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Asean Project
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INTRODUCTION TO ASEAN
This unofficial introduction to ASEAN is prepared by CIL staff. For official information on
ASEAN, please visit the ASEAN Secretariat Website and its “About ASEAN” section.
ASEAN’s Founding
The Association of Southeast Asian Nations (ASEAN) was founded on 8 August 1967 when the
Foreign Ministers of Indonesia, Malaysia, Singapore, Thailand and the Philippines completed
negotiations on the 1967 ASEAN Declaration (also known as the Bangkok Declaration). Against
a backdrop of the Cold War and the tumultuous transition to independence occurring in many
Southeast Asian states, ASEAN’s objective at its founding was “to accelerate the economic
growth, social progress and cultural development in the region through joint endeavours in the
spirit of equality and partnership in order to strengthen the foundation for a prosperous and
peaceful community of South-East Asian Nations”.
Such a commitment was of great importance for building trust in a region divided by stark
differences of ethnicity and a scant history of inter-state cooperation during the period of
colonization. As Southeast Asian countries struggled with newfound independence in the 1960s,
differing visions of fiery nationalism and what shape the region should take in the post-colonial
era gave rise to territorial disputes and confrontations amongst members even as neighbouring
countries in Indochina were in the throes of war and internal conflict. In fact relations between
two founding members, Malaysia and the Philippines, were not normalised until 1969. The
1967 Bangkok Declarationwas an initiative to ensure peace and stability in the region, through a
commitment to work together and deal peacefully with mutual differences. Member states hoped
to forge an independent bloc in Southeast Asia, which would not be dominated or exploited by
external powers. Today, the notions of sovereignty, equality, territorial integrity and non-
interference among member states remain central tenets of ASEAN unity and cooperation.
1
ASEAN’s primary mode of activity is inter-governmental meetings among the representatives of
the ten member states. ASEAN institutions do not include any sort of assembly representing the
people of ASEAN, although various ASEAN institutions maintain contact with civil society
organizations in the region and the ASEAN Inter-Parliamentary Assembly. The latter is not
officially a part of ASEAN as to date, only eight member countries’ political systems incorporate
representative legislative bodies.
2
OBJECTIVE OF ASEAN
At the time of ASEAN’s founding, the primary objective of furthering regional cooperation was
couched in generalterms in the 1967 Bangkok Declaration.
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.
ASEAN’s official work plans include theHanoi Plan of Action 1997-2003 (HPA), Vientiane
Action Programme 2004-2010 (VAP), and now the Roadmap for an ASEAN Community (2009-
2015) comprising the ASEAN Political-Security Blueprint, ASEAN Economic Blueprint,
ASEAN Socio-Cultural Blueprint and the Initiative for ASEAN Integration Workplan II.
Recent priorities for the ASEAN Community in 2009-2010 include enhancing
connectivity, financial stability, sustained development, responses to climate change and the
implementation of the ASEAN Charter.
3
Asean Principles set out in the charter include:
Emphasising the centrality of ASEAN in regional cooperation.
Respect for the principles of territorial integrity, sovereignty, non-interference and national
identities of ASEAN members.
Promoting regional peace and identity, peaceful settlements of disputes through dialogue and
consultation, and the renunciation of aggression.
Upholding international law with respect to human rights, social justice and multilateral
trade.
Encouraging regional integration of trade.
Appointment of a Secretary-General and Permanent Representatives of ASEAN.
Establishment of a human rights body and an unresolved dispute mechanism, to be decided
at ASEAN Summits.
Development of friendly external relations and a position with the UN (like the EU)
Increasing the number of ASEAN summits to twice a year and the ability to convene for
emergency situations.
Reiterating the use of the ASEAN flag, anthem, emblem and national ASEAN day on
August 8.
