Overall Assessment

ASEAN economic co-operation, by all accounts, stands at a crossroads. It underwent a long transition period of accumulation, both process and substance, that became the basis for subsequent transformation. The period was marked with varied degrees of commitment and coverage, from half-hearted measures to dramatic initiatives, from exemptions and exclusions to full participation, from selected and narrow scope to broad coverage.

Chapter 2 has traced ASEAN economic co-operation along several fronts and each of the six areas reviewed had underlying directions. For example, co-operation in trade aimed to push vigorous intra-ASEAN transactions; in transport, communications, and tourism, co-operation aimed to connect ASEAN; in finance and in banking, co-operation aimed to integrate financial sectors closer.

Many of the early co-operation schemes hardly made inroads into the lofty aims espoused in each sector or area. As a collective group, ASEAN experienced early fumbles in economic co-operation. From trade to industrial development, agriculture to minerals, ASEAN cooperation was characterized by fits and starts. Despite the number of economic co-operation meetings, the outputs generated were not that normally expected from a regional group. Yet, they became important strands of confidence that each of the ASEAN states had strewn towards a regional network. The numerous meetings attended by ASEAN member countries served to continue the process of building trust and familiarity, consensus building, and internalizing a regional perspective among ASEAN officials.

Whether turning the corner in ASEAN economic co-operation was long in coming or not depends on the time frame to be reckoned from the start of regional efforts. The organization began with the First ASEAN Ministerial Meeting and was marked by the signing of the ASEAN Declaration in 1967. Although this was followed by subsequent ministerial meetings, multilateral agreements, other political and organizational arrangements, the First ASEAN Economic Ministers Meeting did not take place until November 1975. Four months later, in March 1976, the Second AEM Meeting was held in Kuala Lumpur. In a seeming effort to keep pace with changing global economic developments as these affect ASEAN, three AEM meetings were held in 1979 and 1982, and four in 1987. In many of the interim and subsequent years (after 1987), at least two AEM meetings were held every year. This trend reflected the intensification of member countries’ collective interest in finalizing mechanisms to promote economic cooperation.

Several changes have taken place in the area of ASEAN economic cooperation during the brief interim between the completion of this draft and its publication. ASEAN expanded its membership to include Laos and Myanmar on 23 July 1997. The macroeconomic profile of ASEAN's nine member countries is shown in Table 8.1. The ASEAN Heads of Government meet formally every three years, and in between on an informal basis. The first informal ASEAN Summit was held in Jakarta on 30 November 1996. At the informal Summit the Leaders requested the ministers to develop an ASEAN Vision towards 2020 and the possibility of ASEAN co-operation on the facilitation of goods in transit. The ASEAN Secretariat now has two Deputy Secretary- Generals, one responsible for economic co-operation and the other for other areas of co-operation.

AFTA

The year 1997 marks the fifth year of the implementation of the CEPT scheme for AFTA. Although member countries are only halfway to the deadline of 2003 for realizing AFTA, nearly 42,253 tariff lines (about 90.6 per cent of all tariff lines in ASEAN) have already been included in the CEPT scheme. Average tariff rates for products in the Inclusion List have now fallen to 6.38 per cent from 12.76 per cent in 1993. With the participation of Laos and Myanmar, the Inclusion List under the CEPT scheme will increase from 42,253 to about 45,119 tariff lines, or about 81 per cent of the total tariff lines in ASEAN.

Progress has also been achieved in other areas of implementing AFTA. Firstly, member countries have agreed to issue one legal enactment in 1997 which would cover the whole period of tariff reduction. The previous practice of issuing legislation at the beginning of each year to enact tariff reduction mandated by the CEPT scheme prevented some exporters from immediately enjoying the lower tariffs when the legal enactments were delayed.

Secondly, a great deal of progress was made in eliminating nontariff barriers in the past year. ASEAN removed all customs surcharges on CEPT products at the end of 1996.

Introduction

The official ASEAN machinery is supplemented by a network of regional non-governmental organizations (NGOs) that help promote the objectives of ASEAN co-operation. These networks are the mechanisms for national private sector organizations to link with their ASEAN counterparts to assist their governments in pursuing ASEAN goals and objectives. The network of regional NGOs forms a cluster of transnational linkages that increase the centrality of ASEAN and provides the infrastructure for better communications and enhanced cooperation in various fields.

In a broad sense, NGOs are organizations formed by the business sector and by professional and other non-profit associations. In the ASEAN context, NGOs include (a) the ASEAN-CCI, serving as the official link between ASEAN governments and the private sector engaged in commerce and industry; and (b) other private organizations that help promote ASEAN objectives in the social, cultural, economic, and scientific fields. ASEAN provides for a system of official affiliation of NGOs in the region to bring their activities closer to the workings of ASEAN structures and to promote ASEAN objectives (see Box 4.1).

