Paris following ASEAN-brokered and Indonesia-led meetings among the Cambodian parties.

THE ASYLUM SEEKERS A problem arising from the turmoil in Indochina was that of the “asylum-seekers”, the hundreds of thousands of Vietamese who, by sea or on land, fled Vietnam after its reunification in 1975 or were forced out by the authorities there. A similar exodus took place of Cambodians escaping from the atrocities of the Khmer Rouge and, on a smaller scale, of tribal minorities who had fought on the American side in Laos. The massive numbers of refugees fleeing across land boundaries to the border areas of Thailand, as well as China, or landing in rickety vessels on the shores of Malaysia, Indonesia, the Philippines and Singapore, as well as Hong Kong, were looked upon by those countries and by ASEAN as a security problem. The arrival of enormous numbers of refugees disrupted the lives of communities in which they landed, even as international aid often raised the living standards of the asylumseekers above those of the indigenous population, thus creating social tensions. The need to support the arrivals placed a heavy strain on the resources of the reluctant ASEAN hosts. In some cases, the influx of refugees — many of those from Vietnam were ethnic Chinese — threatened the delicate racial balance of the affected communities. It also raised the possibility of government agents being infiltrated among the arrivals. At the same time, there was the concern over possible actions taken by the arrivals against the governments of the countries that they had fled. The whole issue further strained relations between Vietnam and ASEAN countries.

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Acting in solidarity, ASEAN took a common position on the refugee problem. While the countries of first asylum tolerated the temporary stay of the refugees, they insisted on two things. One was that the developed countries should take in qualified refugees for permanent settlement. The other was that the countries of origin should agree to take back the rest. Meanwhile, the international community — that is, the developed countries and the UN — should shoulder the bulk of the burden of supporting the refugees in the firstasylum camps. Eventually, ASEAN was to call for the expansion and acceleration of the Orderly Departure Programme, in which Vietnam, the resettlement countries and the UN High Commissioner for Refugees had agreed, in 1979, to enable Vietnamese who wanted to do so to emigrate in orderly fashion, without having to undergo the hardships and dangers of escape. In the end, what resolved the refugee problem were the stabilization of the domestic situations in Vietnam and Laos and the settlement of the Cambodian issue. Malaysia, the Philippines and Thailand, as well as, above all, China, voluntarily agreed to accept varying numbers of asylum-seekers for permanent settlement.

THE SOUTH CHINA SEA ASEAN also brought regional solidarity to bear in dealing with China on the complex situation in the South China Sea. (The Chinese do not call the area the South China Sea, but the South Sea, while the Vietnamese refer to it as the Eastern Sea.) For years, China had refused to talk about the South China Sea with ASEAN as a group or in any other multilateral forum, preferring to hold discussions with individual Southeast Asian claimants. In 1992, ASEAN, under the Philippines’ chairmanship, issued

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the Manila Declaration on the South China Sea calling for the peaceful resolution of jurisdictional issues, the exercise of selfrestraint in the area, and cooperation on a range of common maritime problems. The Chinese declined ASEAN’s invitation to sign the declaration. However, although only four ASEAN countries had jurisdictional claims to parts of the South China Sea — indeed, those claims were in conflict among themselves — ASEAN, acting in solidarity, eventually got China to deal with the problem in an ASEAN-China context. ASEAN solidarity on the issue had been given expression and impetus when the other ASEAN governments provided strong backing for the Philippines after the latter discovered, in February 1995, Chinese installations on Mischief Reef, a submerged feature just a little over one hundred kilometers from the Philippine archipelago. The stealthy Chinese move was regarded as threatening to regional stability as well as to Philippine security. Ultimately, the multilateral process that subsequently developed brought forth the Declaration on the Conduct of Parties in the South China Sea. Signed by the ASEAN and Chinese foreign ministers on the day of the ASEAN-China summit meeting in Phnom Penh in December 2002, the declaration committed the parties to the peaceful settlement of disputes in the area, to freedom of navigation and overflight there, to “self-restraint” and refraining from “inhabiting” unoccupied land features, and to building mutual confidence through certain specific measures. The parties also pledged to cooperate in environmental protection, scientific research, safety of navigation and communication, search and rescue, and the fight against transnational crime in the South China Sea. The ASEAN countries, together and individually, have been working with China on implementing the declaration. The

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conclusion of the declaration, made possible both by ASEAN’s collective persistence and China’s eventual flexibility, has calmed the situation in the South China Sea, a major step in preserving the peace and stability of the region. Nevertheless, because the jurisdictional issues remain unresolved, the maritime area semi-enclosed by Chinese and Southeast Asian territory continues to be a potential source of contention, albeit less so than in the recent past.

THE QUESTION OF NON-INTERFERENCE A measure of regional stability is fostered by the ASEAN countries’ adherence to the universal principle of mutual non-interference in the domestic affairs of nations. Contrary to the impression given by much media commentary, the principle is neither the invention nor the monopoly of ASEAN; rather, it dates back at least to the emergence of the concept of the sovereignty of nations, commonly attributed to the Peace of Westphalia of 1648, which put an end to both the Thirty Years’ War and the Eighty Years’ War and upheld the European nations’ sovereignty and freedom from the Holy Roman Empire. Without the principle of noninterference in the internal affairs of nations, the entire inter-state system would collapse. Catastrophic wars have resulted from attempts by states to interfere in the affairs of others. In the case of Southeast Asia, the particularly tenacious emphasis on state sovereignty arises from the regional states’ recent experience with colonialism and with attempts by the former colonial powers to hold sway over them even after their independence. Most felt threatened by the spasms of China’s Great Proletarian Cultural Revolution, with Chinainspired riots and strident rhetoric. They saw the Chinese hand

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in the communist insurgencies and subversion that they had to struggle against. Southeast Asia’s attachment to the principle of non-interference also stems fundamentally from the great diversity among and within the nations of Southeast Asia, from which arises the need for them to reassure one another that none would exploit that diversity for national purposes. The absence of such mutual reassurance would tend to destabilize the region, if not threaten the security of the nations in it. Nevertheless, the definition of interference and the application of the principle have to adjust to changing times. The global economy has become much more integrated than it has ever been since before the outbreak of World War I and has involved a much larger expanse of the world. What happens in one economy often affects others, if not the global economy as a whole. The spread of information in all fields of human endeavour has accelerated to the degree of being largely instantaneous, enabling people in one spot on earth to know immediately the details of what happens elsewhere. Human contacts, no longer limited by geography, have expanded and intensified as a result of revolutionary advances in transportation and information and communications technology, leading to the convergence — or the collision — of cultures and values. In East Asia, the experience of the 1997–98 financial crisis hammered home the recognition of how interlinked the national economies had become. ASEAN, subsequently joined by China, Japan and Korea, launched a process for the review and surveillance of national economies, as well as the regional economy, and began to explore mechanisms for the coordination of exchange rates, with their implications for national monetary policy. These entail a certain measure

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of intrusion in the domestic economies of nations, but they could not be construed as interference. The disastrous effects of the burning of forests and peat land in Indonesia on neighbouring countries opened the subject of Indonesia’s environmental and development policies to regional discussion — with Jakarta’s participation. ASEAN’s Regional Haze Action Plan and the 2002 ASEAN Agreement on Transboundary Haze Pollution, which Indonesia signed but, as of 2007, has not yet ratified, commit Jakarta to avoid acts in its territory that would cause harm beyond its national jurisdiction. ASEAN’s ultimately successful cooperative response to the 2003 SARS crisis entailed actions at the national level, regionally agreed upon, to stem the spread of the disease. In February 1986, the ASEAN foreign ministers issued a statement expressing ASEAN’s concern about the political turmoil in the Philippines and calling for its peaceful resolution. For several years now, ASEAN has been raising the domestic situation in Myanmar with the Myanmar authorities, calling, among other things, for the release of leaders of the National League for Democracy from detention and a faster “transition to democracy”. In September 2007, ASEAN used unusually strong language in declaring itself “appalled” by reports of Myanmar security forces employing automatic firearms against demonstrators and in conveying their “revulsion” to Myanmar officials. They “demanded that the Myanmar government immediately desist from the use of violence against demonstrators”. At the same time, ASEAN has expressed its opposition to political and economic sanctions on Myanmar, not because of its adherence to some “doctrine” but because of geo-strategic considerations and the counterproductive nature of such sanctions.

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ENGAGING THE POWERS ASEAN has sought to foster regional security and stability not by closing itself off to the world in a Fortress ASEAN but, on the contrary, by seeking the engagement of the major powers with Southeast Asia. ASEAN’s first initiative in this regard was the establishment of the system of Dialogue Partnerships. Starting cautiously with what was then called the European Economic Community in 1972 (a partnership formalized in 1977), ASEAN built the Dialogue system, engaging Japan in 1973, Australia in 1974, New Zealand in 1975, and Canada and the United States in 1977. Although they were initially driven by economic motives, the Dialogue Partnerships have had a significant political and security dimension. ASEAN leaders have cited the Dialogue system as a manifestation of the international community’s regard for ASEAN’s political and strategic importance and its viability as a regional institution. It is because of this, as well as for economic reasons, that a growing number of countries have sought Dialogue Partnerships with ASEAN. China, India and Russia became Dialogue Partners in 1996. The ASEAN foreign ministers’ annual “post-ministerial conferences” with their Dialogue Partners had turned from a preoccupation with economic concerns to political issues, especially after Vietnam’s incursion into Cambodia and with the growing problem of the asylum-seekers arising out of Vietnam’s reunification, the Khmer Rouge’s reign of terror, and the Cambodian conflict. By 1992, Vietnam had been stabilized, the Cambodian problem had been settled, China’s political and economic reforms were taking hold, and the Cold War had ended. With a new configuration of power emerging in East Asia and in the world at large, the January 1992 ASEAN

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Summit directed that the Post-Ministerial Conferences be used for the intensification of political and security dialogues among ASEAN and its Dialogue Partners. When the officials of those countries met the next year in Singapore to consider this mandate, it became immediately clear that regional peace and security could not be usefully discussed without the participation of China, Russia and Vietnam. It was subsequently agreed that a new, expanded forum should be set up, to be named the ASEAN Regional Forum (ARF) and to include not only China and Russia, but also the ASEAN observers at the time — Papua New Guinea, Vietnam and Laos. Since its initial ministerial meeting in Bangkok in 1994, the ARF has expanded to include Cambodia and Myanmar when they became ASEAN observers in 1995 and 1996, respectively; India, when it was admitted as an ASEAN Dialogue Partner in 1996; Mongolia in 1999; North Korea in 2000; Pakistan in 2004; Timor-Leste in 2005; and Bangladesh and Sri Lanka in 2007. The centrepiece of the ARF is the meeting of foreign ministers, which is held on the occasion of the annual ASEAN Ministerial Meeting and deals with outstanding regional security issues and with the nature and processes of the forum. National security, defence, military and intelligence officials also attend it. The ARF senior officials meet earlier in the year to prepare for the ministerial meeting and discuss substantive issues on their own. Unfortunately, public attention is drawn to the ARF only on the occasion of the annual ministerial meetings, because of the presence on those occasions of personalities who are attractive to the media. However, many activities take place throughout the year under ARF auspices that serve to build mutual confidence, develop useful networks, promote the capacity to cooperate on common problems, and foster mutual

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learning. The areas in which such activities are conducted have included search and rescue, disaster relief, the detection and removal of landmines, the prevention of the diversion of nuclear materials for weapons purposes, transnational crime, terrorism, maritime security, and small arms and light weapons. Senior defence officials have met with increasing frequency, and defence colleges have formed their own network. Since 1994, the ARF has served as the only Asia-Pacificwide forum in which powers great and small discuss regional security issues in a comprehensive manner — a fact of no small importance. For example, at the 2 August 2007 ARF ministerial meeting, if its Chairman’s Statement is to be an indication, discussions took place on the nuclear situation on the Korean peninsula, Myanmar, Timor-Leste, Thailand, the South China Sea, the Israel-Palestine conflict, Iran’s nuclear activities, Iraq and Afghanistan, arms-trafficking, the Nuclear Non-proliferation Treaty, terrorism, and maritime security. The discussions clarify national positions; on certain issues, they lead to regional consensus. They encourage cooperation in a growing number of practical areas. Through such discussions and cooperative activities, mutual confidence is built. The ARF process — the ministerial and senior-official security discussions and the security-related cooperative activities — provides a valuable venue for protagonists in contentious issues to meet informally in those many instances in which quiet diplomacy, rather than formal, public gatherings, is called for. Yet, media commentators often deride the ARF as an ineffectual “talk shop” that has little impact on important security issues. This is largely because the forum has not been directly involved in dealing substantively with the prominent,

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media-attractive security “flashpoints” in East Asia — North Korea, Taiwan and the South China Sea — although it must be said that the ARF does provide a platform for clarifying national positions on these issues. The nuclear problem in North Korea is being dealt with in the Six-Party Talks, which seem to be making progress. China considers Taiwan to be its internal affair and refuses to discuss it in a multilateral setting. ASEAN and China are working out the issues related to the South China Sea by themselves. While a larger forum like the ARF would be too broad to be able to sort out these complex problems in practical ways, the ARF might usefully continue to discuss them. The year after its inaugural ministerial meeting, the ARF adopted a “concept paper” that laid down three stages for the forum’s development. The first would be the building of mutual confidence. The second would be “preventive diplomacy”, that is, preventing conflict through diplomatic means. The third would have been “Development of Conflict-Resolution Mechanisms” but was watered down to “elaboration of approaches to conflicts”. The ARF has of late been struggling to find ways of moving the forum from confidence building alone to preventive diplomacy. The steps agreed upon so far have been limited to devising institutional mechanisms. A small ARF Unit has been set up in the ASEAN Secretariat. A register of “experts and eminent persons” has been put together, with the experts and eminent persons having met twice, in 2006 and 2007. The terms of reference for the “Friends of the Chair” have been approved. The Inter-sessional Support Group (ISG) on Confidence Building Measures, pursuant to a decision by the ministers in July 2005, has been expanded and renamed the ISG on Confidence Building Measures and Preventive

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Diplomacy. Seminars have been held and studies produced on the subject. However, the ARF has been unable to develop effective mechanisms or adopt a mandate for itself or for the chair, by himself or with the help of the Friends of the Chair, to undertake actual preventive diplomacy, that is, to seek by diplomatic means to prevent specific disputes from turning into violent conflict. One problem is that some ARF participants are wary of preventive diplomacy being used by other ARF participants as a pretext for interfering in their internal affairs. China, for one, rejects any possibility that, in the name of preventive diplomacy, the ARF would intervene in the Taiwan situation or that ARF participants outside of ASEAN and China would get involved in the South China Sea disputes. The question, then, in the face of these positions, is what potential conflict the ARF would seek to prevent from happening as it moves into the preventive-diplomacy phase. The answer that more and more ARF participants are embracing is that preventive diplomacy by the ARF would be most effective and useful if applied to non-military threats, to what many refer to as “non-traditional” security issues, which all ARF participants can regard as common threats. These might include natural or man-made disasters, transboundary environmental pollution, energy security, issues arising from the civilian use of nuclear power, international terrorism, drug-trafficking and other transnational crime, and communicable diseases. These issues would be susceptible to treatment and cooperation in a broad multilateral setting. However, some observers point out that applying preventive diplomacy mainly to “non-traditional”, that is, non-military, threats would divert the ARF from its original purpose. In any case, it must be borne in mind that confidence building, which is the ARF’s main function at this time, is itself

