Course Description:

     ASEAN aspires to integrate the economy into one single region in order to make the region more competitive in the global market. At the Summit in 2001 in Brunei Darussalam, the Leaders agreed on an ASEAN Integration Roadmap (AIR). The implementation of this vision means that economic cooperation activities will be intensified over time. As of January 1, 2002, the ASEAN Free Trade Area (AFTA) has been established among the 6 original signatories of the Agreement. This is the cornerstone of the other economic cooperation activities. Other economic cooperation activities are designed to complement this process.

     As such, economic cooperation in ASEAN is a current event. Activities are evolving in response to this ASEAN agenda and, at the same time, to external changes. More and more institutions are formed in order to manage these new initiatives. At the same time, many other policies and institutions have become obsolete and needed to be abolished.

     This course provides the basic knowledge of various areas of economic cooperation in ASEAN. For each areas of cooperation, the discussion will touch upon the direction of current activities, its constraint and challenges.

Course Objectives:

     This course aims at providing the student with the understanding of overall direction of ASEAN economic cooperation and the direction in which each specific areas of cooperation fit into the broader picture. It would enable the student to appreciate the significance of development in ASEAN economic cooperation and be able to form his/her own opinion on its development. At the end of this course, the student is expected to be able to:

1. Describe the framework and direction of ASEAN economic cooperation;
2. Indicate the major thrust of each area of economic cooperation;
3. Identify the source of information on each area of economic cooperation;
4. Explain the current status, opportunity and challenges of some areas of ASEAN economic cooperation; and
5. Analyse the pros and cons of some areas of ASEAN economic cooperation.
   

Course Status: Required

Teaching and Learning Methods: Lectures, class discussion, research paper presentation and various relevant teaching aids

Course Credit:  3 credits

Hour/week:  3 hours/week

Semester:   The course is designed for 15 weeks/semester.

Academic Year:   Depends on each Member University

Prerequisite Course: None

Core Requisite Courses: 12 units of Social Science courses (including 6 units of Economics) in their bachelor's degree

Concurrent: None

Assessment:

Week One: Foundation of ASEAN Economic Cooperation

This section introduces the rationale of ASEAN as a regional entity. It discusses the benefits and costs of ASEAN economic cooperation and why regionalism is preferred to nationalism for ASEAN member countries. The need to operate as a single economic entity in the globalized world is one of the major benefits that drive ASEAN economic cooperation. The same set of reasons can be used to compare ASEAN with other regional groupings, such as European Union (EU), North American Free Trade Area (NAFTA) and MERCUSOR.

Readings:

ASEAN Secretariat. Annual Report (various issues). Jakarta: ASEAN Secretariat.

Blomqvist, Hans C. 1993. "ASEAN as a Model for Third World Regional Economic Co-operation." ASEAN Economic Bulletin. Vol. 10, No. 1 (July). pp. 52-67.

Fawcett, L.L.E. and. A. Hurrell. 1995. Regionalism in World Politics: Regional Organization and International Order. New York: Oxford University Press.

Plummer, Michael G. 1997. "ASEAN and the Theory of Regional Economic Integration." ASEAN Economic Bulletin. Vol. 14, No. 2 (November). pp. 202-214.

Smith, P.H., ed. 1993. The Challenge of Integration: Europe and the Americas. New Brunswick: Transaction Publishers.

World Trade Organisation (WTO). 1998. Regional Trading Arrangements. Geneva: World Trade Organisation.

Week Two: Evolution of ASEAN Economic Cooperation

ASEAN economic cooperation evolves over time in response to the various changes in both the internal situation and the international environment. The role of ASEAN economic cooperation in the present environment and the plan toward 2020 will be reviewed. Various ASEAN documents which govern economic cooperation, such as ASEAN Framework Agreement on Enhancing ASEAN Economic Cooperation (1992), ASEAN Vision 2020 and the Hanoi Plan of Action, will be discussed.

Readings:

ASEAN Secretariat. 1997. ASEAN Economic Co-operation: Transition and Transformation. Singapore: Institute of Southeast Asian Studies.

