Current Issues Brief 2 1997-98

Dr Frank Frost
Foreign Affairs, Defence and Trade Group
25 August 1997

Contents

Major Issues Summary

Introduction

ASEAN Since 1967

ASEAN after the Cold War

ASEAN at 30: Issues and Challenges

ASEAN and Cambodia

ASEAN and Australia

Conclusion

Endnotes

Appendix A (hard copy version only of these charts; not available on Internet at present)

Major Issues Summary

ASEAN (the Association of Southeast Asian Nations), the premier regional association in East Asia, this year celebrates its 30th anniversary. ASEAN has sought to enhance regional security and economic development in Southeast Asia by pursuing cooperative activities and maintaining active dialogues with the major powers and other Asia Pacific countries, including Australia. Since the end of the Cold War, ASEAN has moved to boost its activities and to enlarge its membership with the aim of including all ten Southeast Asian countries. ASEAN accepted Burma and Laos as new members on 23 July 1997, but the outbreak of conflict in Cambodia from 5-6 July forced ASEAN to postpone that country's entry into the association. P> This paper reviews ASEAN's development and character, its strategies to redevelop its cooperative role in the post-Cold War era, the challenges posed by enlargement and by the conflict in Cambodia, and ASEAN's significance for Australia.

ASEAN was formed by Indonesia, Malaysia, the Philippines, Singapore and Thailand in August 1967 at the height of the Vietnam war and just after the destabilising period of 'Confrontation' by Indonesia of the new state of Malaysia. In its first years of operation the members quietly developed communication and worked to build up trust and confidence. After 1975, the members upgraded their activities. ASEAN played an important role for its members during the Indochina refugee crisis in 1978-79 and after Vietnam's invasion of Cambodia. During the 1980s, ASEAN attained a high international profile through its role in coordinating opposition to Vietnam's presence in Cambodia and through its demands for a negotiated solution.

The decline of the Soviet Union ushered in a new phase of international relations in East Asia. With the Cambodia conflict effectively removed as an international and regional problem by the Paris Agreements of October 1991, ASEAN was anxious that it should not lose momentum or profile. Accordingly, ASEAN in the 1990s has been 're-engineering' its strategies in several major ways. The paper suggests that in these efforts ASEAN faces five major issues and challenges: enlargement, regional security cooperation, economic issues and cooperation, leadership transitions in ASEAN's members, and the renewed problems in Cambodia.

Enlargement has been seen by ASEAN's senior leaders as a way of adding to the associations 'weight' and credibility as a grouping able to represent the whole of Southeast Asia. However, enlargement also poses the question of whether ASEAN can accommodate new members with (in some cases) substantial internal political problems and keep the community of interests and cohesion that it has developed over 30 years. Burma's membership has been especially contentious, both within and outside ASEAN. The paper provides a concise outline of the costs and benefits which may result from ASEAN's enlargement.

ASEAN has faced a complex regional security environment in the 1990s. China's economic growth has benefited the whole East Asian region but its rise in regional prominence has also produced uncertainties, especially in relation to the South China Sea. To contribute positively to post-Cold War security in East Asia, ASEAN has established the ASEAN Regional Forum to engage the Asia Pacific major powers in dialogue and confidence building measures. ASEAN now faces the challenge of maintaining its leading role as an organiser of this important focus for security discussions.

A consistent goal for the ASEAN members has been to maintain their region as an attractive focus for investment and economic growth. The ASEAN region's image of economic confidence has been affected since mid 1997 by the currency stability problems experienced by several countries, especially Thailand, but long term prospects for continued sustained growth remain favourable. To maximise the gains that can be realised from economic relations within their own region, ASEAN is pursuing the implementation of the ASEAN Free Trade Area. AFTA is being developed in parallel with the trade and investment liberalisation policies of the Asia Pacific Economic Cooperation (APEC) group, but AFTA is intended to be effected more rapidly. Progress has been made in reducing trade barriers but ASEAN's enlargement could make development of AFTA more complex.

ASEAN's internal cohesion may also be affected by the issue of leadership transition and whether ASEAN's emerging leaders will continue to give the development of relationships among members the high priority that has in the past been assigned to this by the group's founders and senior leaders, including President Suharto and Senior Minister Lee Kuan Yew.

ASEAN's most serious immediate challenge has been posed by the violent conflict in Cambodia since early July which has forced the delay of that country's entry into the association. Since mid-July, ASEAN has sought to mediate in the conflict but has met with resistance from Cambodia's now dominant leader Hun Sen. ASEAN is now emphasising the importance of the conduct of the scheduled 1998 elections in a free and fair manner, but the effort to accept the country as ASEAN's tenth member remains in abeyance.

ASEAN's move to accept new members has been accompanied by discussion about the role which the association might be able to play in encouraging positive internal change and reform within member countries-in a process of 'constructive intervention'. However, the paper suggests that it will be difficult to pursue such policies within ASEAN's diverse membership without placing the association's own cohesion under strain.

Australia has a strong stake in a stable and prosperous ASEAN region and the ASEAN members are important economic partners for Australia. Australia has welcomed ASEAN's enlargement while expressing the hope that this will be accompanied by positive change and reform, especially in Burma. Australia has been very interested to be involved in ASEAN's multilateral dialogues and has consistently been an active participant in the ASEAN Regional Forum. However, Australia has not yet succeeded in gaining access as a member in ASEAN's newest focus for dialogue, the Asia-Europe Meetings (ASEM) process.

The paper concludes by suggesting that ASEAN's enlargement should bring benefits both to the new and pre-existing members and should add to ASEAN's 'weight' as a regional grouping. However, ASEAN may face some problems in absorbing its new members: effective decision-making may be more difficult, cohesion may be harder to maintain and continuing internal problems in some newer members could see discord emerging between ASEAN's older and newer members. The manner in which enlargement evolves will play a play a large role in determining whether ASEAN retains the profile and prestige which it has gained in its first three decades.

Introduction

On 8 August 1997, the Association of Southeast Asian Nations (ASEAN) celebrated its 30th anniversary. Since its cautious beginning in 1967, during the height of the Vietnam war, ASEAN has come to be regarded as an important factor for stability in Southeast Asia and the most successful regional organisation in the Third World. Developments in 1997 have emphasised ASEAN's continuing vitality. On 23 July, ASEAN accepted two new members, Laos and Burma (Myanmar). Once again, ASEAN's annual meetings (in late July in Kuala Lumpur) were attended by the foreign ministers of the major Asia Pacific powers as well as the European Union, for bilateral dialogues and for the ASEAN Regional Forum-not to mention the annual dinner and musical evening (during which US Secretary of State Madeleine Albright stole the show with her revised version of an Andrew Lloyd Webber song, retitled for the occasion 'Don't Cry for Me ASEANies').

But ASEAN's anniversary has also highlighted its ongoing challenges. ASEAN's move to enlarge its membership was a historic step. However, enlargement does not automatically mean a stronger ASEAN. Moreover, ASEAN's bold plans to include all ten Southeast Asian countries were disrupted by the violent conflict in Phnom Penh on 5-6 July in which First Prime Minister Ranariddh was ousted-a development which has forced ASEAN to postpone acceptance of Cambodia into the association. ASEAN now faces a major challenge in trying to ameliorate conditions in Cambodia, and particularly to encourage Cambodia's government to adhere to constitutional provisions for the conduct of open elections in 1998.

This paper provides a concise overview of ASEAN's origins, character and rise to significance in the 1970s and 1980s, ASEAN's efforts to adapt to the impact of the end of the Cold War in East Asia, and its major current challenges, including those posed by the situation in Cambodia. The paper concludes by discussing ASEAN's significance for Australia.

ASEAN Since 1967

ASEAN was established by a meeting in Bangkok in August 1967 of the foreign ministers of Indonesia, the Philippines, Singapore, and Thailand and the Deputy Prime Minister of Malaysia.(1) The founding members of ASEAN had several major motivations when they first met. In 1967 the Cold War was at its height-as was the war in Vietnam. Each of the founding members was highly concerned about domestic Communist-led revolutionary movements and felt acutely vulnerable in relation to the major powers-especially the Soviet Union and China. The capacity of the major powers for involvement in internal and inter-state conflicts was seen as one of the major security threats to the region-as was being illustrated so clearly in Indochina.