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THE PURPOSES OF ASEAN
1. To maintain and enhance peace, security and stability and further strengthen peace-oriented
values in the region;
2. To enhance regional resilience by promoting greater political, security, economic and socio-
cultural cooperation;
3. To preserve Southeast Asia as a Nuclear Weapon-Free Zone and free of all other weapons of
mass destruction;
4. To ensure that the peoples and Member States of ASEAN live in peace with the world at large
in a just, democratic and harmonious environment;
5. To create a single market and production base which isstable, prosperous, highly competitive
and economically integrated with effective facilitation for trade and investment in which there is
free flow of goods, services and investment; facilitated movement of business persons,
professionals, talents and labour; and freer flow of capital;
6. To alleviate poverty and narrow the development gap within ASEAN through mutual
assistance and cooperation;
7. To strengthen democracy, enhance good governance and the rule of law, and to promote and
protect human rights and fundamental freedoms, with due regard to the rights and responsibilities
of the Member States of ASEAN;
8. To respond effectively, in accordance with the principle of comprehensive security, to all
forms of threats, transnational crimes and transboundary challenges;
9. To promote sustainable development so as to ensure the protection of the region’s
environment, the sustainability of its natural resources, the preservation of its cultural heritage
and the high quality of life of its peoples;
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10. To develop human resources through closer cooperation in education and life-long learning,
and in science and technology, for the empowerment of the peoples of ASEAN and for the
strengthening of the ASEAN Community;
11. To enhance the well-being and livelihood of the peoples of ASEAN by providing them with
equitable access to opportunities for human development, social welfare and justice;
12. To strengthen cooperation in building a safe, secure and drug-free environment for the
peoples of ASEAN;
13. To promote a people-oriented ASEAN in which all sectors of society are encouraged to
participate in, and benefit from, the process of ASEAN integration and community building;
14. To promote an ASEAN identity through the fostering of greater awareness of the diverse
culture and heritage of the region; and
15. To maintain the centrality and proactive role of ASEAN as the primary driving force in its
relations and cooperation with its external partners in a regional architecture that is open,
transparent and inclusive.
6
GENERAL PRINCIPLES OF ASEAN
1. In pursuit of the Purposes stated in Article 1, ASEAN and its Member States reaffirm and
adhere to the fundamental principles contained in the declarations, agreements, conventions,
concords, treaties and other instruments of ASEAN.
2. ASEAN and its Member States shall act in accordance with the following Principles:
(a) respect for the independence, sovereignty, equality, territorial integrity and national identity
of all ASEAN Member States;
(b) shared commitment and collective responsibility in enhancing regional peace, security and
prosperity;
(c) renunciation of aggression and of the threat or use of force or other actions in any manner
inconsistent with international law;
(d) reliance on peaceful settlement of disputes;
(e) non-interference in the internal affairs of ASEAN Member States;
(f) respect for the right of every Member State to lead its national existence free from external
interference, subversion and coercion;
(g) enhanced consultations on matters seriously affecting the common interest of ASEAN;
(h) adherence to the rule of law, good governance, the principles of democracy and constitutional
government;
(i) respect for fundamental freedoms, the promotion and protection of human rights, and the
promotion of social justice;
(j) upholding the United Nations Charter and international law, including international
humanitarian law, subscribed to by ASEAN Member States;
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(k) abstention from participation in any policy or activity, including the use of its territory,
pursued by any ASEAN Member State or non-ASEAN State or any non-State actor, which
threatens the sovereignty, territorial integrity or political and economic stability of ASEAN
Member States;
(l) respect for the different cultures, languages and religions of the peoples of ASEAN, while
emphasising their common values in the spirit of unity in diversity;
(m) the centrality of ASEAN in external political, economic, social and cultural relations while
remaining actively engaged, outward-looking, inclusive and non-discriminatory; and
(n) adherence to multilateral trade rules and ASEAN’s rules-based regimes for effective
implementation of economic commitments and progressive reduction towards elimination of all
barriers to regional economic integration, in a market-driven economy.
8
ADVANTAGES AND DISADVANTAGES OF ASEAN
Criticism
Western countries have criticized ASEAN for being too "soft" in its approach to promoting
human rights and democracy in the junta-led Myanmar. Despite global outrage at the military
crack-down on peaceful protesters in Yangon, ASEAN has refused to suspend Myanmar as a
member and also rejects proposals for economic sanctions. This has caused concern as the
European Union, a potential trade partner, has refused to conduct free trade negotiations at a
regional level for these political reasons. International observers view it as a "talk shop", which
implies that the organization is "big on words but small on action".
During the 12th ASEAN Summit in Cebu, several activist groups staged anti-globalization and
anti-Arroyo rallies.[68] According to the activists, the agenda of economic integration would
negatively affect industries in the Philippines and would cause thousands of Filipinos to lose
their jobs. They also viewed the organization as "imperialistic" that threatens the country's
sovereignty. A human rights lawyer from New Zealand was also present to protest about the
human rights situation in the region in general.
ASEAN has agreed to an ASEAN human rights body which will come into force in 2009. The
Philippines, Malaysia, Indonesia and Thailand want this body to have an enforcement capacity,
however Singapore, Viet Nam, Burma, Laos and Cambodia do not.
