ASEAN

The Association of Southeast Asian Nations (ASEAN) is a political and economic

organisation of ten Southeast Asian countries.

It was formed on 8 August 1967 by

i.
Indonesia
ii.
Malaysia
iii.
Philippines
iv. Singapore
v. Thailand
vi.
Brunei
vii.
Cambodia
viii.
Laos
ix.
Myanmar (Burma)
x.
Vietnam

HISTORY

On 8 August 1967, five leaders - the Foreign Ministers of Indonesia, Malaysia, the
Philippines, Singapore and Thailand - sat down together in the main hall of the
Department of Foreign Affairs building in Bangkok, Thailand and signed a
document. By virtue of that document, the Association of Southeast Asian Nations
(ASEAN) was born. The five Foreign Ministers who signed it - Adam Malik of
Indonesia, Narciso R. Ramos of the Philippines, Tun Abdul Razak of Malaysia, S.
Rajaratnam of Singapore, and Thanat Khoman of Thailand - would subsequently be
hailed as the Founding Fathers of probably the most successful inter-governmental
organization in the developing world today. And the document that they signed
would be known as the ASEAN Declaration.

1967 - ASEAN is established in Bangkok at the height of the Vietnam

War by the five original member countries: Indonesia, Malaysia,
Philippines, Singapore, and Thailand. 1976 - First ASEAN Summit
convenes in Bali, Indonesia.
1978 - First ASEANEuropean Economic Community ministerial meeting
held in Brussels. 1984 - Brunei joins ASEAN.

1994 - ASEAN establishes the ASEAN Regional Forum (ARF), which is

focused on security interdependence in the Asia-Pacific region. Besides
ASEAN member states, the present participants include Australia,
Canada, China, European Union, India, Japan, South Korea, North Korea,
Mongolia, New Zealand, Pakistan, Papua New Guinea, the Russian
Federation and the United States.
1995 - Vietnam joins ASEAN.
1997 - First meeting of ASEAN Plus Three, comprising leaders of the 10
ASEAN members and their counterparts from East Asia China, Japan
and South Korea. Laos and Myanmar join ASEAN.
1998 - The two day ASEAN summit opens in Hanoi, Vietnam. Cambodia
is admitted formally. The ASEAN nations approve the Hanoi Action
Plan, a 34-point declaration that emphasized economic recovery
based on free market policies.
1999 - Cambodia joins ASEAN. 2000 - The Chiang Mai Initiative (CMI) is
set up to help East Asian cash strapped countries defend their
currencies in times of trouble. The initiative comes in response to the
1997 East Asian financial crises. ASEAN, China, Japan, and South Korea
launch the multilateral arrangement of currency swaps (CMI).
2002 - China and ASEAN agree to a China-ASEAN freetrade area to be
implemented in stages up to 2015.
2005 - First meeting of ASEAN Plus Six, also called the East Asia
Summit, comprising the ASEAN countries plus China, Japan, South
Korea, India, Australia and New Zealand.
2007 - ASEAN signs charter giving its 10 member states a legal
identity, a first step towards its aim of a free trade area by 2015.
2008 - The Association of Southeast Asian Nations moves to forge an
EU-style community, signing a charter that makes the bloc a legal
entity. This could pave the way for creating a single market within
seven years.
2010 - A free-trade agreement between China and the 10 members of
the Association of Southeast Asia Nations (ASEAN) comes into effect.
The six richest members scrap tariffs on 90% of goods. The four
poorest (Vietnam, Cambodia, Laos, Myanmar) will not need to cut
tariffs to the same level until 2015.
2013 - ASEAN members and their trading partners (Australia, China,
India, Japan, New Zealand, and South Korea) begin the first round of
3

negotiations on establishment
Economic Partnership.

of

the

Regional

Comprehensive

INTRODUCTION

The ASEAN Charter entered into force on 15 December 2008. With the
entry into force of the ASEAN Charter, ASEAN established its legal identity
as an international organization and took a major step in its communitybuilding process. The ASEAN Community is comprised of three pillars, the
Political-Security Community, Economic Community, and Socio-Cultural
Community.
Number of member countries: 10 Region(s): Asia
Headquarters: Jakarta, Indonesia
Composition: Plurilateral
Coverage: Goods & Services
Signed: August 8, 1967
Entry into force: January 28, 1992
Web Site: http://www.asean.org/

The Associations of Southeast Asian Nations (ASEAN) was formed in 1967 with five nation
members: Indonesia, Malaysia, the Philippines, Singapore, and Thailand. Later on,
Brunei Darussalam (1984), Vietnam (1995), Laos (1997), Myanmar (1997) and
Cambodia (1999) joined the association.
ASEAN was established to accelerate economic growth and promote regional peace and
stability, while enhancing cooperation on economic, social, cultural, technical, and
educational matters.
Since its founding, ASEANs economic integration progress has been affected by various
factors. As a largely voluntary organization with an economically and politically diverse
membership, ASEAN has followed a slow step-by-step approach in changing regional
cooperation in order to make it more legally binding with institutionalized agreements.

 Certain external events, such as Free Trade Agreements (FTAs) involving ASEANs
important trading partners, have stimulated faster integration among member countries.

THE ASEAN WAY

ASEAN member- states approve of the term ASEAN Way to describe their own
method of multilateralism. According to Amitav Acharya, ASEAN Way indicates A
progress of regional interactions and co-operations based on discreetness, informality,
consensus building and non-confrontational bargaining styles.

It is based on ASEANs fundamental principles,

The ASEAN Way is what contributed to the durability and longevity of the organization
by promoting regional identity and enhancing a spirit of mutual confidence and cooperation.