In addition, the five founding members had only very recently experienced serious tensions between each other-particularly during Indonesia's 'Confrontation' of the new state of Malaysia (between 1963 and 1966). In its first year of existence ASEAN was virtually immobilised by the tensions arising over the Philippines' claim to the Malaysian state of Sabah. There was very little trust or confidence among Southeast Asian countries in the late 1960s.

Economic development was also a severe worry for all ASEAN members. In 1967 there was as yet no 'East Asian miracle'-but rather a group comprising one city state and four poor, primarily agriculture-based economies highly dependent on their primary product trade, with what they saw as unsympathetic First World trading partners. In the late 1960s, Singapore was just beginning to plan the export-oriented process of industrial development which has since been followed by many other countries in Southeast Asia.

ASEAN was not initially in a position to exercise any significant influence on these conditions. What its members did do was to set up a model of regional cooperation that its very diverse members could live with and which maximised the members' diplomatic and political strengths. ASEAN's model of cooperation was developed in two main phases. From 1967 until 1975, the pace of activity was very low key and the members concentrated on discussion and confidence building. The end of the wars in Indochina in 1975 was accompanied by a sense of uncertainty in the region which stimulated a second phase of development: ASEAN at its first heads of government summit meeting in Bali (February 1976) upgraded both regional dialogues and efforts at economic cooperation.

The key features of the 'ASEAN style' of regional cooperation which has been developed steadily after 1967 have included:

• A steady process of contact and confidence building has been developed to dampen down the considerable bases for conflict among the members. ASEAN has avoided developing a top heavy organisation and has kept the style of discussions informal;
• Strong emphasis has been given to the principle of non-interference in the internal affairs of member countries: ASEAN's founding declaration in Bangkok in 1967 called upon member states to '...ensure their stability and security from external interference in any form or manifestation in order to preserve their national identities in accordance with the ideals and aspirations of their peoples'.(2)
• Emphasising economic cooperation as a major focus for the group-but without pursuing programs which would have produced serious disharmony among its very diverse members. ASEAN also contributed to building an image for Southeast Asia as a stable and benign destination for foreign investment;
• Utilising ASEAN's collective drawing power to gradually include the major external powers in dialogue-a process begun seriously in 1976 at the Bali summit and now a central feature of ASEAN;
• Using the association to take a stand on key regional security issues-especially the Indochina refugee crisis in 1978-1979, which was a very serious threat to most members, and over the conflict in Cambodia after Vietnam's invasion in December 1978.

ASEAN was a product of the period of the Cold War in Southeast Asia and it gained its greatest influence through its role in the most serious conflict of the Cold War era in the region in the last two decades-Cambodia. The ASEAN members viewed Vietnam's invasion as a violation of the principle of territorial sovereignty, and were also committed to support Thailand, which was concerned at the presence of over 150,000 Vietnamese forces in Cambodia after 1979. ASEAN encouraged international action to deny legitimacy to Vietnam's actions and cooperated with the major powers-particularly China and the United States-to oppose Vietnam's policies. While the conflict over Cambodia continued, ASEAN had a very high profile diplomatically-for example, through the resolutions which it sponsored each year in the United Nations General Assembly.

ASEAN after the Cold War

The decline of Cold War confrontation internationally was reflected directly in Southeast Asia by Vietnam's move to withdraw its forces from Cambodia (in September 1989) and by resolution of the Cambodia conflict as a regional and international problem (through the Paris Agreements of October 1991). After the agreement on Cambodia, the ASEAN members faced an improved regional security situation with new prospects for detente between former adversaries, particularly China and Vietnam, and Vietnam and the ASEAN states. ASEAN members, however, also faced an international climate where many problems competed for the attention of the major powers and where, with the Cambodia issue apparently on the way to resolution, ASEAN might not be able to hold the international interest which its members had got used to during the 1980s. Accordingly, since the early 1990s the ASEAN members, in the third major phase of the association's development, have moved actively to 're-engineer' the Association-to keep it at the centre of regional cooperation in the 1990s and beyond.(3) This has taken several important forms: enhanced cooperation on security and economic issues, organisational change, and enlarging the membership.

The regional security environment was affected substantially by the fall of the Soviet Union in 1991. The decline of Soviet power placed renewed focus on security relations in the East Asian region where optimism was accompanied by a sense of uncertainty, especially over the post-Cold War role of China. The new security environment encouraged continuation of a process of armed forces modernisation in Southeast Asia, and the end of the Cold War made available many weapons systems at reduced prices. In this new environment ASEAN took the opportunity to inaugurate the ASEAN Regional Forum in 1993 to provide the first regional basis for discussion of security issues in East Asia: the Forum now brings together 21 countries for annual ministerial meetings and a series of 'inter-sessional' working groups.(4) ASEAN has also developed other new bases for international and regional dialogue, including inaugurating the Asia-Europe Meetings (ASEM) process, which has brought together the ASEAN members, China, Japan, and South Korea with the 15 members of the European Union in what is planned to be a series of regular meetings, and moving to hold a summit of East Asian states (ASEAN plus the three Northeast Asian members of the ASEM dialogue), which will be held in December 1997.

Secondly, the post-Cold War environment has also involved economic challenges for ASEAN. Competition for access to international investment has been intense, not least because China's economy has drawn so much foreign investment. ASEAN has therefore sought to bolster the attractiveness of its region as a favourable focus for investment by taking more concerted steps to reduce economic barriers among the members and thus create a larger ASEAN market. To pursue this goal, ASEAN initiated the ASEAN Free Trade Area (AFTA) proposal in 1992. AFTA seeks to reduce trade barriers to create a market of up to 500 million people with low external tariff barriers and common internal standards.

Thirdly, ASEAN has moved to improve its own administrative capacities. Since 1992 the office of Secretary-General has been upgraded and has played a more significant role (for example in coordinating the preparations for the acceptance of new members). The size of the Secretariat has also been increased and its members have been recruited from across the ASEAN region.

Fourthly, and perhaps most ambitiously, ASEAN has seized the chance provided by the more flexible post-Cold War environment to expand its own membership. ASEAN had admitted Brunei as its sixth member in January 1984. Less than four years after the Paris Agreements on Cambodia, ASEAN welcomed Vietnam as its seventh member in July 1995. ASEAN has now just accepted Laos and Burma-see below.

All of these steps have been designed to keep ASEAN at the centre of cooperation in East Asia. And the continuing success of ASEAN in attracting the active participation of the major powers shows that the strategy has been succeeding. Nonetheless, ASEAN faces some major challenges as it enters its fourth decade-especially, whether it can at the same time pursue both 'widening' of its membership and also 'deepening' of its cooperation, while retaining the confidence and relative cohesion among its members which has been built carefully since the 1960s.

ASEAN at 30: Issues and Challenges

The 30th ASEAN Ministerial Meetings in Kuala Lumpur in 1997 reaffirmed the activism and profile of the association. The ASEAN meetings accepted formally Burma and Laos as full members. The dialogue sessions with major Asia Pacific countries and the European Union, emphasised ASEAN's continuing capacity to engage the interest of states outside the Southeast Asian region. The fourth meeting of the ASEAN Regional Forum (ARF) provided a venue for another round of discussions on regional security issues. ASEAN leaders were able to engage with and debate key issues of concern with the major powers, both in the meetings' formal sessions and at the media conferences which followed them, as did Malaysia's Prime Minister Mahathir with the US over the issue of human rights.

However, as it enters its fourth decade, ASEAN and its members face some substantial challenges including the process of enlargement of ASEAN itself, the regional security situation and the roles of the major powers, economic issues (including the instabilities in some ASEAN states' currencies in mid 1997) and regional economic cooperation, internal leadership transitions, and the special problems posed by Cambodia. It is useful to consider these challenges separately in turn, although they are in many ways inter-related-the issue of enlargement, for example, will clearly affect all major areas of ASEAN's activities and prospects.