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a means of conflict prevention. This is why it is generally agreed that the confidence-building and preventive-diplomacy phases have to proceed simultaneously and in tandem. It is commonly acknowledged that, under present circumstances and for the foreseeable future, there is no alternative to the ARF, the only Asia-Pacific-wide forum dealing with regional security at a high political level. As such, it is entirely unprecedented. Nor is there any alternative to ASEAN leadership of the ARF forum and process. Leadership by any of the non-ASEAN ARF participants would be unacceptable to others. Accordingly, ASEAN has always insisted on being in the “driver’s seat” of the ARF, as well as of the PMC, process. Not only do the ARF ministerial meetings take place on the occasion of the annual ASEAN Ministerial Meeting; they are also presided over by the ASEAN chair. The other participants have accepted this arrangement as the most practical alternative. However, ARF participants are increasingly frustrated by the ARF’s lack of direction even as a discussion forum. Indeed, some fear that the ARF is being marginalized or at least publicly overshadowed by other security forums that have emerged in the region. Among these are the Shanghai Cooperation Organization of China, Russia and four Central Asian republics. The SCO has been undertaking joint military exercises. Another is the Shangri-la Dialogue, a largely public forum of Asia-Pacific defence ministers and others involved in security policy making. It convenes annually in the Shangri-la Hotel in Singapore under the sponsorship of the United Kingdom’s International Institute for Strategic Studies and Singapore’s Rajaratnam School of International Studies. In addition, there is talk of converting the Six-Party Talks on the nuclear problem on the Korean Peninsula into a permanent security forum for Northeast Asia,

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something, however, on which no firm consensus has been arrived at among the six parties. Several things could be done to invigorate the ARF and make it more effective. As noted above, one way is favoured by a number of ARF participants, and that is for the ARF to go into the preventive-diplomacy phase but apply it to the so-called “non-traditional” security threats. The ministerial meetings should focus on only one or two subjects with a view to deeper and more thorough discussions and, if possible, specific outcomes and collective decisions. This would mean that ASEAN, as chair and “driver” of the ARF process, has to do a better job of agenda setting and, in general, of intellectual leadership of the forum. Here, the ASEAN Secretariat, with a strengthened ARF Unit, could help the ARF chair and its “friends” develop, with clarity and depth, the agenda for each ministerial meeting. The chair should then seek to keep the discussions within the bounds of the agenda instead of allowing it to sprawl in all directions. It would also help if the occasion of the annual ARF ministerial meeting could provide a public platform for the foreign ministers most substantially concerned with the subject or subjects of the year to discuss his or her country’s views and positions for the benefit of the media and the public. Hitherto, ARF discussions have been conducted behind closed doors. It would improve public understanding of the security issues of the day and raise public awareness of the ARF itself if some of those discussions were brought out into the open. There have also been suggestions for the periodic holding of ARF summit meetings. ASEAN has given special importance and focus to its engagement with its neighbours in Northeast Asia — China, Japan and South Korea — through the ASEAN Plus Three

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process. ASEAN Plus Three derives its value most prominently from the economic and financial cooperation that animates it — the concrete projects and the high-profile initiatives like free trade areas, economic partnership agreements, and financial arrangements. However, its significance arises no less from its political and strategic value. The ASEAN Plus Three process, launched with its first summit meeting in 1997, links Northeast Asia to Southeast Asia ever more closely. ASEAN’s norms of non-resort to force and non-interference in internal affairs have gained at least formal adherence throughout East Asia. Not least, the ASEAN Plus Three forum has provided an additional venue for China, Japan and Korea, at several levels, to discuss and sort out their often-troubled relations among themselves. As India has risen in strategic as well as economic importance, ASEAN has drawn New Delhi’s political engagement, an engagement that India itself, for strategic as well as economic reasons, has sought not only with ASEAN but also with East Asia as a whole. To be sure, India has been building direct political and economic bridges to China and Japan, but both India and ASEAN also have a deep interest in India’s participation in the regional arrangements of which ASEAN is the hub — the Dialogues, the ARF, the stand-alone ASEAN-India Summit, and now the East Asia Summit (EAS), which gathers the ASEAN leaders together with those of Australia, China, India, Japan, Korea, and New Zealand. The most recent of the regional forums, the EAS has been convened three times — on the occasions of the ASEAN Summits in Kuala Lumpur in December 2005, Cebu, the Philippines, in January 2007, and Singapore in November 2007. The first meeting was concerned with a possible avian influenza pandemic, and the second was on energy security. The Singapore

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EAS emphasized “Energy, Environment, Climate Change and Sustainable Development”. In all cases, the EAS served as a venue for top-level discussions on broad strategic political and economic issues. Thus, the EAS involves important actors in an ASEAN-centred circle that is larger than ASEAN Plus Three but smaller than the ARF or APEC. It gives the regional process a certain balance — not in the sense of containing or offsetting China, as some regard it in oversimplified fashion, but by way of broadening the regional consensus.

THE CHANGING FACE OF SECURITY A regime of inter-state peace and relative stability has settled on Southeast Asia. This can be attributed to a number of factors, including the transformation of the region’s strategic configuration after the settlement of the Indochina conflicts, the end of the Cold War and the growing economic integration of East Asia. Not least is the existence of ASEAN itself. Thus, security threats to Southeast Asian nations from the policies and actions of states have greatly diminished. However, threats to their security and stability remain, but in other forms. Current security threats come in the shape of transnational problems that endanger the people of two or more countries or the region as a whole. These are mainly transnational crime, international terrorism, environmental degradation, and communicable diseases. All these are susceptible to — indeed, require — regional cooperation. The ASEAN ministers dealing with transnational crime first met in December 1997. The ASEAN Ministerial Meeting on Transnational Crime and its senior-officials counterpart have since then become regular ASEAN forums encompassing such bodies as the ASEAN Senior Officials on Drugs and officials

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dealing with immigration, certain aspects of customs, consular matters, and domestic security. The ASEAN Senior Officials on Drugs is one of the oldest ASEAN platforms for regional cooperation in dealing with regional problems. It focuses on prevention and rehabilitation, education and public awareness, and law enforcement. There is also an association of ASEAN police forces called ASEANAPOL, which, however, is outside the formal ASEAN framework. These bodies share information, intelligence and databases and otherwise cooperate at the operational level. In November 2004, the ASEAN Ministers of Justice or Law or Attorneys General signed a Treaty on Mutual Legal Assistance in Criminal Matters. Some acts of terrorism in Southeast Asia have been motivated by domestic political or social grievances and aspirations. Others are inspired and driven by causes that transcend national boundaries or ethnic divisions and receive support from like-minded cohorts from outside the country. The latter kind, the international kind of terrorism, can be dealt with only through international cooperation. At the regional level, ASEAN countries have cooperated in combating international terrorism, by themselves or with others. As early as 1997, the ASEAN ministers dealing with transnational crime designated terrorism as one of the crimes on which they would cooperate. After the 11 September 2001 attacks on the United States and the subsequent terrorist acts or threats in some other places, including a number of ASEAN countries, ASEAN stepped up its anti-terrorist cooperation. Operational collaboration among law-enforcement agencies in the ASEAN countries involved has resulted in numerous arrests of actual or would-be terrorists and the foiling of terrorist plots. Some of these efforts have received the support of other countries, notably Australia and the United States. The ASEAN

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Regional Forum has organized workshops to improve AsiaPacific cooperation in specific components of counter-terrorism — terrorist financing, border security, transport security, the movement of goods and people, document security and identity fraud, and the management of the consequences of terrorist attacks. Indonesia, Malaysia and Singapore cooperate on maritime security in the Straits of Malacca, dealing not only with piracy but also with potential maritime terrorism. Counter-terrorism cooperation on the ground receives ASEAN-wide political backing in the form of declarations and statements from leaders and ministers repeatedly condemning terrorism and calling for closer collaboration to counter it, even as they urge that terrorism not be identified with any religion, sect, culture or nationality. ASEAN has issued joint statements with Australia, China, the European Union, India, Japan, New Zealand, Pakistan, and the United States, statements that express in no uncertain terms the revulsion of ASEAN and its partners towards terrorism and provide a political mandate for close cooperation between them in combating it. At their summit in January 2007, the ASEAN leaders signed the ASEAN Convention on Counter Terrorism. This convention does a number of things. It adopts the definition of terrorism in any of the 13 listed anti-terrorism conventions and treaties of the United Nations. It clarifies the national jurisdiction over terrorist crimes. It specifies the areas in which ASEAN is to cooperate in combating terrorism. Not least, it mandates measures to ensure the fair treatment of persons detained on grounds of terrorism. The worsening degradation of the environment in Southeast Asia constitutes a growing threat to human security. So do dangers arising from communicable diseases. Catastrophes

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commonly referred to as “natural disasters” arise from within individual countries and normally affect the people living in them. However, regional solidarity and good neighbourliness call for assistance from fellow-ASEAN members in relief, reconstruction and rehabilitation, the prevention of disasters where possible, and the mitigation of their impact. These will be dealt with in Chapter 4.

THE ASEAN SECURITY COMMUNITY ASEAN has made explicit the coherence of its efforts in the pursuit of the association’s political and security purposes. It has done so through the concept of the ASEAN Security Community, which constitutes one of the three components of the envisioned ASEAN Community, the other two being the ASEAN Economic Community and the ASEAN Socio-Cultural Community. In a very real sense, ASEAN is already a security community. It has developed networks for peaceful contact and habits of cooperation, which have made recourse to inter-state violence all but unthinkable. It has evolved informal processes for regional problems to be worked out in non-violent ways. It has provided a regional context within which peaceful negotiations on bilateral disputes are conducted. Because of ASEAN, the divisions of Southeast Asia have been healed much faster than they could otherwise have been. ASEAN has laid down norms for inter-state relations in the region, which constitute a mutual reassurance of peaceful intentions. Not only has its members adhered to these norms; ASEAN has gotten important nonregional states to accede to them. ASEAN members have moved in solidarity on such issues as the Cambodian problem, the asylum-seekers, international terrorism, and the South China

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Sea. They have proclaimed the region as off limits to nuclear weapons. More broadly, through a number of forums and processes, ASEAN has engaged the major outside powers with interests in Southeast Asian affairs and of strategic importance to the region. Nevertheless, ASEAN has found it necessary to define the nature of the ASEAN Security Community that it is seeking to build and strengthen, chart the course of security cooperation in Southeast Asia, and agree on specific measures to advance it further. The Declaration of ASEAN Concord II, which the ASEAN leaders issued in Bali in October 2003, reaffirmed the ASEAN countries’ common interest in regional security and in the peaceful settlement of “intra-regional differences”, even as it again made clear that ASEAN had no intention of setting up “a defence pact, (a) military alliance or a joint foreign policy”. The ASEAN countries reiterated their resolve to be free from “outside interference in their internal affairs”. The declaration characterized the ASEAN Security Community as “open and outward looking” and the ASEAN Regional Forum as the “main forum for regional security dialogue”. The Vientiane Action Programme (VAP) of November 2004 prescribed specific measures for carrying out the Declaration of ASEAN Concord II. After laying down the “goals and strategies” for pursuing the ASEAN Community, the VAP listed the measures to be undertaken. In the case of the ASEAN Security Community, some of the measures, in fact, had already been or were being carried out when the VAP was signed. Nonregional states had been acceding to the Treaty of Amity and Cooperation in Southeast Asia — China and India in 2003, Japan and Pakistan in July 2004, and the Republic of Korea and Russia in November 2004. Consultations were being

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undertaken on the protocol under which the nuclear-weapon states would respect the provisions of the treaty on the Southeast Asia Nuclear Weapon-Free Zone. Exchanges between military officials had been going on, albeit on an informal basis. Consultations and projects were being carried out to implement the Declaration on the Conduct of Parties in the South China Sea. Existing human rights mechanisms in ASEAN had been in contact with one another. On the very day when the VAP was signed in Vientiane, ASEAN ministers and officials were in Kuala Lumpur concluding the Treaty on Mutual Legal Assistance in Criminal Matters. Since the VAP was issued, some other measures prescribed in it have been carried out. More countries have acceded to the Treaty of Amity and Cooperation — Mongolia, New Zealand, Australia, France, Timor-Leste, Bangladesh and Sri Lanka. As the VAP called for, the ASEAN Declaration on the Protection and Promotion of the Rights of Migrant Workers and the ASEAN Convention on Counter Terrorism were signed at the ASEAN Summit in Cebu in January 2007. The ASEAN Charter envisioned in the VAP was signed at the November 2007 Summit in Singapore. The work programme on combating transnational crime has been revised, as the VAP also urged. The ASEAN Defence Ministers convened their inaugural formal meeting in May 2006, subsequent to the suggestion in the VAP. Other measures in the VAP have not been carried out, such as the promotion of education on and public awareness of human rights and the publication of an annual regional security outlook. Needless to say, these two commitments have to entail more than lip-service and be invested with seriousness and substance. There are other measures that may have to be strengthened or added. One of them might be the declaration of Southeast Asia as a zone free from chemical and biological

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weapons in the same vein as the Nuclear Weapon-Free Zone. Another might be the exchange not only of more substantive strategic outlooks but also of energy policies and strategies. Norms for the domestic behaviour of states could be more trenchant and commitments to uphold them more firm. In any event, ASEAN can be said to be already a security community insofar as inter-state relations are concerned. It can now build on this and broaden it, as envisioned by its own leaders and as called for by the times.

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Chapter 3

ASEAN and the Regional Economy Although ASEAN was founded primarily for political and security purposes, the ASEAN Declaration of 8 August 1967 placed “Economic growth, social progress and cultural development” at the top of the new association’s seven “aims and purposes”, which also included: • • •

“Economic, social, cultural, technical, scientific and administrative collaboration; “Mutual assistance in training and research; “Collaboration in agriculture and industry, trade, transportation and communications, and the improvement of living standards.”

