ASEAN

96 ASEANEconomic Group in December 1990. However, the proposal didnot make much headway in ASEAN, partly because of a lackof prior consultation within the association. It was not untilDecember 1997, in Kuala Lumpur, that East Asian regionalismgained both visibility and momentum with the first summit ofASEAN with China, Japan and Korea. Since then, ASEAN leadershave met with their counterparts from the three NortheastAsian countries every year, together and with each of them.The process was called ASEAN Plus Three to signal its informalnature and ASEAN’s leadership role in it. It would be presidedover by the ASEAN chair, and its summits would be held inconjunction with the annual ASEAN Summit. The ASEAN Plus Three process has been steadily expandinginto an increasing number of areas of cooperation. Until theforeign ministers endorsed four new forums in July 2006, ASEANPlus Three had 16 active forums, almost all at the ministeriallevel, undertaking activities and projects of varying degrees ofconcreteness, at different stages of development, and in diversestates of focus and coherence. These pertain to political andsecurity matters, trade and investment, agriculture, fisheriesand forestry, energy, the environment, tourism, transnationalcrime, health, labour, culture and the arts, science and technol-ogy, information and communications technology, social welfare,youth, and rural development, as well as finance. No less than48 mechanisms, not counting the ASEAN Secretariat, manageand drive these activities and projects. The four new areas ofcooperation are rural development and poverty eradication,women issues, disaster risk management and emergency response,and minerals. The leading, and perhaps most important, of ASEAN PlusThree’s areas of cooperation is finance. This is most promin-ently embodied in the Chiang Mai Initiative (CMI), which was

Relations with the Rest of the World 97launched in 2000 to help East Asian nations recover from the1997–98 financial crisis and, above all, prevent its recurrence.Supported by the Asian Development Bank (ADB) as well as theASEAN Secretariat, the CMI has several components. One is asystem for conducting, at the ministerial and senior officials’levels, the collective surveillance and review of the regionaleconomy, a measure for avoiding surprises like that sprung bythe financial crisis. Another is the enlargement of the ASEANSwap Arrangement to include all ten ASEAN members andto a value of US$2 billion. Another is a network of bilateralcurrency swap and repurchase agreements under which eachof the parties would make available foreign exchange to theother party in the arrangement should the latter find itselfin a serious balance-of-payments problem. The total value ofthe 16 arrangements agreed upon so far amounts to someUS$80 billion. The system is being gradually “multilateralized”,that is, consolidated and subjected to collective decision. Whilesome economists consider the amount involved as too smallto make any difference in an actual financial crisis, the veryexistence of the network of swap arrangements, with Japan atits core and the ADB backstopping it, could discourage currencyspeculation and bring an added measure of financial stabilityto the region. ASEAN Plus Three has also launched the AsianBond Market Initiative, which is intended to use East Asia’senormous savings for investments in East Asia, and is exploringways of coordinating exchange rates. Beyond these areas of practical cooperation, the ASEANPlus Three process serves a number of strategic purposes. Itprovides forums, including the annual summits, for buildingconfidence among the countries of East Asia and a politicalframework for the growing linkages between the economiesof Southeast and Northeast Asia. Not least, ASEAN Plus Three

98 ASEANoffers an additional venue for informal contacts among China,Japan and Korea. THE EAST ASIA SUMMITAt the second ASEAN Plus Three Summit, in 1998, President KimDae Jung of the Republic of Korea proposed the establishmentof 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 AsiaStudy Group (EASG) of senior officials and the ASEAN Secretary-General to assess the EAVG recommendations. One of the long-term recommendations was for the estab-lishment of an East Asia Summit. Although neither the EAVG northe EASG envisioned this to happen anytime soon, the ASEANSummit of 2004 decided to convene the East Asia Summit inconjunction with the ASEAN and ASEAN Plus Three Summits inKuala Lumpur in 2005. The ASEAN Plus Three leaders quicklysupported the ASEAN decision, apparently without the issueof participation being settled. That issue was basically one ofwhether to limit EAS participation to ASEAN Plus Three or toinclude other states in it. ASEAN was divided on the question. Some member-stateswanted to restrict it to ASEAN Plus Three as, it seems, originallyintended. Others preferred the broader participation, initiallyto include ASEAN’s next circle of important neighbours. Inanswer to a question after his Singapore Lecture in February2005, President Susilo Bambang Yudhoyono stated Indonesia’sdesire for the inclusion of Australia, India and New Zealand inthe EAS. Singapore had signaled a similar preference. A largerEAS would in certain ways provide value beyond ASEAN PlusThree, bring Australia, India and New Zealand into cooperative