ASEAN Chambers of Commerce and Industry (ASEAN-CCI)

The ASEAN-CCI, formed in April 1972, is the largest and most significant private sector organization in the region. Being the official channel between the private sector and ASEAN governments, its founding represents member countries’ recognition that regional economic co-operation can only succeed through the active participation of the private sector. On the other hand, it also reflects the positive response of the business community to the political initiatives of ASEAN leaders in promoting regional co-operation.

The initial ASEAN-CCI organization was composed of five national chambers, namely, that of the original five member countries (that is, the Kamar Dagang Dan Industri Indonesia [KADIN], the National Chamber of Commerce and Industry of Malaysia [NCCIM], the Philippine Chamber of Commerce and Industry [PCCI], the Singapore Federation of Chambers of Commerce and Industry [SFCCI], and the Joint Standing Committee on Commerce, Industry and Banking [JSCCIB] of Thailand). The National Chamber of Commerce and Industry of Negara Brunei Darussalam (NCCI-NBD) and the Chamber of Commerce and Industry of Vietnam (CCIV) became the sixth and seventh national chambers when Brunei Darussalam and Vietnam joined ASEAN.

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Chee Peng Lim. “Small Enterprises in ASEAN: Need for Regional Cooperation”. ASEAN Economic Bulletin 1, no. 2 (November 1984): 89-114.

Chee Peng Lim and Jang-Won Suh. “ASEAN Industrial Cooperation”. First published 1988. Reprinted in The ASEAN Reader, compiled by K.S. Sandhu et al., pp. 242∧47. Singapore: Institute of Southeast Asian Studies, 1992.

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Basic Data

Introduction

Although ASEAN was established primarily for the purpose of intraregional co-operation, the need to develop external relations with developed countries emerged in the early 1970s in the field of trade and commodities. It was during this time that ASEAN was prompted to take collective action vis-a-vis its major trading partners on pressing international economic issues — one related to the effects of synthetic rubber on ASEAN exports of natural rubber to Japan, the other on tariff preferences on ASEAN-sourced products from the European Union. Consequently, at UNCTAD IV in 1976, ASEAN participated actively in the establishment of the Integrated Programme of Commodities and took effective collective approaches to promote member countries' interests in the Association of Natural Rubber-Producing Countries as well as in the International Tin Agreement.

At the First ASEAN Summit Meeting in Bali in 1976, the ASEAN Heads of Government affirmed the importance of establishing relations with third countries and reflected this in the Declaration of ASEAN Concord. In a specific provision, the Declaration states that the principle of ASEAN co-operation on trade shall also be reflected on a priority basis in joint approaches to international commodity issues and other world economic problems such as the reform of the international monetary system, and the transfer of real resources, with a view to contributing to the New International Economic Order. The Declaration calls upon member states to give priority to the stabilization and increase of export earnings of those commodities produced and exported by ASEAN through commodity agreements, including bufferstock schemes and other means.

The principles of ASEAN external relations contained in the Declaration of ASEAN Concord were confirmed at the Second ASEAN Summit held in Kuala Lumpur in 1977. The following years saw the establishment of dialogue relations with the EU, Australia, and New Zealand. Relations with Japan, Canada, and the United States followed subsequently. Dialogues with the EU and Canada were formalized through the signing of Co-operation Agreements in 1980 and 1981, respectively. In addition to its major trading partners, ASEAN also accorded dialogue partner status to the UNDP, the only multilateral agency that provides regular and substantial technical assistance to ASEAN.

The ASEAN Declaration of 8 August 1967 states that one of the aims of ASEAN is to accelerate economic growth in the region through joint endeavours in the spirit of equality and partnership in order to strengthen the foundation for a prosperous and peaceful community of Southeast Asian nations. In pursuit of that objective, ASEAN has over the years implemented various economic co-operation schemes.

While the progress of economic co-operation in ASEAN might have been slow in the early years of the Association's existence, the pace of such co-operation has significantly accelerated in the last few years. The turning point in ASEAN economic co-operation came at the Fourth ASEAN Summit in Singapore, 27-28 January 1992 when the Framework Agreement on Enhancing ASEAN Economic Co-operation was adopted. The most important initiative implemented within the Framework Agreement was the ASEAN Free Trade Area (AFTA).

