Nineteen ninety-nine will be remembered as the year when the vision of ASEAN's founders to build an association comprising all ten Southeast Asian countries was fully realized. The admission of Cambodia into ASEAN at a special ceremony held on 30 April 1999 in Hanoi marked the culmination of ASEAN's efforts to achieve regional cohesion.
The ASEAN region now has a total population of about 500 million, a total area of 4.5 million square kilometers, a combined gross domestic product of US$ 735 billion, and total trade of US$ 720 billion.
Over the past year, ASEAN and its Member Countries have been preoccupied with implementing reform measures to address the causes and impact of the regional economic and financial crisis, which began in mid-1997. The economic situation and outlook in the concerned countries have improved since then.
The region is now in the process of economic recovery. Positive indicators include (a) the return of stability in the foreign exchange markets; (b) rising current account surpluses and a build-up of reserves; (c) the substantial decline in domestic interest rates; (d) the easing of inflationary pressures; (e) the recovery in stock markets; (f) the improvement in consumer sentiment; and (g) the leveling off in the contraction of industrial production. The pace of this recovery will depend on the implementation of national economic and financial reforms, the developments in ASEAN's major economic partners, and the support of international financial and development institutions.
To prevent the recurrence of the regional contagion, ASEAN finance cooperation has been intensified. The Member Countries have articulated the "Common ASEAN Position in Reforming the International Financial Architecture". ASEAN has initiated a process of monitoring short-term capital and macroeconomic indicators through the ASEAN Surveillance Process supported by the ASEAN Select Committee and the ASEAN Surveillance Coordinating Unit at the ASEAN Secretariat.
ASEAN has implemented measures to mitigate the social impact of the economic and financial crisis. As stated in the common ASEAN position, "while the purpose of any international reform is to enhance efficiency and stability in financial markets and to promote global economic activity, such efforts must not lose sight of the overriding objective of improving living standards. Due priority must, therefore, be accorded to measures to protect the poor and most vulnerable segments of society". In this regard, ASEAN has started to implement the Plan of Action on Social Safety Nets and the Plan of Action on Rural Development and Poverty Alleviation.
To restore the region's long-term economic competitiveness, ASEAN continued to implement the ASEAN Free Trade Area (AFTA), the ASEAN Investment Area (AIA), the ASEAN Industrial Cooperation (AICO) scheme, and specific "bold measures" to promote direct investment. The scheduled completion of AFTA has been advanced by one year, from 2003 to 2002 for the six original members. The Framework Agreement on the AIA was signed on 7 October 1998, which aims to implement a coordinated investment cooperation and facilitation programmes to attract direct investment. Under the AICO scheme, companies from the same group or administered by the same principal in different ASEAN countries can avail themselves of incentives to rationalize their production units by assigning specialized manufacturing facilities to cater to their entire regional and even global requirements.
To contribute to the promotion of ASEAN's technological competitiveness, ASEAN established the Science and Technology Information Network. The Network provides up-to-date information on S&T manpower, research and development, technology offers and requests, and technology-specific databases relevant to the R&D requirements of the private sector. ASEAN has agreed to augment the ASEAN Science Fund.
The protection of the environment remains an important priority for the region. ASEAN continued to undertake projects in the fields of nature conservation and biodiversity and coastal and marine environment. The transboundary haze pollution problem, which occurred in late 1997 and early 1998, had drawn the Member Countries to collaborate closely in preventing, monitoring, and mitigating the haze disaster resulting from land and forest fires. ASEAN continued to implement the Regional Haze Action Plan with its three components: (a) preventive measures; (b) monitoring measures; and strengthening fire-fighting capabilities.
The promotion of ASEAN has assumed a critical role in restoring confidence in the long-term prospects of the region. In line with the mandate in the Hanoi Plan of Action, the ASEAN Ministers Responsible for Information have agreed to pursue programmes aimed at promoting (a) public awareness of ASEAN programmes and issues; (b) the ASEAN region as an investment and trade area; (c) the implementation of the ASEAN Satellite Channel; and (d) mass media networking and linkages.
ASEAN had very active external relations as the region stepped up cooperation with its major economic partners to complement the Member Countries' efforts in managing the economic and financial crisis. In particular, ASEAN continued to provide venues and opportunities for East Asian countries to develop closer relations.
The most notable of these developments were the institutionalization of the ASEAN+3 and the ASEAN+1 summits between the ASEAN Heads of State and Government and their counterparts from China, Japan and the Republic of Korea. As proposed by China, a meeting of Vice Ministers and Deputy Governors of the Central Banks within the ASEAN+3 framework was held to discuss issues related to the restructuring of the international financial architecture on 18 March 1999 in Hanoi. Their Finance Ministers met on 30 April 1999. Japan has proposed the establishment of ASEAN+3 Senior Officials Meetings to follow up and prepare for future summits. The ROK has proposed the convening of an East Asia Vision Group to formulate a framework for cooperation among East Asian countries.
ASEAN continued to enhance its relations with its Full Dialogue Partners and Sectoral Dialogue Partner through regular exchange of views on areas of mutual interest and through joint cooperative activities. ASEAN's Full Dialogue Partners are Australia, Canada, China, India, the European Union, Japan, Republic of Korea, New Zealand, the Russian Federation, the United States of America, and the United Nations Development Programme (UNDP). Pakistan is ASEAN's Sectoral Dialogue Partner.
In pursuance of the mandate in the Hanoi Plan of Action, the ASEAN Standing Committee (ASC) reviewed the role and functions of the ASEAN Secretariat with a view to making it more effective and efficient. While upholding the basic mandate of the ASEAN Secretariat as set out in the 1992 Protocol Amending the Agreement on the Establishment of the ASEAN Secretariat, the ASC agreed that the ASEAN Secretariat should function as a Coordinating Secretariat that would provide support in facilitating effective decision-making by ASEAN bodies. The nature of the work of the ASEAN Secretariat shall be more substantive. The activities of the ASEAN Secretariat shall be reflected in its Annual Operational Plan. Recognizing the increased responsibilities of the ASEAN Secretariat, ASEAN has agreed to further strengthen the Secretariat with the addition of more professional staff and the strengthening of its administration.