Relations with the Rest of the World 99endeavours to which they could usefully contribute, and signalASEAN’s open-ended desire to engage the international com-munity beyond East Asia. Australia, India and New Zealandwere increasingly linked to East Asia, particularly economically.Indeed, ASEAN was already having annual summit meetingswith India, while Australia and New Zealand had been holdingintensive talks with ASEAN on a “comprehensive economicpartnership” between the two groups. The view favouring the broader participation in the EASultimately prevailed, with the ASEAN foreign ministers agreeingin April 2005 on three conditions for participation — thestatus of full ASEAN Dialogue Partner, accession to the Treatyof Amity and Cooperation in Southeast Asia, and substantiverelations with ASEAN. The first two criteria — Dialogue Partnerstatus and accession to the Treaty of Amity and Cooperation— are objective enough. Australia and New Zealand have beenASEAN 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 denigratedthe treaty, but, faced with exclusion from the EAS, had to doa policy turnaround and acceded to it in Kuala Lumpur, fourdays before the first EAS. In my paper “Russia, ASEAN and East Asia” in the ISEASpublication, Russia-ASEAN Relations: New Directions, I noted,“The third criterion — whether a prospective EAS participanthas ‘substantive’ relations with ASEAN — is more subjective.Whereas the other two criteria are matters of fact, the thirdis a matter of judgment and, therefore, of political decision.If, for political reasons, an ASEAN member wished a DialoguePartner and treaty party to participate in the EAS, it could arguethat that country’s relations with ASEAN are ‘substantive’. Onthe other hand, if another ASEAN member had an interest in

100 ASEANblocking that Dialogue Partner’s participation, it could claimthat the latter’s relations with ASEAN are not “substantive”enough. In other words, as is usual in diplomacy, the politicaldecision determines the public argument rather than the otherway around.” The distinction between the functions of ASEAN PlusThree and the EAS remains fuzzy. The countries involvedhave not sought to clarify it, apparently preferring to let eachforum evolve over time, with ASEAN at its core. Meanwhile,there should be no reason why Australia, India and NewZealand cannot join any of the cooperative endeavours ofASEAN Plus Three if it would be in the interest of allinvolved for them to do so. While the three EAS meetings sofar have been largely devoted to discussions of broad strategicand economic issues, each of them did focus on a subjectof great significance for people in Asia and in the world —the threat of an avian influenza pandemic in Kuala Lumpurin December 2005, energy security in Cebu, the Philippines, inJanuary 2007, and “Energy, Environment, Climate Change andSustainable Development” in Singapore in November 2007. CONCLUSIONSThe succession of frameworks that ASEAN has built over theyears for relating to other countries and regions has providedpolitical platforms for ASEAN to relate to the world’s devel-oped countries and strategic powers and other significantactors on the regional stage. It has, for example, helped to keepthe United States engaged in East Asia in constructive waysand to provide the U.S., China and others with a benignmultilateral environment for developing their relations witheach other and with the rest of the region and other important

Relations with the Rest of the World 101parts of the world. The variety of those frameworks manifeststhe flexibility and pragmatism of ASEAN’s approach to itsrelations with others in the world. At the same time, the external powers find ASEAN con-venient as the convener and hub of regional forums for inter-action, ASEAN being benign, harmless, neutral and made upof no less than ten countries. The forums provide additionalvenues for the external powers not only to engage ASEAN butalso to interact with each other bilaterally or in small groups,as the three Northeast Asian powers do on the occasion of theASEAN Plus Three meetings. The free trade area and economicpartnership agreements that ASEAN has been concluding withmajor partners are not only measures for promoting trade,investments and other economic interactions. They alsoexpress the intention of ASEAN and its partners to intensify theirrelationships, send signals to their officials and peoples aboutthose relations, and indicate the direction of the partnershipsin the future. The negotiations leading to the agreements clarifypositions and concerns and enable the parties to identify andreach common ground. Not least, the agreements require andencourage reforms in domestic policy. In order to derive maximum benefit from leading the processof East Asian and Asia-Pacific regionalism and enhance theeffectiveness of its leadership role, ASEAN has to strengthenits capacity to provide the intellectual impetus for the process.This would require closer political cohesion, deeper economicintegration, as well as creativity, imagination and a keen senseof the region’s long-term strategic interests.

