Date: Sat, 19 Dec 1998 23:35:36 -0600 (CST)
From: email@example.com (Rich Winkel))
Subject: ASIAN FLU: ASEAN Goes for Broke)
/** ips.english: 515.0 **/)
** Topic: /UPDATE/SOUTH-EAST ASIA: ASEAN Sets 'Bold' Cure, But Differences **)
** Written 2:37 PM Dec 18, 1998 by newsdesk in cdp:ips.english **)
Copyright 1998 InterPress Service, all rights reserved.)
Worldwide distribution via the APC networks.)
*** 15-Dec-98 ***
ASEAN Sets 'Bold' Cure, But Differences Remain
ByJohanna Son, IPS
15 December 1998
HANOI, Dec 15 (IPS) - South-east Asian leaders on Tuesday sought a
common, strong dose of action to deal with the region's economic
crisis, saying a weakened Association of South-east Asian Nations
(ASEAN) risked becoming an irrelevant club without it.
Their common prescription is a series of "bold measures," to
be formally issued at the close of the sixth ASEAN summit
Wednesday in Hanoi, that aims to show that despite the pain of
liberalisation member economies will hasten the tearing down of
barriers to trade and investment.
A draft document on such measures says member economies will
shorten by one year, to 2002, the period by which most tariffs
will be cut to 0 to 5 percent under the ASEAN Free Trade Area.
The "bold" measures also grant ASEAN and external investors
more "special privileges" for investments in manufacturing, in
what members hope will draw more foreign funds and generate
employment at home.
"Our immediate priority is therefore to demonstrate
convincingly that we are seriously coming to grips with our
present economic problems," Singapore Prime Minister Goh Chok
Tong said at the opening of the summit Tuesday at the Bao Dinh
Hall in Hanoi.
"If we cannot convince the world that we are united in our
determination to repair our economies, it could lead the major
powers to turn away from South-east Asia toward other more
interesting regions," Goh said.
Calling 1998 a "most traumatic year" for ASEAN, he said
faster tariff cuts send a "powerful signal that we will keep our
markets free, that we will remain plugged into the global economy,
and that we are determined to move forward with liberalisation".
South-east Asian economies have been hard hit by Asia's
recession, resulting in negative growth of up to 15 percent this
year in Indonesia and official recession for Singapore next year.
But though the nine ASEAN leaders stressed their commitment to
reforms to lure foreign investments and strengthen financial
systems, differences showed up on how exactly to proceed.
Just as prominent in Tuesday's speeches were calls to tame the
ill effects of economic liberalisation. "Even as we embrace it
(globalisation), we must be wary of the dangers which accompany
it," said Malaysian Prime Minister Mahathir Mohamad.
His remarks carried a warning for economies pursuing programmes
prescribed by the International Monetary Fund, which has given
bail-out funds to Thailand and Indonesia.
Malaysia tried a "virtual IMF approach" earlier but "we
discovered that these measures worsened the economic situation and
failed to restore foreign investor confidence", Mahathir said.
"As the international community refused to do anything,
Malaysia had no choice but to change direction," he argued,
defending the capital and currency controls he ordered in
"Malaysia cannot afford to wait while the developed economies
and international financial institutions dawdle," Mahathir said,
stressing that beyond the controls "our economy is as open as
His remarks were echoed by Vietnamese Prime Minister Phan Van
Khai, who said that just as stricken economies needed to undertake
corrective measures, so did international financial institutions.
"Developing countries are often requested to foster foreign
investors' confidence. That is a legitimate request and we are all
doing out utmost to improve the investment environment, restore
investors' confidence," Khai pointed out.
"In return, we expect foreign investors to reinforce our
confidence in their commitment to long-term and mutually
beneficial investments," he added.
Khai noted: "Clearly it is high time that we reformed
international financial and monetary institutions, found ways to
curb monetary speculation detrimental to many economies and the
global economy as a whole."
Indonesian President Bacharuddin Jusuf Habibie says ASEAN has
the opportunity "to make the workings of globalisation benefit
not just a few, at the expense of the othes". Yet, Thai premier
Chuan Leekpai said, "we can't simply build a wall around us".
ASEAN leaders also agreed on ways to ease the social impact of
the crisis, with Philippine President Joseph Estrada saying
"ASEAN must ensure the social dimension is never relegated to the
sidelines ever again."
Despite the tough economic times ahead, the leaders of
Singapore, Thailand, Brunei, Indonesia, the Philippines, Malaysia
Vietnam, Laos and Burma gave themselves a bit of pep talk. They
said the 'ASEAN way' that saw the group through the last three
decades would help it again now.
They conceded though that ASEAN's image had lost its shine and
as Mahathir put it, "relations between its members have come
under some strain". Added Chuan: "Some have gone as far as to
write us off" for failing to do much as a group against economic
Whether the low-key ASEAN way of consultation and compromise
will be enough remains to be seen. The group has just used it
again in the ticklish case of Cambodia's admission: in a solution
that offends no one, it said yes to Phnom Penh's entry but set no
time frame for it.
At a dinner Tuesday, the leaders sought a middle path between
host Vietnam's desire to have Cambodia join at this summit, and
that of others like Singapore, Thailand and the Philippines who
want to ensure the stability of the new Cambodian coalition
They agreed that ASEAN will admit Cambodia at a "special
ceremony" of their foreign ministers to be held in Hanoi -- but
set no date. Diplomats said the admission rite could happen in
few weeks or several months.
In true ASEAN fashion, the formula gave the appearance of
accepting the host's position without rejecting the others'. But
at an evening briefing, Vietnamese Foreign Minister Nguyen Manh
Cam said "it can be considered, and everybody should consider
(Cambodia) the 10th member".
Though Cambodian Prime Minister Hun Sen stayed on during the
ASEAN summit, he did not address the session. But for Hun Sen,
with or without the official ceremony, Cambodia is already an
ASEAN "member". (END/IPS/ap-dv-ip/js/ak/98)
Origin: Rome//UPDATE/SOUTH-EAST ASIA/
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