Progress and Development in ASEAN

THE YEAR 1981-1982 was a successful one for ASEAN. Behind the newspaper headlines of the continuing crisis in Indochina, ASEAN continued to pursue its low-key but far more important task of giving new breadth and scope to its regional cooperation endeavours. New programmes were launched, achievements in existing programmes consolidated, and steady progress attained over a broad front.

Despite the energy expended in the vigour of growth, 1981-1982 was also a year of reflection, of taking stock, and of evaluation. Needed attention has been devoted in the past year to evaluating and improving the total organizational machinery of ASEAN with a view to increasing its effectiveness. As a dynamic Organisation, institutional linkages in ASEAN have sprung up spontaneously at every level - official, non-governmental as well as purely private-sector. Every such tie is valuable as it expresses the ASEAN idea and strengthens the ASEAN framework. Similarly, with the growing maturity of ASEAN's various "Third-Country Dialogues", a comprehensive evaluation of ASEAN's third-country relations has also been initiated.

ECONOMIC COOPERATION continued to occupy the bulk of ASEAN's efforts, and 1981-1982 saw notable developments.

The ASEAN Economic Ministers (AEM) held their Twelfth Meeting in Kuala Lumpur, Malaysia, on 14-16 January 1982 to review the work, and provide direction and impetus to the full range of ASEAN activities under their charge. Earlier in the year, the AEM on Agriculture and Forestry held their Third Meeting in Jakarta on 14-16 August 1981, and the AEM on Energy Cooperation also held their Third Meeting in Manila on 8-9 October 1981, to discuss matters pertaining to their specific portfolios.

At their Twelfth Meeting, the AEM adopted various new guidelines to expedite the implementation of subsequent sets of ASEAN Industrial Projects (AlPs). On the ground, further progress was made in the Projects that have been implemented. Overall construction progress on the ASEAN Urea Project (Indonesia) was 46.4 percent completed as of April 1982. The completion date of the Project has been estimated to be in late 1983 or early 1984.

The ASEAN Urea Project (Malaysia) has also made substantial progress. With an authorised capital of Ringgit 300 million (US$140 million), this project will have a capacity of 1 000 tons per day of ammonia and 1,500 tons per day of urea. The loan package of 48 billion yen constituting about 70 percent of the cost of the Project has- now been formally arranged with Japan at a weighted average annual interest rate of 5.125 percent. The target date for the completion of this Project is 1985.

The ASEAN Copper Fabrication Project (Philippines) has also started moving. A study confirmed its commercial viability and the Twelfth AEM Meeting agreed that it should have a capacity of 100,000 tons per year to serve both the ASEAN as well as external markets.

The ASEAN Rock Salt Soda Ash Project (Thailand), after some initial delays is now all set for launching with the initialing of the Supplementary Agreement on the Project at the Twelfth AEM Meeting. The Soda-Ash Plant will have a capacity of 400,000 tons per year of soda-ash and 400,000 tons per year of ammonium chloride. The Rock Salt Mine will have a capacity of 1.8 million tons per year.

With the encouraging progress made on various AlPs, increasing attention has come to focus on arrangements for preferential trade in AIP products. The 13th AEM Meeting approved in principle the granting of substantial margin of preference to products of AlPs within a specific period, subject to a review thereafter.

With the signing of the Basic Agreement on ASEAN Industrial Complementation (AIC) by the ASEAN Foreign Ministers in June 1981, the AIC scheme was formally launched and the implementation of two packages of automotive complementation products, initially introduces to "test" the AIC scheme, was given added impetus. The Twelfth AEM Meeting agreed that a 50 percent preferential tariff margin be given on the first package of AIC automotive products with effect from 1 June 1982. In addition non-tariff preferences on a bilateral basis are being negotiated. At the Twelfth AEM Meeting, Singapore's allocated product for the second package of automotive products was changed to differential gears for motor vehicles. However, the 13th AEM Meeting deferred finalising the second package pending the formulation of guidelines towards a more systematic and comprehensive approach particularly the possibility of brand-to-brand complementation.

The experience gained in implementing the various AIC packages has an influence in the formulation of the proposed ASEAN Industrial Joint Venture (AIJV) scheme which has now entered an important negotiating phase. Con- ceptually a cross between the AIP and the AIC schemes, it is hoped that AIJVs will incorporate various new elements of greater flexibility such as number of participating countries, terms of participation, and freedom of location.

The ASEAN Economic Ministers on Energy Cooperation met for the third time in Manila, Philippines, on 8-9 October 1981. Among other things, the Ministers reviewed the progress of the various programmes of energy cooperation in coal and power utilities adopted at their last meeting, and gave further guidance for their implementation, including the structuring into priority areas of the identified areas for coal cooperation as well as the provision of detailed institutional arrangements in wide areas of energy cooperation. The Ministers also agreed to establish in Thailand the proposed ASEAN Coal Information Centre.