Chapter 6Building a CommunityA senior officer at the ASEAN Secretariat once observed thatpeople will really feel part of ASEAN when they are able tolive and work or study freely anywhere in the region, as inthe European Union. Other observers of ASEAN have counteredthat the free movement of Southeast Asians to live andwork or study anywhere in the region will be possible onlywhen the consciousness of belonging to ASEAN has reacheda certain level among its people. Not surprisingly, the truthlies in both assertions. The two propositions reinforce eachother. A regional consciousness and a regional identity haveto be relentlessly cultivated even as policies are evolved progres-sively to free up the movement of people around the region. A regional consciousness does not come at the expense ofone’s national identity. A German acquaintance of mine likes tosay, “I am a Bavarian, a German and a European — all at thesame time.” A French scholar asserts that her children considerthemselves European as well as French. Southeast Asia has notyet reached the stage at which its people can say and trulyfeel that they are Southeast Asians or people of ASEAN. Thisis another way of saying that ASEAN is not yet a communityin the sense that Europe is. Because of its social and political implications, the freemovement of people should be and can only be a later phase 103

104 ASEANin the process of regional economic integration; such a processwould normally begin with the free movement of goods andservices. Then would come, selectively, the free flow of capital.Regional economic integration, in turn, would require, and atthe same time reinforce, a resolve on the part of states andpeoples to strive for good relations and develop mutual trustamong them. So would effective cooperation in dealing withregional problems. So would a realization, necessarily gradual,of shared regional interests and mutual need. Only in this waywill an ASEAN community emerge and be built. As the European experience has demonstrated, the concretemeasures of regional community building must first aimat the integration of the regional economy. An integratedregional economy is supposed to attract investments into theregion, create jobs, increase the efficiency of production, lowertransaction costs, reduce prices, foster competition, and thushone the competitiveness of the region’s firms and workers.It would give all participants a common stake in the region’seconomic growth — and in regional peace and cooperation. Itwould thereby persuade the people in the region of the concretebenefits of regional community building. It would strengthenthe bonds among them. Moreover, regional economic integrationwould require a significant measure of transparency and thuspromote mutual confidence. Not least, economic integration would both require andfoster domestic policy and institutional reforms. A preferentialtrading arrangement like the ASEAN Free Trade Area wouldnot work unless customs procedures in the ASEAN coun-tries were competent, efficient and honest. The harmoniza-tion of product standards would require raising the qualityof ASEAN goods and services. Regional economic integrationwould call for significant improvements in certain services,

Building a Community 105like transportation and telecommunications, which would bene-fit both businesses and consumers. This would entail foster-ing competition in these sectors. Economic integration wouldattract investments into the region, but the investments wouldgo to those individual economies that have the elements of agood investment climate — the rule of law, consistent policiesconsistently applied, reduced corruption, an independent judi-ciary, fair competition, protection of intellectual propertyrights, and so on. Participation in an integrated ASEAN economyshould, therefore, inspire domestic policy and institutionalreforms. It should be noted that new entrants into the EU — forexample, Ireland in 1973 and Greece, Portugal and Spain in the1980s — were able to launch their economic take-offs aftertheir entry, not so much because of the financial aid givento them by the Union, as is sometimes claimed. They coulddo so largely because of the domestic reforms that they hadto undertake by virtue of their EU membership as well as thelarger markets opened to them. In ASEAN’s case, this, of course, assumes that agreements oneconomic integration measures are complied with. A culture ofcompliance has to develop within the association. This meansthat the member-states would be following through on theircommitments with the necessary implementing agreements anddomestic reforms. Compliance and its culture would presupposethe recognition of the value of regional stability, integrationand cooperation for the national welfare. One thing is clear: Without a culture of compliance, ASEANas a region would not only lack credibility in investors’ eyes;it would not gain the other benefits of regionalism describedabove. As noted in Chapter 3, while the tariff-cutting exerciseon intra-ASEAN trade has been more or less on track, the

106 ASEANfollow-through on the other foundations of regional economicintegration has been largely inadequate. Compliance would, of course, not be limited to the economicundertakings, but would apply to such commitments as thosemade in the Treaty of Amity and Cooperation in SoutheastAsia, the Southeast Asia Nuclear Weapon-Free Zone treaty, theASEAN Agreement on Transboundary Haze Pollution, otheragreements on the environment, and the cooperative measureson 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, thecharter itself is complied with. After almost 40 years of operating without a formal charterand with few binding agreements, relying largely on informalprocesses and personal relationships, ASEAN, at the summit ofDecember 2005, decided to adopt an ASEAN Charter and toappoint an Eminent Persons Group (EPG) that would submitrecommendations on its nature and contents. Chaired by TunMusa Hitam, former Deputy Prime Minister of Malaysia, theEPG turned over its report to the ASEAN Summit in January2007. According to the report, the charter should codify theobjectives and principles found in various ASEAN declarationsand agreements, many of them having been embodied inthe 2005 Kuala Lumpur Declarations on the Establishment ofthe ASEAN Charter. Most had to do with the relations amongASEAN countries and among states in general. Beyond these,however, they included certain norms for the behaviour ofstates towards their citizens. Among those norms were:• “Respect for and protection and promotion of human rights and fundamental freedoms; …