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THE GOOD:
Free Trade Area
The foundation of the AEC is the ASEAN Free Trade Area (AFTA), a common external
preferential tariff scheme to promote the free flow of goods within ASEAN.[44] The ASEAN
Free Trade Area (AFTA) is an agreement by the member nations of ASEAN concerning local
manufacturing in all ASEAN countries. The AFTA agreement was signed on 28 January 1992 in
Singapore. When the AFTA agreement was originally signed, ASEAN had six members,
namely, Brunei, Indonesia, Malaysia, the Philippines, Singapore and Thailand. Vietnam joined in
1995, Laos and Myanmar in 1997, and Cambodia in 1999. The latecomers have not fully met the
AFTA's obligations, but they are officially considered part of the AFTA as they were required to
sign the agreement upon entry into ASEAN, and were given longer time frames in which to meet
AFTA's tariff reduction obligations.
Comprehensive Investment Area
The ASEAN Comprehensive Investment Area (ACIA) will encourage the free flow of
investment within ASEAN. The main principles of the ACIA are as follows
* All industries are to be opened up for investment, with exclusions to be phased out according
to schedules
* National treatment is granted immediately to ASEAN investors with few exclusions
* Elimination of investment impediments
* Streamlining of investment process and procedures
* Enhancing transparency
* Undertaking investment facilitation measures
Full realization of the ACIA with the removal of temporary exclusion lists in manufacturing
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agriculture, fisheries, forestry and mining is scheduled by 2010 for most ASEAN members and
by 2015 for the CLMV (Cambodia, Lao PDR, Myanmar, and Vietnam) countries.
Trade in Services
An ASEAN Framework Agreement on Trade in Services was adopted at the ASEAN Summit in
Bangkok in December 1995.Under the agreement, ASEAN members are negotiating intra-
regional services liberalization in several sectors, including air transport, business services,
construction, financial services, maritime transport, telecommunications and tourism. Although
some sectors have liberalized faster, such as air transport, other sectors remain subject to
continued negotiation. Efforts to expand the scope of the Framework Agreement also remain
subject to continued negotiations.
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AIMS AND IT'S FUNCTION Of ASEAN
As set out in the ASEAN Declaration, the aims and purposes of ASEAN are:
To accelerate the economic growth, social progress and cultural development in the region
through joint endeavours in the spirit of equality and partnership in order to strengthen the
foundation for a prosperous and peaceful community of Southeast Asian Nations;
To promote regional peace and stability through abiding respect for justice and the rule of law in
the relationship among countries of the region and adherence to the principles of the United
Nations Charter;
To promote active collaboration and mutual assistance on matters of common interest in the
economic, social, cultural, technical, scientific and administrative fields;
To provide assistance to each other in the form of training and research facilities in the
educational, professional, technical and administrative spheres;
To collaborate more effectively for the greater utilisation of their agriculture and industries, the
expansion of their trade, including the study of the problems of international commodity trade,
the improvement of their transportation and communications facilities and the raising of the
living standards of their peoples;
To promote Southeast Asian studies; and
To maintain close and beneficial cooperation with existing international and regional
organisations with similar aims and purposes, and explore all avenues for even closer
cooperation among themselves.
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IMPORTANCE OF ASEAN
A S Cambodia draws nearer to the date in 1997 when it hopes to become a member ofthe
Association of South East Asian Nations (ASEAN) it reaches a pivotal time inits economic and
political growth.Its full acceptance into ASEAN will mark a tremendous achievement in the
rebuildingof the Kingdom.The economic repercussions will be significant and likely painful as
Cambodia graduallymoves its import tariffs into line with those required by the organization.