ASEAN's Enlargement

ASEAN's expansion of membership is a key part of its strategy to remain a vital focus for regional cooperation but it has also been one of the biggest recent sources of controversy, both within the association and externally.

Vietnam and Laos

Vietnam was ASEAN's first new member in the post-Cold War period (on 28 July 1995). Vietnam's move towards ASEAN was a logical outcome of the end of the Cold War era in East Asia and it was effected more rapidly than many observers expected. The decline of the Soviet Union and the pursuit of internal economic reform gave Vietnam a new basis for common interests with the rest of Southeast Asia, from which it had been separated by over three decades of conflict. Vietnam's withdrawal of its forces from Cambodia in September 1989 followed by the achievement of the Paris Agreements in October 1991 removed the major basis for differences between Vietnam and ASEAN. For Vietnam, ASEAN membership offered a new basis for international acceptance, held out the prospect for access to added investment both from the ASEAN region and externally, and provided Vietnam the chance to join a prestigious diplomatic group which could balance the influence of China.(5)

Vietnam's role in ASEAN is still being developed but appears to have gone well so far. Vietnam has been cautious in pursuing its role in its first two years of membership, but has been willing to advance its views on key issues of major concern, such as the early incorporation of Burma and Cambodia, both of which it has supported.

For Laos, entry into ASEAN is also a logical development in its post Cold War foreign policy evolution. As Southeast Asia's third smallest state in population terms (after Brunei and Singapore) and one of its poorest, ASEAN membership involves substantial financial costs and will impose major demands on its limited supplies of trained and English-language proficient personnel. The Lao government has also been concerned that full adherence to AFTA would see the Lao economy, and its fledgling industries, swamped by an influx of goods from Thailand. Nonetheless, Laos probably felt that full membership of ASEAN was both necessary and unavoidable. As Professor Carlyle Thayer (Australian Defence Force Academy) has observed:

Burma

The entry of Burma has been much more contentious. The pattern of political conflict in Burma, culminating in the 1990 elections, and the overturning of the results of the elections (which were won decisively by the opposition National League for Democracy) by the military-dominated State Law and Order Restoration Council (SLORC), attracted international and regional attention and concern. ASEAN from the 1991 began to pursue a policy widely termed as 'constructive engagement' towards Burma (Myanmar). The rationale for this was summed up in a regional journal in 1996:

However, the issue of acceptance of Burma into ASEAN has been contentious both within and outside the ASEAN region. Within ASEAN, concern over Burma's acceptability was expressed in both Thailand and the Philippines.(8) Non-Government Organisations (NGOs) were vocal in criticising the level of political repression of the SLORC regime, and this criticism was also advanced in Malaysia, for example by the Malaysian Islamic Youth Movement (ABIM).(9) The potential acceptance of Burma by ASEAN was criticised by some Western governments-especially the US. At the 1997 ARF meeting, US Secretary of State Albright stated that:

ASEAN's leaders, however, appear to have taken the view that Burma's isolation from ASEAN would not serve the association's long term interests. Prime Minister Mahathir in his address to the ASEAN Ministerial Meetings said, in an evident reference to the US attitude towards Burma, that:

Concern about the potential for China to increase its influence in Burma has clearly been one factor in ASEAN calculations: for example, President Suharto was recently reported as having said that if Burma was not incorporated into ASEAN it would be open to China's influence, with the risk of 'ASEAN's encirclement by China'.(12) It is also likely that ASEAN's most influential senior leaders (including President Suharto, Senior Minister Lee Kuan Yew and Prime Minister Mahathir) have held the view that the 30th anniversary of ASEAN was a good opportunity to realise the aspirations of ASEAN to include all ten Southeast Asian states. They may well feel that while Burma has a repressive regime and is economically well below the level of development of the founders, some of ASEAN's present members were also very underdeveloped in 1967. Finally, they may have thought that the ASEAN members are better qualified to advise the Burmese regime on how to develop and open up than anyone else.

At the Fourth ASEAN Regional Forum on 27 July, the Ministers in their communique commended '...ASEAN's efforts at constructive engagement with Myanmar'. The immediate prospects for this policy, nonetheless, remain uncertain. It seems unlikely that the entry of Burma to ASEAN will have any major immediate positive impact on the internal political situation or on the pace of reform. ASEAN membership, it may be argued, will widen Burma's contacts, expose its regime to a wider range of discussions and provide added opportunities for ASEAN neighbours to quietly advocate a process of internal dialogue and liberalisation-in a situation where the regime seems quite unwilling to accept more active pressure from Western countries. A key question for ASEAN in the next several years, however, will clearly be whether Burma's acceptance within the association is accompanied by some discernible movement towards political liberalisation and dialogue. If this does not take place, then ASEAN is likely to face continuing criticism over internal conditions within Burma.

Enlargement: Costs and Benefits

A key issue for ASEAN is how enlargement will affect its character and cohesion. As Singapore's Foreign Minister Jayakumar noted on 23 July 1997 at the ceremony in which Burma and Laos were admitted, 'The challenge for ASEAN is how to remain robust and united. ASEAN will be able to build on its strength if all the member countries continue to work closely together and if we remain cohesive'.(13)

ASEAN must now pursue cohesion and unity with a substantially more diverse array of members. In economic terms, ASEAN now contains members whose per capita GNP (in 1994) ranged from Singapore's $US23,260 and Brunei's $14,240, to Malaysia's $3,520, Thailand's $2,210, the Philippines' $960 and Indonesia's $880, and to Burma's $200, Vietnam's $190 and Laos' $320 (with Cambodia's at an estimated $210):(14) (for further data on the comparative size and national incomes of the ASEAN economies see Appendix A). Politically, ASEAN now includes widely varying types of governments, including comparatively liberal representative democratic systems (the Philippines and Thailand), well-established representative systems with strongly entrenched ruling parties or coalitions (Singapore and Malaysia), a sultanate without elected representative institutions (Brunei), a military-dominated government but with substantial civilian participation (Indonesia), an illiberal and repressive military regime (Burma), and two Communist, single party-dominated states (Vietnam and Laos). As was noted above, much of ASEAN's strength has derived from its members' capacity to build up trust, consensus and a sense of common identity. Maintaining cohesion with its enlarged membership will clearly be a substantial additional challenge.

Enlargement involves both potential costs and benefits-which have been aptly summed up in a recent Parliamentary submission by Professor Carlyle Thayer.(15) The major potential costs include:

• the danger that the inclusion of new members will erode the traditional ASEAN spirit of solidarity, accommodation and consensus building;
• the danger that a larger ASEAN may not be able to move effectively to make decisions on regional issues and areas of cooperation;
• the potential for longstanding suspicions between some members (for example, Vietnam and Thailand) to carry over into ASEAN;
• the danger of impeding the development of the ASEAN Free Trade Area;
• the danger that ASEAN may come to be divided on key issues, for example that a 'two tier' ASEAN may develop with the older and richer members coming into conflict with the newer and much poorer members; and
• the danger that expansion may lead to difficulties in ASEAN's relations with major external partners such as the US and the EU over the policies of certain members, for example Burma.

The major potential benefits include that:

• an expanded ASEAN will be able to increase its geo-political weight and enhance its leverage with major powers including the US, China, Japan and India (as well as Australia);
• an expanded ASEAN with an internal market of about 500 million people will be attractive to investors and enhance ASEAN's overall international economic weight;
• an expanded ASEAN will be able to reduce the danger of inter-state conflict by increasing confidence and communications;
• an expanded ASEAN will encourage the newer members to continue and increase progress towards economic reform and towards strategies that can achieve both growth and equity;
• an expanded ASEAN will enhance prospects for bilateral and subregional cooperation, and contribute to stability both in Southeast Asia and in East Asia overall; and
• an expanded ASEAN should be able to contribute to an increased sense of regional confidence and identity and thus bolster ASEAN's 'spirit' and positive image.