Building a Community 107• “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 andproduction base” as one of ASEAN’s objectives and the “Fulfill-ment and implementation in good faith of all obligations andagreed commitments to ASEAN” as one of its principles, notably,it is presumed, obligations and commitments with respect toregional economic integration. As drafted by a committee of senior government officialsand signed by the ASEAN leaders at their November 2007summit, the charter puts forward, in addition to those havingto do with inter-state relations and regional cooperation,purposes that pertain to the conduct of countries’ internalaffairs. 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 principlestwo that prescribe basic domestic policies for the member-states:

108 ASEAN• “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 productionbase” as one of ASEAN’s goals and, as one of its principles,“adherence to multilateral trade rules and ASEAN’s rules-basedregimes for effective implementation of economic commit-ments and progressive reduction towards elimination of allbarriers to regional economic integration”, a formulation morespecific than the EPG report’s. To make the member-states’commitment to this goal and principle clear and firm, theASEAN leaders adopted a “blueprint” for achieving the ASEANEconomic Community by 2015. The “blueprint” reiteratesprevious commitments to regional economic integration, add-ing a few new ones, spells out specific “actions” for carryingthem 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, “forany serious breach by a Member State of the objectives, prin-ciples, and commitments as contained in the existing ASEANdeclarations, agreements, concords, and treaties as well as thenorms and values adhered to by ASEAN”. The recommenda-tions specified the suspension of the “rights and privileges”of membership as a possible sanction. Among the causesfor sanction would be defiance of a decision by an ASEANdispute-settlement mechanism. The Secretary-General would bedirected to report to the leaders “cases of non-compliance”. On the other hand, the charter carries no reference tosanctions in the text as adopted. In a bow to pragmatism andrealism, and as a result of inter-governmental negotiations, it

Building a Community 109leaves it to the leaders collectively to decide on what actionto take on any serious breach of the objectives and principlesadopted in the document. Laying down norms of behaviour — internal as well asexternal, domestic as well as inter-state — even in the generalterms of the charter would project ASEAN as an associationwith standards, affirm what it stands for, and provide memberswith agreed principles to invoke in case of egregious departuresfrom them. Reaffirming the goal of a single market and specify-ing in greater detail the steps for achieving it would, it is hoped,give ASEAN countries further impetus for carrying out thosesteps. The very possibility of sanctions, unlikely their imposi-tion might be, would serve to put member-states’ feet to the fire. The fact is that the charter must not be expected to changeASEAN’s character overnight. No document can do that for anyassociation of sovereign states. At most, the charter can embodythe association’s aspirations for the future, reflect its presentreality, derive lessons from its past experience, and make moreeffective its institutions and processes — and subject it to rulesmore than it has been so subjected in the past. In this way,the charter can help ASEAN evolve, as its members realize thecommonality of their interests, develop a culture of compliance,and gradually inspire in their people a true sense of regionalidentity. All this would represent significant progress, and thosewho are thinking of withholding ratification from the charterfor whatever reason would do well to remember that such anact would set back this progress. Although the charter is meant to give ASEAN a legalpersonality, ASEAN does not — charter or no charter — havean existence separate from that of its member-states. Anythingthat ASEAN does or becomes is the result of negotiations andcommon decisions by the member-states.

110 ASEAN ASEAN has so far succeeded in fostering peace and stabilityin Southeast Asia and contributing to the stability of East Asiaand thus to global peace. The charter can help, but the member-states will individually have to ensure that the region remainsstable and at peace in the future. To improve its competitivenessin the markets of the world, ASEAN has laid the foundationsfor regional economic integration. The charter has to makepossible a way to make sure that member-states comply withtheir commitments. ASEAN has recognized the necessity ofcooperating in dealing with the growing number and complexityof regional problems. With the help of the charter, it mustnow see to it that the member-states strengthen their and theassociation’s capacity to do so. Underlying all this would be the expansion of the scopeof perceived common interests, common interests in peace andstability, in regional economic integration, and cooperation forcommon purposes. This would require the patient and long-term endeavour of education, both of the public at large andof children in their formative years. In the end, ASEAN’s future depends on how member-statessucceed in this regard.

ReferencesThe 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. 111