The important features that constitute the ASEAN way are non-interference, informality,
minimal institutionalization, consultation and consensus, non-use of force and nonconfrontation, and the principle of non-interference in the domestic affairs of one another

GDP INFORMATION

With a total area of 4.44 million square kilometers and a population of 629
millioniii, ASEAN was able to reach a total regional GDP of US$3.8 trillion in
2013. Per capita regional GDP reached $US12,441 and regional GDP growth was
5.2%.
The highest GDP for a participating member was Indonesia (USD$1.285 trillion),
followed by Thailand (US$674.3 billion) and Malaysia (US$525 billion). The
highest per capita GDP was achieved by Singapore (US$54,775.53), followed by
Brunei Darussalam (US$39,942.52) and Malaysia (US$10,547.97).
All member countries achieved a per capita GDP higher than US$1,000, with only
four country members attaining a 6% or higher GDP growth rate. Lao PDR
attained the highest GDP growth in the region (8.3%).

According to the World Banks classification of country economies according to incomes

(low, low middle, upper middle, and high), Cambodia, Lao, Myanmar and Vietnam
collectively called CLMV countries - are categorized as lower-income countries. Thailand,
Indonesia and Philippines are in the upper middle-income bracket. Singapore, Brunei and
Malaysia are high-income countries.

FACTS AND FIGURES

ASEAN Population and Development Indicators
With a total estimated population of more than 629 million people living in 10 countries
across ASEAN, the highest population concentrations are found in Indonesia, Philippines,
Vietnam, Thailand and Myanmar. As seen on the table below, ASEAN countries generally
enjoy a high literacy rate.
ASEANs GDP, Population and Literacy Rate
Countries GDP
(US$)

per

capita Population
(million)

Literacy
Rate

Indonesia 3,509.82

251.16

92.0%

Malaysia

10,547.97

29.63

93.1%

Brunei

39,942.52

0.42

95.4%

Singapore 54,775.53

5.46

95.9%

Philippines 4,700

105.72

95.4%

Thailand

5,674.39

67.50

93.5%

Lao PDR

1,476.95

6.70

72.7%

Cambodia 1,016.41

15.21

73.9%

Myanmar 868.72

55.17

92.7%

Vietnam

92.48

93.4%

1,901.70

International Monetary Fund and CIA, 2014

Labour force and unemployment

The labour market landscape in ASEAN is characterized by large gaps between member
states. In 2012, the largest labour markets were Indonesia (118 million workers), followed by
Vietnam (52 million workers) and the Philippines (40 million workers).
In terms of unemployment rate, the Philippines has the highest percentage (17.9 %), while
Indonesia occupies second place with 5.92%, followed by Myanmar with 5.2%.

The ASEAN Charter

The 2007 ASEAN Charter is a landmark constitutional document for ASEAN, reaffirming
ASEANs status as an intergovernmental organization, establishing its legal personality,
codifying ASEANs purposes and principles, and setting up an institutional framework to
allow ASEAN to better coordinate its many areas of cooperation and operate effectively in a
rules-based system. ASEAN is distinct from other regional and international organizations in
that this basic document was created not upon its founding, but instead created only after
forty years of confidence-building and cooperation, and signed at the associations
40th anniversary.
The ASEAN institutional system set out in the Charter incorporates key existing institutions,
while creating new structures which are being phased in to ASEANs operations. The key
features are as follows:
The ASEAN Summit. The ASEAN Summit is the supreme policy making body of ASEAN.
It has been convened since 1976 and comprises the heads of government of the ten member
states. As the highest level of authority in ASEAN, the Summit sets the direction for
ASEAN policies and objectives. Signing or endorsement of agreements, and the issuance of
declarations by the ASEAN Leaders at the Summit signify the highest level of commitment
of ASEAN member states. The Summit authorizes the establishment or dissolution of
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ASEAN sectoral bodies for specific areas of cooperation. It also functions as final decisionmaking body in matters referred to it by ASEAN ministerial bodies or the SecretaryGeneral, and plays the role of an appellate body for disputes and cases of non-compliance
that cannot be resolved by ASEANs dispute settlement mechanisms. Under the Charter,
the Summit meets twice a year.

ASEAN Ministerial Councils. The Charter established four important new Ministerial
bodies to support the Summit. They are the ASEAN Coordinating Council (ACC) which
takes over the ASEAN Ministerial Meetings functions of support for the ASEAN Summits
meetings and to oversee overall implementation and coordination in the ASEAN
Community, the ASEAN Political-Security Community Council, ASEAN Economic
Community Council, and ASEAN Socio-Cultural Community Council to ensure coordination
of the activities under each of the three areas. Together, the Councils supervise the sectoral
activities of ASEAN over 700 meetings each year in the various sectoral areas of the
ASEAN Community.

ASEAN Secretariat (ASEC). Administrative support for ASEANs official activities is

provided by the ASEAN Secretariat, which was established in 1976. ASEC is headed by the
ASEAN Secretary-General, staffed by nationals from ASEAN member states and located in
Jakarta. ASEC is also responsible for monitoring implementation of ASEAN commitments
and maintaining the organisations official records.

Committee of Permanent Representatives (CPR). For the day-to-day working level

coordination of ASEAN activities, the Charter established a Committee of Permanent
Representatives (CPR) in Jakarta, comprising ambassadorial-level representatives from the
member states. The CPR will take over the work of the ASEAN Standing Committee, which
was established in 1967 to perform the coordinating role for ASEAN.