The ASEAN Economic Ministers on Agriculture and Forestry held their third meeting in Jakarta on 12-14 August 1981 to review and give impetus to the various areas of ASEAN cooperation under their jurisdiction. On the ASEAN Food Security Reserve (AFSR), in operation since July 1980, the Ministers agreed to a review of its size as well as the possibility of bringing other basic food commodities, in addition to rice, within its scope. In the field of Forestry, the Ministers adopted and signed the "Jakarta Consensus on ASEAN Tropical Forestry". This document incorporates broad areas of cooperation in forestry matters qrouped under the five headings of: ASEAN Common Foresty Policy; Technical Cooperation; Institutions; Cooperation in Intra-ASEAN Timber Trade; and ASEAN Common Stand on International Issues on Forestry.

The ASEAN Common Forestry Policy and Technical Cooperation extend over the following four areas: Conservation, Reforestation and Management of Forest Resources; Utilisation of Forest Resources; Production, Processing and Marketing; Research and Development; and Education and Training.

The Agricultural and Forestry Ministers also signed two other important documents: the "ASEAN Declaration on Specific Animal Diseases Free Zone" and the "ASEAN Declaration to Eradicate Foot and Mouth Disease". The former declared ASEAN member countries free from Rinderpest, contagious Bovine Pleuropneumonia, African Swine Fever and African Horse Sickness. The latter declared areas of ASEAN traditionally free of Foot and Mouth Disease, areas to which high priority wiII be accorded in the development as Foot and Mouth Disease Free Zones, and ASEAN's adoption of a coordinated programme in combatting foot and mouth disease.

IN THE REALM of trade liberalisation various significant developments took place. The Twelfth AEM Meeting approved another 1,948 items exchanged under the Committee on Trade and Tourism (COTT) and bringing the total number of items exchanged under the Preferential Trading Arrangement to 8,529 items. These additional items, all enjoying a minimum margin of preference of 20-25 percent, took effect on 16 April 1982. With respect to across-the-board tariff Annual Report of The ASEAN Standing Committee 1981 - 1982 cuts, the Ministers agreed that the preferential ceiling be raised to cover items with import values of US$ 1.0 million and instructed COTT to study the implications of further raising the ceiling to US$ 2.5 million as well as to formulate measures to limit the restrictiveness of exclusion lists. With the expanded use of such trade liberalisation instruments, voluntary exchanges of trade preferences were felt redundant and thus discontinued.

As one of the greatest primary commodity producing and trading regions of the world, ASEAN's joint approach to international commodity issues has acquired a new dimension and urgency over the recent past as a result of deepening recession in the developed countries and their weakening resolve to respond positively to the developing countries' proposals on North- South issues. ASEAN's effort in this field in the major forums of the world, and especially at Dialogue Meetings with its third country partners, has concentrated largely on tin and rubber, but also covers commodities such as vegetable oils, timber, sugar, bananas and coffee.

In the field of finance and banking, strenuous efforts continued to be made in the search for new sources of funding for ASEAN industrial projects and other programmes of cooperation, as well as in devising new financial arrangements and instruments to promote intra-ASEAN trade. ASEAN Tax Administrators met for the first time in Manila on 22-24 February 1982 and agreed to work closely on tax matters. At their Fifth Meeting in Pattaya/ Bangkok on 2-6 April 1982, the ASEAN Working Group on Customs Matters drew up an ASEAN Customs Code of Conduct for the approval of the AEM. On 4 February 1982, the ASEAN Swap Arrangement, first established in August 1977 and last extended in September 1 979 for a period of three years, was further extended for another five years. This Arrangement, designed as a mechanism of short-term financing to alleviate temporary balance of payments needs of member countries, has proved of real practical benefit in recent years and central banks of member countries have made active use of it.

In the field of transport and communications the momentum of ASEAN cooperation has been maintained. In articulation of the AEM's Resolution on Shipping, an Integrated Work Programme on Shipping for the period 1982-1986 has been drawn up by the Joint Ad Hoc Working Group on Shipping of COTAC and COTT, and approved by the Twelfth AEM Meeting. This Work Programme contains five major areas, each broken down into projects and activities that are structurally linked as regards time-frame, priority listing, institutional mechanism, etc.

The year also saw, under the inspiration of COTAC, the coming into being of the ASEAN Automobile and Motor Association and the ASEAN International Airport Association. Both are non-governmental organisations, and the sort of linkages they have established will no doubt further develop the vibrancy of ASEAN regionalism.

ASEAN COOPERATION in the field of social development entered a new phase when fresh efforts were undertaken by the Committee on Social Development (COSD) to develop an integrated plan of action that would cover the broad scope of projects and activities in this area of endeavour.