The balance of benefits and costs from enlargement will play a large part in determining ASEAN's future in the next decade and beyond.

Regional Security and the ASEAN Regional Forum

As they work to draw strength from their expanded membership, the ASEAN members continue to face the challenge of contributing to the maintenance of a secure regional environment. ASEAN as a group has two major strategies to help achieve this: through avoiding conflict among themselves, and through the engagement of the major powers.

One of ASEAN's most valuable contributions to security in Southeast Asia has been its role in helping to dampen the potential for disputes among its own members-disputes which could otherwise attract external interference. Even though ASEAN has been actively fostering communication and cooperation for three decades, sensitivities between members can easily surface. A notable recent example was the ill-feeling between Singapore and Malaysia after Senior Minister Lee made comments about the allegedly poor state of law and order in the Malaysian state of Johore which produced hostile reactions from Malaysian media and officials.(16) Despite such problems, ASEAN has continued to serve as an umbrella under which bilateral disputes can be alleviated. There has been a trend for some members to seek arbitration from the International Court of Justice as a way of resolution; for example, in relation to the dispute between Malaysia and Indonesia over islands off Sabah and Kalimantan. While ASEAN as a regional group has not played a direct role in these negotiations, the efforts at conflict reduction are very much in line with ASEAN's interests.

The roles of the major powers in East Asia pose a further challenge for the ASEAN members' efforts to maintain national and regional security. One of the striking characteristics of East Asia is that while there has been a growing pattern of economic interactions, the level of political and institutional cooperation has remained modest. The sharp differences in level of wealth and historical and cultural background among the region's major powers-combined with the impact of four decades of Cold War conflict-have meant that the East Asia region overall has never fostered the kind of cooperative activities pursued by organisations like the European Union or the North Atlantic Treaty Organisation. The end of the Cold War has opened up new opportunities for regional association and cooperation. However, as Richard Baker (East West Center, Hawaii) has argued, the security order in the region is in a state of transition, 'in suspension between a Cold War framework that no longer applies and new approaches that are just being developed and cannot yet cope with major challenges'.(17)

China's gradually rising profile and national power has been a focus of concern and a stimulus for continuing cooperation in the ASEAN region during the last decade. In 1996 concerns about China's polices were reinforced by the tensions generated in the Taiwan Straits at the time of the 1996 elections. As one observer has noted, 'The decision by China's leadership, announced by China's Premier Li Peng on 5 March, to conduct missile test firings to within 32 kilometres of Taiwan's coast shook Southeast Asian complacency'.(18) The Taiwan straits incidents, which drew a firm US response in the form of the dispatch of two carrier battle groups into the area, aroused considerable concern in the ASEAN region because of the potential dangers posed for security in East Asia, although these concerns were not given public official expression.

The ASEAN members are most immediately concerned at China's policies in the South China Sea. A complex set of overlapping claims are in effect to areas of the Sea including the Spratly islands, in what is considered to be a potentially petroleum rich area. A series of discussions over the issue have failed to see any progress towards resolving these claims. Meanwhile, the ASEAN members continue to see the potential for what has been described as a pattern of 'creeping assertiveness' by China in the area. The Philippines criticised China's occupation of areas on Mischief Reef in early 1995. In early 1997 some tensions were evident again between China and Vietnam when a Chinese vessel conducted petroleum explorations in an area claimed by Vietnam. The potential for dispute in the South China Sea also highlights the difficulty for the ASEAN members in developing and maintaining a concerted response.(19) There have been longstanding differences in emphases among ASEAN members towards China, with some members (including Thailand and Singapore) relatively more sanguine about China's regional role than others (particularly Indonesia and Vietnam). The issue of such tensions was raised by Vietnam's concerns in early 1997, but the tensions abated after the withdrawal of the Chinese exploration vessel involved.

The problem of overlapping and unresolved claims in the South China Sea seems set to continue: Premier Li Peng during discussions with Malaysian leaders in August 1997 said that the Spratly islands dispute would carry on for a long time and reaffirmed Beijing's call for a concentration on economic development.(20) The ASEAN members are thus likely to remain in a state of uncertainty about prospects for further disputes in the area.

Japan has played a leading role as a stimulus for economic development in the ASEAN region, both through investment and as the world's largest aid donor, and since the mid 1980s has directed another wave of investment into the ASEAN members' economies. Japan has also played an important role in encouraging regional cooperation on both economic and security issues and has had an extensive dialogue relationship with ASEAN since the late 1970s. However, Japan's existing and potential regional roles are also viewed with some reserve and concern. Japanese political figures have alienated neighbouring states with their capacity for insensitive comments about Japan's history in the region.: The issue of the historical legacy continues to undercut Japan's regional legitimacy. As Kua Chong Guan (a Singaporean defence analyst) has noted:

In the context of China's rising profile, the role of the United States in East Asia remains of central importance to the ASEAN region. The United States remained the dominant single power in the region, with its set of bilateral alliances (which include those with two ASEAN members, Thailand and the Philippines), its forward deployment of over 100,000 military personnel (especially in Japan and South Korea) and its powerful naval forces which together provide a major part of the region's balance of power. In the post-Cold War environment however, the US has wished to pursue a range of foreign policy interests with the ASEAN region including bilateral economic issues of market access, and human rights concerns. US policies, moreover, have sometimes appeared to some observers to have lacked a strong sense of strategic direction in the setting of priorities in policy areas including trade, human rights and security relations.(22)

In the 1990s, the ASEAN members have faced areas of dispute with the US. At the recent meetings in Kuala Lumpur, for example, the US and ASEAN clashed over human rights issues (including the controversy over the proposal by Prime Minister Mahathir that the Universal Declaration on Human Rights should be recast to reflect non-Western concepts of rights), Burma, Cambodia and the question of currency speculation and the alleged responsibility of particular individual financiers. Despite these areas of contention, ASEAN's members see a continued active involvement by the US as a central factor in the maintenance of regional security.(23) However, ASEAN's enlargement may be accompanied by continuing diplomatic tensions in the US relationship, particularly over Burma and Cambodia.

ASEAN members have responded to the uncertain security environment with individual and bilateral defence cooperation strategies. A number of intersecting bilateral arrangements have developed into what is referred to in ASEAN defence circles as an extensive 'defence spider's web', but these have been pursued strictly on a 'non ASEAN' basis(24). ASEAN's major formal multilateral response to the post-Cold War security environment has been the ASEAN Regional Forum (ARF).(25) The ARF has been significant because it has been able to draw in all the major powers in the region. It has been helping to develop a sense of shared strategic and security interest among regional states: it has helped to draw China into cooperative dialogue in the region, enables Japan to engage in regional security in a way comfortable to other states, and reinforces US engagement in East Asia. The ARF is intended to gradually move through a three stage evolution from confidence building, to preventative diplomacy, to being a body capable, in the longer term, of developing approaches to conflict resolution.

ASEAN has played a high profile role in the Forum by co-chairing all its working groups and the Fourth ARF meeting on 27 July 1997 reaffirmed that '... ASEAN continues to undertake the obligation to be the primary driving force'.(26) The Forum has so far sponsored a relatively modest but expanding program of discussions among senior ministers and officials on cooperative and confidence building measures. The Fourth ARF drew attention to the work of the 'inter-sessional' specialist working groups, which have discussed issues including confidence building measures, disaster relief, search and rescue coordination, conduct of peacekeeping operations, and de-mining. The 1997 meeting extended the mandates for the groups and also welcomed the 'track 2' activities conducted primarily by non-governmental organisations The Ministers also agreed that '...the evolutionary approach to the development of the ARF process and the practice of taking decisions by consensus shall be maintained' to help ensure that the process is consolidated.(27)

The ARF has made a cautious start to its efforts at regional consensus building. Since the ARF does not include among its members either Taiwan or North Korea, it is not in a position to discuss or try to ameliorate the two most serious threats to security in the East Asian region. Nonetheless, the ARF is regarded as a valuable initiative and one which only ASEAN was able to achieve. An important task for ASEAN is therefore to maintain ASEAN's own cohesion so that it can continue to claim an equal role in determining the activities of the Forum alongside the much more powerful major powers whom it seeks to keep engaged in the ARF process.