However,the long term importance of ASEAN membership should not be
underestimated.Regional groupings based on economics are becoming increasingly important as
theworld moves toward the twenty-first century.There are at least 32 economic groupings of
some form now in existence: three inEurope, four in the Middle East, five in Asia and ten each in
Africa and the Americas.Some of these groupings around the world have the superstructure of
nation states(such as the European Union); some (like the ASEAN Free Trade Area or AFTA),
aremultinational agreements that tend to be more political arrangements than cohesivetrading
blocs at present. With respect to the three major blocs - the North American,western European
and Asian - intra-bloc trade has grown rapidly, while trading betweenthe blocs or with outsiders
has either declined or grown far more slowly.The development of a unified trading bloc in Asia
has been quite different from thatin Europe and in the Americas.While European and North
American arrangements tend to have been driven by politicalwill, market forces and more
pragmatic considerations are what have been compellingpoliticians in Asia to move toward more
a formal integration.First, European and American markets are significant for the Asian
producers andsome type of organization or bloc may be needed to maintain leverage and
balanceagainst the two other blocs.Secondly, given that much of the growth in trade for the
nations in the region isfrom intra-Asian trade, having a common understanding and policies is
becoming moreand more necessary.A future arrangement will most likely be using the frame of
the most establishedarrangement in the region, ASEAN.ASEAN as a regional body has grown
up for various purposes.Defense and a common foreign policy were initially more important
reasons for theformation of the grouping than the goal of economic development. But, with
perceived threats to safety receding, economic development has taken on a more important role
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as the general goal of the ASEAN states.The states now have booming economies and have
attracted much attention from foreign
investors.Traditionally, the Asian region has received more foreign investment than any
otherpart of the developing world.There has been significant inter-regional investment, with
capital from countrieslike Singapore, Hong Kong and Taiwan moving to other countries in the
region. Thereis also a considerable and ever increasing flow of capital from one ASEAN state
intoanother in the form of foreign investment.The states of the region have mixed economies and
are inclined towards growth thatis led by foreign investment.Within the ASEAN region, the
example provided by Singapore which grew spectacularlythrough foreign investment is one
factor that makes states of the region more hospitableto foreign investment than many other areas
of the world.The attraction to foreign investment, however, is balanced by nationalism and
understandableefforts to ensure that investment that is made will further the economic
developmentof the state and not be detrimental to local business interests.For this reason, some
control over foreign investment has been instituted in varyingdegrees in all ASEAN states.The
techniques used by the ASEAN states to attract foreign investment are largely
similar. The use of tax incentives as a means of channeling investment into desiredareas has been
widely prevalent and there have in the past been calls for a coordinationof efforts on a regional
basis on the granting of such incentives.Other moves to increase regional economic
cooperation have included the ASEAN IndustrialJoint Venture, established in 1983 as a means of
encouraging the development of intra-regionalproduction.This is also a concept that promotes
cooperation.There have also been efforts to develop areas which have not been traditionally
attractiveto investors through the creation of "growth areas" such as the trianglebetween
Singapore, Johore (a state in Malaysia) and the Riau Islands of Indonesia.The aim for this
particular area is for Malaysia and Indonesia to provide land andother natural resources and
Singapore to provide management and technical expertisefor the development of industries
within the triangle. Other "growth areas"include a triangle linking Medan in Indonesia, Phuket in
Thailand and Penang in Malaysia.Before late 1991, ASEAN had no real structures, and
consensus was reached throughinformation consultations.In October 1991, ASEAN members
announced the formation of a customs union calledASEAN Free Trade Area (AFTA).A customs
union is a grouping whose members dismantle barriers to trade in goodsand services among
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themselves and establish a common trade policy with respect tonon-members.Typically thistakes
the form of a common external tariff, whereby imports from non-membersare subject to the
sametariff when sold to any member country.Tariff revenues are then shared among members
according to a prespecified formula.It is through this aspect of ASEAN membership, the
adjustment of tariff rates toconform with AFTA requirement, that Cambodia will likely enjoy the
greatest longterm gain and the harshest short term pain.Trading businesses and those importing
raw materials from ASEAN nations will benefitgreatly.However, with the bulk of the kingdom's
tax revenue presently coming from customsduties and tariffs, other sources will have be
developed to allow the governmentto compensate for the resulting loss of income.
15
WHY IS ASEAN IMPORTANT?
ASEAN’s geostrategic importance stems from many factors, including the strategic location of
member countries, the large shares of global trade that pass through regional waters, and the
alliances and partnerships which the United States shares with ASEAN member
countries. Recognizing its geostrategic importance, the US cooperates with ASEAN and its
member states on a multitude of intitatives ensuring security and stability in the region.
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ASEAN COMMUNITY COUNCILS
1. The ASEAN Community Councils shall comprise the ASEAN Political-Security Community
Council, ASEAN Economic Community Council, and ASEAN Socio-Cultural Community
Council.
2. Each ASEAN Community Council shall have under its purview the relevant ASEAN Sectoral
Ministerial Bodies.
3. Each Member State shall designate its national representation for each ASEAN Community
Council meeting.
4. In order to realise the objectives of each of the three pillars of the ASEAN Community, each
ASEAN Community Council shall:
(a) ensure the implementation of the relevant decisions of the ASEAN Summit;
(b) coordinate the work of the different sectors under its purview, and on issues which cut across
the other Community Councils; and
(c) submit reports and recommendations to the ASEAN
Summit on matters under its purview.
5. Each ASEAN Community Council shall meet at least twice a year and shall be chaired by the
appropriate Minister from the Member State holding the ASEAN Chairmanship.
