AbstractsEconomics

The Association of South East Asian Nations (ASEAN) was established in 1967, with the signing of the Bangkok Declaration (ASEAN Declaration) by Indonesia, Malaysia, the Philippines, Singapore and Thailand. When ASEAN was established, it was conventional wisdom that the new organization would be short-lived and many observers thought that ASEAN would probably be destroyed by disputes between the member countries. Despite these early speculations on its long-term viability, ASEAN has gradually grown as an important regional grouping, with increased recognition from the outside world, and has played a very significant role in the promotion of regional co-operation in political and economic affairs during the last twelve years. The promotion of regional economic co-operation was the principal objective of ASEAN at its founding in 1967. However, an analysis of the factors accounting for the formation of ASEAN suggests that it was not established primarily as a vehicle for economic development in the member countries. The five countries grouped themselves together in 1967 mainly for political and security reasons. The political objectives of the five countries were twofold. The first objective was to build up regional political cohesion as a counter-weight to the great powers who appeared to be competing with each other in regional political affairs. The second objective was to strengthen the national stability of the five countries in the face of the growing communist threat which was perceived to be of two kinds - an internal threat from communist subversion and insurgency and an external threat from China. However, because of the sensitive nature of international and regional political environment, ASEAN was initially formally limited to activities such as the promotion of regional co-operation in economic, social, cultural, educational, scientific and administrative fields. These were areas of a non-controversial nature. The early 1970's marked the beginning of a new era in the Southeast Asian political environment. The U.S.A. was gradually withdrawing from the Vietnam war while developing friendly relations with China. The relations between the U.S.A. and the Soviet Union had also entered into a new era and the word 'detente' became a watchword in the Soviet-American relations. The Great Cultural Revolution in China came to an end and China appeared to have changed its aggressive policy towards the ASEAN countries since the end of the Cultural Revolution. The Indo-Chinese war came to an end in 1975 with the fall of South Vietnam, Cambodia and Laos into the communist •hands and the new Indo-Chinese communist states were predominantly occupied with the re-construction of their economies. All these factors combined to bring a relatively stable political environment into Southeast Asia in the mid-1970's at least for a short period. These political developments have had a profound impact on ASEAN. In particular, the changing attitudes of China towards ASEAN countries have…