There were three reasons for this public emphasis on the economic dimension of the new association. One was to dispel any notion that ASEAN would be some kind of defence arrangement, as Beijing and Moscow would charge and as Hanoi suspected. Another was publicly to underscore the member-states’ strong commitment to economic development. The third was to persuade Southeast Asia’s people that the improvement of their lives was uppermost in their governments’ minds. 41

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True to their word, the year after ASEAN’s founding, the ASEAN foreign ministers agreed to set up permanent committees on food, civil aviation, communications, air traffic services and meteorology, and shipping. These were areas that clearly called for and required regional cooperation. The next year, 1969, the foreign ministers created more permanent committees, those on finance, commerce and industry, tourism, and transportation and communications. They also approved no less than 99 project recommendations pertaining to commerce and industry, tourism, shipping, civil aviation, air traffic services and meteorology, transportation and communications, finance and food, as well as mass media and cultural activities. By the fourth ASEAN Ministerial Meeting, in 1971, the recommended projects had increased to 121. The ministers signed a multilateral agreement on non-scheduled air services. The next year, the number of projects had grown to 215, of which 48 were reported to have been implemented. At this time, a United Nations team had completed its study on ASEAN economic cooperation. Significantly, in opening the 1972 ASEAN Ministerial Meeting, Singapore’s Prime Minister Lee Kuan Yew, according to the joint communiqué of that meeting, pointed out that “ASEAN did not for the present aim at integrating a regional economy”. The watchword then was economic cooperation rather than integration, a term that ASEAN at the time was meticulously avoiding. Nevertheless, as early as 1974, the foreign ministers were able to refer to the “good progress” made in “liberalizing trade in selected food products”, partly foreshadowing the attempt 30 years later to integrate ASEAN economically by product groups. The primacy of political and security considerations in ASEAN’s early years was reflected in the fact that the ASEAN Economic Ministers forum was not formally established until

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the first ASEAN Summit in 1976. Until then, the foreign ministers had been in almost complete control of the ASEAN process, including making decisions on economic matters as well as formally concluding economic agreements. At their first summit, in Bali in February 1976, the ASEAN leaders were quite specific in their mandate for the economic ministers: they were to meet in Kuala Lumpur the next month, in March, to consider measures to implement the top-level decisions on economic cooperation. The leaders even prescribed the inaugural meeting’s agenda: • • • •

Giving priority to ASEAN member-countries in the supply of food and energy products in “critical circumstances”; Cooperation in the production of basic commodities, particularly of food and energy; The establishment of “large-scale” industrial projects; Preferential trading arrangements for basic commodities, especially food and energy, and the products of the ASEAN industrial projects.

Of course, the economic ministers themselves had recommended these details. The year before, Indonesia’s Minister for Economic, Financial and Industrial Affairs, Widjojo Nitisastro, and Minister for Trade, Radius Prawiro had gone around ASEAN to solicit support for an ASEAN economic ministers’ forum. In November 1975, the economic ministers met informally in Indonesia to iron out the economic contents of the Declaration of ASEAN Concord that was to be issued in Bali three months later. At that time, ASEAN attention to economic matters was gaining urgency in the light of the energy crisis of 1972–73, the Philippines and Thailand being large-scale importers of energy, and the continuing vulnerability to food (meaning mainly rice) shortages of Indonesia and, sporadically, the Philippines.

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THE EARLY STAGE OF ECONOMIC COOPERATION In 1975, the ASEAN foreign ministers had called on the permanent committees to give priority to “selective trade liberalization and industrial complementation”. These largely took the form, respectively, of the Preferential Trading Arrangements and the ASEAN Industrial Projects (AIP). Under the AIP scheme, the ASEAN states sought to allocate large-scale industrial projects among themselves. Each of them was to contribute to the equity of each project. The projects’ products were to be protected from competition and guaranteed a monopoly of the regional market. Initially, urea fertilizer was allocated to Indonesia and Malaysia, superphosphates to the Philippines, diesel engines to Singapore and soda ash to Thailand. Ultimately, only the urea plants in Aceh, Indonesia, and Bintulu, Malaysia, have survived. The other proposals were plagued by several changes in projects, clashes of national interests, and Singapore’s antagonism to state-directed industrial policies and to uncompetitive economic practices. More fundamentally, the system collapsed as it collided with the region’s shift from import-substitution, autarkic policies to export-oriented, marketopening economic strategies. ASEAN sought to liberalize intra-ASEAN trade through the Preferential Trading Arrangements (PTA). Agreed upon in 1977, the PTA envisioned granting “margins of preference” to intra-ASEAN trade in food and energy, the products of the ASEAN Industrial Projects, and negotiated lists of other goods. Although the lists progressively lengthened and the margin of preference became larger, the PTA failed substantially to free up and increase intra-ASEAN trade. Tariffs were not brought down to absolute levels but were merely accorded margins of preference. This meant that, since tariffs were cut by a certain

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percentage, those that had been high to begin with remained relatively high. It also meant that the ASEAN countries had different tariff rates on trade among themselves. Moreover, the preferences were applied to negotiated lists of products rather than across the board. This led to the spectacle of ASEAN states, in the protectionist spirit of the times, offering concessions on many products that they did not import.

THE ROAD TO ECONOMIC INTEGRATION As ASEAN entered the decade of the 1990s, it was becoming clear that it not only had to engage in economic cooperation or go through the motions of trade liberalization; it had to integrate the regional economy to a substantial extent if it was to remain competitive in the global marketplace. The World Trade Organization was emerging from the old General Agreement on Tariffs and Trade. The Europeans were creating the European Union as the next step in Europe’s integration. The North Americans were concluding their free trade agreement, and in the southern cone of South America a common market was being established. Reforms in China and, later, in India were energising those economies, presenting ASEAN with formidable competition for markets and investments. In Southeast Asia, the realities of globalization and regionalization were making the notion of regional economic integration no longer taboo in ASEAN circles. Indeed, the decision was made, formally in 1992, to bring about the ASEAN Free Trade Area (AFTA). The scheme would help tone up ASEAN industries for global competition, attract investments into the region, and enable ASEAN to remain a significant actor in the world economy. Regional economic integration would also require domestic reforms that would move the regional eco-

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nomies faster on the road from protectionism to freer markets. AFTA, through the Common Effective Preferential Tariff scheme, committed ASEAN countries to bringing down tariffs on intra-ASEAN trade across the board to 0 to 5 per cent, with limited exceptions, within 15 years. ASEAN was to advance this deadline twice, partly in response to the financial crisis, and eventually aim for zero tariffs. AFTA also called for the elimination of quantitative restrictions and other non-tariff barriers to intra-ASEAN trade. In 1996, the ASEAN Industrial Cooperation scheme (AICO) was set up. In it, companies with production in two or more ASEAN countries could trade their products at the AFTA tariff end-rate, currently at zero (with some exceptions). Recognizing that market integration required more than tariff cutting, ASEAN subsequently agreed on other measures to integrate the regional market, measures pertaining to customs, product standards, transportation, trade in services, and tourism. The effectiveness of free trade areas like AFTA and of other preferential trading arrangements vitally depends on the ability — and willingness — of national customs authorities to administer them correctly and honestly. Thus, in 1997, ASEAN concluded an agreement that basically formalized the code of conduct that the regions’ customs authorities had agreed upon in 1983. ASEAN has adopted the GATT Customs Valuation Agreement and the ASEAN Harmonized Tariff Nomenclatures in order to arrive at a certain level of consistency in the application of customs regulations. To expedite customs processing, ASEAN has set up the Green Lane, through which imports from ASEAN exclusively pass, and the Single Window, which is intended to have import documents cleared at one station. It has adopted

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the post-clearance audit system, under which shipments can be cleared immediately and inspected later. Goods cannot be marketed freely within a regional market unless they are subject to the same standards and specifications. In 1997, ASEAN designated 20 products for standardization, mostly electronic and electrical equipment. Two years later, it adopted common safety standards for such equipment. ASEAN concluded a framework agreement on mutual recognition arrangements under which products traded within ASEAN do not have to undergo tests or other conformity assessments in both the importing and the exporting countries. With a progressively larger portion of the ASEAN economy being made up of services, the intra-regional liberalization of the market for services is vital for the integration of the regional economy as a whole. Many services sectors are also directly supportive of the production of and trade in goods. The quality and effectiveness of certain services are often a factor in investment decisions. In December 1995, ASEAN concluded the ASEAN Framework Agreement on Services, which was meant to remove most restrictions on intra-regional trade in services, liberalizing such trade beyond the commitments made under the global General Agreement on Trade in Services. Since then, ASEAN has concluded five packages of commitments involving business services, construction, distribution, education, environmental services, health care, maritime transport, telecommunications and tourism. In addition, two packages have been worked out for financial services and two for air transport. Mutual recognition arrangements (MRAs) have been adopted for engineering and nursing services, followed by MRAs for architecture and surveying services. Transport, almost by definition, is essential to trade in goods and to most movement of people, the smoother and

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the less expensive the better. ASEAN, therefore, has launched a programme to inter-connect and in various ways upgrade Southeast Asia’s highways. The ASEAN energy sector has laid plans for a gas pipeline network. The Singapore-Kunming Rail Link (SKRL) is the flagship project of the ASEAN Mekong Basin Development Cooperation, an ASEAN-China programme. The SKRL project aims to rehabilitate or improve existing rail lines on mainland Southeast Asia and to construct the missing links, largely in Cambodia, and spur lines into Laos and Myanmar. In 1998, ASEAN concluded a framework agreement to allow goods being traded between two countries to pass in transit through a third without hindrance. That same year, ASEAN agreed on the mutual recognition of commercial vehicle inspection certificates. It adopted agreements on air cargo in 2002 and on multimodal transport in 2005. In 2002, the ASEAN leaders signed a regional tourism agreement expressing the intention to facilitate travel within the region and the entry of international visitors into it, loosen airline restrictions and liberalize other tourism-related services, conserve the environment, preserve the cultural and historical heritage, and protect women and children against tourismrelated exploitation.

FALLING SHORT OF INTEGRATION In terms of tariff cutting, AFTA has been more or less on schedule, so that today almost all of intra-ASEAN trade is no longer subject to tariffs. However, many non-tariff barriers remain in place, although the AFTA agreement calls for their removal. One important problem is that ASEAN looks to governments to identify their own non-tariff barriers rather than listening to the traders, who actually deal with them. This

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self-serving procedure almost ensures that any removal of nontariff barriers will happen not through region-wide arrangements but by unilateral reforms in national trade policies. In any case, intra-ASEAN trade has remained stuck at the 25 per cent level or below in the past few years. Even that level of trade cannot be attributed to AFTA, since, for various reasons, AFTA tariff rates are invoked in only a very small percentage of intra-ASEAN trade. Much of the trade in manufactured goods in the region consists of electronics products, which are duty-free. Nor has AFTA been much of a factor in deciding whether to invest in ASEAN or not. One exception is AICO. As of 10 April 2007, 150 applications for AICO tariff treatment have been approved, most of them in the automotive sector. However, AICO involves only intra-company trade and cannot be considered as an indication of the success of AFTA as a whole. As noted above, market integration takes more than the removal of tariffs, and ASEAN has taken steps to address the other requirements of integration. It has adopted certain norms to achieve greater coordination, consistency and efficiency in customs operations in the region, but the progress of reform in the practices of national customs administrations is quite uneven. ASEAN has committed itself to product standardization and has adopted common standards for certain products. It has agreed on some form of mutual recognition arrangements for two sectors — cosmetics and electrical and electronic equipment — and is working on a third — pharmaceuticals. However, progress has been extremely slow. Transport is vital for trade and travel, and ASEAN has rightly given much importance to it. However, four of the five ASEAN countries on the Mekong Basin, where much of this attention is concentrated, are the four newer and less economically ad-

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vanced members of the association. Three of them are in the United Nations’ category of least-developed countries. The physical-infrastructure component of ASEAN transport schemes — the rail link, the highway network, the bridges, and the gas pipelines — is, therefore, highly dependent on grants and loans from developed countries and financial institutions like the Asian Development Bank. The China-financed endeavours to dredge parts of the Mekong in order to expand its use for transport purposes may have negative effects on the ecology of the Mekong area. The goods-in-transit framework agreement has not been implemented because of continuing disputes between Malaysia and Singapore over transit routes, although some progress has been achieved. Land transport through certain countries on the Southeast Asian mainland remains prohibitively expensive. The liberalization of passenger air services still depends on unilateral policy decisions or bilateral agreements. In many cases, air services continue to be restrictive, to the detriment of commerce and tourism, although, with the advent of low-cost carriers, the situation has improved. Several countries have excluded commercially important airports from the application of the 2002 air cargo agreement. The annual ASEAN Tourism Forum has been a roaring success since 1981, bringing thousands of buyers and sellers of tourism services together as a collective ASEAN endeavour. However, the ASEAN tourism agreement providing for further measures to encourage tourism in the region has been largely ignored. With respect to services in general, the five packages of commitments agreed upon thus far have not resulted in any meaningful liberalization of the services trade. Most of the commitments are already in the books of the ASEAN states

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concerned; many are in fact less than those made in the WTO. Nevertheless, committing them in a regional context locks in the commitments, making them more difficult to repeal. Ironically, this is probably why ASEAN has not achieved much progress in regional agreements to integrate the regional market for services.

FINANCE COOPERATION ASEAN has long recognized the importance of finance as a component of economic cooperation. A special committee of ASEAN central banks (Monetary Authority in the case of Singapore) was organized as early as 1973. The ASEAN swap arrangement was set up in 1977, an instrument that to this day remains in effect, in an expanded form in terms both of participation and amounts involved. However, ASEAN financial cooperation gained momentum only in 1997, with the onset of the Asian financial crisis. Although ASEAN had not anticipated the depth or timing of the crisis — practically nobody else did — the member-states, in response, took steps to prevent a recurrence of a crisis of that magnitude. (The ASEAN finance ministers had their first formal meeting in March 1997, four months before the start of the crisis.) They launched a process for the review and surveillance of the regional and national economies, a process that soon encompassed China, Japan and Korea. With those three Northeast Asian countries, they set up a steadily expanding network of bilateral currency swap and repurchase agreements, anchored by Japan, to discourage currency speculation and enable the participants to help one another in case of liquidity problems. Today, the forums of finance ministers and finance ministry and central bank officials are among the most active of the

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ASEAN economic mechanisms, meeting three or four times a year, both among ASEAN member-countries and in the ASEAN Plus Three process with China, Japan and Korea. They keep the regional economy and the national economies under scrutiny in frequent review and surveillance sessions The ASEAN swap arrangement has been enlarged to US$2 billion, with all ten ASEAN member-countries participating in it. The network of bilateral currency swap and repurchase arrangements among the ASEAN Plus Three countries has expanded to 16 arrangements and a total value of about US$80 billion. The network is being multilateralized, that is, a swap is to be activated through collective decision, and the earmarked currencies are to be pooled. The portion of the swap outside of International Monetary Fund conditionalities has been raised from 10 to 20 per cent. ASEAN Plus Three has also launched the Asian Bond Market Initiative, which is meant to channel East Asia’s enormous savings and financial reserves into investments in the region. Several Asian-currency bond issues have been carried out. How best to coordinate exchange rates is being explored, a goal that would bring about greater financial stability and make trade easier in the region. Research projects and training programmes underpin these endeavours, all of which have the technical support of the Asian Development Bank. The question is being raised as to whether it is now time to create permanent and dedicated institutions to drive and support financial cooperation on an ASEAN Plus Three basis. Such institutions would provide staff support for the review and surveillance process, the multilateralized swap and repurchase arrangements, the credit guarantee facility for the Asian Bond Market, the proposed exchange rate mechanism, the research, and the training programmes, among other functions.