Economic Issues and AFTA

One of ASEAN's central goals has been to help create a stable environment to encourage economic growth for its members. High growth has been seen as a prerequisite for the maintenance of internal stability and of 'national resilience'. ASEAN has in turn benefited from economic growth: a considerable part of ASEAN's prestige as a grouping has been derived from the members' international image of being part of the 'East Asian miracle' of growth and long-term alleviation of poverty.

The ASEAN members have therefore been disturbed by the currency problems in mid 1997 which affected first Thailand and which then spread to affect the Philippines, Indonesia and Malaysia. The causes of the recent round of currency instability in the region are still being assessed but it has been argued that some aspects of domestic policies in several states have increased their vulnerability to the kind of pressure which resulted in downward currency movements. In Thailand, for example, problems were associated with large inflows of foreign investment which were often used for relatively unproductive purposes, such as resort and real estate development and short term portfolio investments. This was taking place in the context of a fixed exchange rate between the baht and the US dollar. Increasingly the value of the baht seemed to be above the level warranted by the fundamentals of the Thai economy. Ultimately, the confidence of investors faltered and the position of the currency came under pressure. The Thai Minister for Commerce Dr Narongchai Akrasanee (a well-known specialist on the ASEAN economies) commented in mid-August 1997 that 'We made a major mistake in keeping the exchange rate fixed for so long'.(28) The pressure on the Thai currency forced a devaluation on 2 July and in mid August a large rescue package was organised by the International Monetary Fund totalling $US 16 billion, which will necessitate stringent austerity measures. Other regional economies have also been placed under pressure, particularly the Philippines which has also received IMF assistance and Indonesia which in mid August was forced to float the rupiah.(29)

The pressure on Thailand and on several other ASEAN members inevitably affected the climate for the Ministerial Meetings in late July and attention was focused on the alleged role of currency speculators. In their communique, the Ministers declared that they were seriously concerned at 'well-coordinated efforts to destabilise ASEAN currencies for self-serving purposes, thus threatening the stability of all ASEAN economies'. Malaysia's Prime Minister Mahathir made highly publicised attacks on one well known speculator, George Soros, and he continued the criticism in August. These arguments have been contested by some financial analysts who have suggested that the criticism of financial speculators distracts attention from the internal policy problems of individual ASEAN members. For example, Jim Walker (Chief Economist for Credit Lyonnais Securities Asia) has commented that 'All the talk about foreign speculators is a diversion from the real issue. The main cause is locals selling'.(30)

At the time of writing (2 September) the IMF package for Thailand (supported by Australia) appears to have been received well. The issues about the precise causes of the round of currency problems in regional economies are continuing to be analysed. A number of analysts have argued that while growth rates in the ASEAN economies may slow in the short run, the medium term prospects for growth continue to be favourable. The currency problems, however, have highlighted the fact that the successful economic performance of the ASEAN economies cannot be taken for granted inside or outside the region. Some revised domestic strategies-including reforms to the banking sector and greater efforts to upgrade the skill levels of the work forces of ASEAN economies so that they are equipped to support the demands of rapid economic development-will be needed to bolster the prospects for continued growth.(31)

The tension aroused by the currency problem in mid 1997 also directed attention to the value of boosting trade and investment in the ASEAN region and to the contribution which ASEAN as a group is seeking to make to this. The ASEAN economies have traditionally been highly outward looking, with their major trading partners generally being in Northeast Asia, North America and Europe. In 1995 trade among the ASEAN members amounted to 23 percent of their total trade and it has been estimated that if goods transhipped through Singapore were to be discounted, the level of intra-ASEAN trade would fall to just 12 percent. Nonetheless, intra-ASEAN trade has been growing at a faster rate than the countries' trade with the rest of the world (the trend annual rate for growth of intra-ASEAN trade between 1991 and 1995 was 21.6 percent versus 15 percent for the world overall).(32) ASEAN members therefore see economic cooperation as encouraging an already strong and beneficial trend.

The ASEAN Free Trade Area (AFTA) agreement is seeking to reduce intra-ASEAN tariffs over a ten year period, with most cuts expected to be achieved among the largest economies by 2003 (Vietnam has been asked to comply by 2006 and Laos and Burma by 2008). ASEAN members are aiming to maximise the number of tariffs in the 0-5 percent category by 2000 and zero percent by 2003. The mechanism for implementation of AFTA is the Common Effective Preferential Tariff (CEPT). The AFTA agreement also requires the removal of all quantitative restrictions and other non-tariff barriers on goods brought within the scheme within five years. ASEAN has also been working on a prioritised list of items on which non-tariff barriers are to be lifted. A 'Green Lane' system for express customs clearance of AFTA items has also been introduced. Overall progress on harmonising customs procedures however has been slow.

ASEAN is also pursuing other areas of economic cooperation. Extensive discussions have taken place on development of an ASEAN Investment Area to further stimulate intra-ASEAN and foreign investment into the ASEAN region. Work is also being conducted to follow through the Framework Agreement on Services and the Framework Agreement on Intellectual Property, both signed in December 1995.

ASEAN's pursuit of AFTA is taking place in the context of the commitments made by the Asia Pacific Economic Cooperation (APEC) group at Bogor in 1994 in which APEC members pledged to remove trade barriers among developed economies by 2010 and less developed economies by 2020.(33) AFTA is pursuing effectively a similar goal, but at a pace which is intended to be faster. It is thus another way in which ASEAN is seeking to be at the forefront of regional cooperation activities. While ASEAN has reaffirmed its commitments to AFTA, the actions of individual members have not always been in full accord with its spirit or provisions. For example, Indonesia's pursuit of a 'national' car industry (through a joint venture between an Indonesian company and South Korea's KIA Corporation) has involved the imposition of barriers which are not compatible with AFTA's goals.(34)

The addition of new ASEAN members need not slow the pace of tariff reductions already agreed to, since the 2003 target is legally binding. If the new members do not adhere to their timetables, the six 'older' members do appear to be likely to adhere to their agreed target of 2003, although sensitive sectors such as rice and cars are proving difficult. It is possible that some new members may wish to seek exclusion from AFTA for some sectors or industries: Vietnam, for example, might wish to seek exemption for some of its state-owned industries or conglomerates. This kind of issue could slow the pace of cooperation. However, a recent Australian government report has argued that if the newer members seek to 'drop out' of key areas of ASEAN's economic cooperative activities, they run the risk of becoming marginalised in the wider regional context of liberalisation and growth.(35)

Political Transition and 'National Resilience'

Another important issue for ASEAN as it enters its fourth decade is the interplay between internal stability and regional 'resilience'. A number of ASEAN members face impending transitions in their leaderships and political systems. In Indonesia, President Suharto's continued dominance is accompanied by discussion about the succession issue, in Vietnam the generation of revolutionary leaders who led the anti-colonial struggle will be replaced by a younger generation, Thailand will in the medium future face the issue of a successor to the revered King Bhumibol, the Philippines will see a successor elected to replace the Presidency of Fidel Ramos which has seen great progress towards economic reform and growth, and in Malaysia Prime Minister Mahathir will presumably be in time replaced by Deputy Prime Minister Anwar Ibrahim. In the case of Malaysia, a smooth process of leadership change may be expected on the basis of past experiences of orderly transitions. In other cases the outlook is much more uncertain. The focus which ASEAN will be able to retain as a group will clearly depend partly on effective processes of leadership and political change in the individual member countries.