Dispute Settlement. The Charter calls for the resolution of disputes between ASEAN
members in a peaceful and timely manner through dialogue, consultation and negotiation, in
which the Chairman of ASEAN or the Secretary-General may be called upon to offer their
good offices, conciliation or mediation. The Charter further mandates dispute settlement
mechanisms for all fields of ASEAN cooperation. Whereas the economic community is
covered by the 2004 ASEAN Protocol on Enhanced Dispute Settlement Mechanism, the
other two communities will be addressed through new dispute settlement institutions
currently under negotiation. Unresolved disputes and non-compliance with the findings of
dispute settlement mechanisms are to be referred to the ASEAN Summit. For further
information please see CILs resource page on dispute settlement in ASEAN.

 Decision Making. The primary mode of decision-making in ASEAN is consultation and

consensus, a tradition that ensures that ASEAN initiatives have the full support of its
members and that no member state will feel discriminated against. However, the Charter
enshrines the principle of ASEAN-X in implementation. This means that if all member
states are in agreement, a formula for flexible participation may be used so that the
members who are ready may go ahead while members who need more time for
implementation may apply a flexible timeline. In cases where consensus cannot be reached,
the Charter provides for the ASEAN Summit to decide on an alternative method of
decision-making.

Human Rights. Article 14 of the ASEAN Charter called for the establishment of an ASEAN
Human Rights Body. Accordingly, ASEAN officials completed negotiations on the Terms
of reference for the ASEAN Inter-governmental Commission on Human Rights (AICHR),
which was established at the 15th ASEAN Summit in October 2009. The AICHR can be
seen as a culmination of discussions on the establishment of a human rights mechanism in
ASEAN that began at the ASEAN Ministerial Meeting in 1993 and continued with the work
of the ASEAN Working Group for a Human Rights Mechanism. For further information
please see CILs resource page on human rights in ASEAN.

OBJECTIVES

At the time of ASEANs founding, the primary objective of furthering regional cooperation
was couched in general terms in the 1967 Bangkok Declaration.
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Some of the earliest ASEAN initiatives were those that pertained to norms of peace and
security in the region, including the 1971 Declaration on the Zone of Peace, Freedom and
Neutrality (ZOPFAN) and the 1976 Treaty of Amity and Cooperation. This was
later supplemented by the 1995 Southeast Asia Nuclear Weapons Free Zone(SEANWFZ) and
the 2002 Declaration on the Conduct of Parties in the South China Sea.
In the early years, ASEAN also initiated cooperation on economic and cultural projects,
which were seen as means to enhance regional stability. Some early initiatives were in the
areas of preferential trading agreements, industrial complementation, agriculture, tourism,
cultural and media cooperation, and the promotion of Southeast Asian studies.
The objectives of ASEAN were broadened with the notion of an ASEAN Community
encompassing security, economic, social and cultural cooperation. The idea of the ASEAN
Community was seeded in the 1976 Declaration of ASEAN Concord (also known as
the Bali Concord), and further developed into the three specific areas of security, economic
and socio-cultural cooperation in the 1997 ASEAN Vision 2020, and the 2003 Declaration of
ASEAN Concord II (Bali Concord II). ASEAN continues to work towards the attainment of
these goals, guided by a series of specific targets and work plans for each of the three
communities. ASEANs official work plans include the Hanoi (HPA), Vientiane Action
Programme 2004-2010 (VAP), and now the Roadmap for an ASEAN Community (20092015) comprising the ASEAN Political-Security Blueprint, ASEAN Economic Blueprint,
ASEAN Socio-Cultural Blueprint and the Initiative for ASEAN Integration Workplan II.

To achieve the goals, the Master Plan sets out the following objectives for an enhanced
ASEAN Connectivity:
(i)
To consolidate existing work plans related to connectivity and prioritise and enhance
actions, taking into account related existing sub-regional cooperation frameworks;
Physical Connectivity
(ii)

To develop an integrated and well-functioning intermodal transport, ICT and energy

networks in ASEAN and the wider region; Institutional Connectivity

(iii)

To put in place strategies, agreements, and legal and institutional mechanisms to

effectively realise the ASEAN Connectivity, including those to facilitate trade in
goods and services, and the appropriate types of investment policies and legal
frameworks to ensure that the investments are protected to attract the private sector
investments; People-to-People Connectivity

(iv)

To develop initiatives that promote and invest in education and life-long learning,
support human resource development, encourage innovation and entrepreneurship,
promote ASEAN cultural exchanges, and promote tourism and the development of
related industries; Operationalisation of ASEAN Connectivity

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(v)

To establish the principles of funding, recommend appropriate funding mechanisms

and provide an estimate of the required funding to develop and/or enhance the
linkages identified in the Master Plan;

(vi)

To forge win-win partnerships among the public sector, the private sector, ASEAN
peoples and the international community;

(vii)

To draw up specific timetables for realising the goals of ASEAN Connectivity which
will complement the work being undertaken to realise the ASEAN Community by
2015 as well as take into account the different levels of development of ASEAN
Member States; and

(viii)

To prepare capacity building cooperation arrangements in ASEAN such as the

Initiative for ASEAN Integration (IAI) and other appropriate regional institutes in
narrowing the development gap within the region, and in 9 complementing ongoing
regional efforts to realise a people-oriented ASEAN Community by 2015.

FUNDAMENTAL PRINCIPLES
At the first Asian Summit in Bali in February 1976 the member countries signed the Treaty of
amity and Co-operation in South East Asia. Its spelled out the basic principles for their
relations with one another and the conduct of the associations programme for co-operation.
The fundamental principles are as follows:

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I.
II.
III.
IV.
V.
VI.

Mutual respects for the independents, sovereignty, equality, territorial integrity and
national identity of all nations.
The right of every state to lead its national existence free from external interference,
subversion, or coercion.
Non- interference in the internal affairs of one another.
Settlement of differences or dispute by peaceful means.
Renunciation of the that or use of force and
Effective co-operation among themselves.