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ECONOMIC LINKS TO THE WORLD ASEAN’s links with the outside world were initially economic. Its first move in this direction was the establishment in 1972 of the Special Coordinating Committee of ASEAN Nations, (SCCAN) made up of economics officials and headed by Indonesia’s Minister of Trade, Sumitro Djojohadikusumo, to start a dialogue with the European Economic Community. ASEAN had deemed it appropriate to establish a relationship with the world’s most advanced regional association. Moreover, ASEAN sought to gain greater access for its exports — at that time, primarily commodities — to the European market. Europe, too, was looked upon as a source of development assistance. At the same time, ASEAN appreciated its recognition as a regional entity by the European Economic Community. A Joint Study Group was organized to make recommendations on ASEAN-EEC economic cooperation. In the case of Japan, the initial ASEAN concern was over the “indiscriminate expansion” and “accelerated export” of Japan’s synthetic rubber industry in direct competition with Southeast Asian, mainly Malaysian, natural rubber. On Japan’s part, it saw Southeast Asia as an important source of raw materials, including fossil fuels, and an export market. Later, the appreciation of the yen in 1985 led Tokyo to encourage Japanese firms to relocate operations to Southeast Asia. For this, Japan had to help raise Southeast Asia’s purchasing power, train its people, and build its infrastructure. These considerations drove Japan’s official development assistance programme in Southeast Asia, which has come consistently to account for 30 per cent of Japan’s global ODA. Meanwhile, the riots that greeted Prime Minister Kakuei Tanaka’s visit to Bangkok and Jakarta in January 1974 — soon

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after a major global energy crisis — brought home to Japan the need to develop ASEAN-Japan relations beyond the purely economic to a comprehensive strategy that would include firmer political ties and cultural and people-to-people relations. This strategy was spelled out in the 1977 Fukuda Doctrine — named for Prime Minister Takeo Fukuda, who enunciated it — a policy invoked thereafter by succeeding Japanese leaders, who generally made it a point to visit ASEAN countries shortly after taking office. It is in this context that Japan has underwritten many cultural and people-to-people, as well as economic and development, projects for ASEAN and its member-states. Australia entered the ASEAN Dialogue system in 1974 and New Zealand in 1975. The United States and Canada followed in 1977. As in the case of Japan, ASEAN’s initial interest in these relationships was centred on market access, investments, and technical and development assistance. After the ASEAN leaders issued their mandate to them as the association’s central economic forum, the ASEAN Economic Ministers (AEM) became heavily involved in the Dialogues in the light of their heavily economic content at the time. Thus, the AEM had much say on the Dialogues’ agendas, the assignment of Dialogue coordinator-countries, the projects to be undertaken with the Dialogue Partners, the composition of the joint cooperation committees to manage the projects, and so on. In the mid-1980s, however, as the Dialogues gradually broadened to include political and security matters, the ASEAN foreign ministries took sole control of the process. Thereupon, the AEM initiated consultations with their counterparts from ASEAN’s leading economic partners. The economic ministers conduct such consultations regularly with China, Japan and Korea, together and separately, and with Australia and New Zealand together. They meet in varying degrees of

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frequency with the European Trade Commissioner, the United States Trade Representative, and India’s Minister of Commerce. It is in these forums where trade and investment issues are worked out and the principles for free trade areas and economic partnerships are agreed upon. On the basis of their 2002 Comprehensive Economic Cooperation Agreement, ASEAN and China have concluded an agreement on trade in goods in which they undertook progressively to reduce tariffs on trade between them. They also agreed to remove non-tariff barriers to trade, with the modalities and timeline to be decided later. At the same time, they set up a dispute-settlement mechanism for issues arising from the CEC agreement. ASEAN and China have recently concluded a broad agreement on the liberalization of trade in services. Similarly, following the conclusion of a Comprehensive Economic Cooperation Agreement, ASEAN and South Korea have set up a dispute-settlement mechanism and, with Thailand opting out, signed an agreement on trade in goods and, later, one on trade in services. India has entered into a Comprehensive Economic Partnership Agreement with ASEAN. The two sides are negotiating a free trade area agreement. ASEAN and Australia and New Zealand concluded a Comprehensive Economic Partnership Agreement in 2000 providing for the liberalization and facilitation of trade and investments and are negotiating a free trade agreement. ASEAN and the European Union have started negotiations on a free trade area between them. Japan, together with the United States, is ASEAN’s leading trading partner. It is among ASEAN’s principal sources of investments, technology and tourism. It is the largest provider of official development assistance to ASEAN as a group and

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to its individual members. Japan has concluded “economic partnership” agreements with Singapore, Malaysia, the Philippines, Indonesia, Thailand and Brunei Darussalam and, at the ASEAN-Japan Summit in November 2007, one with ASEAN as a group. The United States has entered into a Trade and Investment Framework Arrangement (TIFA) with ASEAN as a group after concluding TIFAs with some individual ASEAN members. It has entered into a free-trade agreement with Singapore and started negotiating one with Malaysia. Negotiations with Thailand have been suspended partly on account of the political turmoil in that country. The US-ASEAN Business Council, a business association of more than a hundred major American corporations doing business in ASEAN, holds periodic consultations with the ASEAN economic, finance, transport, energy, telecommunications and other ministers. It articulates the interests and requirements of American business in ASEAN and makes recommendations for ASEAN policy and practice. It has a modest programme of trade-related technical assistance for ASEAN countries. It is also the leading ASEAN advocate in the U.S. As recounted in the previous chapter, ASEAN has given special importance to its relations with China, Japan and Korea through the ASEAN Plus Three and ASEAN Plus One processes. Starting with the first summit meetings in 1997, these processes are heavily economic in content, although they exert a strong political impact as well. Apart from the highprofile political dimension, the most prominent of the ASEAN Plus Three activities have been those of an economic nature — the measures to accelerate regional economic integration and cooperation in finance. ASEAN Plus Three finance cooperation is described above. An ASEAN Plus Three Joint Expert Group has completed a

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study recommending the conclusion of an East Asia Free Trade Area. On the other hand, upon Japan’s proposal, the East Asia Summit (EAS) in January 2007 agreed to launch a study on a Comprehensive Economic Partnership in East Asia among EAS participants.

IMPERATIVES OF ECONOMIC INTEGRATION From several standpoints, the case for ASEAN economic integration seems evident. An integrated ASEAN economy would be more attractive to investors than one that is fragmented into small national economic regimes, both as a “domestic” market and as a platform of production for export. An integrated market tends to lower production and transaction costs and enhance the efficiency of trade. This should stimulate and attract investments and translate itself into jobs and lower prices. The requirements of integration could be used as an argument in support of domestic reforms. An integrated ASEAN would magnify Southeast Asia’s voice, influence and leverage in global economic affairs. Beyond the economic considerations, an economically integrated ASEAN would strengthen the association’s political cohesion by giving each member-country a bigger stake in the region’s progress and prosperity and enlarging their common interests. As a salutary side-effect, this would enhance ASEAN’s credentials and capacity to manage the regional processes in the larger area of the Asia-Pacific of which it serves as the hub, but currently simply by default. ASEAN’s governments recognize these benefits of regional economic integration, having largely removed tariffs on intraASEAN trade and entered into framework agreements to bring about effective integration. However, these broad commitments are not self-executing. Specific obligations to take action have

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to be undertaken. Customs operations have to be reformed in order for trade preferences to work. The painstaking work of harmonizing product standards has to be stepped up. Transportation links have to be strengthened and transport costs reduced. Trade in services has to be liberalized with a view to integrating the regional economy. One problem is that ASEAN institutions and processes are weak in terms of moving initiatives forward and ensuring compliance with commitments. They are weak, because not all ASEAN countries have reached the point at which they identify to a substantive extent their national and political interests with the welfare and progress of the region as a whole. In some cases, they do not look beyond their current markets to the promise of a regionally integrated economy that will benefit all. This is reflected in the fact that most ASEAN governments do not feel any pressure from their business sectors to accelerate the pace of regional economic integration. Despite all this, some progress is being made, albeit slowly. The November 2007 ASEAN Summit adopted a blueprint for achieving the ASEAN Economic Community, with clear schedules. It remains to be seen, of course, whether the time lines prescribed in the blueprint will be complied with. Meanwhile, China, India and others in the world are not standing still. The new ASEAN Charter is supposed to strengthen ASEAN’s institutions and make its processes more effective and expeditious. However, the Charter will be only as good and effective as the member-states make it in terms of actual implementation. This, in turn, will depend on whether they and their business communities see the regional good as identical to their own.

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Chapter 4

Working Together for the Common Good There have been in recent years increasing calls upon ASEAN to be “people-centred” or “people-oriented”, to take the “people’s” concerns into account, and to consult with the “people’s representatives” in what is often called “civil society”. The implication is that regional security is the domain of politicians, diplomats and generals and that regional economic integration is the concern only of governments, corporations and captains of industry. This is somewhat surprising, since people, in very real ways, do benefit from regional security and would profit from the effective integration of the regional economy. An atmosphere of regional stability and security allows people to live their lives and pursue their livelihoods in peace — provided, of course, that the domestic situation is also largely free of violence. Regional economic integration would, if done right, attract investments, spur economic growth, generate jobs, and lower costs. If accompanied by national policies to distribute the benefits of growth equitably, it would benefit the people at large. The problem is that this linkage between regional security and economic integration on the one hand and people’s personal welfare on the other is seldom made. Moreover, legitimate governments are expected to reflect the 59

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interests of their people and articulate and advance them in inter-governmental processes. Nevertheless, ASEAN does take cooperative action on matters that more directly affect the quality of people’s lives and are publicly perceived to do so. The most prominent of these have been communicable diseases and the environment, together with transnational crime and international terrorism. ASEAN cooperation with respect to natural disasters has also gained prominence, particularly as a consequence of the 2004 tsunami and the other catastrophes that have visited the region in recent years. The ASEAN position on human rights has been the subject of occasional public attention.

COMMUNICABLE DISEASES The ASEAN response to the 2003 SARS crisis has been hailed as an achievement in regional cooperation against a common threat. Preceded by a meeting of the health ministers of ASEAN, China, Japan and Korea, an emergency ASEAN summit meeting, joined later by China’s Premier and Hong Kong’s Chief Executive, issued the mandate for inter-agency cooperation — “with real power of enforcement” — in carrying out the health ministers’ decisions. Those decisions included the establishment of a “hotline” network among designated contact points, the quick sharing of information, pre-departure screening, the management of suspected cases in flight, disinfection of aircraft, coordinated procedures at international departure and arrival points, and other measures recommended by the World Health Organization (WHO) for travel from and to countries affected by SARS. Because of such cooperation and the support of the WHO and countries like China and Japan, the SARS epidemic was stopped in its tracks.

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The threat of an outbreak of avian influenza among humans is more diffuse. Only a few ASEAN countries have suffered fatalities from the disease, but the possibility of a pandemic hangs over the whole region. This possibility arises from the potential mutation of the avian influenza virus into a strain that can be transmitted between humans. At the same time, culling infected poultry inflicts enormous costs on the families affected or their governments or both. Whether between fowls, between fowls and humans or, potentially, between humans, such infections easily cross national boundaries. Moreover, the disease requires quick diagnosis and intensive information sharing. The expensive medicine needed to counter it has a short shelf life and has to be administered within 48 hours of the onset of the infection. Thus, avian influenza has risen to the top of ASEAN’s concerns. ASEAN bodies dealing with agriculture and health are working jointly at the ministerial, officials and technical levels to prevent, control and eradicate the disease, officially called the highly pathogenic avian influenza. They are working together with other countries, particularly Australia, China, Japan and Korea, and international organizations, notably the World Health Organization, the United Nations Food and Agriculture Organization, the World Organization for Animal Health and the Asian Development Bank. ASEAN cooperation covers surveillance, containment, vaccination policy, diagnostic capability, information sharing, emergency preparedness, and public awareness. ASEAN countries also participate in global efforts to prepare for and respond to the possible outbreak of a pandemic. Already, Japan has donated vaccines, test kits and protective equipment, which are stockpiled in Singapore for ASEAN use in case of a pandemic outbreak.

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According to UNAIDS, the countries that have the highest national AIDS infection levels are in Southeast Asia. It is in recognition of this that two ASEAN Summits have devoted special sessions to the HIV/AIDS problem, in November 2001 and in January 2007. While ASEAN’s declared commitments in countering the HIV/AIDS epidemic entail operational action at the national level, ASEAN attention to it furnishes a political and institutional framework for mutual support and the exchange of data and knowledge. It gives regional sanction to sometimes-difficult national decisions. It provides regional coherence to international cooperation on a global problem. Coordinating regional cooperation on HIV/AIDS is the ASEAN Task Force on AIDS, which the ASEAN leaders created in 1992. ASEAN cooperation with the Northeast Asian countries in dealing with communicable diseases is prescribed in and guided by the ASEAN Plus Three Emerging Infectious Diseases Programme, which was adopted in April 2004 and has Australia’s support.

THE ENVIRONMENT Unlike the management of infectious diseases, in which the regional interest and the necessity of regional action are clear, the problem of transboundary haze pollution — a case of events in one country severely affecting its neighbours — has been a struggle for Indonesia primarily, but also for neighbouring countries. It has been a concern for ASEAN as a whole and the world at large. The haze in question arises largely from fires deliberately set to clear forests for oil palm, rubber or other plantations. Some of it is caused by the burning of peat just beneath the surface of the soil. The fires are ignited by

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a combination of forest clearing and dry conditions during El Niño episodes. Much of the burning takes place in the tropical forests of Indonesia. Although ASEAN had addressed haze episodes in the past, specifically in the 1980s and early 1990s, the most severe since ASEAN’s founding took place in 1997–98. That disaster wrought immense damage to the agriculture, tourism and transportation of the neighbouring countries and to Indonesia’s forests and their ecology, posed health problems for their peoples, and affected the global environment. There were and are, of course, no easy or simple solutions to this huge problem. It involves drawing up the appropriate laws and policies and enforcing them, navigating the shoals of clashing and intersecting business and political interests, poverty, tradition, commerce, and the diversification of sources of energy as well as environmental considerations. Accordingly, ASEAN has adopted both short-term and longterm measures to deal with all facets of the complex situation. In response to the 1997–98 episode, an ASEAN Ministerial Meeting on Haze was organized, supported by the Haze Technical Task Force. It is in this institutional framework that ASEAN countries have pressed Indonesia to try harder in enforcing its own laws and policies against the burning of forests. Notable among these policies is that of zero burning, which ASEAN adopted as a group. It was also in this framework that ASEAN agreed on the Regional Haze Action Plan, which prescribes action at both regional and national levels to monitor “hot spots”, prevent forest and peat fires, and mitigate their impact. The plan and its implementation have had the support of the Asian Development Bank. The ASEAN Specialised Meteorological Centre, a basically Singapore facility, was strengthened. The locations of fires and

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“hot spots” in Southeast Asia as detected by the centre can be pinpointed daily on ASEAN’s haze Web site (http://www. haze-online.or.id). Some ASEAN countries have earmarked firefighting equipment and personnel for deployment in case an ASEAN country afflicted by haze-causing fires requests for assistance. The ASEAN Secretariat and the Indonesian Government, with the support of other countries and international organizations, have conducted simulation exercises, training programs at the community level, and campaigns to raise awareness of the zero-burning policy among communities and businesses involved in the clearing of forests. With the support of the UN Environment Programme for its drafting, ASEAN concluded the Agreement on Transboundary Haze Pollution in June 2002. After the requisite six ratifications, the agreement entered into force in November 2003. (Indonesia and the Philippines have not ratified it.) Under the agreement, each party commits itself to ensuring that no activity in its territory harms the environment or human health “beyond its national jurisdiction” and to taking measures to prevent transboundary haze pollution resulting from land or forest fires, monitor such fires, and put them out should they occur. The country where the haze arises is obligated to furnish information to an affected country that requests it. The agreement also has provisions for mutual assistance and the establishment of institutions to ensure compliance and implementation. Because of the complexity and deep roots of the haze problem, ASEAN has taken long-term measures to deal with it in addition to its immediate response. Many of these measures are embodied in the Regional Haze Action Plan, its “operationalized” version, and the implementing manuals and protocols. They involve capacity building through train-