Fawcett, L.L.E. and. A. Hurrell. 1995. Regionalism in World Politics: Regional Organization and International Order. New York: Oxford University Press.

Mansfield, E.D. and H.V. Milner. 1999. "The New Wave of Regionalism." International Organization. Vol. 53, No. 3. pp. 589-627.

Mattli, W. 1999. The Logic of Regional Integration: Europe and Beyond. Cambridge, Cambridge U.P.

Naya, Seiji F. and Michael G. Plummer. 1997. "Economic Co-operation after 30 Years of ASEAN." ASEAN Economic Bulletin. Vol. 14, No. 2 (November). pp. 117-126.

Palmer, Ronald D. 1987. Building ASEAN: 20 Years of Southeast Asia Cooperation. New York: Praeger.

Tay, Simon, S., Jesus P. Estanishlao and Hadi Soesastro (eds.). 2001. Reinventing ASEAN. Singapore: Institute of Southeast Asian Studies. ASEAN Documents: Framework Agreement on Enhanced ASEAN Economic Cooperation.1992. ASEAN Vision 2020 Hanoi Plan of Action

ASEAN Documents:

Framework Agreement on Enhanced ASEAN Economic Cooperation.1992.
ASEAN Vision 2020
Hanoi Plan of Action

Week Three: Structure of Economic Cooperation in ASEAN

This section discusses the organization structure of ASEAN Economic Cooperation at 3 levels: Intra-ASEAN, Extra-ASEAN and Sub-regional arrangements. In order to provide the decision to plan and implement various areas of activities, a structure of command has evolved to assume this role. The mechanism of ASEAN economic cooperation has become more intense to assume more responsibilities, especially after the 1997 financial crisis.

In general, each area of cooperation is governed by a ministerial forum which meets once or twice a year. They report to the ASEAN Summit. The ministerial forum is supported by senior officers and their working groups.

ASEAN, as a group, also engages in the consultation and pursues activities with other countries and groupings. ASEAN is the core group in many other regional economic arrangements, e.g., Asia-Pacific Economic Cooperation (APEC), Asia-Europe Meeting (ASEM) and the more recent engagement with Northeast Asia under the ASEAN + 3 framework.

Within ASEAN, there are also sub-group arrangements or sub-regional arrangements such as the various Growth Triangles (e.g., IMT-GT, BIMP-EAGA and the Emeral Triangle) and Economic Corridors (e.g., West-East Economic Corridors).

Readings:

ASEAN Secretariat. Annual Report (various issues). Jakarta: ASEAN Secretariat.

________________. 1997. ASEAN Economic Co-operation: Transition and Transformation. Singapore: Institute of Southeast Asian Studies.

Naya, Seiji and Michael G. Plummer. 1991. "ASEAN Economic Cooperation in the New International Economic Environment." ASEAN Economic Bulletin. Vol. 7, No. 3 (March). pp. 261-176.

Tan, Gerald. 2000. ASEAN Economic Development and Cooperation. Singapore: Times Academic Press.

Tay, Simon, S., Jesus p. Estanishlao and Hadi Soesastro (eds.). 2001. Reinventing ASEAN. Singapore: Institute of Southeast Asian Studies.

Weeks Four and Five: Trade

One of the most active areas of ASEAN economic cooperation is the cooperation in trade. The objective of ASEAN cooperation in trade is to promote the movement of goods across ASEAN borders by eliminating tariff and non-tariff barriers.

The main efforts employed are the reduction of tariff barrier through the Common Effective Preferential Tariff (CEPT) Scheme for the ASEAN Free Trade Area (AFTA) and various trade facilitating activities, such as customs cooperation and mutual recognition of product standards.

Various institutions, like a Dispute Mechanism, a Notification Process and a Modification of Concession, are created over time to ensure the implementation of AFTA. Externally, ASEAN is implementing the Closer Economic Partnership (CEP) with Australia and New Zealand. It is also exploring free trade arrangement with China and India.

Relevant Document:

Agreement on the Common Effective Preferential Tariff (CEPT) for the ASEAN Free Trade Area. 1992. Singapore. January 28.