The treaty envisaged this principles as the foundation of a strong SouthEast Asian
community. It stated that ASEAN political and security dialogue and co-operation should aim
to promote regional peace and stability by enhancing regional resilience. This resilience shall
be achieved co-operation in all fields among the member countries and these principles gave
rise to the ASEAN WAY.

A CLOSER LOOK AT ASEAN TRADE PERFORMANCE, DEPENDENCY AND

INVESTMENT
Intra-ASEAN Trade Grows Faster than Extra-ASEAN Trade
Intra-ASEAN trade increased at a faster pace, with annual growth rate averaging 10.5%, as
compared to either overall ASEAN trade (by 9.2%) or extra-ASEAN trade (by 8.9%) during
the period 1993-2013. The share of intra-ASEAN trade in overall ASEAN trade has been on
13

an increasing trend starting from 19.2% in 1993 to 22% in 2000 and 24.2% in 2013, and
accounted for 25% of the regions total GDP in 2013. ASEAN is a very important export
market (with a share of 15% or higher) for most of the ASEAN Member States (AMSs), and
a very important import supplier (with a share of 15% or higher) for all ten AMSs.

Trade Dependency with Major Trade Partners

Some major trade partners, although accounting for a small share of ASEAN total trade,
played an important role in some commodities. On the one hand, most major trade partners
have selected commodity items in which ASEAN was highly dependent on (with shares of
above 75% of ASEAN trade in a particular commodity product). These include imports of
meat and wool from Australia and New Zealand; cobalt ores and concentrates from Canada;
peanut oilcake and other solid residues from India; and asbestos from Russia. On the other
hand, in 2013, ASEAN secured its position as a net exporter of agricultural and
manufacturing products, with a trade surplus of US$44 billion and US$7 billion, respectively.
The region has also maintained its position as a net exporter of rice, with a trade surplus of
US$6.5 billion.

Trade on Priority Integration Sectors (PIS)

Over the period 1993-2013, ASEAN trade in PIS expanded the most during 2002-2007, with
exports recording either very high (15% or higher) or high (10-15%) annual growth rates. In
particular, exports of automotive products grew appreciably by 34% per year. From 2007 to
2013, exports of wood-based, fisheries, and electronic products dropped significantly,
resulting to negative growth rates. Similarly, exports of electronic products slightly declined
after enjoying a buoyant growth of 17% per year during 2002-2007. Agro-based, rubberbased and automotive exports maintained high annual growth rates ranging from 9% to 11%,
while growth rate of textile exports slowed down to around 7% per year.

Trend of Foreign Direct Investment (FDI)

Data on FDI inflows in ASEAN showed that from 2000 to 2013, intra-ASEAN FDI inflows
grew at an average annual rate of around 25%, in tandem with extra-ASEAN FDI inflows,
which posted an average annual growth of 13%. ASEAN total FDI inflows stood at US$122
billion in 2013, with extra-ASEAN countries providing US$101 billion. In 2013, major
sources of FDI inflows comprised of EU-28 (with 22% share to total), Japan (18.7%),
ASEAN Member States (17.4%), China (7.1%), and Hong Kong (3.7%). Economic activities
under the Services sector accounted for the bulk of FDI inflows to ASEAN, with an average
share of nearly 70% in the last four years, followed by FDI in Manufacturing.

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ASEAN Community
In 2003, the ASEAN leaders resolved that an ASEAN community shall be established by
2015 comprising three pillars namely,
(i) ASEAN Security Community
(ii) ASEAN Economic Community
(iii)
ASEAN Socio-Cultural Community.
The general objective of the ASEAN community is to build ASEAN into a stronger and more
close nit intergovernmental organization, but it will not become a super-national and closed
organization because it opens doors for co-operation with external partners.
15

i.

ASEAN Security Community(ASC):

Recognising the strong interconnections among political, economic and social realities, the
ASEAN Security Community acknowledges the principle of comprehensive security, and
commits to address the broad political, economic, social and cultural aspects of building an
ASEAN Community. It is also acknowledged that political and social stability, economic
prosperity, narrowed development gap, poverty alleviation and reduction of social disparity
would constitute strong foundation for a sustained ASC given its subscription to the principle
of comprehensive security.
The realisation of an ASEAN Security Community would ensure that countries in the region
live at peace with one another and with the world at large in a just, democratic and
16

harmonious environment. The ASC would be based on shared norms and rules of good
conduct in inter-state relations; effective conflict prevention and resolution mechanisms; and
post-conflict peace building activities.
The ASC promotes an ASEAN-wide political and security cooperation in consonance with
the ASEAN Vision 2020 rather than a defence pact, military alliance or a joint foreign policy.
The ASC Plan of Action is mutually-reinforcing with bilateral cooperation between ASEAN
Member Countries while recognising the sovereign rights of the Member Countries to pursue
their individual foreign policies and defence arrangements. In addressing future security
challenges, ASEAN Member Countries share the responsibility for strengthening peace,
stability and security of the region free from foreign military interference in any form or
manifestation.
The ASC shall contribute to the further promotion of peace and security in the wider Asia
Pacific region. In this regard, the ASC is open and outward looking, engaging ASEAN's
friends and Dialogue Partners to promote peace and stability in the region. The ASC will
reflect ASEAN's determination to move forward the stages of ASEAN Regional Forum
(ARF) at a pace comfortable to all. In this regard, the ASC will strengthen ASEAN's role as
the driving force in the ARF.