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ing, simulations and joint exercises, raising awareness of the zero-burning policy among plantation owners and executives and villagers, mobilizing communities and local governments, public education, and research. In these, ASEAN has the support of the Asian Development Bank, the UN Development Programme, the UN Environment Programme, the European Union, the United States, and other countries and international organizations. The haze problem is only one, albeit the most prominent one, of ASEAN’s environmental concerns. Southeast Asia is incredibly rich in natural resources and biodiversity. Yet, because of rapid economic growth, weak law enforcement in several countries, and in some cases outdated policies and a low level of concern, Southeast Asia’s natural environment is under severe threat. According to the Third ASEAN State of the Environment Report 2006, forests and woodlands cover 45 per cent of ASEAN’s land area, as against 30.3 per cent of the whole earth. However, the ASEAN region is being deforested at the rate of 1.35 per cent a year, the highest among the regions of the world. From 1990 to 2005, Southeast Asia suffered an average annual loss of 2,700 square kilometers of forest, so that the region’s forest cover has dropped from 55 per cent in 1990 to 45 per cent in 2005. ASEAN accounts for 31 per cent of the world’s coral reef area — and 34 per cent of its mangroves — again, the highest among the world’s regions. However, no less than 80 per cent of ASEAN’s coral reefs is at risk — as against 58 per cent of the world’s total — from pollution, overfishing and destructive methods such as dynamite and cyanide fishing. As many as 27,100 plant and animal species are endemic to Southeast Asia, 20 per cent of the world’s known species. However, seven out of the world’s 25 recognized biodiversity “hot

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spots” are also in the region, “hot spots” being biologically rich areas that are under the greatest threat of destruction. Southeast Asia still has adequate sources of fresh water, but regional demand is expected to increase by one-third over the next 20 years. At the same time, many Southeast Asian cities are plagued by problems of waste disposal and other forms of urban blight. The measures required to hold back and reverse environmental destruction are largely national responsibilities. However, ASEAN has recognized that such measures would gain in effectiveness if they were pursued also through regional cooperation. With the support of the German and Korean governments, ASEAN has embarked on two programmes for the conservation and restoration of Southeast Asia’s forest ecosystems. It has set up a system of “heritage parks” to promote conservation, preserve the park areas for the enjoyment of people, and raise public consciousness of the need to preserve and protect nature. With financial support from the European Union, ASEAN has established a Centre for Biodiversity in the Philippines, which is engaged in formulating policy, developing capacity, promoting public awareness and education, and coordinating ASEAN’s collaboration with the international community to conserve and promote Southeast Asia’s biodiversity. Because environmental concerns involve many other areas of human life and endeavour, ASEAN has conducted its cooperation on the regional environment in a comprehensive manner. Thus, the ASEAN State of the Environment Reports, which have been published every three years since 1997, contain a wealth of data not only on fresh water, coral reefs, forests, and emissions but also on the regional economy, population and other social indicators.

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NATURAL DISASTERS Most Southeast Asian countries are prone to natural disasters — typhoons, earthquakes, tsunamis, volcanic eruptions, floods, mudslides, and so on. Some of these disasters occur year after year, others in unexpected times. Despite being called “natural”, some are brought about or aggravated by human activity, such as the deforestation that causes floods and mudslides and the burning of forests that brings about haze pollution. Others are simply acts of nature, which are impossible to prevent but which, in some cases, can be anticipated and the impact of which can sometimes be mitigated. Most disasters are within the capacity of individual states to deal with. If they are of such magnitude as to call for international assistance, they often are too big for ASEAN to handle and require a response from the larger international community, in which ASEAN neighbours can and do take part. Nevertheless, a specifically ASEAN response to a disaster in a member-country would be an obvious focus of ASEAN cooperative action and a vivid manifestation of regional solidarity. In March 2005, less than three months after the great tsunami ravaged the countries on the rim of the Indian Ocean, the ASEAN Secretary-General, Ong Keng Yong, speaking at a conference in Seoul, lamented, “The earthquake and tsunami disaster of 26 December 2004 … laid bare our unpreparedness and our weaknesses in collectively addressing such large scale calamities. The sad thing is we, in fact, have the technology and resources to deal with such disasters. Unfortunately, we have not made the best use of these assets.” In fact, as early as 1976, the then-five members of ASEAN had issued their Declaration on Mutual Assistance on Natural Disasters pledging to improve their channels of communication

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with respect to natural disasters, exchange experts, trainees, information and documents, disseminate “medical supplies, services and relief assistance”, and facilitate it. However, it was not until 2003 that the experts’ group set up shortly after the declaration’s adoption was elevated into the ASEAN Committee on Disaster Management. Made up of the heads of national agencies dealing with natural disasters, the committee promptly adopted the ASEAN Regional Programme on Disaster Management for 2004–10 and began working on the ASEAN Agreement on Disaster Management and Emergency Response. The agreement reaffirms the ASEAN countries’ undertaking to render assistance to members afflicted by a natural disaster and commits them jointly and individually to develop “strategies to identify, prevent and reduce risks” of such disasters. The strategies would include “regional standby arrangements” for relief and rehabilitation, under which members would voluntarily earmark assets for the purpose. The agreement calls for the coordination of relief and emergency response operations. Under the agreement, an ASEAN Coordinating Centre for Humanitarian Assistance would be established to facilitate cooperation and coordination, including the consolidation and dissemination of data, administer the regional standby arrangements, and otherwise support the implementation of the agreement. An ASEAN Disaster Management and Emergency Relief Fund has been set up, to which contributions would, at least for now, be voluntary. Because it was signed seven months after the great tsunami, on 26 July 2005, the impression set in that the agreement was a response to that catastrophe. In fact, the ASEAN disaster committee had begun working on it sometime before then. ASEAN did respond quickly to the tsunami, particularly in

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the case of Indonesia, the hardest-hit of the ASEAN members. Eleven days after the tsunami struck, ASEAN convened an international summit to deal with the dire situation. Fifteen heads of state or government and fifteen ministers were in attendance, including all ten ASEAN leaders and the Prime Ministers of China, Japan and South Korea. UN Secretary-General Kofi Annan and European Commission President José Manuel Barroso were also on hand. ASEAN assistance was mobilized in the aftermath of the earthquake that struck the Yogyakarta area in Central Java on 27 May 2006, killing some 5,000 people. Brunei Darussalam, Malaysia, the Philippines, Singapore and Thailand deployed teams to the area, while Cambodia, Laos and Vietnam sent food and cash. Requiring ten ratifications, the ASEAN Agreement on Disaster Management and Emergency Response has not yet formally entered into force. However, a number of its provisions are already being carried out. Disaster-related specialized training is being undertaken, and training institutes are being linked. Information is being shared through a dedicated website and a communications system. A database has been set up with data from four countries so far. Technical cooperation is being carried out with respect to earthquakes, flash floods, landslides and river-bank erosion, typhoon preparedness, and an early warning system for haze pollution. Not least, simulation exercises are being conducted. Two months after the agreement’s signing, an exercise took place in response to a hypothetical earthquake in Selangor, Malaysia. For this, at Malaysia’s request, Brunei Darussalam and Singapore deployed search-and-rescue teams. The exercise also tested the capacity of Malaysia’s own agencies to coordinate their response. It was followed by a meeting and a workshop with a view to

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incorporating the lessons learned into the ASEAN Standby Arrangements and Standard Operating Procedures. A similar exercise was held in September 2006 to simulate the ASEAN response to possible flooding in Cambodia. A third was scheduled in October 2007 to deal with a hypothetical “structural collapse” in Singapore. For many among the public, ASEAN’s cooperative response to natural disasters is the litmus test of the efficacy of ASEAN cooperation.

HUMAN RIGHTS Some people measure ASEAN’s value in terms of human rights. The discourse on human rights in ASEAN frequently features the consideration of the balance and tension between individual and community rights, between rights and obligations, between freedom and order, between self-determination and territorial integrity. The closest that ASEAN has moved to a common position on human rights was in the Joint Communiqué of the 1993 ASEAN Ministerial Meeting, which included this carefully crafted statement: 16. The Foreign Ministers welcomed the international consensus achieved during the World Conference on Human Rights in Vienna, 14–25 June 1993, and reaffirmed ASEAN’s commitment to and respect for human rights and fundamental freedoms as set out in the Vienna Declaration of 25 June 1993. They stressed that human rights are interrelated and indivisible comprising civil, political, economic, social and cultural rights. These rights are of equal importance. They should be addressed in a balanced and integrated manner and protected and promoted with due regard for specific cultural, social,

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economic and political circumstances. They emphasized that the promotion and protection of human rights should not be politicized. 17. The Foreign Ministers agreed that ASEAN should coordinate a common approach on human rights and actively participate and contribute to the application, promotion and protection of human rights. They noted that the UN Charter had placed the question of universal observance and promotion of human rights within the context of international cooperation. They stressed that development is an inalienable right and that the use of human rights as a conditionality for economic cooperation and development assistance is detrimental to international cooperation and could undermine an international consensus on human rights. They emphasized that the protection and promotion of human rights in the international community should take cognizance of the principles of respect for national sovereignty, territorial integrity and non-interference in the internal affairs of states. They were convinced that freedom, progress and national stability are promoted by a balance between the rights of the individual and those of the community, through which many individual rights are realized, as provided for in the Universal Declaration of Human Rights. 18. The Foreign Ministers reviewed with satisfaction the considerable and continuing progress of ASEAN in freeing its peoples from fear and want, enabling them to live in dignity. They stressed that the violations of basic human rights must be redressed and should not be tolerated under any pretext. They further stressed the importance of strengthening international cooperation on all aspects of human rights and that all governments should uphold

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humane standards and respect human dignity. In this regard and in support of the Vienna Declaration and Programme of Action of 25 June 1993, they agreed that ASEAN should also consider the establishment of an appropriate regional mechanism on human rights.

This is a balanced statement, the product of consensus among the then-six ASEAN members. Since the entry of the four newer members in the late 1990s, the 1993 position has not changed. In practice, ASEAN promotes human rights step by step, sector by sector. In June 2004, for example, the ASEAN foreign ministers signed the Declaration on the Elimination of Violence Against Women in the ASEAN Region. That document expresses the ASEAN states’ commitment to “endeavour to fully implement the goals and commitments made related to eliminating violence against women and monitor their progress”. The measures envisioned include research and data-gathering, an “integrated” approach to the elimination of violence against women, and domestic legislation for that purpose. The commitments, however, are far from binding, the document being sprinkled with such terms as “encourage”, “promote” and “intensify efforts”. There is no evidence that progress in carrying out these intentions, general as they are, is being monitored or followed through. The problems arising from the increasing numbers of people from ASEAN countries working or seeking jobs in other ASEAN countries have been a growing ASEAN concern. To address them, the ASEAN leaders issued in January 2007 the ASEAN Declaration on the Protection and Promotion of the Rights of Migrant Workers. The declaration defines the obligations of both the sending and the receiving states and outlines areas of

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ASEAN cooperation on the subject with a view to developing a legal ASEAN instrument on it. While there is nothing coercive about them, these are public commitments that can be invoked in case of egregious violations of human rights. The problem is that the scope of ASEAN’s concern with human rights is expanding much too slowly, with differing national imperatives hindering faster progress. The aspect of human rights on which ASEAN is firmly united has been the question of labour rights, specifically in terms of its opposition to the use of labour rights in international trade agreements for disguised protectionist purposes. In this light, ASEAN insists that the subject of labour rights be dealt with in the International Labour Organization rather than in international trade negotiations.

BUILDING A REGIONAL IDENTITY In January 2003, hundreds of young Cambodians set fire to the Thai embassy in Phnom Penh and destroyed Thaiowned business establishments in the Cambodian capital. The immediate trigger for the riots was a report in the Cambodian media that a popular Thai television actress had claimed that the famed ruins of Angkor Wat and the land where it is located rightfully belonged to Thailand, a statement that the actress subsequently denied making. The Prime Ministers of the two countries quickly went on the telephone and agreed to defuse the situation, with the Cambodians pledging restitution for the damage done. The situation soon calmed down. This sequence of events revealed two things about ASEAN. One was that, because of the close relationships developed among Southeast Asian leaders, it is possible to manage crisis situations by personal contact before they get out of control.

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The other was that animosities rooted in the past have a way of igniting popular passions between Southeast Asian nations. This has been manifested in other, occasional flare-ups of temper between neighbours. Such flare-ups often arise from inadequate understanding or visceral antipathies, which rational discourse and friendly networking among leaders and elites have so far managed to transcend and overcome. However, one cannot be sure that the leaders and elites will or can do it every time. ASEAN has contributed significantly to regional peace and stability. However, its political solidarity is not assured. Neither is the continued compliance with the norms agreed upon for inter-state relations and so far adhered to. ASEAN has recognized the need for regional economic integration and has laid the foundations for it. However, implementation has been slow and, in some cases, reluctant. ASEAN has cooperated on a number of regional problems requiring regional solutions, but the member-states have to carry out this cooperation more regularly, expeditiously, and effectively, as well as in good faith. The fundamental source of ASEAN’s shortcomings in these respects has been the insufficient sense of regional identity among the peoples of Southeast Asia, even among the elites. One might say that people have a sense of regional identity to the extent that they are truly convinced that the regional welfare is also in their national or even personal interest, that good relations with neighbours are essential for their own — and the nation’s — security and well-being, that the integration of the regional economy would expand their own opportunities for jobs and increased incomes, and that regional cooperation is necessary in dealing with such problems as those related to the environment, communicable diseases, and

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transnational crime. Unless people have this sense of regional identity, a feeling of regional community, they will not have enough confidence in one another and in regional institutions and processes to ensure regional peace and stability, genuinely integrate the regional economy, and substantially enable regional cooperation to deal with regional problems. ASEAN’s leaders have long acknowledged this. Their ASEAN Vision 2020, issued in 1997, aspired for “an ASEAN community conscious of its ties of history, aware of its cultural heritage and bound by a common regional identity”. In the 2003 Declaration of ASEAN Concord II, they saw the ASEAN Community as “fostering regional identity as well as cultivating people’s awareness of ASEAN”. These aspirations, so necessary for ASEAN’s purposes, cannot, of course, be achieved quickly. They require patient, long-term effort. A keen awareness of one’s ASEAN neighbours has to be cultivated — their cultures, religions and histories. Mutual understanding and empathy have to be developed. Southeast Asia as a region and ASEAN as an institution have to be understood and appreciated. People have to be convinced that, to a significant extent, the peace, stability and progress of the region would be of genuine benefit to them. The alternative is not pretty. Mutual prejudices, suspicions and antipathies could easily rise to the surface, increasing tensions between states. The regional economy would continue to be fragmented, stunting the region’s global competitiveness. The region’s capacity to deal regionally with regional problems would not grow. For all this, education is essential, education of the general public and of the young and those in school. The 1998 Hanoi Plan of Action urged ASEAN to “Develop linkages with mass media networks and websites on key areas of ASEAN

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cooperation to disseminate regular and timely information on ASEAN”. The 2004 Vientiane Action Programme called on ASEAN to “Mainstream the promotion of ASEAN awareness and regional identity in national communications plans and educational curricula”. The ASEAN Secretariat has been carrying out publicinformation programmes. ASEAN has presented joint moderndance performances of the Ramayana. It has conducted popular-song festivals among member-countries. It has taken out television commercials promoting ASEAN as a single tourist destination. However, these efforts have been sporadic at best. The Secretariat needs immensely more resources to sustain them. The member-states have been doing their part, mainly on the occasion of ASEAN anniversaries and at the time of their hosting of the ASEAN Summit or the ASEAN Ministerial Meeting, mounting exhibits, promoting media coverage, and conducting quizzes and art and essay contests. However, such efforts have been uneven and, again, need to be sustained. Programmes for bringing together the youth of ASEAN are important for making friends across the region, raising awareness of ASEAN, and cultivating a regional identity. ASEAN has done this through youth camps and jamborees. ASEAN youth also get together on the “Ship for Southeast Asian Youth”, organized and funded by the Japanese Government since 1974, in which 30 young people from each ASEAN country and 40 from Japan go on a cruise on the Nippon Maru every year, visiting Southeast Asian and Japanese ports, making friends, forming networks. However, an understanding of Southeast Asia and the countries in it would be most effectively developed through formal education at an early age — at the primary and secondary

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levels. ASEAN’s leaders and governments have recognized this from the beginning. ASEAN’s founding document, the ASEAN Declaration of 8 August 1967, laid down as one of the association’s seven “aims and purposes” the promotion of Southeast Asian studies. The 1976 Declaration of ASEAN Concord called for the “Introduction of the study of ASEAN, its member states and their national languages as part of the curricula of schools and other institutions of learning in the member states”. Unfortunately, little has been done to carry out these wise mandates. Yet, progress towards ASEAN’s principal purposes depends greatly on the ability and willingness of the association and its members to do so.