6. Each ASEAN Community Council shall be supported by the relevant senior officials.
ASEAN NATIONAL SECRETARIATS
Each ASEAN Member State shall establish an ASEAN National Secretariat which shall:
(a) serve as the national focal point;
(b) be the repository of information on all ASEAN matters at the national level;
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(c) coordinate the implementation of ASEAN decisions at the national level;
(d) coordinate and support the national preparations of ASEAN meetings;
ASEAN Political-Security Community
The objectives of the ASEAN Political-Security Community (APSC) are to ensure that the
peoples and Member States of ASEAN live in peace with one another and with the world at large
in a just, democratic and harmonious environment. Activities in this community include
cooperation on building norms of peace and security, strong relationships with external partners,
the promotion of political development in areas such as good governance and human rights, as
well as specific sectoral meetings on defence, law, and transnational crime. Traditionally the
APSC also includes the ASEAN Foreign Ministers, who serve core coordinating and decision-
making functions in ASEAN. As the first ministerial body created at ASEAN’s founding in
1967, the Foreign Ministers’ meeting was termed the ASEAN Ministerial Meeting (AMM). In
2009 with the implementation of the ASEAN Charter, the Foreign Ministers functions were
separated into their roles as the ASEAN Foreign Ministers (which retains the acronym AMM)
and the ASEAN Coordinating Council.
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ASEAN Economic Community
The objective of the ASEAN Economic Community (AEC) is to transform ASEAN into a region
with free movement of goods, services, investment, skilled labour, and freer flow of capital. The
AEC envisages a single market and production base making ASEAN more dynamic and
competitive with new mechanisms and measures to strengthen the implementation of its existing
economic initiatives; accelerating regional integration in the priority sectors; facilitating
movement of business persons, skilled labour and talents; and strengthening the institutional
mechanisms of ASEAN. Initiatives under the AEC include the ASEAN Free Trade Area,
ASEAN Investment Area, and sectoral cooperation in the specific areas of energy, finance,
agriculture and forestry, minerals, science and technology, telecommunications and IT, tourism,
and transport.
Enabling economic development throughout ASEAN is also an important objective of the AEC.
With the enlarged membership of ASEAN came a new set of challenges. Cambodia, Laos,
Myanmar and Vietnam were the last four members to join and were acknowledged to have a
significant development gap with the first six members. “Narrowing the Development Gap” thus
became an additional priority of ASEAN. Projects under the Initiative for ASEAN Integration
(IAI) are designed to enable new ASEAN members to accelerate the pace of economic growth,
and to enable them to participate on a similar level with the first six members.
ASEAN Socio-Cultural Community
The ASEAN Social-Cultural Community (ASCC) contributes to realising an ASEAN
Community that is “people-centred 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.” Areas of cooperation in this community
include culture, arts and information, disaster management, education, environment, health,
labour, rural development and poverty eradication, social welfare and development, youth and
civil service cooperation.
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External Relations
Another essential aspect of ASEAN’s activities today is the development of close partnerships
with other countries. The simultaneous engagement of many important countries with an interest
in South East Asia forms part of ASEAN’s strategy to remain in the driver’s seat in regional
developments – ensuring that the region is stable and prosperous, and free from domination by
any single external power. The main instruments of ASEAN’s relations with its partners are the
promotion of norms of peace and conciliation, and the creation of a network of economic
agreements in the region.
Today, ASEAN has established official dialogue relations with ten external partners including
Australia, Canada, China, the European Union, India, Japan, Korea, New Zealand, Russia, and
the USA. ASEAN also has relations with the United Nations and a sectoral partnership with
Pakistan. At the regional level, ASEAN is the driving force for forums including the ASEAN
Regional Forum, ASEAN+3 (with China, Japan and Korea) and the East Asia Summit (with
Australia, China, India, Japan, Korea and New Zealand).
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ASEAN INVESTMENT AREA (AIA) COUNCIL
The AIA Council is the Ministerial body under the ASEAN Economic Ministers responsible for
overseeing the implementation of the ASEAN Comprehensive Investment Agreement (ACIA),
ASEAN’s main economic instrument to realise a free and open investment regime. It is
composed of Ministers from the ten Member States responsible for investment and the Secretary-
General of ASEAN.
The Coordinating Committee on Investment (CCI) composed of senior officials responsible for
investment and other officials from other government agencies supports the AIA Council in
carrying out its functions.
Free Flow of Investment
A key element to establishing ASEAN as a single market and production base is having a free
and open investment regime where (a) non-discriminatory treatment is extended to ASEAN and
ASEAN-based investors, save for limited exceptions that are also due for progressive
elimination; (b) rules and regulations are made transparent; and (c) investors and their
investments (i.e. covered investments) enjoy protection.
ASEAN is achieving these via the implementation of the ACIA, which took effect on 29 March
2012. The ACIA, as one of the economic instruments for realising regional economic
integration, aims to create a liberal, facilitative, transparent and competitive investment
environment in ASEAN.