ASC DUTIES
a) Political Development
One of the main objectives of the ASEAN Security Community as envisaged in the Bali
Concord II is to bring ASEAN's political and security cooperation to a higher plane.
In working towards this objective, ASEAN Member Countries shall promote political
development in support of ASEAN Leaders' shared vision and common values to achieve
peace, stability, democracy and prosperity in the region. This is the highest political
commitment that would serve as the basis for ASEAN political cooperation. In order to better
respond to the new dynamics within the respective ASEAN Member Countries, ASEAN shall
nurture such common socio-political values and principles. In this context, ASEAN Member
Countries shall not condone unconstitutional and undemocratic changes of government or the
use of their territory for any actions undermining peace, security and stability of other
ASEAN Member Countries.
b) Conflict Prevention
Based on the principles contained in the TAC, which is the key code of conduct governing
relations between states and diplomatic instrument for the promotion of peace, security and
stability in the region, the objectives of conflict prevention shall be:
1. To strengthen confidence and trust within the Community;
2. To mitigate tensions and prevent disputes from arising between or among member
countries as well as between member countries and non-ASEAN countries; and
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3. To prevent the escalation of existing disputes.

ASEAN Member Countries shall enhance security cooperation by strengthening confidence
building measures; carrying out preventive diplomacy; resolving outstanding regional issues;
as well as enhancing cooperation on non-traditional security issues.

c)

Implementing Mechanisms
To ensure the effective implementation of this Plan of Action, the following
measures will be undertaken:
1. The AMM shall take necessary follow-up measures to implement this Plan of
Action including consultation and coordination with other relevant ASEAN
ministerial bodies; to set up ad-hoc groups as appropriate; and to report annually
the progress of implementation to the ASEAN Summit; as well as to introduce new
measures and activities to strengthen the ASEAN Security Community as
appropriate;
2. The AMM shall undertake overall review of progress of this Plan of Action. The
AMM shall inscribe permanently an agenda item entitled "Implementation of the
ASC Plan of Action" in the agenda of its meetings; and
3. The Secretary-General of ASEAN shall assist the ASEAN Chair in monitoring and
reviewing the progress of implementation of this Plan of Action.

ii.

ASEAN Economic Community(AEC):

The ASEAN Economic Community (AEC) shall be the goal of regional economic integration
by 2015. AEC envisages the following key characteristics: (a) a single market and production
base, (b) a highly competitive economic region, (c) a region of equitable economic
development, and (d) a region fully integrated into the global economy.
The AEC areas of cooperation include human resources development and capacity building;
recognition of professional qualifications; closer consultation on macroeconomic and
financial policies; trade financing measures; enhanced infrastructure and communications
18

connectivity; development of electronic transactions through e-ASEAN; integrating

industries across the region to promote regional sourcing; and enhancing private sector
involvement for the building of the AEC. In short, the AEC will transform ASEAN into a
region with free movement of goods, services, investment, skilled labour, and freer flow of
capital.
Benefits of the Asean Economic Community (AEC)

It will open more regional cooperation and will improve the scale efficiencies,
dynamism and competitiveness of Asean members. AEC will enable easier movement of
goods, services, investment, capital and people. Ultimately, it will offer new ways of
coordinating supply chains, or access to new markets for established products.

All Asean countries are more important to foreign investors if they are considered as
one node in a larger regional market of nearly 600 million people - a single market. The
Asean Free Trade Agreement will be expanded to zero tariffs on almost all goods by
2015. Asean plans to remain engaged with the global economy through regional-level
free trade agreements - today, Asean has such agreements with China, Japan, Korea,
India, Australia and New Zealand.

The USITC's Asean: Regional Trends in Economic Integration, Export Competitiveness,

and Inbound Investment for Selected Industries Report noted that the AEC is coming at a
time when it is recognized thatinvestment in emerging markets is more desirable than
in the US and Europe. "There will be no shortage of funding coming from within Asean,
the Asia Pacific or even the US and Europe. These investments can bring about badly
needed capital for some countries, allowing them to leapfrog from the 20th century into
the 21st in terms of competition in mature countries such as Thailand and Malaysia", said
the report.

Tourism opportunity. Asians travels more in the region and there are more travelers
from other countries that have begun to reach out to Asia as new visitors. The trends were
evident at the recent Hub City Forum, held by the Pacific Asia Tourism Association
(Pata), where more than 100 travel industry executives discussed the tourism potential,
government's spending to upgrade facilities both for leisure attractions like museums; and
also MICE facilities such as convention centers, reported the newspaper. MICE tourism
opportunities are particularly large and hopefully countries that have the most experience
in this area such as Thailand and SIngapore will render their assistance to those with weak
MICE experience - recent examples of this are Thailand with Vietnam and also some talk
in Thailand about rendering assistance in Laos and possibly Cambodia.

iii.

ASEAN Socio-Cultural Community:

19

The ASEAN Socio-Cultural Community aims to contribute to realising an ASEAN

Community that is people-oriented and socially responsible with a view to achieving
enduring solidarity and unity among the peoples and Member States of ASEAN. It seeks to
forge a common identity and build a caring and sharing society which is inclusive and where
the well-being, livelihood, and welfare of the peoples are enhanced.
ASCC is focused on nurturing the human, cultural and natural resources for sustained
development in a harmonious and people-oriented ASEAN.
The Blueprint for the ASEAN Socio-Cultural Community 2009-2015 sets the goal to
contribute to realizing an ASEAN Community that is people-centered and socially
responsible with a view to achieving enduring solidarity and unity among the nations and
peoples of ASEAN, by forging a common identity and building a caring and sharing society
which is inclusive and harmonious where the well-being, livelihood, and welfare of the
peoples are enhanced.
Among major document adopted at the Fourth ASEAN Socio-Cultural Community Council
Meeting were the ASEAN Leaders Statement on Human Resources and Skills Development
for Economic Recovery and Sustainable Growth and the Ha Noi Declaration on the
Enhancement of Welfare and Development of ASEAN Women and Children.