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Chapter 5

Relations with the Rest of the World One of ASEAN’s strengths is not just its willingness but its assiduous endeavours to link up with countries and organizations that can contribute to its development and security and to those of its member-states. ASEAN has taken this position despite its clear intention, at the time of its founding, to loosen its involvement in the quarrels of the big powers and to avoid being an arena for the conflicts of others. At the same time, despite its move to deal with others as a group, ASEAN has been pragmatic and flexible enough to take into consideration the individual members’ particular interests in bilateral security and economic relations with other countries. On the other hand, ASEAN’s strategic location, resource endowments, economicgrowth trajectory, emerging political solidarity, and openness to the outside world have attracted the interest of the world’s major powers.

THE DIALOGUE SYSTEM From the start, ASEAN’s external relations have been driven by both political and economic motives. The first relationship that ASEAN entered into, appropriately enough, was with the 79

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European Economic Community (EEC), in 1973, when ASEAN and the EEC began to conduct an “informal dialogue”. (Some date the formalization of the ASEAN-EEC relationship in 1977.) As ASEAN ministers noted then, it was right that the association should engage in a dialogue with another regional group, the most advanced among the world’s regional associations. To them, a relationship with Brussels also meant an important mark of international recognition. In practical terms, ASEAN used the dialogue with the EEC as a vehicle for seeking access for the member-countries’ products to the lucrative European market, promoting European investments in ASEAN, and attracting development assistance to the member-states. However, the political benefits of the relationship have also been high in ASEAN’s mind. For its part, the European Union (EU) sees ASEAN as a commercial and strategic link to the fast-rising East Asian region. To reinforce its relationship with the association, the EU supports some ASEAN projects, particularly those having to do with the environment, energy and regional economic integration. EU and ASEAN ministers meet regularly for discussions on international issues and on the relations between the two groups. Since 1996, the EU member-states and Asian countries, now including all ASEAN member-states, have been meeting at the summit in the Asia Europe Meeting every two years. This relationship is underpinned by the numerous cultural, intellectual and people-to-people exchanges sponsored by the Asia Europe Foundation, which was set up in 1997 and is headquartered in Singapore. In somewhat of a contrast, the relationship between ASEAN as a group and Japan started with a specific economic issue — the surge in Japan’s production and export of synthetic rubber, which competed directly with Southeast Asia’s

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exports of natural rubber, particularly Malaysia’s. ASEAN first raised the issue with Japan in 1973, and its foreign ministers took it up formally with their Japanese counterpart the next year. On Japan’s part, soon after the Pacific War, Tokyo had once again looked to Southeast Asia as a source of minerals, timber, crude oil, and other raw materials and as a market for Japanese manufactured products, this time in peaceful terms. In this light, Japan started to provide development assistance to build the required infrastructure in Southeast Asia and raise the purchasing power of its people. With ASEAN showing signs of long-term viability and growing political influence, Japan felt it increasingly necessary to deal with ASEAN as a group and with Southeast Asia as a region. After its Prime Minister, Kakuei Tanaka, underwent the unnerving experience of being threatened by anti-Japanese mobs in Bangkok and Jakarta in January 1974, Japan decided that it had to put its relationship with ASEAN in a broader context so as to strengthen relations with Southeast Asia in a more comprehensive way, generating goodwill as well as markets. Those relations would have to encompass the political, social and cultural, as well as the economic. Prime Minister Takeo Fukuda articulated this decision in the “doctrine” that he enunciated at the end of his tour of ASEAN countries, which followed his summit meeting with their leaders in 1977. He had been the first foreign leader, together with those of Australia and New Zealand, to hold such a meeting with ASEAN as a group. The Fukuda Doctrine had three components: •

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Japan’s commitment to peace and rejection of military power;

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The consolidation of mutual confidence between Japan and Southeast Asia on the basis of “‘heart-to-heart’ understanding”; Equal partnership with ASEAN and its member-countries, support for their “efforts to strengthen their solidarity and resilience”, and “mutual understanding” with the nations of Indochina.

Evidently, the Japanese intended to dispel any notion of Japan as a military threat, stress the importance of cultural and people-to-people relations with the Southeast Asian countries, and give assurances of Japan’s support for ASEAN as an association while reaching out to the new regimes in Indochina. Since then, succeeding Japanese Prime Ministers have frequently invoked the Fukuda Doctrine, basing on it their respective initiatives for strengthening the overall relationship between ASEAN and Japan. Starting with Fukuda’s 1977 swing around Southeast Asia, each Prime Minister has made the rounds of the ASEAN countries early in his incumbency. Aside from being those countries’ leading or second trading partner, Japan has been by far the region’s primary source of official development assistance, whether for its individual members or for ASEAN as a group, with the assistance going into infrastructure, human resource development, and institutional capacity building. It has been at the forefront of countries extending emergency help to ASEAN nations stricken by disasters. Japan has been an important source of support for the development of the Greater Mekong Sub-region, directly or through the Asian Development Bank. After the revaluation of the yen pursuant to the Plaza Accord of 1985, Japan began encouraging firms to relocate their operations to Southeast Asia, substantially contributing to the region’s industrialization. Similarly, Tokyo promoted Japanese

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tourism to Southeast Asia as part of its attempt to redress its trade surpluses with the rest of the world. Following the Asian financial crisis of 1997–98, it led regional efforts to recover from the crisis and prevent its recurrence, proposing an Asian Monetary Fund, a move, however, that was rebuffed by the United States. Japan has served as the anchor for the network of bilateral currency swap and repurchase agreements that is meant to discourage speculation on the region’s currencies. It has lent its considerable economic weight to the other measures to stabilize the regional economy taken under the so-called Chiang Mai Initiative (CMI) of the ASEAN Plus Three process. The CMI will be discussed in further detail below. Established in 1981, the ASEAN Center in the heart of Tokyo promotes ASEAN exports in Japan and Japanese investments and tourism in ASEAN. Japan finances the Center to the extent of 90 per cent, with the balance of 10 per cent shared equally by ASEAN’s member-states. Japan has also been supporting youth and cultural exchange programmes, including the ASEAN Cultural Fund, a scholarship programme for ASEAN students, the Friendship Programme for the 21st Century, the Ship for Southeast Asian Youth, and the Solidarity Fund in the ASEAN Foundation. With Europe and Japan recognizing ASEAN’s value and establishing “dialogues” with it, Australia, seeking to strengthen its links with Asia, followed suit in 1974, and New Zealand in 1975. Chastened by its tragedy in Vietnam but continuing to maintain considerable interests in Asia, the United States entered into a Dialogue relationship with ASEAN in 1977. So did Canada. Australia was the first individual country to be an ASEAN Dialogue Partner, the first to discuss economic cooperation projects as well as trade issues with ASEAN. An ASEAN-Australia

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Forum manages the projects, which are quite concrete and pragmatic and come in phases covering several years each. Australia has a clear interest in close relations with ASEAN, which Canberra sees as an avenue for its engagement with Southeast Asia, an additional platform for its ties with East Asia, and the hub of East Asian and Asia-Pacific regionalism. New Zealand’s Prime Minister met with ASEAN’s heads of government on the occasion of the second ASEAN Summit in Kuala Lumpur in 1977, together with those of Australia and Japan. Although it is a small country with a relatively small economy, New Zealand exploits its strengths — specifically, in alternative sources of energy and in forestry — in its development cooperation with ASEAN. Wellington has been active in supporting capacity building in the newer members of ASEAN. By virtue of its extensive trade, investment and tourism links with ASEAN’s member-countries and of its economic heft, military power and political influence, the United States is one of ASEAN’s indispensable Dialogue Partners. Its ties with the U.S. provide ASEAN with broader strategic options beyond East Asia. The U.S. has always been a prominent participant in the Post-Ministerial Conferences and the ASEAN Regional Forum. Exchanges of views on security and strategic issues between ASEAN and the U.S. — leaders, ministers, officials, academics — are extremely valuable. Contrary to perceptions shaped by the mass media, Washington’s ties with Southeast Asia as a region and ASEAN as a regional entity have intensified under the George W. Bush administration, particularly in support of ASEAN’s economic integration. President Bush met with the leaders of the ASEAN members of APEC on the occasion of the APEC Economic Leaders Meetings in Los Cabos, Mexico, in 2002, and at subsequent

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such meetings. The Joint Vision Statement on the ASEAN-U.S. Enhanced Partnership, which was issued in Washington and in all ASEAN capitals in 2005, followed by a Plan of Action, set the direction of ASEAN-U.S. relations in the future. The ASEAN Cooperation Programme, initiated in 2002, places ASEAN-U.S. development cooperation within a coherent framework, which encompasses the ASEAN-U.S. Technical Assistance and Training Facility. A regional aid office has been set up in Bangkok. An ASEAN liaison officer has been assigned to the U.S. embassy in Jakarta, and the future appointment of a U.S. ambassador to ASEAN has been announced. Specialists from the U.S. have worked in the ASEAN Secretariat. ASEAN senior officials have met with their U.S. counterparts in Washington and been received at Cabinet level in the U.S. capital. With a membership of more than a hundred of the U.S. leading corporations, the US-ASEAN Business Council has been the primary advocate of strong U.S. links with ASEAN and articulates American business interests in Southeast Asia, including contacts with the economic, finance, transport and other ASEAN ministerial bodies. Canada was one of ASEAN’s first six Dialogue Partners, being at that time one of the few developed, market economies. However, trade and investment flows between ASEAN and Canada have been rather thin. Based on the ASEAN-Canada Economic Agreement, development cooperation focused on forestry, human resource development, fisheries, energy, agriculture, transportation and communications. Active cooperation was interrupted in 1997 on account of Canada’s refusal to have any dealings with Myanmar and to extend assistance to Brunei Darussalam and Singapore. It was resumed in 2004. The United Nations Development Programme became an ASEAN Dialogue Partner in 1977, but it is a special case, being

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the only international agency in the Dialogue system. It occasionally takes part in limited segments of ASEAN’s PostMinisterial Conferences. With ASEAN assuming the status of UN observer in December 2006, consideration is being given to conferring Dialogue Partner status on the UN itself. Although strategic considerations were never far from their minds, the ASEAN countries, before the 1990s, used the Dialogues as a venue for gaining access for their products, which were at the time mostly commodities, to developedcountry markets, protecting those products from synthetic competition or releases from strategic stockpiles, encouraging investments in ASEAN countries, and drawing development assistance to them. Thus, for about a decade and a half, the Dialogue system was limited to the ASEAN countries’ major trading partners and sources of investments and development aid, that is, the developed world — Australia, Canada, the European Community, Japan, New Zealand and the United States — plus the UNDP. It was not until 1991 that ASEAN added a new Dialogue Partner — South Korea, which was technically a developing country but had become highly industrialised and acquired many of the characteristics of a developed economy. ASEAN also used the Dialogue process to gain international support for its diplomatic positions, such as on the Cambodian situation of the 1980s and on the Indochinese asylum-seekers. For their part, the Dialogue Partners have been driven mostly by political as well as economic motives in their relations with ASEAN. They use ASEAN mainly to strengthen their presence in the region, to maintain a voice in developments there, and, on the part of those from outside the region, as an additional political and economic link to East Asia as a whole. For the Dialogue Partners, ASEAN has served the useful purpose of

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giving a regional, political dimension to their relations with Southeast Asia, which is strategically and economically important to them. Thus, for both ASEAN and the Dialogue Partners, the Dialogue system has a mixture of political and economic components, the proportions of which have varied with each ASEAN country, with each Dialogue Partner, and from time to time. Having sought a Dialogue Partnership with ASEAN as early as 1982, South Korea became an ASEAN Dialogue Partner in 1991. Since then, Seoul has been crisp and business-like in its approach to development cooperation with ASEAN, which has included economic and technical assistance, especially for the newer ASEAN members, environmental protection, and youth and cultural exchanges. It was, under President Kim Dae Jung, at the forefront of the development of the ASEAN Plus Three process. As the political element in the Dialogues grew in the 1990s, ASEAN considered it useful to bring China, India and Russia into the Dialogue system. The three countries were deemed to have important strategic roles to play in East Asia. Moreover, their economies were surging, albeit at different paces and in different ways. They became ASEAN Dialogue Partners in 1996. Since their collaboration on the Cambodian conflict in the 1980s and its eventual political settlement, the relationship between ASEAN and China has been the fastest to develop among the ASEAN Dialogue Partnerships. Even before China formally entered the Dialogue system in 1996, the ASEANChina relationship had started to grow rapidly, with joint committees on trade and economic cooperation and on science and technology being set up in 1994 and a regular political consultative forum of senior foreign ministry officials being launched