Comprehensive in scope it covers investment liberalisation, protection, promotion and
facilitation. At par with international best practices it adopts a single negative list approach,
extends automatic most-favoured nation treatment to all Member States, and carries a
comprehensive and detailed investor-state dispute settlement mechanism, among others.
Forward looking, it prohibits performance requirements, and contains provision on senior
manager and board of directors (SMBD) to encourage inflow of key foreign managerial and
senior management personnel. Comprehensive and integrated in approach, it revised, merged and
improved upon the ASEAN Investment Guarantee Agreement (ASEAN IGA) and theFramework
Agreement on ASEAN Investment Area (AIA Framework Agreement) and provides a clearer
interaction of provisions pertaining to investment liberalisation and protection under a single
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investment agreement. ACIA supersedes these two precursor investment agreements (issued in
1987 and 1998, respectively) including their subsequent amendments.
ASEAN’s task now is to effectively implement the ACIA to ensure that the benefits from the
Agreement are realised with ASEAN and ASEAN-based foreign investors taking advantage of
the opportunities that the ACIA provides. ASEAN through the AIA Council and its subsidiary
body (the CCI) has intensified its efforts to support the implementation of the Agreement
cognisant of the importance of the ACIA in keeping ASEAN’s competitive strength vis-à-vis the
changing economic landscape, and in achieving ASEAN’s economic integration goal. It has
given focus to: (a) completing the work pertaining to the build-in agenda items; (b) promoting
the ACIA and reaching out to businessmen and investors to create awareness about the benefits
of ACIA; (c) enhancing the capacity of ASEAN and its Member States in implementing the
Agreement; and (d) developing a regional cooperation work programme aimed at supporting the
work of ASEAN on investment liberalization, protection, promotion and facilitation.
Key Developments in the Implementation of ACIA At the entry into force of the ACIA on 29 March 2012, ASEAN also issued the ACIA
Scheduleor the Member States Reservation Lists. The Lists contains measures that are maintained by Member States that do not conform to the National Treatment and SMBD provisions of the Lists are required to be reduced or eliminated as prescribed in the Agreement.
The AIA Council endorsed the Modality to Improve and Eliminate the Impediments to Investment, which sets out the process in carrying out the task to progressively reduce and/or eliminate non-conforming measures in the Lists.
A vital component of the Modality is the adoption of the ASEAN Investment Peer Review Process that enhances the operation of the transparency provisions of the ACIA. The Peer Review Process requires the regular reporting of any changes in the law, rules and regulations, policies and administrative guidelines that may significantly affect investments or commitments of Member States under the Agreement. It also demands the reporting of any international agreement that a Member States has entered into and grants preferential treatment.
Underway is the development of a mechanism by which changes or modification in the Schedule or reservations of Member States could be effected.
ASEAN has implemented various activities to promote and create awareness on the new investment agreement. It published an introductory booklet on ACIA in April 2012 and anACIA Guidebook for Businessmen and Investors in March 2013. It also recently organized an ACIA Socialization Forum in cooperation with the Malaysia Investment Development Authority in Kuala Lumpur.
To have a greater reach in the promotion of ASEAN as a single investment destination, ASEAN is also developing an ASEAN investment website that will serve as ASEAN’s gateway for
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sharing information on investing in the region, and as a window for investors to learn and know more about ASEAN, its opportunities and potentials.
ASEAN has stated a platform for strategic discussion among the Heads of the ASEAN Investment Promotion Agencies on enhancing investment facilitation and promotion in ASEAN via the annual event “The ASEAN Investment Forum”.
THE ASEAN CHAPTER
The 2007 ASEAN Charter is a landmark constitutional document for ASEAN, reaffirming
ASEAN’s status as an intergovernmental organization, establishing its legal personality,
codifying ASEAN’s 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 association’s 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 ASEAN’s 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 ASEAN sectoral bodies for
specific areas of cooperation. It also functions as final decision-making body in matters referred
to it by ASEAN ministerial bodies or the Secretary-General, and plays the role of an appellate
body for disputes and cases of non-compliance that cannot be resolved by ASEAN’s dispute
settlement mechanisms. Under the Charter, the Summit meets twice a year.
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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 Meeting’s functions of support for the ASEAN Summit’s 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 ASEAN’s 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 organisation’s 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 CIL’s
resource page on dispute settlement in ASEAN.
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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 CIL’s
resource page on human rights in ASEAN.
ASEAN Integration 2015
Initially launched in the 4th ASEAN Summit held in Singapore in November 2000 as an
"Initiative for ASEAN Integration" (IAI) by then Prime Minister Goh Chok Tong which created
a framework for human resource development programs and the integration of the new member
States - Vietnam, Lao PDR, Myanmar and Cambodia.