PERFORMANCE OF ASEAN STRATEGIES:

(i) Implement initiatives to facilitate inter-state passenger land transportation
The expansion of road and rail connections within ASEAN would help to facilitate land travel
between Member States (by private vehicles, tour buses and coaches) which could result in
20

the development of new tour packages comprising tourism products from different Member
States. 48 However, there are a number of challenges which could impede the free movement
of vehicles, goods, and people across international borders including (i) restrictions on the
entry of motor vehicles; (ii) different standards requirements (vehicle size, weight and safety
requirements, and driver qualifications); (iii) inconsistent procedures related to customs
inspections, customs clearances, and assessment of duties; and (iv) restrictive visa
requirements. In addressing these concerns, under the Greater Mekong Sub-region (GMS),
the Cross Border Transport Agreement (CBTA) was signed to facilitate cross-border transport
for both goods and people. BIMP-EAGA also signed and implemented the Memorandum of
Understanding on Cross Border Movement for Buses and Coaches. Several ASEAN Member
States have also entered into bilateral agreements to cater for greater cross-border mobility of
passenger ASEAN should capitalise on the existing sub-regional agreements with the view to
develop it into an ASEAN-wide agreement to facilitate inter-state passenger land
transportation in the region.

(ii) Develop the ASEAN Single Aviation Market (ASAM)

In view of the rapidly growing importance of air transportation as well as the accelerated
restructuring of the global aviation market, ASEAN needs to strengthen its aviation industry
by establishing the ASAM. Low Cost Carriers (LCCs) have been rapidly growing in ASEAN,
thereby facilitating intra-ASEAN tourism which in turn contributes to enhanced people-topeople connectivity. The Roadmap for Integration of Air Travel Sector (RIATS) has defined
the timeline to establish the ASAM by 2015.

(iii)Accelerate the development of an efficient and competitive logistics sector, in

particular transport, telecommunications and other connectivityrelated services in the
region
The competence, efficiency and cost effectiveness of logistics services industry in a number
of ASEAN Member States can be further improved, as reflected in the wide variation in the
ranking of the ASEAN countries in the competence of service providers subcomponent of
the World Banks Logistics Performance Index (2010). As ASEAN Member States develop
21

their logistics development plans, the liberalisation of the logistics services industry can be
expected to contribute to the improvement of logistics in the region. In addition, the transport
services component of connectivity and logistics would also need to be improved
significantly in a number of ASEAN countries. Similarly, the geographic breadth and
efficiency

of

telecommunications

infrastructure

and

cost

competitiveness

of

telecommunications services in a number of ASEAN countries leave much to be desired. A

52 more liberalised and competitive environment can entice more investment and continuing
technology improvements to the regions telecommunications, logistics and transport services
industries.

(iv)Substantially improve trade facilitation in the region

here is no doubt that many ASEAN Member States need to substantially improve the quality
of customs services and the timeliness of delivery of goods before the region can become
truly an integrated production hub for the world. At present, the international ranking on the
quality of customs services of ASEAN Member States as reflected in the World Banks
Logistics Performance Index 2010 is divergent (from the worlds number 2 to the worlds
number 146 out of a total of 155 countries). Among the ASEAN Member States, the
percentage of imports subjected to physical inspection ranges from 1 percent to 50 percent
while the percentage of imports subjected to multiple physical inspection ranges from 1
percent to 15 percent of imports. The extremely wide range of performances of customs
services in the ASEAN region, among others, effectively illustrates the significant challenge
of providing institutional connectivity towards an integrated and interconnected ASEAN
region.
The development and operationalisation of the National Single Windows has proven to be
more complex than earlier anticipated; hence, the delays in the implementation in the 53
original ASEAN-6 countries beyond the original target. Nonetheless, given the critical
importance of the National Single Windows and the ASEAN Single Window for ASEAN
Connectivity, there is a need to forge ahead on the implementation of the Single Window
initiative in the whole ASEAN region with greater resolve.

22

(v) Encourage greater intra-ASEAN people mobility

Despite the growing number of people visiting ASEAN over the years, there are still a
number of limitations and restrictions deterring private individuals from visiting ASEAN for
business or leisure. Amongst others, these include visa requirements, inadequate
infrastructure and facilities which tend to limit accessibility, and also the quality of services
rendered.

(vi) Complete the ASEAN Highway Network

In terms of traffic volume, road transport is the most important mode of transportation.
Moreover, it is the integration of the lagging areas in the region under the ASEAN Highway
Network (AHN) project that would have significant benefit to the poorer 41 areas of
continental ASEAN region. However, the implementation of the Ministerial Understanding
on the Development of the ASEAN Highway Network Project (5th ASEAN Transport
Ministers Meeting, Hanoi, 1999) is behind schedule, which required ASEAN Member States
to upgrade all designated routes to Class III or above and to install road signs by 2004.
(vii) Complete the implementation of Singapore Kunming Rail Link (SKRL) project
The Singapore Kunming Rail Link (SKRL) project has been a priority agenda in ASEAN
transport cooperation, and the political motivation to complete SKRL is significantly high.
SKRL is expected to provide an alternative mode of land transportation, which is more
environmentally friendly than road transportation. The SKRL has two lines, an Eastern line
through Thailand, Cambodia and Viet Nam, with a spur line between Lao PDR and Viet Nam,
and a Western line through Thailand and Myanmar. In view of the greater challenges in
establishing the Western line, it is preferable to first complete the Eastern line in order to have
a fully operational railway link between Singapore and China (via Kunming) as soon as
possible.