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in 1995. China was a founding participant in the ASEAN Regional Forum and was the first Dialogue Partner to accede to the Treaty of Amity and Cooperation in Southeast Asia. On the jurisdictional disputes that China has with four ASEAN members in the South China Sea, Beijing, faced with determined ASEAN solidarity on the issue, altered its posture from its insistence on dealing with the ASEAN claimants individually to discussing the matter with ASEAN as a group. The process resulted in the 2002 Declaration on the Conduct of Parties in the South China Sea, an informal code of conduct committing all parties not to resort to force, exercise self-restraint, and refrain from moving into unoccupied land features in the South China Sea. With the death of Mao Zedong in 1976 and the rout of the radical Maoist faction in the Chinese leadership, Beijing, under Deng Xiaoping’s leadership, reformed China’s economy and opened it to the world. Aside from resulting in that economy’s spectacular growth, China’s economic reforms eventually opened new opportunities for its Southeast Asian neighbours. ASEAN and China have reinforced market forces by entering into agreements that provide policy frameworks for their rapidly growing trade and investment links. The centrepiece is the ASEAN-China Framework Agreement on Comprehensive Economic Cooperation, signed in 2002. Pursuant to this, agreements on trade in goods, trade in services, and a dispute-settlement mechanism have been concluded, with the investment component still being negotiated. Besides liberalizing and promoting trade and investments between them and laying down agreed rules for them, these policy frameworks send signals to ASEAN and China’s officials and business people affirming the importance of their countries to each other and strengthen the political ties between them. China

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also organizes an annual China-ASEAN EXPO in Nanning, the Chinese provincial capital closest to Southeast Asia. China has agreed to set up an ASEAN-China Centre for Trade, Investments and Tourism similar to the long-standing such center in Tokyo. India almost became an ASEAN Dialogue Partner as early as 1980. It would have been the first developing country to do so. However, ASEAN and India found themselves on opposite sides of the Cambodian conflict in the 1980s, and the Dialogue Partnership was held in abeyance. After the settlement of the Cambodian problem, and with India undertaking reforms in its economy and opening it up, India finally entered the ASEAN Dialogue system in 1996, together with China and Russia, and started participating in the ASEAN Regional Forum. ASEAN’s interest in India arises from the strategic role that New Delhi plays in Asian and global affairs. For countries like Singapore and Malaysia, India also represents a rapidly growing market and a potential investment destination. Within the framework of the Dialogue relationship, ASEAN and India have been cooperating largely on the basis of India’s strengths in the biological sciences, information technology, pharmaceuticals, small and medium enterprises, and human resource development in general. In 2002, on the occasion of the ASEAN Summit in Phnom Penh, the ASEAN leaders met with India’s Prime Minister for their first summit. The ASEAN-India summit has been held annually ever since. Pursuant to the 2003 Framework Agreement on Comprehensive Economic Cooperation, ASEAN and India are negotiating a free trade area agreement. After the Russian Federation’s emergence from the breakup of the Soviet Union and following the settlement of the Cambodian problem, ASEAN and Moscow began to look at

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each other with interest. Despite its diminished size, Russia has remained a power to reckon with in world affairs. It is a nuclear-weapon state that is a permanent member of the United Nations Security Council. An important factor in the Middle East, Russia is a member of the Quartet that is nudging the Israel-Palestine peace process along. It takes part in the Six-Party Talks on the nuclear problem in North Korea. Russia considers itself as an Asian power, with a robust military presence, notably of its Navy. It is in partnership with China and four Central Asian states in the Shanghai Cooperation Organization, which has conducted joint military exercises. It has been admitted to the Asian Cooperation Dialogue, a loose forum of nations in a region stretching from Central Asia to East Asia. Russia has enormous energy resources, from which it has considerably bolstered its financial power as a result of soaring energy prices. It has made significant advances in certain sectors of science and technology. Nevertheless, ASEAN does not consider its relations with Russia substantive enough to merit Moscow’s inclusion in the East Asia Summit. It was for its strategic importance that Russia became an ASEAN Dialogue Partner in 1996 and was a founding participant in the ASEAN Regional Forum.

THE POST-MINISTERIAL CONFERENCES For more than 25 years, the dialogues have been consolidated in gatherings at the ministerial level. The ASEAN foreign ministers invited their Japanese counterpart to meet with them on the occasion of the 1978 ASEAN Ministerial Meeting to discuss ways of following through on the decisions at the ASEAN-Japan Summit of 1977. The next year, the United States, Australia, New Zealand and the European Community expressed

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their interest in also meeting with ASEAN, particularly in the light of Vietnam’s incursion into Cambodia and the continuing problem of Indochinese asylum-seekers. Such meetings, including Canada and, later, the four additional Dialogue Partners, have been convened annually since then. They have been taking place immediately after the annual ASEAN Ministerial Meetings; hence, they are called the Post-Ministerial Conferences. In these conferences, ASEAN engages its Dialogue Partners, together and individually, in discussions of global and regional issues and initiatives for regional cooperation. At the “working lunch” among ASEAN and its ten Dialogue Partners in August 2007, for example, they discussed the situation on the Korean peninsula and the threat of climate change. In addition, forums and joint committees are convened between ASEAN officials and those of each Dialogue Partner for more detailed discussions of the issues and for decisions on specific cooperative projects and other activities. In recent years, “comprehensive partnership agreements” have been adopted with three- to five-year plans of action to set the direction of most Dialogue Partnerships.

FREE TRADE AREAS AND ECONOMIC PARTNERSHIPS ASEAN has been at various stages of negotiating and concluding free trade area (FTA) or “comprehensive economic partnership” (CEP) arrangements with China, South Korea, India, Japan, and Australia and New Zealand. These arrangements are expressly intended to reduce or remove obstacles to trade and investments and facilitate them. In some cases, they include technical assistance for the ASEAN parties that need them. Just as or even more importantly, the FTA or CEP arrangements

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are politically considered as hallmarks of close relations with ASEAN. Of these, the arrangement with China is the most advanced. In accordance with the 2002 ASEAN-China Framework Agreement on Comprehensive Economic Cooperation, agreements on trade in goods and on a dispute-settlement mechanism were concluded in 2004 and a framework agreement on trade in services was signed in 2007. As of this writing, the investments component is still under negotiation. Similarly, pursuant to a 2005 comprehensive agreement, ASEAN and South Korea concluded the trade-in-goods component in 2006 (minus Thailand on account of continuing disputes over agricultural trade) and established a dispute-settlement mechanism. An agreement on services was signed in 2007, with the investments component to follow. ASEAN and India are still struggling in their own negotiations, primarily over the pace of tariff reductions and India’s reluctance to free up trade in agriculture. ASEAN’s negotiations with Australia and New Zealand together have been taking the longest time but are also the most comprehensive, prominently including technical assistance and capacity building, which are to some extent already being carried out. In November 2007, ASEAN and Japan concluded negotiations on a Comprehensive Economic Partnership Agreement, scheduled for signing in 2008. In the meantime, Japan had been concluding “economic partnership” agreements with individual ASEAN countries — so far, with Singapore, Malaysia, the Philippines, Indonesia, Thailand and Brunei Darussalam. ASEAN and the United States have entered into a broad Trade and Investment Framework Arrangement, in the context of which the U.S. would negotiate free-trade agreements with individual ASEAN members. The U.S. has concluded such an

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agreement with Singapore and has started negotiating one with Malaysia. Similar negotiations with Thailand are in abeyance. ASEAN and the European Union have started negotiations on a free-trade agreement, with the EU insisting that only a comprehensive agreement including services and investments makes sense and ASEAN preferring initially to negotiate only on trade in goods. Aside from easing trade and investment flows between the parties, the negotiation, conclusion and implementation of freetrade or comprehensive-partnership agreements serve to clarify economic issues between them. They can be used as platforms for the launch of domestic reforms that would be necessary not only by virtue of the demands of the agreements themselves but also for the overall competitiveness of the economies concerned. They highlight for the business community of one party the opportunities offered by the other. Not least, a free-trade or comprehensive-partnership agreement sends a signal of the importance in which the two parties hold their overall relationship with each other.

THE ASEAN REGIONAL FORUM By the early 1990s, the political importance of the Dialogues intensified as a result of the altered configuration of the strategic situation following the end of the Cold War, the reforms in China, and, in Southeast Asia, the settlement of the Cambodian problem. Accordingly, at the ASEAN Summit of January 1992, its leaders directed ASEAN to “intensify its external dialogues in political and security matters by using the ASEAN Post Ministerial Conferences”. Senior officials of ASEAN and its Dialogue Partners met in Singapore in May 1993 to discuss how to carry out this mandate. With Vietnam not yet an ASEAN

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member and China and Russia not yet in the Dialogue system, it soon became quite clear that regional security could not be fruitfully discussed without their participation. Accordingly, after an informal meeting among ministers in July 1993, ASEAN invited not only its Dialogue Partners but also others to a gathering called the ASEAN Regional Forum (ARF) on the occasion of the annual ASEAN Ministerial Meeting in Bangkok in mid-1994. The others were China and Russia, categorized in ASEAN’s usual creative and pragmatic way as “consultative partners”; Papua New Guinea, an observer in ASEAN since 1976; and Laos and Vietnam, at the time ASEAN observers on the way to membership. Together with Myanmar, India took part in the ARF ministerial meeting for the first time in 1996, the year of its entry into the ASEAN Dialogue system. A year earlier, Cambodia had joined the ARF, having become, like Myanmar, an ASEAN observer on the way to full membership. Mongolia was admitted into the forum in 1999, North Korea in 2000, Pakistan in 2004, Timor-Leste in 2005, Bangladesh in 2006, and Sri Lanka in 2007, increasing ARF participation to 27 as of mid2007. Inevitably, with the entry of four countries from South Asia, the ARF’s “footprint” is bound to expand beyond the Asia-Pacific. The ARF is discussed more extensively in Chapter 2.

TREATY OF AMITY AND COOPERATION At the first ASEAN Summit in February 1976, the ASEAN leaders signed the Treaty of Amity and Cooperation in Southeast Asia, which embodies Southeast Asia’s commitment to its norms for inter-state relations — the rejection of the use or threat of force, the peaceful settlement of inter-state disputes, and non-

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interference in others’ internal affairs. Subsequent ASEAN members had to sign on to the treaty. After the signatories amended the treaty in 1987 to allow non-regional states to accede to it, Papua New Guinea did so in 1989, China and India in 2003, Japan and Pakistan in July 2004, South Korea and Russia in November 2004, New Zealand and Mongolia in July 2005, Australia in December 2005, France and East Timor in January 2007, and Sri Lanka and Bangladesh in August 2007. By doing so, these countries adopted the ASEAN norms for inter-state relations. The European Union has reached a decision to be a party to the treaty, with ASEAN sorting out the legal questions surrounding the accession by a non-state party. The United Kingdom has expressed an interest in acceding to the treaty.

ASEAN PLUS THREE By the early 1990s, it had become evident to ASEAN that the times were calling for a heightened relationship with its neighbours in the north — China, Japan and South Korea. China’s economy was continuing its extraordinary surge. Korea’s was maintaining its dynamic industrial expansion. Japan remained eager to play its role as Asia’s economic leader. At the same time, the East Asian economy was becoming more integrated in terms of trade and investment flows, so that today intraregional trade, as a percentage of total East Asian trade, is at a higher level than that of the North American Free Trade Agreement and approaching that in the European Union. Moreover, promoting East Asian contacts would help manage the tensions and potential conflicts in the relations among the three Northeast Asian powers. Malaysia’s Prime Minister, Dr. Mahathir Mohamad, gave voice to his recognition of this when he proposed an East Asia

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Economic Group in December 1990. However, the proposal did not make much headway in ASEAN, partly because of a lack of prior consultation within the association. It was not until December 1997, in Kuala Lumpur, that East Asian regionalism gained both visibility and momentum with the first summit of ASEAN with China, Japan and Korea. Since then, ASEAN leaders have met with their counterparts from the three Northeast Asian countries every year, together and with each of them. The process was called ASEAN Plus Three to signal its informal nature and ASEAN’s leadership role in it. It would be presided over by the ASEAN chair, and its summits would be held in conjunction with the annual ASEAN Summit. The ASEAN Plus Three process has been steadily expanding into an increasing number of areas of cooperation. Until the foreign ministers endorsed four new forums in July 2006, ASEAN Plus Three had 16 active forums, almost all at the ministerial level, undertaking activities and projects of varying degrees of concreteness, at different stages of development, and in diverse states of focus and coherence. These pertain to political and security matters, trade and investment, agriculture, fisheries and forestry, energy, the environment, tourism, transnational crime, health, labour, culture and the arts, science and technology, information and communications technology, social welfare, youth, and rural development, as well as finance. No less than 48 mechanisms, not counting the ASEAN Secretariat, manage and drive these activities and projects. The four new areas of cooperation are rural development and poverty eradication, women issues, disaster risk management and emergency response, and minerals. The leading, and perhaps most important, of ASEAN Plus Three’s areas of cooperation is finance. This is most prominently embodied in the Chiang Mai Initiative (CMI), which was

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launched in 2000 to help East Asian nations recover from the 1997–98 financial crisis and, above all, prevent its recurrence. Supported by the Asian Development Bank (ADB) as well as the ASEAN Secretariat, the CMI has several components. One is a system for conducting, at the ministerial and senior officials’ levels, the collective surveillance and review of the regional economy, a measure for avoiding surprises like that sprung by the financial crisis. Another is the enlargement of the ASEAN Swap Arrangement to include all ten ASEAN members and to a value of US$2 billion. Another is a network of bilateral currency swap and repurchase agreements under which each of the parties would make available foreign exchange to the other party in the arrangement should the latter find itself in a serious balance-of-payments problem. The total value of the 16 arrangements agreed upon so far amounts to some US$80 billion. The system is being gradually “multilateralized”, that is, consolidated and subjected to collective decision. While some economists consider the amount involved as too small to make any difference in an actual financial crisis, the very existence of the network of swap arrangements, with Japan at its core and the ADB backstopping it, could discourage currency speculation and bring an added measure of financial stability to the region. ASEAN Plus Three has also launched the Asian Bond Market Initiative, which is intended to use East Asia’s enormous savings for investments in East Asia, and is exploring ways of coordinating exchange rates. Beyond these areas of practical cooperation, the ASEAN Plus Three process serves a number of strategic purposes. It provides forums, including the annual summits, for building confidence among the countries of East Asia and a political framework for the growing linkages between the economies of Southeast and Northeast Asia. Not least, ASEAN Plus Three

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offers an additional venue for informal contacts among China, Japan and Korea.

