The Association of South East Asian Nations (ASEAN) and South Asian Association for Regional Co-operation (SAARC) are two Asian regional groupings striving for the speedy development of member countries. The ASEAN member states, Brunei, Indonesia, Malaysia, the Philippines, Singapore and Thailand, are economically better off compared to their SAARC counterparts — Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan and Sri Lanka. A late starter, the SAARC is organizationally less mature than ASEAN.

As in the case for most regional groupings, fast changing global economic scenarios have prompted these Asian economies to form a group to help absorb the occasional shocks and enhance their economic capabilities. Even though free trade is obviously the best policy from the point of view of world welfare, preferential trading within a group to promote intra-regional trade is regarded as a “second best” policy inherent in customs union theories.

Tariff reduction — considered as one of the many aspects of preferential trading — is generally aimed at achieving greater competition within the region, as well as increasing the size of markets, and using economies of scale eventually to lower costs. Preferential Trading Arrangements (PTA) have been adopted as one of the measures to promote intra-regional trade in ASEAN.

This paper highlights the operation of ASEAN PTA, and identifies issues which could be of relevance to SAARC that has yet to incorporate trade co-operation in its sphere of activities.

This article has examined the scope of ASEAN-South Asia regional co-operation in the development of trade in primary commodities as a component in South-South co- operation. The first section of the analysis examined what countries in the region could attempt to achieve within the global institutional framework. The active support of the North is mandatory; otherwise the attempt would be mere rhetoric. The second section focused on the improvement of the production-marketing process of the commodities. It's success would depend on the willingness to help a competitor or ability to compete. The third section was on the intra-regional trade within the group, which is limited mostly because of the complementary nature of the commodities. In addition to these factors, low productivity and regular production shortfalls in certain primary commodities could impede co-operation among countries in the region. Although promising on the surface, as a component in the South-South co-operation, this has its own drawbacks.

Overview

The development ideology prevalent during the 1970s called on the state to play a more active role in the development process. The influence of this ideology is more apparent in developing countries such as those in the Association of Southeast Asian Nations (ASEAN) than in developed countries as their governments have established various state enterprises to correct perceived market failures, rationalizing that the market mechanism is unable to provide both collective and merit goods. Moreover, the private sector's inability to invest in sectors or industries with unusually high commercial and non-commercial risks became natural conduits for government assistance and direct economic participation. In the Philippines, the government took the responsibility for providing most public utilities, including public transport services. Transport per se formed part of a new ideological package called the “eleven basic needs of man.” Conceived by Mrs Ferdinand Marcos, the ideology rationalized the existence of the Ministry of Human Settlements in the early 1970s, and made it imperative for government to provide facilities, or access to it. to satisfy people's “basic needs”. Thus, government built and managed infrastructure requirements (for example housing and recreation facilities) and provided direct services (for example the operation of the Food Terminal, Inc. and the Metro Manila Transport Corporation [MMTCj) whenever applicable. In Malaysia and Singapore, similar inclinations were apparent in government efforts to institutionalize and improve the delivery mechanism for public utilities and the different modes comprising the transport system.

Specifically, the initiative and more importantly, the push to “marketize” stateowned enterprises (SOEs) in the Philippines, particularly utilities, have been selective. Among the public utilities which the government either fully owns, or maintains a majority ownership of, only a few are expected to be in the hands of the private sector in the next few years. More notable among these are the Manila Gas Corporation, a subsidiary of the National Development Company, and the Metro Manila Transport Corporation. In the water utilities sector, there is no similar tendency to privatize, or at least create a contestable environment to promote greater efficiency in such firms as the Metropolitan Waterworks and Sewerage System and the Local Water Utilities Administration.

The Challenge of the European Currency System for ASEAN?

The single European market in 1992 has become a major point of interest in our world today. The programme is expected to produce not only substantial changes in different areas within the European Community (EC) but in other countries as well. In the mean time, countries outside the EC have started to dwell seriously on the potential impact of such a programme upon their own economies.

While the countries of the Association of Southeast Asian Nations (ASEAN) enjoy close economic relations with the EC, they also follow closely the activities centring around 1992. Their concerns are mainly concentrated in the real sector of international trade in goods and services and international investment. These two areas are in fact at the very core of economic ties between the two regional groupings. The EC's move towards 1992 means that the ASEAN countries have to adjust themselves in these sectors so as to be more competitive in the coming years. The famous fearful jargons of the time include “standards of goods”, “reciprocity”, “rules of origins”, while a magical message speaks of twelve markets being opened as never before. Whether or not one likes it, the wheels of the EC single market programme are already set in motion and the EC invites everyone to participate and become accustomed with it from now on.

Because of the cautious way the European Currency System (ECS) presented its programmes initially, the ASEAN countries appeared to be less preoccupied with the ECS during current formulations held at different forums. It was only after the Madrid summit in June 1989 that the EC began to shed some light on a more interesting direction for the ECS. It is in ASEAN's interest to see how such a system can contribute to the stability of exchange rates in tomorrow's world and to see what part ASEAN can play in the new system.