Readings:

"The ASEAN Free Trade Area: Reaching its Target." 2002. ASEAN Economic Bulletin. Vol. 19, No. 2 (August). pp. 221-222. Opening Remarks of Rodolfo Severino, Secretary-General of the ASEAN at the AFTA 2002 Symposium. Jakarta, January.

ASEAN Secretariat. 1997. ASEAN Economic Co-operation: Transition and Transformation. Singapore: Institute of Southeast Asian Studies.

_______________. AFTA Readers. Vol. 1 - 5. Jakarta: ASEAN Secretariat. (can be downloaded from www.aseansec.org/economiccooperation/trade)

Asian Development Bank. Annual Report 2001. 2002.

Austria, Myrna S. and John Lawrence Avila. 2001. "Looking Beyond AFTA: Prospects and Challenges for Inter-regional Trade." Journal of Philippine Development. Vol. 28, No. 2-a.

Azarcon, Chulia J. 1997. "Comparative Tariff Policies of ASEAN Member Countries." Journal of Philippine Development. Vol. 24, No. 1-c.

Websites:

http://www.aseansec.org/4920.htm
http://www.aseansec.org/12025.htm

Week Six: Investment

This session focuses on current status of investment situation in ASEAN, the cooperation activities and the mechanism to forge common action. With the liberalisation of trade (through AFTA), investment will have to be liberalised in order to realize the benefit from the tariff reduction. Hence, cooperation in these two areas stimulates each other.

The core initiative in investment is the ASEAN Investment Area (AIA) which aims at making ASEAN a single investment area through activities in the following areas: Facilitation, Promotion and Liberalisation.

Readings:

ASEAN Investment Area Public

ASEAN Secretariat. 2001. ASEAN Investment Report 2000. Jakarta: ASEAN Secretariat.

Economic and Social Commission for the Asia and the Pacific (ESCAP). 1998. "Enhancement of Trade and Investment Cooperation in Southeast Asia: Opportunities and Challenges Toward ASEAN-10 and Beyond." ESCAP, Studies in Trade and Investment, no. 34. New York: United Nations.

"Investing in ASEAN: New Factors to Consider." 2001. ASEAN Economic Bulletin. Vol. 18, No. 2 (August). pp. 222-224. Speech given by Rodolfo Severino, Secretary-General of ASEAN on October 25, 2000.

Molteni, Corrado, Jim Slater and Robert Strange. 2000. The European Union and ASEAN: Trade and Investment Issues. London: Palgrave Macmillan.

Websites:

http://www.aseansec.org/Economic cooperation/Investment
http://www.aseansec.org/4947.htm

Week Seven: Agriculture, Food and Forestry

This session covers the development of one of the oldest areas of ASEAN economic cooperation. The discussion will cover the evolution of this area from cooperation in production to more emphasis in trade in the past decade.

This area of cooperation involves many subjects: Agriculture (Crop, Livestock and Fisheries), Food and Forestry. The adjacent issues with agriculture are issues related to technology and trade, e.g., Genetically Modified Organism (GMO) and the preservation of genetic resources in the rain forest.

Reading:

Than, Mya. 1998. "Development Strategies, Agricultural Policies and Agricultural Development in Southeast Asia." ASEAN Economic Bulletin. Vol. 16, No. 3 (December). pp. 1-12.

Websites:

http://www.aseansec.org/economic cooperation/agriculture
http://aseansec.org/4921.htm

Week Eight: Industry

This session provides the overview of the development and current structure of cooperation in industry. The thrust of ASEAN cooperation in industry is to provide channel where resources among ASEAN countries can be pooled and market can be shared in order to take advantage of the economy of scale of the regional market.

The various schemes were devised to "do the job" e.g., the ASEAN Industrial Project (AIP), ASEAN Industrial Complementation Scheme, Brand-to-Brand Complementation Scheme (BBC) and the ASEAN Industrial Cooperation Scheme (AICO).

In the 1990s, there are increasing emphasis on trade incentives in the industrial cooperation like the Cooperation in Intellectual Property Right and Standard and Conformance.

In more recent years, cooperation in SMEs has gained more attention in response to the need from industrial adjustment after the financial crisis.