The IAI has set-up four human resource development training centers in the new member States
and by 2002 there were more than 10,000 participants in the program in various fields such as
English Language, Information and Communication Technology, Trade and Tourism.
During the 12th ASEAN summit held in Cebu, Philippines in 12–15 January 2007, the member
States signed the 5 agreements aimed in further strengthening the integration of ASEAN and
further enhancing political, economic and social cooperation in the region.
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Among those issues drafted in the agreement includes the "Cebu Declaration on the Acceleration
of the Establishment of an ASEAN Community by 2015."
On the 13th ASEAN Summit in Singapore, from 18–22 November 2007 with the theme "One
ASEAN at the Heart of Dynamic Asia" leaders of the member States endorsed the ASEAN
Economic Community Blueprint on a plan to establish a single market and production base in the
ASEAN region by 2015.
ASEAN Economic Community Blueprint[edit]
The ASEAN Leaders adopted the ASEAN Economic Blueprint at the 13th ASEAN Summit on
20 November 2007 in Singapore to serve as a coherent master plan guiding the establishment of
the ASEAN Economic Community 2015
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One Market Economy
The ASEAN Integration 2015 will see member-nations converge with one market economy,
where trade is done with less restrictions (like no tariffs). The business playing field is flowing
with goods (raw materials and products) and services (manpower). Nationalities are given a wide
array of product choices which range from low end to high end. The integration encourages
competition (showcasing the best) and complementarity (providing unique products).
Member-nations will place the right infrastructure to keep up with the fast changing ASEAN
economic landscape. It also poses challenges, especially to member-nations like the Philippines
whose economy is starting to boom. Journalist-businessman Wilson Lee Flores in his column
titled Bull Market, Bull Sheet interviewed tycoons and identified different challenges that
ASEAN businessmen face. They are the challenge of size or scale (family businesses can survive
or flourish by becoming big or remaining small); the challenge of competitive spirit (market
players should work harder); the challenge of speed (increase in transactions and productivity
and developing new ideas); the challenge of efficiency (investment in technology and human
resources); and the challenge of having a global mindset (thinking the international way).
Manila Bulletin writer Reynaldo Lugtu Jr. in his article titled ASEAN 2015 — challenges and
opportunities adds “Entry of imported products” and “The challenge to innovate” as the other
challenges entrepreneurs in the region will face when the integration is fully implemented next
year. The former will see local manufacturers compete in the market share, where cheaper and
competitive products are made available. On the other hand, the latter will see companies invest
“in research and development, market research, and new technologies of production.” This is
inevitable and expected since the business sector needs to deliver goods to consumers in a faster
way (The challenge of speed). As Lugtu Jr. shares the ASEAN single market comprises 600
million consumers and with $1.9 trillion in combined Gross Domestic Product (GDP). On top of
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these challenges, he sees opportunities such as “Access to a bigger market,” and “Supply of
human capital,” where member-nations with large population, like the Philippines whose
population is now at 100 million and most members of workforce speak English, can take
advantage.
The report written by Mia Aznar further discusses the challenges the Philippines will encounter
when the integration takes place in 2015. According to Mia’s interview with Philippine Stock
Exchange president and CEO Hans Sicat, ASEAN “only constitutes (the) 17 percent share of
(the Philippines’) exports” as compared to East Asia with 50.1 percent export share. It is a
question whether the integration will become beneficial to the country? China, Hong Kong,
Japan, Macau, Mongolia, North and South Korea and Taiwan compose the East Asia group.
Other points raised by Sicat in the article titled “Asean integration in 2015 will be challenge for
PH: PSE president” are Philippines has “a small economy, its citizens have a low awareness
about the integration initiative, it has limited products and a small investor base.” Sicat also
offers solutions to lessen the challenges that lie ahead. These include having political will,
implementing arrangements, coordinating and mobilizing resources, capacity building,
strengthening institutions and consulting with public and private sectors.
Lessening the vulnerabilities of Phl “to foreign competition and exposure to market risks” is also
the concern of Rafael Alunan III in his article “2015: Asean Integration, ready or not?.” The
sectors which will be affected are the agribusiness and manufacturing industries. This is extra
challenging to the agricultural industry which has to work double time in achieving its self-
sufficiency status and surplus growth for export. Like Sicat, Alunan III also shares his two cents
on making these identified sectors ready for the Asean integration in 2015. The author shares that
by providing “adequate incentives, critical infrastructures and universal access to know-how
capital” and addressing “high business costs, low import duties and extensive technical
smuggling” the agribusiness and manufacturing sectors, respectively, will improve. The present
manufacturing industry should be developed into an industry capable of producing dual purpose
factories “producing for the domestic and export markets, supported by vital infra and systems,
to spur industrialization.” It is also implied that the Phl’s defense should be built up to its
“minimum desired level” to make the economy more competitive.
