Leaders at ASEAN Summit Call for Rebuilding Unity Amid Region's Economic Woes : Southeast Asia Fears Damage To Its Influence 
International Herald Tribune
December 16, 1998
Michael Richardson 

Leaders of the Association of South East Asian Nations are warning that their organization is in danger of losing international influence as recession and financial turmoil remove its former high-growth luster and expose cracks in the group's once impressive facade of unity.

Four of the nine heads of government taking part in the two-day ASEAN meeting here that began Tuesday said the region was confronting a major credibility challenge. Others spoke in more general terms about the damage done to their economies and societies since the currency crisis started in Thailand in July 1997.

"This crisis has not only dealt body blows to individual countries in the region," said President Joseph Estrada of the Philippines. "Doubts have been raised about the ASEAN spirit, about our solidarity, about our credibility." He described the crisis as the greatest challenge facing the group since its creation in 1967.

Prime Minister Chuan Leekpai of Thailand said the crisis had raised questions about whether the association could regain its vitality, adding, "Some have gone so far as to write us off."

He said the group needed to develop "new approaches and new thinking to keep up with the rapid pace of developments, both regionally and internationally."

"If not," Mr. Chuan added, "we risk being left behind by other more dynamic and forward-looking regional groups around the world."

On Wednesday, ASEAN leaders will meet with Prime Minister Keizo Obuchi of Japan, Vice President Hu Jintao of China and President Kim Dae Jung of South Korea to discuss closer cooperation between Southeast and Northeast Asia in such areas as aid and monetary policy.

Officials said Japan would announce details of its $30 billion aid program, known as the Miyazawa Plan, to help finance the recovery of East Asian nations hit hardest by crisis.

They said Mr. Hu was expected to unveil a Chinese proposal for a new East Asian forum that would enable the deputy finance ministers and deputy central banks governors from the ASEAN countries, China, Japan and South Korea to meet whenever necessary for talks on financial and monetary policy.

"It could result in some useful consultations and possible coordination of monetary policy in the region," one Southeast Asian official said.

But in a reference to doubts about the association among Western and Asian countries that have close ties with the group, Prime Minister Goh Chok Tong of Singapore cautioned at the opening of the summit talks that some of ASEAN's dialogue partners were quietly questioning its future.

"Some of them are taking us less seriously than before," he said. "They believe that ASEAN has been exposed as ineffective."

The association is made up of Brunei, Burma, Indonesia, Laos, Malaysia, the Philippines, Singapore, Thailand and Vietnam.

Mr. Goh said ASEAN needed the combined weight of its 500 million population to exercise international influence and compete as an economic entity against other regional economic blocs like Mercosur in South America, the European Union and the North American Free Trade Area.

Officials said they hoped that new measures to be formally approved by the summit meeting before it concludes Wednesday would help convince skeptics that the association remains one of the most effective regional groupings.

They said that the measures would give a major boost to trade and investment liberalization in the region, and accelerate economic integration.

Some bankers and business executives are skeptical that the association will be able to implement the needed market opening measures because its members differ in their diagnosis of the reforms required.

Many of the ASEAN leaders who spoke Tuesday acknowledged the need to revamp their economies and institutions to make them more open and competitive.

But Prime Minister Mahathir bin Mohamad of Malaysia, whose government imposed currency and stock trading controls in September, said "predatory" speculators and a defective international financial system were to blame for the crisis, impoverishing Malaysia and leading to the near-collapse of the country's banks and corporations.

Mr. Mahathir said that by insulating its economy from speculators, Malaysia was able to implement measures to revive growth. "Until the international community agrees on an international regime that will remove the kind of dangers we have been exposed to," he added, "we will have to continue with our controls."

Reflecting the concerns of the association's newer and less developed members, Prime Minister Phan Van Khai of Vietnam said that rapid economic globalization was "bringing about greater market access and new partners for development — but also putting the weaker economies in a more vulnerable and disadvantageous position, and in an uneven competition."

ASEAN's political unity was also under renewed stress Tuesday over how to interpret compromise wording on the timing of Cambodia's admission as the 10th member of the group.

The compromise was patched together by the heads of government late Monday after some members, led by Vietnam, Indonesia and Malaysia, sought immediate entry for the Cambodian coalition government so it could take part in the summit meeting. Others, including Singapore, the Philippines and Thailand, counseled a delay to ensure that the recently re-formed coalition led by Prime Minister Hun Sen was durable.

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