Relevant Document:

Basic Agreement on the ASEAN Industrial Cooperation Scheme. 1996. Singapore. April 27.

Reading:

ASEAN Secretariat. AICO Reader. Jakarta: ASEAN Secretariat.

Website:

http://www.aseansec.org/4929.htm

Week Nine: Services

Services sector is the largest production sector in the ASEAN economy. The achievement in this area of cooperation will determine the competitiveness of ASEAN in the future. In order to strengthen the development of this sector, ASEAN began to consolidate cooperation in this area in 1996.

Services sector covers a wide range of areas, e.g., finance (banking and insurance), transportation (air, land and marine), tourism, and professional services (engineering, accountancy etc.). Some of these areas are governed by specific ASEAN forums, such as ASEAN Finance Ministers, ASEAN Transportation Ministers and ASEAN Tourism Ministers.

One central focus that cut across these areas is the liberalisation effort. ASEAN has completed two rounds of negotiation for the liberalisation of services under the ASEAN Framework Agreement on Services (AFAS).

Readings:

ASEAN Framework Agreement on Services (FAS)

"Services and Economic Growth in ASEAN Economies." 2002. ASEAN Economic Bulletin. Vol. 19, No. 2 (August). pp. 155-169.

Websites:

http://www.aseansec.org/economic/AFAS
http://aseansec.org/4949.htm

Week Ten: Finance

The financial crisis in mid-1997 illustrates the imperative of cooperation in finance and banking. Each ASEAN member country is a small player in the global financial market. As a group, the concern and interest of each country can be more effectively represented in the international forum/arena. After the financial crisis in 1997, the cooperation in finance has grown rapidly although the ASEAN Ministers of Finance met for the first time only in March 1997.

Cooperation in finance and banking is governed by the ASEAN Finance work program which covers liberalisation and facilitation activities in the following areas: monetary policy, capital market development, banking and insurance.

A peer review mechanism among the Finance Ministers, called the ASEAN Surveillance Process, was established in 1998. The mechanism provides the report of economic situation and the main finance issues in the region for the discussion of the Ministers. In 2001, this process is extended to include China, Japan and Korea.

In 2000, the ASEAN Finance Ministers + China, Japan and Korea agreed in Chiang Mai, Thailand on a bilateral currency swap arrangement scheme called Chiang Mai Initiative for the group. The East Asia Vision Group suggests the establishment of an Asian currency unit as one of the targets for the group.

Relevant Document:

Ministerial Understanding on ASEAN Cooperation in Finance. 1997. Phuket, Thailand. March 1.

Reading:

De Grauwe, Paul. 1997. The Economics of Monetary Integration. Oxford and New York: Oxford University Press.

Useful Websites:

http://www.aric.adb.org
http://www.aseansec.org/4927.htm
http://www.mofa.go.jp/region/asia-paci/report2001.pdf  - "Toward an East Asian Community: Region of Peace, Prosperity and Progress." 2001. East Asia Vision Group Report (October)

Week Eleven: Transport and Communication

The physical aspect on regional integration is the development of various hardwares, such as road, rail and sea transportation and communication system. Clearly, cooperation is needed between at least two countries. However, it is more efficient to pursue this within a regional framework and plan.

Activities in this area include the ASEAN Highway Network (a 38,000-kilometer road to link up ASEAN) and the Multi-model Transport (an agreement that allows all mode of transportation to join up in moving goods across ASEAN countries). This is supplemented by software, such as the Good-in-Transit Agreement (with its 8 protocols covering routing, vehicle standard, customs points, customs procedure and insurance).

The development in this area can be traced and followed from the ASEAN Transport Ministerial Meetings.

ASEAN Documents:

ASEAN Framework Agreement on the Facilitation of Goods-in-Transit
ASEAN Investment Map
ASEAN Highway Network
ASEAN Annual Reports, various issues.
ASEAN Plan of Action in Transport and Communications

Reading:

"The Second ASEAN Transport Ministers Meeting." 1997. ASEAN Economic Bulletin. Vol. 14, No. 1 (July). pp. 89-90.