An accompanying important issue is that several of the region's senior leaders who are likely to depart from the political scene within the next decade have played vitally important roles in establishing and developing ASEAN-in several cases through its entire history. A considerable part of the cohesion among the members has been contributed by the long-standing efforts of leaders such as President Suharto, Senior Minister Lee Kuan Yew, President Ramos and Prime Minister Mahathir. As Professor James Clad has observed:

ASEAN and Cambodia

ASEAN's progress towards enlargement to include all ten Southeast Asian countries was severely disrupted by the upsurge of political tensions in Cambodia which led to the violent conflict in Phnom Penh on 5-6 July, the ousting of First Prime Minister Prince Ranariddh and the assumption of a clearly dominant position by Second Prime Minister Hun Sen. The developments since early July have created major problems for Cambodia, raised a new set of problems for ASEAN as it seeks to pursue dialogue and to redevelop a basis for Cambodia's entry, and added to debate on the extent to which ASEAN may be able to exercise a positive influence on internal developments in Southeast Asian countries.

The 5-6 July 1997 Conflict and ASEAN's Response

The precise causes of the outbreak of conflict within the Cambodian government in early July are still emerging. It appears that the conflict stemmed primarily from the exacerbation of tension between the two main coalition parties, the Cambodian People's Party (CPP) led by Hun Sen and the royalist National United Front for an Independent, Neutral, Peaceful and Cooperative Cambodia (FUNCINPEC) led by Prince Norodom Ranariddh.(37) The delicate coalition between the CPP and FUNCINPEC, established after the UN-sponsored 1993 elections, came under great strain in 1996, exacerbated by the competition between those parties for the allegiance of breakaway elements of the Khmer Rouge. Both parties actively sought the allegiance of defecting Khmer Rouge elements. When FUNCINPEC appeared to be gaining particular success in this effort, antipathy in the CPP increased.

The deterioration of relations into outright violence appears to have been precipitated by efforts by FUNCINPEC elements to gain a negotiated end to the residual resistance by the Khmer Rouge. According to recent reports, negotiations took place in May and June between senior FUNCINPEC and Khmer Rouge leaders including a meeting on 1 June 1997 between Prince Ranariddh and senior Khmer Rouge leader Khieu Samphan. These negotiations helped fuel an intense internal struggle in the Khmer Rouge in which those supporting negotiations were opposed by the movement's longstanding senior figure, Pol Pot. After a fierce conflict within the Khmer Rouge, Pol Pot was captured on 19 June and placed under arrest (he was later presented to foreign media representatives during a show 'trial' in late July). On 4 July Prince Ranariddh and senior Khmer Rouge leader Khieu Samphan reached a provisional agreement by which the Khmer Rouge would end their armed struggle, disband their provisional government, recognise the Constitution, recast themselves as the 'National Unity Party' and be allowed to rejoin the political system.(38)

The prospect of FUNCINPEC announcing an agreement to end the Khmer Rouge's resistance evidently prompted Hun Sen to seize the opportunity to confront Ranariddh and his chief allies, including General Nhek Bun Chhay. On 5 July, fighting broke out between CPP party and militia forces and FUNCINPEC elements in Phnom Penh; a number of people were arrested and up to 60 people were killed in fighting, with a number of others allegedly killed after their capture by CPP forces. Prince Ranariddh, who had left Cambodia just before the outbreak of fighting was accused by Hun Sen of the illegal importation of arms and of planning to infiltrate Khmer Rouge forces into Phnom Penh. In Phnom Penh, as one observer (Jason Barber in The Phnom Penh Post) has commented, 'Funcinpec officials and MPs were effectively left with two choices: give up their positions and livelihoods or agree to Hun Sen's demands'.(39) A number of FUNCINPEC figures, including several Ministers, chose to remain in Cambodia and were prepared to cooperate with Hun Sen and the CPP. Many other individuals and groups of FUNCINPEC forces fled to border areas. Hun Sen and the CPP were rapidly able to dominate the situation in the capital and in most of the country.(40)

With Ranariddh outside the country and the residual FUNCINPEC armed forces on the northern and western borders, Hun Sen moved to consolidate his position. In late July, the CPP sought to reaffirm the ruling coalition by appointing Foreign Minister Ung Huot as Ranariddh's replacement as First Prime Minister. On 6 August, the National Assembly elected Ung Huot to this office, with the support of the CPP members and a majority of the 58 elected FUNCINPEC members: about twenty FUNCINPEC members were outside Cambodia and unable to participate in the vote. This move went some way to legitimise the CPP's position, but left Hun Sen as the dominant figure in Cambodia.

ASEAN leaders reacted with consternation and anger at Hun Sen's actions, since he, along with Prince Ranariddh, had promised on several occasions (including to Indonesia's President Suharto and Thai Prime Minister Chavalit) that the FUNCINPEC-CPP coalition would be maintained until the 1998 elections. The reactions of individual ASEAN members, however, appeared to differ: Malaysia apparently remained in support of going ahead with the plan to accept Cambodia as a member, perhaps partly because of its concern for the image of the ASEAN meetings which it was hosting. Vietnam also supported Cambodia's early admission. Thailand opposed Cambodia's immediate entry, supported by Singapore and Indonesia. At a meeting on 10 July, the ASEAN foreign ministers decided to delay Cambodia's entry and the foreign ministers of Thailand, Indonesia and the Philippines were appointed to try to mediate a solution.

ASEAN's move came at a time of substantial international criticism of Hun Sen's actions, although no concerted international approach developed: for example, while two major aid donors suspended aid (the US and Germany), others did not (Japan and France), while Australia suspended military assistance but continued its civilian and humanitarian programs.(41) In the immediate aftermath of the coup there was some support for the restoration of Prince Ranariddh, particularly from the US, but this emphasis has not been sustained. At the ASEAN Regional Forum on 27 July, ASEAN was given the responsibility of attempting to restore political stability in Cambodia. However, ASEAN has had difficulties in trying to exercise a moderating influence in Cambodia in the face of resistance from Hun Sen.

One tactic by Hun Sen has appeared to be an effort to exercise leverage in relation to ASEAN by playing on concerns about a possible rise in Chinese influence in Cambodia. In late July, Hun Sen ordered the closure of Taiwan's representative office in Cambodia, the Taipei Economic and Representative Office, which he claimed had assisted Prince Ranariddh. The Phnom Penh Post in late July argued that:

In August, with the CPP-FUNCINPEC coalition government now reaffirmed with the elections of Ung Huot as First Prime Minister, Hun Sen made clear his continuing desire to resist efforts at mediation. On 20 August, for example, Hun Sen challenged ASEAN to grant early entry to Cambodia and criticised the idea that Cambodia should have to wait until the conduct of the scheduled 1998 elections before it was granted membership. He said in a radio broadcast that:

In Cambodia, government forces have continued to confront the residual FUNCINPEC forces, which have been operating in alliance with Khmer Rouge elements near the northern border with Thailand. While the Cambodian government appears to be clearly predominant in the military conflict, it still faces substantial problems. The economy has been affected badly by the fighting in early July in which many businesses were damaged by fighting or looting. The confidence of investors is likely to take a long time to revive. While aid programs remain in effect, actual aid deliveries have been severely hampered by the withdrawal of most foreign aid personnel in the aftermath of the fighting. The internal political situation also cannot be regarded as fully stable. There has been some indication of internal disagreement within the CPP at the violent tactics pursued by Hun Sen (who issued a warning against internal party divisions in mid August).(44) King Sihanouk returned to Cambodia on 29 August: he went to Siem Reap, rather than Phnom Penh; at the time of writing it was not yet clear whether he might be able to pursue negotiations or mediation in relation to the recent political confrontation.(45)

The ASEAN foreign ministers at a meeting on 11 August decided to keep in place an indefinite postponement of Cambodia's entry into the association, and to continue to attempt a mediating role. In a joint statement, the ASEAN ministers 'stressed the importance of holding free and fair elections in Cambodia as scheduled in May 1998'. They also 'reaffirmed the necessity for all political parties in Cambodia to participate fully in the elections and reiterated ASEAN's readiness to help Cambodia with technical cooperation in facilitating these elections'.(46)

The outcome of ASEAN's efforts at mediation continue to be uncertain. Much is likely to depend on what kind of electoral contest will take place in Cambodia, on the level of participation allowed and on the conduct of the polls. In the meantime, ASEAN's goal of representing all ten Southeast Asian countries remains in abeyance.