23

(viii) Prioritise the processes to resolve institutional issues in ASEAN energy infrastructure
projects
Physical energy infrastructures play a critical role to deepen the extent of regional integration
and economic growth in ASEAN region. To enhance the current status of the Trans-ASEAN
Gas Pipeline (TAGP) and ASEAN Power Grid (APG), there is a need to address the
challenges of the technical and legal issues through harmonisation of standards. In addition,
the complementary development of additional supply of piped natural gas and other energy
sources such as coal and liquefied natural gas (LNG) also needs to be addressed.

(ix)Enhance border management capabilities

Synchronising activities of control at border among related agencies in charge of border
management is the first step to improve the connectivity among Member States. Mutual
recognition arrangements constitute a comprehensive upgrade to enable goods, means of
transport and passengers to cross border without interruption. At present, the cooperation in
the area has started and if accelerated, outputs of this cooperation will assist in enhancing
ASEAN Connectivity. In this regard, appropriate measures need to be explored and
developed as necessary, in accordance with national laws and regulations, in order to ensure a
safe region for the peoples of Southeast Asia and secure supply chains throughout the region.

(x) Accelerate the development of ICT infrastructure and services in each of the ASEAN
Member States
A robust ICT infrastructure in tandem with better human resources and regulatory
environment is critical for enabling ICT as an engine of trade, economic growth, innovation
and better governance in the ASEAN region. A number of countries in the region are gaining
global reputation in ICT infrastructure, ICT-based industries and services. However, the
digital divide within ASEAN remains, especially between the lagging regions and the urban

24

areas on the one hand and between countries on the other hand. The digital divide needs to be
reduced in order to narrow the development gaps within the region.

Key Principles for the Master Plan

The Master Plan on ASEAN Connectivity is premised on the following key principles:
(i)
Serve to accelerate, not hinder, existing ASEAN initiatives and complement
ASEAN Community building process;
(ii)

Foster a win-win solution to reflect the interest of all ASEAN Member States;

25

(iii)

Ensure synchronisation of ongoing sectoral strategies or plans within the

frameworks of ASEAN and its sub-regions;

(iv)

Strive for balance between regional and national interests;

(v)

Strengthen connectivity between mainland and archipelagic Southeast Asia;

(vi)

Outward-looking and serve to promote healthy competitive dynamics among

external partners and also help preserve ASEAN centrality; and

(vii)

Feasible in practice with clear financial mobilisation models, including the

involvement of private sector

FUTURE OF ASEAN

ASEAN is widely recognized in the international community as an exemplar of enlightened

and successful regionalism. But what precisely constitutes the nature and measure of its
achievements?

26

In the first place, it is remarkable enough that ASEAN has survived for all of three decades,
considering that at the time of its birth, not a few political observers had predicted that, like
its predecessors - the SEATO, the Association of Southeast Asia (ASA) and the Maphilindo it would soon wither in the blast of the complex and unpredictable regional situation. As
Indonesian Foreign Minister Ali Alatas recalls, "When ASEAN was born, there were a good
number of skeptics who would not believe that, given the wide divergences of view among
the ASEAN countries, the differences in the political and economic systems of its founding
members, it would ever succeed in this endeavor at regional cooperation.
Former ASEAN Secretary General, Narciso G. Reyes, once suggested that in order to
measure ASEAN's worth, one should ask what could have happened to Southeast Asia
without ASEAN. "Southeast Asia minus ASEAN," he said, "equals greater political
instability, more widespread economic deterioration and, almost surely, the ascendancy of
expansionist forces that thrive on the weakness, isolation and disunity of others." He said this
in 1981 when ASEAN was proving to be a bulwark of political cohesion and solidarity in the
face of the situation in Indochina and he was then anticipating only that the ASEAN countries
would show excellent economic performance during the rest of the decade. Optimistic as he
was, it was beyond his expectations that the ASEAN countries would prove to be among the
world's most dynamic economies going into the 21st century.
And even today, ASEAN's political achievement tends to be cited more spiritedly than its
considerable role in the economic development of its members. Says Philippine Foreign
Secretary Domingo L. Siazon Jr : "ASEAN has transformed itself from a small subregional
organization into a major influence in world affairs. During the last 30 years, ASEAN has
been able to maintain peace and stability among its Member Countries despite the many
territorial problems and other issues among them. ASEAN today is the only subregional
organization in Asia that provides a political forum where Asian countries and the world
Powers can discuss and consider problems related to security, political issues and military
concerns".
ASEAN has acknowledged that periods of rapid social and economic progress are often
accompanied by fundamental shifts in power relations among States. If not managed well,
such realignments can lead to conflict. At the same time, increased economic globalization,
accompanied by structural adjustments of national economies, can create challenges to social
order. With its rapid economic development, ASEAN also faces some issues related to
27

resource conservation including environmental protection. Greater mobility of people, goods