THE EAST ASIA SUMMIT At the second ASEAN Plus Three Summit, in 1998, President Kim Dae Jung of the Republic of Korea proposed the establishment of an East Asia Vision Group (EAVG) of “eminent intellectuals” to recommend ways of developing an East Asian community. The 2000 ASEAN Plus Three Summit appointed an East Asia Study Group (EASG) of senior officials and the ASEAN SecretaryGeneral to assess the EAVG recommendations. One of the long-term recommendations was for the establishment of an East Asia Summit. Although neither the EAVG nor the EASG envisioned this to happen anytime soon, the ASEAN Summit of 2004 decided to convene the East Asia Summit in conjunction with the ASEAN and ASEAN Plus Three Summits in Kuala Lumpur in 2005. The ASEAN Plus Three leaders quickly supported the ASEAN decision, apparently without the issue of participation being settled. That issue was basically one of whether to limit EAS participation to ASEAN Plus Three or to include other states in it. ASEAN was divided on the question. Some member-states wanted to restrict it to ASEAN Plus Three as, it seems, originally intended. Others preferred the broader participation, initially to include ASEAN’s next circle of important neighbours. In answer to a question after his Singapore Lecture in February 2005, President Susilo Bambang Yudhoyono stated Indonesia’s desire for the inclusion of Australia, India and New Zealand in the EAS. Singapore had signaled a similar preference. A larger EAS would in certain ways provide value beyond ASEAN Plus Three, bring Australia, India and New Zealand into cooperative

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endeavours to which they could usefully contribute, and signal ASEAN’s open-ended desire to engage the international community beyond East Asia. Australia, India and New Zealand were increasingly linked to East Asia, particularly economically. Indeed, ASEAN was already having annual summit meetings with India, while Australia and New Zealand had been holding intensive talks with ASEAN on a “comprehensive economic partnership” between the two groups. The view favouring the broader participation in the EAS ultimately prevailed, with the ASEAN foreign ministers agreeing in April 2005 on three conditions for participation — the status of full ASEAN Dialogue Partner, accession to the Treaty of Amity and Cooperation in Southeast Asia, and substantive relations with ASEAN. The first two criteria — Dialogue Partner status and accession to the Treaty of Amity and Cooperation — are objective enough. Australia and New Zealand have been ASEAN Dialogue Partners since 1974 and 1975, respectively, and India since 1996. India signed the treaty in October 2003, New Zealand in July 2005. Australia had publicly denigrated the treaty, but, faced with exclusion from the EAS, had to do a policy turnaround and acceded to it in Kuala Lumpur, four days before the first EAS. In my paper “Russia, ASEAN and East Asia” in the ISEAS publication, Russia-ASEAN Relations: New Directions, I noted, “The third criterion — whether a prospective EAS participant has ‘substantive’ relations with ASEAN — is more subjective. Whereas the other two criteria are matters of fact, the third is a matter of judgment and, therefore, of political decision. If, for political reasons, an ASEAN member wished a Dialogue Partner and treaty party to participate in the EAS, it could argue that that country’s relations with ASEAN are ‘substantive’. On the other hand, if another ASEAN member had an interest in

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blocking that Dialogue Partner’s participation, it could claim that the latter’s relations with ASEAN are not “substantive” enough. In other words, as is usual in diplomacy, the political decision determines the public argument rather than the other way around.” The distinction between the functions of ASEAN Plus Three and the EAS remains fuzzy. The countries involved have not sought to clarify it, apparently preferring to let each forum evolve over time, with ASEAN at its core. Meanwhile, there should be no reason why Australia, India and New Zealand cannot join any of the cooperative endeavours of ASEAN Plus Three if it would be in the interest of all involved for them to do so. While the three EAS meetings so far have been largely devoted to discussions of broad strategic and economic issues, each of them did focus on a subject of great significance for people in Asia and in the world — the threat of an avian influenza pandemic in Kuala Lumpur in December 2005, energy security in Cebu, the Philippines, in January 2007, and “Energy, Environment, Climate Change and Sustainable Development” in Singapore in November 2007.

CONCLUSIONS The succession of frameworks that ASEAN has built over the years for relating to other countries and regions has provided political platforms for ASEAN to relate to the world’s developed countries and strategic powers and other significant actors on the regional stage. It has, for example, helped to keep the United States engaged in East Asia in constructive ways and to provide the U.S., China and others with a benign multilateral environment for developing their relations with each other and with the rest of the region and other important

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parts of the world. The variety of those frameworks manifests the flexibility and pragmatism of ASEAN’s approach to its relations with others in the world. At the same time, the external powers find ASEAN convenient as the convener and hub of regional forums for interaction, ASEAN being benign, harmless, neutral and made up of no less than ten countries. The forums provide additional venues for the external powers not only to engage ASEAN but also to interact with each other bilaterally or in small groups, as the three Northeast Asian powers do on the occasion of the ASEAN Plus Three meetings. The free trade area and economic partnership agreements that ASEAN has been concluding with major partners are not only measures for promoting trade, investments and other economic interactions. They also express the intention of ASEAN and its partners to intensify their relationships, send signals to their officials and peoples about those relations, and indicate the direction of the partnerships in the future. The negotiations leading to the agreements clarify positions and concerns and enable the parties to identify and reach common ground. Not least, the agreements require and encourage reforms in domestic policy. In order to derive maximum benefit from leading the process of East Asian and Asia-Pacific regionalism and enhance the effectiveness of its leadership role, ASEAN has to strengthen its capacity to provide the intellectual impetus for the process. This would require closer political cohesion, deeper economic integration, as well as creativity, imagination and a keen sense of the region’s long-term strategic interests.

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Chapter 6

Building a Community A senior officer at the ASEAN Secretariat once observed that people will really feel part of ASEAN when they are able to live and work or study freely anywhere in the region, as in the European Union. Other observers of ASEAN have countered that the free movement of Southeast Asians to live and work or study anywhere in the region will be possible only when the consciousness of belonging to ASEAN has reached a certain level among its people. Not surprisingly, the truth lies in both assertions. The two propositions reinforce each other. A regional consciousness and a regional identity have to be relentlessly cultivated even as policies are evolved progressively to free up the movement of people around the region. A regional consciousness does not come at the expense of one’s national identity. A German acquaintance of mine likes to say, “I am a Bavarian, a German and a European — all at the same time.” A French scholar asserts that her children consider themselves European as well as French. Southeast Asia has not yet reached the stage at which its people can say and truly feel that they are Southeast Asians or people of ASEAN. This is another way of saying that ASEAN is not yet a community in the sense that Europe is. Because of its social and political implications, the free movement of people should be and can only be a later phase 103

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in the process of regional economic integration; such a process would normally begin with the free movement of goods and services. Then would come, selectively, the free flow of capital. Regional economic integration, in turn, would require, and at the same time reinforce, a resolve on the part of states and peoples to strive for good relations and develop mutual trust among them. So would effective cooperation in dealing with regional problems. So would a realization, necessarily gradual, of shared regional interests and mutual need. Only in this way will an ASEAN community emerge and be built. As the European experience has demonstrated, the concrete measures of regional community building must first aim at the integration of the regional economy. An integrated regional economy is supposed to attract investments into the region, create jobs, increase the efficiency of production, lower transaction costs, reduce prices, foster competition, and thus hone the competitiveness of the region’s firms and workers. It would give all participants a common stake in the region’s economic growth — and in regional peace and cooperation. It would thereby persuade the people in the region of the concrete benefits of regional community building. It would strengthen the bonds among them. Moreover, regional economic integration would require a significant measure of transparency and thus promote mutual confidence. Not least, economic integration would both require and foster domestic policy and institutional reforms. A preferential trading arrangement like the ASEAN Free Trade Area would not work unless customs procedures in the ASEAN countries were competent, efficient and honest. The harmonization of product standards would require raising the quality of ASEAN goods and services. Regional economic integration would call for significant improvements in certain services,

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like transportation and telecommunications, which would benefit both businesses and consumers. This would entail fostering competition in these sectors. Economic integration would attract investments into the region, but the investments would go to those individual economies that have the elements of a good investment climate — the rule of law, consistent policies consistently applied, reduced corruption, an independent judiciary, fair competition, protection of intellectual property rights, and so on. Participation in an integrated ASEAN economy should, therefore, inspire domestic policy and institutional reforms. It should be noted that new entrants into the EU — for example, Ireland in 1973 and Greece, Portugal and Spain in the 1980s — were able to launch their economic take-offs after their entry, not so much because of the financial aid given to them by the Union, as is sometimes claimed. They could do so largely because of the domestic reforms that they had to undertake by virtue of their EU membership as well as the larger markets opened to them. In ASEAN’s case, this, of course, assumes that agreements on economic integration measures are complied with. A culture of compliance has to develop within the association. This means that the member-states would be following through on their commitments with the necessary implementing agreements and domestic reforms. Compliance and its culture would presuppose the recognition of the value of regional stability, integration and cooperation for the national welfare. One thing is clear: Without a culture of compliance, ASEAN as a region would not only lack credibility in investors’ eyes; it would not gain the other benefits of regionalism described above. As noted in Chapter 3, while the tariff-cutting exercise on intra-ASEAN trade has been more or less on track, the

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follow-through on the other foundations of regional economic integration has been largely inadequate. Compliance would, of course, not be limited to the economic undertakings, but would apply to such commitments as those made in the Treaty of Amity and Cooperation in Southeast Asia, the Southeast Asia Nuclear Weapon-Free Zone treaty, the ASEAN Agreement on Transboundary Haze Pollution, other agreements on the environment, and the cooperative measures on communicable diseases. The ASEAN Charter is supposed, among other purposes, to promote compliance with ASEAN commitments. Obviously, this assumes that, once it is ratified by all member-states, the charter itself is complied with. After almost 40 years of operating without a formal charter and with few binding agreements, relying largely on informal processes and personal relationships, ASEAN, at the summit of December 2005, decided to adopt an ASEAN Charter and to appoint an Eminent Persons Group (EPG) that would submit recommendations on its nature and contents. Chaired by Tun Musa Hitam, former Deputy Prime Minister of Malaysia, the EPG turned over its report to the ASEAN Summit in January 2007. According to the report, the charter should codify the objectives and principles found in various ASEAN declarations and agreements, many of them having been embodied in the 2005 Kuala Lumpur Declarations on the Establishment of the ASEAN Charter. Most had to do with the relations among ASEAN countries and among states in general. Beyond these, however, they included certain norms for the behaviour of states towards their citizens. Among those norms were: •

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“Respect for and protection and promotion of human rights and fundamental freedoms; …

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“Rejection of unconstitutional and undemocratic changes of government; … “Rejection of acts of genocide, ethnic cleansing, torture, the use of rape as an instrument of war, and discrimination based on gender, race, religion or ethnicity”; … “Commitment to develop democracy, promote good governance and uphold human rights and the rule of law”.

The report reaffirms the creation of “a single market and production base” as one of ASEAN’s objectives and the “Fulfillment and implementation in good faith of all obligations and agreed commitments to ASEAN” as one of its principles, notably, it is presumed, obligations and commitments with respect to regional economic integration. As drafted by a committee of senior government officials and signed by the ASEAN leaders at their November 2007 summit, the charter puts forward, in addition to those having to do with inter-state relations and regional cooperation, purposes that pertain to the conduct of countries’ internal affairs. These include: •

•

“To strengthen democracy, enhance good governance and the rule of law, and … promote and protect human rights and fundamental freedoms, with due regard to the rights and responsibilities of the Member States of ASEAN; … “ To enhance the well-being and livelihood of the peoples of ASEAN by providing them with equitable access to opportunities for human development, social welfare and justice”.

Similarly, the charter lays down among ASEAN’s principles two that prescribe basic domestic policies for the memberstates:

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“Adherence to the rule of law, good governance, the principles of democracy and constitutional government; “Respect for fundamental freedoms, the promotion and protection of human rights, and the promotion of social justice”.

The charter has the creation of “a single market and production base” as one of ASEAN’s goals and, as one of its principles, “adherence to multilateral trade rules and ASEAN’s rules-based regimes for effective implementation of economic commitments and progressive reduction towards elimination of all barriers to regional economic integration”, a formulation more specific than the EPG report’s. To make the member-states’ commitment to this goal and principle clear and firm, the ASEAN leaders adopted a “blueprint” for achieving the ASEAN Economic Community by 2015. The “blueprint” reiterates previous commitments to regional economic integration, adding a few new ones, spells out specific “actions” for carrying them out, and lays down deadlines for most of them. The EPG report prescribed the consideration of sanctions, to be unanimously decided upon by the ASEAN leaders, “for any serious breach by a Member State of the objectives, principles, and commitments as contained in the existing ASEAN declarations, agreements, concords, and treaties as well as the norms and values adhered to by ASEAN”. The recommendations specified the suspension of the “rights and privileges” of membership as a possible sanction. Among the causes for sanction would be defiance of a decision by an ASEAN dispute-settlement mechanism. The Secretary-General would be directed to report to the leaders “cases of non-compliance”. On the other hand, the charter carries no reference to sanctions in the text as adopted. In a bow to pragmatism and realism, and as a result of inter-governmental negotiations, it

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leaves it to the leaders collectively to decide on what action to take on any serious breach of the objectives and principles adopted in the document. Laying down norms of behaviour — internal as well as external, domestic as well as inter-state — even in the general terms of the charter would project ASEAN as an association with standards, affirm what it stands for, and provide members with agreed principles to invoke in case of egregious departures from them. Reaffirming the goal of a single market and specifying in greater detail the steps for achieving it would, it is hoped, give ASEAN countries further impetus for carrying out those steps. The very possibility of sanctions, unlikely their imposition might be, would serve to put member-states’ feet to the fire. The fact is that the charter must not be expected to change ASEAN’s character overnight. No document can do that for any association of sovereign states. At most, the charter can embody the association’s aspirations for the future, reflect its present reality, derive lessons from its past experience, and make more effective its institutions and processes — and subject it to rules more than it has been so subjected in the past. In this way, the charter can help ASEAN evolve, as its members realize the commonality of their interests, develop a culture of compliance, and gradually inspire in their people a true sense of regional identity. All this would represent significant progress, and those who are thinking of withholding ratification from the charter for whatever reason would do well to remember that such an act would set back this progress. Although the charter is meant to give ASEAN a legal personality, ASEAN does not — charter or no charter — have an existence separate from that of its member-states. Anything that ASEAN does or becomes is the result of negotiations and common decisions by the member-states.

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ASEAN has so far succeeded in fostering peace and stability in Southeast Asia and contributing to the stability of East Asia and thus to global peace. The charter can help, but the memberstates will individually have to ensure that the region remains stable and at peace in the future. To improve its competitiveness in the markets of the world, ASEAN has laid the foundations for regional economic integration. The charter has to make possible a way to make sure that member-states comply with their commitments. ASEAN has recognized the necessity of cooperating in dealing with the growing number and complexity of regional problems. With the help of the charter, it must now see to it that the member-states strengthen their and the association’s capacity to do so. Underlying all this would be the expansion of the scope of perceived common interests, common interests in peace and stability, in regional economic integration, and cooperation for common purposes. This would require the patient and longterm endeavour of education, both of the public at large and of children in their formative years. In the end, ASEAN’s future depends on how member-states succeed in this regard.

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References The ASEAN Charter, November 2007. ASEAN Declaration, Bangkok, 8 August 1967. Qadri, S. Tahir, ed. Fire, Smoke, and Haze: The ASEAN Response Strategy. Manila: Asian Development Bank, 2001. Report of the Eminent Persons Group on the ASEAN Charter. Jakarta: ASEAN Secretariat, 2006. Sandhu, K. S. et al. The ASEAN Reader. Singapore: Institute of Southeast Asian Studies, 1992. Severino, Rodolfo C. Southeast Asia in Search of an ASEAN Community. Singapore: Institute of Southeast Asian Studies, 2006. Siddique, Sharon, and Sree Kumar. The 2nd ASEAN Reader. Singapore: Institute of Southeast Asian Studies, 2003. “Third ASEAN State of the Environment Report”. Jakarta: ASEAN Secretariat, 2006. Treaty of Amity and Cooperation in Southeast Asia, 24 February 1976. Vientiane Action Programme (VAP) 2004–10. Jakarta: ASEAN Secretariat, 2004.

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