'Constructive Engagement' and 'Constructive Intervention'

The conflict in Cambodia in early July and ASEAN's efforts to exercise influence have added to a debate in ASEAN circles about the potential for the association to assume a more active role in exercising a moderating influence in relation to certain countries' internal affairs. This area of debate has been increasing since the mid 1990s and has partly reflected the development of academic and other non-government organisations in some of the older and more wealthy ASEAN members, including the Philippines, Thailand and Malaysia. In an article in 1995, for example, the leading Indonesian analyst, Jusuf Wanandi (Centre for Strategic and International Studies, Jakarta) argued that:

In 1997 attention has been given to the concept of 'constructive intervention', which has been mooted as a possible ASEAN response to some internal situations in Southeast Asia, particularly by Malaysia's Deputy Prime Minister, Anwar Ibrahim. In a recent article on the concept, the Malaysian academic Dr Abdul Rahman Adnan (Institute of Policy Research, Kuala Lumpur) has suggested that ASEAN needs to revise its modes of operation and exercise an increased degree of political maturity. In Cambodia, he has argued, ASEAN needs to encourage reconciliation and free elections in accordance with the constitution. More widely, ASEAN needs to develop a concept of 'constructive intervention'.

Such a concept, however, is likely to be difficult to develop and execute. In the case of Cambodia the ASEAN countries have an international agreement (the Paris Agreements of October 1991) which eight of the nine current ASEAN members signed, on which to base their pressure for free and open elections. Such a basis, however, does not exist in the case of any other regional state. ASEAN's nine members now comprise a number of very different political systems; it would be difficult to gain a consensus on how terms such as 'civil society' should be defined. It would also be difficult to maintain agreement on how and where 'constructive intervention' might be justified. If the concept is endorsed to secure free and fair elections in Cambodia, might the same kind of request be made in Brunei, which has no elected legislature, or in Vietnam? Given that freedom of expression, a pluralistic media, non-governmental organisations and academic debate are all relatively much more developed in the 'older' ASEAN members, there would seem to be some potential for discord if attention is directed from some ASEAN members onto the political systems and societies of some of the newer members. Such a development could make the maintenance of solidarity and cooperation among the new, larger ASEAN more difficult to achieve than was the case in ASEAN's first three decades.

It is therefore difficult to see how pursuing the notion of 'constructive intervention' can easily co-exist with the maintenance of cohesion and harmony within ASEAN.

ASEAN and Australia

Australia has an important stake in the success of ASEAN's expansion and consolidation in its fourth decade and beyond. ASEAN's development of cooperation and regional confidence has benefited Australia's own security environment. ASEAN's rapid economic growth has made its members a major focus for Australia's trade. As a result, successive governments have affirmed the value of the Australia-ASEAN relationship.

In economic terms, Australian merchandise exports to ASEAN countries have increased by 40 percent in the last five years to reach a level of $A11.6 billion in 1996. ASEAN as a group is now Australia's second largest market for exports, buying over 15 percent of our merchandise exports. Australia's imports from ASEAN countries have also risen rapidly: in 1996 merchandise imports from ASEAN amounted to 10 percent of total merchandise imports, up from 5 percent a decade ago.

Australia was the first country to establish a multilateral relationship with ASEAN, in 1974. Relationships both bilateral and multilateral have since proliferated. Australia and ASEAN cooperated closely during the refugee crisis in the region in 1978-79 and during the process which developed the Paris Agreements on Cambodia. Interactions have sometimes involved clashes of policy and interests, for example over trade and civil aviation issues in the late 1970s, but there have been many areas of longstanding cooperation.

In a review of the relationship on 26 August 1997, the Foreign Minister, Mr Downer, referred to the unique atmosphere of ASEAN's annual meetings and said that 'it is now the most important set of meetings in my international calendar'.(49) Mr Downer said that the expansion of ASEAN was a 'moment of truth for the association as it takes on the challenge of using its prosperity and consensus-based cohesion to assist the new members participate in the ASEAN success story'.

The issues of Burma and Cambodia are important areas of current Australian concern. Australia's policies on Burma differ from those of ASEAN in that Australia has protested strongly about the violation of human rights and it has taken a position of neither encouraging nor discouraging trade and investment with Burma. In relation to Cambodia, Australia was a major proponent of the peace process and UN involvement and since 1993 has sought to support Cambodia through both civil and some military assistance: Australia has been the fourth largest aid donor. In his 26 August statement, Mr Downer expressed confidence about the progress of Vietnam and Laos as ASEAN members but noted that Burma and Cambodia were exceptions to the general rule of prosperity and stability in the region. Australia along with the rest of the international community has 'deep concerns' about the situation in Burma and Mr Downer said that 'I urge other ASEAN countries to endeavour to ensure Burma can contribute to the political as well as economic success of the members of ASEAN'. On Cambodia, the Minister noted that the recent ARF meeting had agreed that ASEAN was best placed to be a positive influence. 'This is a new direction for ASEAN, a new challenge and a test of its political model, its flexibility and its adaptability'. He expressed confidence that ASEAN could help Cambodians find a peaceful, constitutional and democratic solution to their problems.(50)

In the area of multilateral cooperation, Australia has direct interests in the outcome of ASEAN's enlargement and is hoping to be increasingly involved in the regional dialogues which ASEAN has been sponsoring. Australia has been an active supporter and participant in the ARF from its inception and Australians have been very active in the 'second track' (primarily non-government) security discussions in Southeast Asia. The Australian government has been enthusiastic about the possibilities of establishing an association between AFTA and the Australia-New Zealand Closer Economic Relations agreement.(51) Australia's ongoing long-term involvement in the ASEAN economies was underscored in August 1997 by the government's commitment of $US1 billion ($A1.4 billion) to support the stabilisation program for the Thai baht coordinated by the International Monetary Fund.(52)

Australia has also expressed great interest in the dialogue established through the Asia-Europe Meetings (ASEM) process, which has its next summit in London in April 1998. Australia has been concerned that it should be a part of any emerging forum or dialogue that could affect Australia's trade and investment relationships in Asia and Europe. However, although there has been substantial support among the East Asian members of the ASEM dialogue for Australia's participation, the issue of increasing the number of countries participating in the ASEM dialogues has been complicated by contention over the issue of membership in the dialogue in relation to Burma: EU governments have refused visas to Burmese diplomats. In addition, Malaysia has remained opposed to Australia's participation and has maintained a veto within ASEAN on the issue.(53) Thus, while Australia's associations with ASEAN are very extensive, it still faces some unresolved issues about the degree to which it will be able to participate in the major cooperative dialogues sponsored by ASEAN.

Conclusion

ASEAN has been a resilient, flexible grouping which has served its members well. The fact that as an association established at the height of the Cold War it has been able to serve as the means for the easing of ideological and political divisions in Southeast Asia, while retaining the interest of the major powers, illustrates this vividly. ASEAN's future depends on a number of variables, including the maintenance of a peaceful accommodation of interests among the Asia Pacific major powers, the achievement of processes of stable political transitions within ASEAN's members and the maintenance of a favourable pattern of growth in the region. The kind of future ASEAN has in its fourth decade and beyond will also depend heavily on the balance of costs and benefits which ASEAN's enlargement brings.

ASEAN has seized the chance offered by the end of the Cold War to expand. All the new members will clearly benefit from membership. All the members should be able to benefit from a continuing process of economic cooperation, closer relationships and enhanced access to investment which should boost development prospects. Politically ASEAN's claim to represent Southeast Asia has been enhanced by its move to encompass all but one of the region's states. ASEAN should as a result have relatively more 'weight' in balancing the influence of the East Asian major powers, particularly China.

However, enlargement seems likely to make cohesion and decision-making in ASEAN more difficult. Burma's inclusion is likely to have some adverse impact on ASEAN's international image and limited progress towards internal reform in Burma may exacerbate this problem. ASEAN also faces a difficult test in relation to the expectations that have now been developed that it can alleviate the situation of political confrontation in Cambodia. In the more wealthy and 'older' ASEAN members, continued economic growth has sponsored the emergence of more pluralist societies in which domestic progress is leading to an increasing interest in the social and political conditions in fellow member countries and to consideration of the concept of 'constructive intervention'. However it will be difficult to develop a consensus on social and political issues that could attract agreement across the highly diverse ASEAN region. ASEAN's cohesion could be weakened by ongoing divisions between the older, richer members and the new, poorer members.