Website:

www.aseansec.org/4953.htm

Week Twelve: Tourism

Tourism industry is one of the most successful service sectors in ASEAN where all ASEAN countries are involved.

The annual ASEAN Tourism Forum, which gathers a few thousand of travel and tourism entrepreneurs from within and outside the region, is one of the most successful privately run events in ASEAN. Many initiatives are pursued under the ASEAN Tourism Ministerial Meeting and the ASEAN Tourism Forum.

Initiatives under this area of cooperation included "Visit ASEAN Year" and "ASEAN as one Single Tourist Destination."

Relevant Document:

Plan of Action on ASEAN Cooperation in Tourism. 1998. Cebu, Philippines. January 10.

Websites:

www.aseansec.org/4952.htm
www.asean-tourism.com

Week Thirteen: Energy

The thrust of ASEAN energy cooperation is to provide energy security for the region. This infrastructure is critical for smooth economic activities - production and business operation.

There are 4 sources of energy in ASEAN: petroleum oil, electricity, coal and gas. Each of these areas is governed by a forum of senior officers who provide guidance and direct these cooperation activities.

Under the petroleum cooperation, there is an ASEAN Petroleum Security reserve which provides the member countries with priority access to petroleum from other countries during emergency (1/1/1986).

ASEAN Centre for Energy
Clark, Allen L. 1990. "ASEAN Nonrenewable Mineral and Energy Resources: Present Status and Future Development. ASEAN Economic Bulletin. Vol. 7, No. 2 (November). pp. 173-184.

Fesharaki, Fereidum. 1989. "Energy Outlook in the Asia-Pacific Region." ASEAN Economic Bulletin. Vol. 6, No. 2 (November). pp. 143-148.

http://www.ace.or.id

Week Fourteen and Fifteen: Sub-regional Arrangements

There are arrangements between and among ASEAN countries for trade and investment activities. The objective of these arrangements is to forge closer economic cooperation to promote business activities. The major sub-regional arrangements in ASEAN are:

• Indonesia-Malaysia-Thailand Growth Triangle (IMT-GT)
• Brunei-Indonesia-Malaysia-Philippines East ASEAN Growth Area (BIMP-EAGA)
• East West Corridor (Vietnam-Lao-Thailand-Myanmar)
• Greater Mekong Subregion (GMS)
  

Readings:

Tay, Simon with Obood Talib. 1997. "The ASEAN Regional Forum: Preparing for Preventive Diplomancy." Contemporary Southeast Asia. Vol. 19, No.3 (December). pp. 252-268.

Wurfel, D. & B. Barton (eds). 1990. The Political Economy of Foreign Policy in Southeast Asia. London: Macmillan.

Anderson, K. & R. Blackhurst (eds.). 1993. Regional Integration and the Global Trading System. New York: St. Martin's.

Baldwin R.E. 1999. Market Integration, Regionalism and the Global Economy. Cambridge: Cambridge University Press.

Buckley P.J. and P.N. Ghauri. 1999. The Global Challenge for Multinational Enterprises: Managing Increasing Interdependence. Amsterdam and New York: Pergamon.

Hagaard, S. 1995. Developing Nations and the Politics of Regional Integration. Washington D.C.: The Brookings Institutions.

Oman, C. 1994.Globalisation and Regionalisation: The Challenge for Developing Countries. Paris: OECD Development Centre.

Porter, M.E. 1998. The Competitive Advantage of Nations. New York: Free Press.

Severino, Rodolfo. 2001. "ASEAN: A Region of Rising Opportunities." In ASEAN Faces the Future. Edited by Rodolfo Severino. Jakarta: ASEAN Secretariat. pp. 121-124.

Smith, P.H., ed. 1993. The Challenge of Integration: Europe and the Americas. New Brunswick: Transaction Publishers.

Tay, Simon with Obood Talib. 1997. "The ASEAN Regional Forum: Preparing for Preventive Diplomancy." Contemporary Southeast Asia. Vol. 19, No. 3 (December). pp. 252-268.

Wurfel, D. & B. Barton (eds.). 1990. The Political Economy of Foreign Policy in Southeast Asia. London: Macmillan.