The seat of the Committee had moved to Indonesia in 1981 and two meetings were held at the ASEAN Secretariat in Jakarta during the year under review.

The current projects of COSD pertain to education, population, control of dangerous drugs, health and nutrition, and natural disasters. One notable development during the year was the reactivation of cooperative programmes on women.

In the field of education, the ASEAN Development Education Project, which is supported by Australia, has been cited as "a model for future projects for its excellent planning and organization." ADEP, which is coordinated by a regional coordinating committee, has established the ASEAN Networks of Development Education Centers (ANDEC) comprising educational institutions officially designated by each member country to coordinate activities pertaining to the ADEP.

The ASEAN Heads of Population Programme (AHPP) held their Fifth Meeting in Chiang Mai, Thailand on November 27-28, 1981 and agreed on the theme "Population and Development in the 1980s" to serve as the basis of cooperation for the following areas of activity: population size and growth; information, education and communication; mortality, sanitation and nutrition; health and family planning; fertility; education; social welfare; migration and urbanization; and population and development.

In the field of cooperation on the prevention of drug abuse, the ASEAN Drug Experts have made steady progress in the implementation of projects. The Experts have recommended member countries to initiate legislative measures that would provide stiff penalties on illicit drug trafficking and abuse. The ASEAN Training Centre for Preventive Education and Information has formulated a three-year programme for the training of personnel in preventive drug education.

Member countries have also agreed to establish at the ASEAN Secretariat a Narcotics Desk - a new Home Based Staff position - that would oversee ASEAN cooperation in narcotics control.

With the establishment of the ASEAN Women's Programmes (AWP) in November 1981 under the COSD, four projects have been formulated: ASEAN Women's Programme on Arts and Culture; Clearing House on Information on Women in Development; Women's Vocational Training Centre; and Population Development Project.

COOPERATION in culture and information has maintained a steady progress with the implementation of 21 projects in 1980-1981, approval of ten on-going projects to be undertaken annually around the ASEAN region, and approval of ten new projects for 1982.

Funded out of the ASEAN Cultural Fund, the projects cover several activities such as cultural exchanges, ASEAN studies, festivals, performances, exhibitions, traditional cultures, mass media, etc.

The Committee on Culture and Information (COCI), which is responsible for drawing up projects to be funded our of the Cultural Fund, has also agreed to streamline its monitoring and coordinating mechanism and procedures for a more effective implementation of its multifarious programmes and projects. Five programme areas have been recommended by COCI . namely: Visual Arts; Performing Arts; Literary Works; ASEAN Studies; and Communication Media.

THE GROWING recognition of the viability of ASEAN as a regional grouping was manifested by the expansion in its external relations.

In the year under review, ASEAN welcomed visits from the Economic Community for West African States (ECOWAS), for the purpose of exchanging views on possible areas of cooperation, and the South Pacific Forum, through its Bureau for Economic Cooperation (SPEC), which proposed an expansion of its existing cooperation with ASEAN. The ECOWAS mission was led by Dr. Aboubakar Diaby-Ouattara, the Executive Secretary of ECOWAS, and visited ASEAN countries and the ASEAN Secretariat in Jakarta in June and July 1981. The then Director of SPEC, Dr. Gabriel B. Gris, visited the ASEAN Secretariat on 26 August 1981. Formal relations between ASEAN and both ECOWAS and the. South Pacific Forum is currently maintained at the Secretariat level.

ASEAN continued to conduct its regular meetings with its existing dialogue partners. For the year under review, ASEAN had held meetings with the European Community, Japan, the United States of America and Canada.

The Second Meeting of the Joint Cooperation Committee (JCC) as provided for under the Cooperation Agreement between ASEAN and the EEC was held at the EEC headquarters in. Brussels, Belgium on 19-20 October 1981. Preceding the JCC Meeting, the ASEAN Foreign Ministers met their EC counterparts in London on 13-14 October 1981 and the EC Commissioners in Brussels on 15 October 1981.

The Fourth ASEAN-U.S. Dialogue was held in Washington D.C. on 9-11 March 1982. ASEAN and the U.S. signed the Second ASEAN-U.S. Energy Cooperation Agreement during the Dialogue. The Agreement provides for US$ 1.0 million assistance in the area of energy planning and development in the ASEAN region over a three-year period.

ASEAN and Canada have also signed an Economic Cooperation Agreement. The ASEAN Foreign Ministers and the Canadian Foreign Minister signed the Agreement in New York on 25 September 1981. Details of the implementation of the Agreement were discussed during the Third ASEAN-Canada Dialogue in Manila on 25-26 May 1982.

The Fifth ASEAN-Japan Forum was held in Jakarta on 28-30 January 1982. Proposals for cooperation in the field of Human Resources Development and the Promotion of Regional Research were discussed.