Economic co-operation in ASEAN received a further boost in 1995 at the Fifth ASEAN Summit in Bangkok, 14-15 December 1995, when the Bangkok Declaration outlined an agenda for greater economic integration. This agenda is likely to generate further initiatives in new areas of ASEAN economic co-operation, specifically in services and investment.

Since the early years of ASEAN economic co-operation, which saw the implementation of the ASEAN Preferential Trading Arrangement and the Food Security Reserve for ASEAN in the late 1970s, economic co-operation in ASEAN has not only widened but also deepened. In an effort to take stock of ASEAN's progress in such co-operation, the ASEAN Secretariat has prepared this publication to put into perspective ASEAN's major achievements in various sectors of economic co-operation.

These achievements are a tribute to the founding fathers of ASEAN whose vision of a prosperous and peaceful community of Southeast Asian nations is now being realized through joint endeavours in various economic co-operation schemes. It is also a tribute to the present and all the past ASEAN economic ministers and senior economic officials who have spent countless hours charting the course of ASEAN economic co-operation.

Finally, the ASEAN Secretariat is pleased to acknowledge the assistance of Professor Florian Alburo in preparing this study and the United Nations Development Programme (UNDP) for funding this publication.

The chapters for this book were all written in headier days — not too long ago — when the “Asian Economic Miracle” was still riding high. When words like “free-wheeling” and “dynamic” were bandied about freely, conveying a sense of limitless investment opportunities and a new age of growth which would soon overflow into general affluence, and further down the line, human rights and democratic freedoms.

But even then people knew that there was an underside to the Asian dream: official corruption, environmental havoc, the exploitation of marginal or vulnerable social groups (migrant workers, rural women, children, ethnic minorities), the appropriation of land, the spread of drug abuse, prostitution. This was a vision of capitalist greed backed by state controls, a nightmare world in which the worst of capitalism meets the worst of Stalinism, where workers locked in at work die in factory fires, border guards are drug smugglers and forestry officials are loggers and poachers.

The Asian economic crisis that began with the collapse of the Thai baht in mid-1997, along with the pall of haze which hung across Southeast Asia as a result of the enormously destructive forest fires in Indonesia, swung attention to the downside of the seemingly fast-fading miracle. International commentators now focus on the effects of corruption and cronyism in government across the region, and there is an embarrassed silence about the earlier upbeat assessments.

The chapters in this volume, all written during the final heydays of the “Tiger Economies”, are neither enthralled by the “miracle”, nor do they simply focus on its downside. Instead, they all convey a rare understanding of the complexity of the changes engulfing the region. Indeed, the chapter by Hinton, “Where Nothing Is as It Seems”, is not only a careful critique of many of the conceptualizations of the changes in the region. It is also a statement about how difficult it is to conceptualize such diverse changes, and diverse capitalisms (rather than some fictitious, singular “Asian capitalism”), and he warns us about how easy it is to be smug in retrospect.

People on borders, and people who cross borders, people who live on boats, and people who are nomadic may be especially difficult to classify. They are not tied to a particular territory, and do not fit the agrarian model of identity that underlies both much of Western theorizing (ethnic group plus language plus homeland) and nationalist ideologies based on peasant culture. They represent the remnants of pre-modern identities in the sense that the people concerned do not have to have a clear answer to questions such as “What is your mother-tongue?” or “What is your ethnicity?” The questions asked by the ethnographer or linguist symbolize the approaching centralizing-categorization process of the state.

Border areas between modern states are zones of transition and of complex and often bitter identity politics and territorial claims. Ethnographically, borders can seem arbitrary or artificial, and political states are often concerned to contain or deny the transitional or marginal identities found there and to emphasize their control (symbolic and actual) over territory. The role of anthropologists and linguists in this is ambiguous. On the one hand, they often recognize the “artificiality” or contingency of political borders; yet they are frequently (in some sense) the agents of colonial or nationalist states. In contrast with pre-modern polities, empires and post-colonial national states have made it their business to find out who their subjects are. They have undertaken radical labelling enterprises, literal and metaphorical mapping exercises, in which the unknown, the uncharted, and the unclassified have been measured and catalogued. Colonial and nationalist states (unlike pre-modern ones) require a much higher degree of order within their naming and labelling systems. They set up centralized education systems and devise language policies; they register their citizens and carry out censuses. Categories and classifications become a pre-requisite of policy formation and instruments of social control.

The opening up of the land borders between China and the mainland Southeast Asian states has not only involved economic processes, but also social and cultural ones, such as shifts in ethnic composition along the border. In some cases it has seen the re-establishment of a previous status quo, such as the return of ethnic Chinese (Hoa) traders to the northern borders of Vietnam. During the conflict with China along the border in the late 1970s and early 1980s, the Hoa were compelled to move away from the border for “security” reasons, and many fled Vietnam as refugees. Today, they have moved back in strength, and border towns like Mong Cai or Lang Son once again have large and thriving Hoa populations (see Chapter 12).