and capital also demands sophisticated border security measures and closer collaboration
among States. All these concerns ASEAN must continue to address. It helps that the nations
of the Asia-Pacific delight in their prosperity and realize that tensions and armed conflict
make bad economics. It helps that ASEAN, the Asia-Pacific Economic Cooperation (APEC)
and the recently established Asia-Europe Meeting (ASEM) processes are effectively
promoting a more constructive and cooperative approach to international relations in this part
of the world.
The expansion of ASEAN "shall pave the way for a new synergy, maximizing the
cooperation potential for growth of the entire region", Vietnam's Foreign Minister Nguyen
Manh Cam envisions. He expresses caution, however, that "In the face of a greater ASEAN
which comprises countries at different levels of economic and technological development and
with different cultures and historical backgrounds, there emerges a need on how to keep those
differences from slowing down the ASEAN growth pace and concurrently from creating
difficulties for those countries of lower levels of development."
The virtual realization of the vision of the Founding Fathers of ASEAN to have an
association of all Southeast Asian countries is by no means the end of ASEAN history. It is a
call for a renewed commitment towards broader regional solidarity among the peoples of
Southeast Asia. As Foreign Minister Prachuab Chaiyasan of Thailand stated: "As we move
towards the year 2020, ASEAN will have derived its strength not only from unity among
governments but unity among its diverse peoples. The ASEAN experience and the ASEAN
process must reach out to all spectrum of our societies.
ASEAN faces the future with confidence. Its strong foundation and remarkable achievements
will serve ASEAN well as it pursues higher goals at the dawn of the new millennium. The
ASEAN Heads of Government have reaffirmed succinctly that Cooperative peace and shared
prosperity shall be the fundamental goals of ASEAN. Towards these goals, ASEAN shall
remain a driving force in building a more predictable and constructive pattern of relationships
among nations in the Asia-Pacific region to ensure lasting peace and security. Economically,
ASEAN shall move towards greater economic integration with emphasis on sustainable and
equitable growth. Finally, ASEAN shall nourish a caring and cohesive ASEAN community,
whose strength lies in fostering a common regional identity and a shared vision for the future.

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29

ASEAN AND INDIA

The ASEANIndia Free Trade Area emerged from a mutual interest of both parties to expand
their economic ties in the Asia-Pacific region. India's Look East policy was reciprocated by
similar interests of many ASEAN countries to expand their interactions westward.
After India became a sectorial dialogue partner of ASEAN in 1992, India saw its trade with
ASEAN increase relative to its trade with the rest of the world. Between 1993 and 2003,
ASEAN-India bilateral trade grew at an annual rate of 11.2%, from US$ 2.9 billion in 1993 to
US$ 12.1 billion in 2003.[6] Much of India's trade with ASEAN is directed
towards Singapore, Malaysia, and Thailand, with whom India holds strong economic
relations.
The signing of the ASEAN-India Trade in Goods Agreement paves the way for the creation
of one of the worlds largest FTAs a market of almost 1.8 billion people with a combined
GDP of US$ 2.8 trillion. The ASEAN-India FTA will see tariff liberalisation of over 90
percent of products traded between the two dynamic regions, including the so-called special
products, such as palm oil (crude and refined), coffee, black tea and pepper. Tariffs on over
4,000 product lines will be eliminated by 2016, at the earliest.
While there are many benefits to the ASEAN-India FTA, there is concern in India that the
agreement will have several negative impacts on the economy. As previously stated, the two
regions aim to reduce their tariffs on a majority of their traded goods. This will allow them to
increase the market access of their products. It is criticised, however, that India will not
experience as great an increase in market access to ASEAN countries as ASEAN will in
India.[8] The economies of the ASEAN countries are largely export-driven, maintaining high
export-to-GDP ratios (in 2007, Malaysia had a ratio of over 100% [9]).[10] Considering this, as
well as the global financial crisis and India's expansive domestic market, the ASEAN
countries will look eagerly towards India as a home for its exports.[10]

30

Since the early 2000s, India has had an increasing trade deficit with ASEAN, with imports
exceeding exports by more than US$6 billion in 2007-2008. [10] It is feared that a gradual
liberalisation of tariffs and a rise in imported goods into India will threaten several sectors of
the economy, specifically the plantation sector, some manufacturing industries, and the
marine products industry.[10] As a dominant exporter of light manufacturing products, ASEAN
has competitive tariff rates that make it difficult for India to gain access to the industry
market in ASEAN countries.[11]

CONCLUSION

With regard to political-security, ASEAN will continue to be a rules-based Community

especially with an ASEAN Charter in place. The member-states, as is the case right now,
have promised to work more closely with one another in solving non-traditional security
issues like maritime piracy, disaster management, transnational crimes, and the like.
However, when it comes to traditional security issues, member-states may be hesitant to
discuss some issues especially when these will impinge on their sovereignty and territorial
integrity. ASEAN member-states highly value a peculiar brand of diplomacy the ASEAN
Way, hence, anything perceived to alter the status quo may not bode well for the bloc.
It is in the economic pillar where ASEAN cooperation has been widely touted to be
successful. The Member-States find it easier to cooperate with one another vis--vis the two
other pillars. As such, when the AEC commences in 2015, it can be expected that the
economies will aggressively open up given that barriers to trade both tariff and non-tariff
will be eliminated. Economies will be liberalized to achieve the goal of ASEAN becoming a
single market and production base.
On the socio-cultural front, we should hope for an ASEAN that is more in touch with its
people. Initiative towards greater people engagement should happen and we should hope that
the peoples of ASEAN will have vigorous contact with one another. The road to achieving a
regional identity may be hard but only in investing heavily on people-to-people initiatives
will this become a reality. Continuous contact will help the peoples of ASEAN understand
one another and learn the peculiarities of each and everyones culture.
31

The creation of an ASEAN Community in 2015 is definitely one thing to look forward to.
Integration may have birth pains in the beginning but at the end of the day, there are many
opportunities that each member-state can take advantage of that will benefit the people of
ASEAN.

32

BIBLIOGRAPHY:
Websites:

http://www.rappler.com/world/specials/southeast-asia/asean-journey/47239-aseancommunity-2015-overview

https://en.wikipedia.org/wiki/Association_of_Southeast_Asian_Nations

http://www.asean.org/communities/asean-political-security-community

http://www.asean.org/#

http://eeas.europa.eu/asean/index_en.htm
Books:

Economics of Global Trans and Finance (Manan Prakashan)

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