Core Readings:

ASEAN Documents Series. Jakarta: ASEAN Secretariat.

ASEAN Secretariat. 1997. ASEAN Statistical Indicators. Singapore: Institute of Southeast Asian Studies.

________________. 1997. ASEAN Economic Co-operation: Transition and Transformation. Singapore: Institute of Southeast Asian Studies.

Asia 2001 Yearbook. Hong Kong: Review Publishing Co. (annual).

Southeast Asian Affairs 2001. 2000. Singapore: Institute of Souteast Asian Studies (annual).

Regional Outlook: Southeast Asia 2000-2001. Singapore: Institute of Southeast Asian Studies

Supplementary Readings:

Bresnan, John. 1994. From Dominoes to Dynamos: The Transformation of Southeast Asia. New York: Council on Foreign Relations.

Ellings, Richard and Sheldon Simon, eds. 1996. Southeast Asian Security in the New Millennium. New York: M.E. Sharpe.

Funabashi, Yoichi. 1993. "The Asianization of Asia." Foreign Affairs. Vol. 72, No. 5 (November/December). pp. 72-85.

Jackson, Karl. 1999. Asian Contagion: The Causes and Consequences of a Financial Crisis. Boulder, CO: Westview Press.

Khoo How San. 2000. "ASEAN as a Neighbourhood Watch Group." Contemporary Southeast Asia. Vol. 22, No. 2 (August). pp. 279-301.

Koppel, Bruce. 1998. "Fixing the Other Asia." Foreign Affairs. Vol. 77, No. 1 (January-February). pp. 98-110.

Leifer, Michael. 1995. Dictionary of the Modern Politics of Southeast Asia. New York: Routledge.

___________1996. "The ASEAN Regional Forum." Adelphi Paper No. 302. London: International Institute for Strategic Studies. pp. 1-65.

Lingle, Christopher. 1998. The Rise and Decline of the Asian Century. Hong Kong: Asia 2000 Limited.

Mahbubani, Kishore. 1995. "The PacificWay." Foreign Affairs. Vol. 74, No. 1 (January/February). pp. 100-111.

Mulders, Neil. 1992. Inside Southeast Asia. Bangkok: D.K. Printing House, Ltd.

Pitsuwan, Surin. 2001. Future Directions for ASEAN. Singapore: Institute of Southeast Asian Studies.

Radalet, Steven and Jeffrey Sachs. 1997. "Asia's Reemergence." Foreign Affairs. Vol. 76, No. 6 (November/December). pp. 44-59.

Rajan, Ramkishen (ed.). 2001. Special Focus on "Economic Globalization and Asia: Trade, Finance, and Taxation. ASEAN Economic Bulletin. Vol. 18, No. 1 (April). pp. 1-11.

Richardson, James L. 1994/1995. "Asia-Pacific: The Case for Geopolitical Optimism." The National Interest. No. 43 Winter. pp. 28-39.

Ross, Robert. 1999. "The Geography of the Peace: East Asia in the Twenty-first Century." International Security. Vol. 23, No. 4 (Spring). pp. 81-119.

Singh, Daljit and Anthony L. Smith (eds.). 2001. Southeast Asian Affairs 2001. Singapore: Institute of Southeast Asian Studies.

Steinberg, David Joel (ed.). 1987. In Search of Southeast Asia: A Modern History. Honolulu: University of Hawaii Press.

Recommended Journals:

Contemporary Southeast Asia; Indonesian Quarterly; Asian Journal of Political Science; Pacific Review; Pacific Affairs; ASEAN Economic Bulletin; Australian Journal of International Affairs; Asian Survey; Far Eastern Economic Review; Asiaweek.

National Newspapers:

The major English dailies in the region

Websites:

Asia-Pacific Economic Cooperation

Association of Southeast Asian Nations

Asian Development Bank

Asian Development Bank Institute

Asian Recovery Information Center (ARIC)

Australian Department of Foreign Affairs And Trade

European Commission

Ministry of Foreign Affairs of the People's Republic of China

Ministry of Foreign Affairs of Japan

U.S. Department of State

Virginia University of Wellington

World Trade Organization