National and International Developments

Privatization as a National Phenomenon

The modern state in Europe, developed out of the national consciousness of its citizens, is by its very nature a national state. This does not mean that we cannot find different forms of public life in a country or congruence between governments in different countries. Belgium may serve as an example; after establishing a new constitution, the Walloon and the Flemish parts of the public administration have developed in different directions. The nature of public law, which is quite similar on the whole continent, confirms the second statement. However, the administrative practice of the European Community (EC) highlights what in administrative science is classified as the difference between classical administration — such as in France, Germany, etc. — and civic culture administration — for example Great Britain.

Despite such distinctions, the line between public and private functions is drawn by the political-administrative culture of the national state. This can clearly be seen by the different meanings for the term “privatization”. Even within the European context, it is difficult to discuss privatization under this term as different approaches are subsumed according to the various national experiences. For some, extending the autonomy of a public enterprise or introducing profit orientation constitutes privatization. For others the term privatization is restricted to a transfer of ownership either in the formal sense of changing the legal structure, or in the material sense of an actual transfer of ownership. Taking into consideration the situation outside Europe, including the developing countries, means adding more problems to the understanding of the term privatization. Often, the only solution is to specify the respective politico-economic problem.

The distinction between public and private functions in the first place determines which instruments can be applied later to change this distinction in favour of the private sector. This is obvious in the case of the United States of America. In accordance with the distinctive administrative culture there the discussion on privatization centres on certain instruments such as contracting-out, franchise, voucher system and self-service arrangements.

ASEAN as a group has a fast-growing economy. The economic performance of individual member countries – Brunei, Indonesia, Malaysia, Philippines, Singapore, and Thailand – has been impressive during the last two-and-a-half decades. The success of the economic development, in general, can be attributed to their market-oriented, outward-looking economic policies.

The region, whose economy is closely related with the energy sector, comprises both energy importers and energy exporters. Three major producers of oil and gas – Indonesia, Malaysia, and Brunei – depend heavily on oil and gas exports for foreign exchange earnings and government revenues. Singapore, the largest oil-refining and trading centre in the region, is a major exporter of petroleum products. On the other hand, the Philippines and Thailand depend overwhelmingly on imported oil. The high degree of dependence on energy has made the economy of these countries vulnerable to energy prices. Despite the impressive economic growth, the region was greatly affected by the oil crises.

Rapid price increases and vulnerability in supply in the 1970s led oil-importing countries to pursue various counter-acting policies. ASEAN countries formulated and implemented comprehensive energy policies; exploration and production activities of energy resources were intensified. Substitutions of other sources of energy for oil were sought and encouraged. Efforts were also made to increase the efficiency in energy use. Different pricing policies were adopted and macroeconomic policies were adjusted to ease the adverse impact of the oil crises. However, because of the diverse nature of the countries, the policy responses to the energy crises and the experiences were different.

The objective of this chapter is to provide a comparative analysis of the energy policies of ASEAN member countries, especially after 1973. Policy response to the crisis, relating to demand and supply management, pricing, non-pricing, and macroeconomic policies, is also discussed.

DEMAND AND DEMAND MANAGEMENT

ASEAN's share in the world's total energy consumption is small. The region accounts for only about 1.2 per cent of the world's total although it has more than 5 per cent of the population.

Introduction

European economic integration has gathered new momentum since Member States of the European Community (EC) signed the Single European Act in February 1986 aimed at creating a region with no internal frontiers and with a free movement of goods and services, capital, labour, and the professions by the end of the year 1992. Since then, numerous decisions have been taken by EC heads of governments, the EC Council of Ministers, the EC Commission, the European Parliament, and the twelve national parliaments in order to achieve this ambitious goal. As third countries are increasingly becoming more aware of the emerging EC internal market, they are increasingly concerned about the implications and repercussions of this single European market on their future economic relations with the EC and the impact on their national economies.

The implications and repercussions of the EC internal market on economic relations with non-member countries and with the Southeast Asian economies in particular have to be studied thoroughly in order to enable these economies to adjust accordingly and to react positively to impending changes in the international economic environment. For quite some time, discussions on the external dimension of the EC internal market have been dominated by fears that the EC would become more protectionist and create a fortress Europe. Interestingly enough, the term “fortress Europe” emerged within the increasingly protectionist climate in Washington, where, in the context of the Omnibus Trade Bill debate, polemic slogans such as this obviously were perceived to be helpful to rally support for the introduction of stiffer protectionist measures on the part of the United States (see also Nölling 1988).

Fears regarding the implications of the EC internal market for non-members may have also been induced by a lack of detailed and comprehensive information and thorough analyses. Not only do non-member countries lack the necessary information, but the EC itself was preoccupied with the internal problems of the completion of a truly common market and almost entirely overlooked the external dimension of the EC 1992 programme.