By comparison, the towns inside Laos along its border with China have always been small, and the volume of trade low. The ethnic Lao are in a minority in the provinces of Phongsaly, Oudomxay, and Luang Namtha, all of which have ethnically very mixed populations of Khmu, Lue, Hmong, Goh (Akha), Phu Noi, Haw (Yunnanese Chinese), and others. While Haw have always played an important trading role and tended to base themselves in the towns, the boundary between ethnic Chinese towns and ethnic “other” rural areas has been blurred.

For example, Haw (who are sometimes thought of as a “hilltribe”) also engage in slash-and-burn upland cultivation. Many Chinese left Laos after the 1975 communist take-over, including a significant number of Haw from the north, and the subsequent conflict with China in the late 1970s caused more to leave, although they were not compelled to do so, as they were in Vietnam. Some, in fact, remained, and they have formed a core for the return of Chinese to the border, including Chinese who have never lived there before. For example, a Lao-Chinese from Pakse in the south of Laos, who had studied Chinese in China, moved to Luang Namtha with his wife from Hubei to act as an interpreter in Lao-Chinese trade, at the same time setting up a small coffee-shop in the main street.

The development of new infrastructure linking the northern margins of Southeast Asia with the southern perimeter of China is retracing historical trade routes that once connected the indigenous peoples of the region. This chapter is an attempt to provide some empirical evidence of Akha cross-border trading activities between southwest China, Myanmar, and Thailand. Trade and commerce activities are found to be important components of Akha society and they especially illuminate the dynamics of Akha mobility and social networks. Trade activities also shed light on the way in which the Akha interact with other ethnic groups and the way in which their ethnic identities are manipulated in such a context.

The image of highlanders, particularly the Akha in Thailand, as “egalitarian”, “self-sufficient”, and “the least contacted hill tribes” is widely pervasive. Researchers tend to view them as subsistence farmers, and the ideology and ritual practices associated with this pursuit have intrigued anthropologists. Consequently, little attention has been paid to their non-farm activities. Few studies have focused on the trade and commerce activities of the Akha.

There is no doubt that agricultural activities are a prominent part of life among the Akha and that their ritual practices follow the agricultural cycle. But the Akha have always been aware of other economic possibilities, because agriculture did not always supply enough food. Food shortages are nothing new and the fear of hunger is chronic. It was often the case in the past that, in order to survive, the villagers would inevitably be involved with trade and commerce. Indeed, the Akha have been trading for centuries.

Therefore, in order to explore the effects of economic development in the Mekong region on the local society, it would be misleading to assume that Akha society has moved from an “egalitarian” situation to one of unequal class stratification, from a subsistence economy to a market-oriented economy, and from “homogeneous” to complex ethnic relations.

China has a long border, which it shares with numerous neighbours. In the northeast are the Jilin and Liaoning provinces, both sharing a border with North Korea; in the northwestern region Xinjiang shares a border with Russia; Mongolia is its northern neighbour; Heilongjiang has Russia as its northern neighbour; the west has Kashmir, Nepal, Sikkim, and Bhutan as its neighbours; the southeast has India; and the southwest provinces of Yunnan and Guangxi share a border with Myanmar, Laos, and Vietnam.

Traditionally, mountain ranges have formed natural barriers on long stretches of China's border. These mountains have obstructed communication and social interaction among the many neighbours that live in proximity to one another. Increasingly, however, it is the political boundary that serves to artificially segregate the people living along the border, irrespective of their cultural background. Thus, some scholars argue for the need to explore and study cultural areas instead of political areas. Despite the tight control over border regions, those living along the borders have continued to communicate, interact, and trade with one another, albeit on a small and restricted scale.

Since the communist victory in the civil war in China in 1949, the border regions have been closely guarded and tightly sealed to prevent outside influences from entering China. Apart from political considerations, there were fears that cultural and other forms of social pollution would enter China and thereby upset the morals of the Chinese people. The border regions remained closed until the 1980s. After the death of Mao Zedong in 1976, China under Deng Xiaoping embarked on a new direction of economic liberalization and modernization. This was the 1978 Reform Era, which has become a new watershed for China's economic development. The 1978 Reform has provided the border regions with a legitimate excuse to reopen their borders for trade with neighbouring countries.

The 1980s and 1990s are important decades in the development of the economy of the border regions.