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The 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?
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. Well, ASEAN proved
all its critics wrong and it is now a vibrant reality, an Association recognized not only in its own
region but also in the world at large as one of the most successful regional cooperative schemes".
The recollection of the Foreign Minister of Singapore, Professor S. Jayakumar is that when
ASEAN was founded, the situation in Southeast Asia was so grim the mass media kept
comparing it with the European region that would eventually hand down the horrible legacy of
"ethnic cleansing"-the Balkans. "The media described us as dominoes about to fall at any time,"
he says. "Indeed, there was no optimism on the future of the countries of Southeast Asia. But
now, 30 years later, the situation is very different. The countries in Southeast Asia now constitute
one of the most peaceful, stable and prosperous regions in the world. I don't think this would
have been possible if it were not for ASEAN".
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
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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".
The relative peace, security and stability that ASEAN has helped achieve and maintain in
Southeast Asia as well as in the entire Asia-Pacific has been good for business. It created a
favorable environment where rapid and sustained economic growth became possible. Economic
development, in turn, brought about social progress and human development.
Just how was ASEAN able to achieve its phenomenal success? Malaysian Foreign Minister
Abdullah Haji Ahmad Badawi explains it convincingly. "ASEAN has been successful," he says,
"because there is a very strong commitment among ASEAN members to cooperation.
Cooperation for the benefit of all and cooperation for stability and peace of the region. This is a
very important hallmark of ASEAN… (Second), there is also a very strong commitment to
pragmatism. ASEAN has been pragmatic in ways that develop cooperation among the members
in undertaking various projects. And ideology has never been a problem to ASEAN. Ideological
differences have never interfered in efforts to cooperate positively for the common good of all
and for regional prosperity. And, third, I think the ASEAN Leaders and Ministers are never tired
of seeking consensus. We work hard, we work with full commitment to seek consensus on any
particular issue, on any particular program we wish to develop and when we do this, we are very
very aware of one another's sensitivity."
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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 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 establishment of the ASEAN Regional Forum (ARF) also represents a breakthrough in the
history of the region and, as stated in the Chairman's Statement of the ARF's inaugural meeting
in 1994, "signified the opening of a new chapter of peace, stability and cooperation for Southeast
Asia".
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
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spectrum of our societies. Through ASEAN, this region will become a grassroot- supported and
close-knit community bound together not only by common interests, but by shared values,
identity and aspirations among our peoples."
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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CONCLUSION
The dynamism of the ASEAN region has been inextricably intertwined with the appearance of
theeconomic rise of East Asia at a time during the early 1980s when the world's economic
activitydeclined. While the United States and EC-12 experienced a protracted recession, Japan
continued itsexpansion at a lower rate of growth.Japan has become the locomotive for the East
Asian region as a source of investment, trade anddevelopment aid, especially in the NIEs, China
and ASEAN. Japan and the NIEs faced similarchallenges, such as: world economic recession,
currency appreciation, increasing wages andprotectionism, resulting in the movement of some
industrial sectors to neighbouring countries in orderto maintain competitive advantages.15In the
face of such challenges, ASEAN countries launched measures of deregulation and
restructuringboth at the national and regional level. As a whole, ASEAN countries experienced
large inward FDIflows, especially from Japan and the NIEs, except for the Philippines where
most FDI originated fromthe United States. These flows have strengthened ASEAN's exports.
ASEAN exports however, weremuch higher to extraregional than to intraregional markets.
Nevertheless, little progress both in tradeand investment was achieved. And yet ASEAN is the
most successful subregional cooperation group in the Asian Pacific region. The Association has
been successful in speaking in one voice on majorinternational trade and economic issues. It
presented a joint stand at the Uruguay Round ofmultilateral trade negotiations to improve world
trade and worked out trade benefits jointly with EC-12,Japan and other major trading
partners.According to many predictions, ASEAN will keep its dynamism during the 1990s.While
ASEAN'sbooming economies might be confronted with changing internal and external
conditions, like Japanand the NIEs during 1980s, the New Indochina (Viet Nam, Laos and
Cambodia) looks an attractivedestination for future ASEAN investment and trade. With their
new free-market economic system,liberalised foreign investment laws and more open borders,
the countries of Indochina more and more serve as production bases for a host of industries, from
garment-making to assembly of the basic electronics.
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