Over the last 30 years, ASEAN has often defied sceptical observers and critics. It will need to continue to do so as it meets the challenges of enlargement in the post Cold War environment.

Endnotes

1. On the origins and development of ASEAN see Frank Frost, 'Introduction: ASEAN Since 1967 - Origins, Evolution and Recent Developments', in Alison Broinowski, ed, ASEAN into the 1990s, London, MacMillan, 1990, pp 1-31.
2. The Bangkok Declaration, 6 August 1967, in Alison Broinowski, ed, Understanding ASEAN, London, MacMillan, 1982, p 270.
3. M. C. Abad Jnr, 'Re-engineering ASEAN, Contemporary Southeast Asia, Vol. 18, No 3, December 1996, pp 237-253.
4. The ASEAN Regional Forum's members are: Australia, Brunei, Burma, Cambodia, Canada, China, European Union (Presidency), India, Indonesia, Japan, Laos, Malaysia, New Zealand, PNG, the Philippines, Republic of Korea, Russia, Singapore, Thailand, USA and Vietnam.
5. Allen E. Goodman, 'Vietnam and ASEAN: Who Would Have Thought it Possible', Asian Survey, Vol. XXXVI, No 6, June 1996, pp 592-601.
6. Carlyle A. Thayer, 'ASEAN's Expanding Membership', Submission to Foreign Affairs Subcommittee, Joint Standing Committee on Foreign Affairs, Defence and Trade, Parliament of Australia, February 1997, p 6.
7. ibid, p 8.
8. Sukhumband Paribatra, 'ASEAN and the SLORC conundrum', Bangkok Post, 22 May 1997.
9. 'ASEAN split on Burma timetable', The Australian, 30 May 1997.
10. 'Asia's New Test', The Australian, 28 July 1997.
11. Peter Alford and Don Greenlees, 'Leave Asia to the Asians, Mahathir warns US', The Australian, 25 July 1997.
12. Paul Kelly, 'United region balances the China factor', The Australian, 30 July 1997.
13. Michael Richardson, 'Club seeks safety in larger numbers', The Australian, 8 August 1997.
14. Per capita GNP figures are from Russell Trood and Deborah McNamara, eds, The Asia-Australia Survey, 1997-98 Melbourne, MacMillan, 1997.
15. Thayer, op cit, pp 19-21.
16. 'Warning to tourists fans Singapore, Malaysia rift', The Australian, 22 May 1997.
17. Richard Baker, quoted in M. C. Abad, 'Re-engineering ASEAN', loc cit, p 241.
18. James Clad, 'Regionalism in Southeast Asia: A Bridge Too far?', in Southeast Asian Affairs 1997, Singapore, Institute of Southeast Asian Studies, 1997, p 6.
19. Barry Wain, 'Vietnam should get ASEAN help', Asian Wall Street Journal, 31 March 1997.
20. 'Chinese premier says that Spratlys dispute will carry on', Kuala Lumpur, AFP, 22 August 1997.
21. Kwa Chong Guan, 'Asia Pacific Security Concerns: A Singaporean Perspective', in Ralph Cossa, ed, Asia Pacific Confidence and Security Building Measures, Washington D C, Centre for Strategic and International Studies, 1995, p 76.
22. See for example, Greg Sheridan, 'US misguided over ASEAN', The Australian, 26 August 1997. For a review of US recent policies see Frank Frost, The United States and East Asia, Research Paper No 18, 1995-96, Parliamentary Research Service, December 1995.
23. Amitav Acharya, 'ASEAN and Conditional Engagement', in James Shinn, ed, Weaving the Net: Conditional Engagement with China, New York, Council on Foreign Relations, 1996, pp 220-248.
24. Ibid, pp 235-236.
25. For a detailed assessment of the ARF see Michael Leifer, The ASEAN Regional Forum: Extending ASEAN's Model of Regional Security, Adelphi Paper No. 302, London, International Institute of Strategic Studies, July 1996.
26. 'Chairman's Statement: The Fourth Meeting of the ASEAN Regional Forum', Subang Jaya, Malaysia, 27 July 1997.
27. ibid.
28. Peter Hartcher, 'Crisis will bring about change for the better', Australian Financial Review, 18 August 1997.
29. ibid, and Henny Sender, 'Drop Everything', Far Eastern Economic Review, 24 July 1997.
30. Peter Hartcher, 'Why Soros may be Mahathir's red herring', Australian Financial Review, 26 August 1997.
31. Peter Hartcher, 'The undoing of the South-East Asian miracle', Australian Financial Review, 2 September 1997.
32. The New ASEANs: Vietnam, Burma, Cambodia and Laos, Canberra, East Asia Analytical Unit, Department of Foreign Affairs and Trade, June 1997, p 310.
33. APEC's 18 members comprise Australia, Brunei, Canada, Chile, the People's Republic of China, Hong Kong, Indonesia, Japan, Korea, Malaysia, Mexico, New Zealand, Papua New Guinea, the Philippines, Singapore, Chinese Taipei (Taiwan), Thailand and the United States.
34. James Clad, 'Regionalism in Southeast Asia: A Bridge Too far?', in Southeast Asian affairs 1997, Singapore, Institute of Southeast Asian Studies, 1997, p 4.
35. The New ASEANs: Vietnam, Burma, Cambodia and Laos, op cit, p 324.
36. James Clad, 'Regionalism in Southeast Asia: A Bridge Too far?', loc cit, p 12.
37. For a discussion of Cambodian politics from the 1993 elections to mid-1996 see Frank Frost, Cambodia's Troubled Path to Recovery, Research Paper No 34, Parliamentary Research Service, June 1996.
38. Nate Thayer, 'The Deal that Died', Far Eastern Economic Review, 21 August 1997.
39. Jason Barber, 'Democracy from the barrel of a gun', Phnom Penh Post, 12-24 July 1997.
40. Christiane Chaumeau, 'Two days that shook the capital', Phnom Penh Post, 12-24 July 1997.
41. Elizabeth Moorthy, 'Foreign aid-a guide for the bemused', Phnom Penh Post, 15-28 August 1997.
42. 'ASEAN backs off as Hun Sen digs in', Phnom Penh Post, 25 July-7 August 1997.
43. 'Impatient Hun Sen pushes ASEAN for quick decision', Phnom Penh, AFP, 20 August 1997.
44. 'Cambodia's Hun Sen warns against split in party', Phnom Penh, Reuters, 19 August 1997.
45. 'King Sihanouk's return to Cambodia set for August 30', Phnom Penh, Kyodo, 23 August 1997.
46. Michael Richardson, 'ASEAN opts for continued mediation in Cambodia', International Herald Tribune, 12 August 1997.
47. Jusuf Wanandi, 'ASEAN's Domestic Political Developments and Their Impact on Foreign Policy', Pacific Review, Vol 8, No 3, 1995, p 457.
48. Abdul Rahman Adnan, 'ASEAN turns to "Constructive Intervention"', Asian Wall Street Journal, 30 July 1997.
49. 'Speech by the Minister for Foreign Affairs, the Hon Alexander Downer M P, to the ASEAN 30th Anniversary Seminar, ASEAN and Australia: A Future Together', Sydney, 26 August 1997.
50. ibid.
51. See The New ASEANs: Vietnam, Burma, Cambodia and Laos, Canberra, East Asia Analytical Unit, Department of Foreign Affairs and Trade, June 1997, pp 345-356.
52. Paul Kelly, 'Money makes us friends in the neighbourhood', The Australian, 27 August 1997.
53. Greg Earl, 'ASEAN links snag Aust's summit move', Australian Financial Review, 30 July 1997.

Appendix A

(hard copy version only of these charts; not available on Internet at present)