This item is the archived peer-reviewed author-version of:
50 years of regional integration in ASEAN
Reference:
Cuyvers Ludo, Chen Lurong, De Lombaerde Philippe.- 50 years of regional integration in ASEAN
Asia Pacific business review - ISSN 1360-2381 - Abingdon, Routledge journals, taylor & francis ltd, 2019, 25:5, p. 609-618
Full text (Publisher's DOI): https://doi.org/10.1080/13602381.2019.1652975
To cite this reference: https://hdl.handle.net/10067/1616180151162165141
Institutional repository IRUA
50 Years of Regional Integration in ASEAN
Ludo Cuyvers1, Lurong Chen2 and Philippe De Lombaerde3
(Received: 13 December 2018; accepted 1 August 2019)
Abstract
This article offers a brief overview of the development of ASEAN in its 50 years of existence.
It covers the early motivations and developments since the late 1960s, the acceleration of
integration and creation of the ASEAN Free Trade Area in the 1990s, and – more recently – the
development of the ASEAN Economic Community, the ASEAN Political-Security
Community, and the ASEAN Socio-Cultural Community.
Keywords: ASEAN, regional integration, ASEAN Economic Community
1. Introduction
In its 50 years of existence, the Association of Southeast Asian Nations (ASEAN) has become
an essential part of the (socio-)economic, regulatory and political environment in which
businesses in Southeast Asia operate. At the same time, for many multinational companies from
East Asia and beyond, production, assembly or distribution sites in ASEAN have become
important nodes in their production networks and links in their global or regional value chains.
ASEAN was established on 8 August 1967 in Bangkok by the five original member
countries, namely Indonesia, Malaysia, the Philippines, Singapore and Thailand. The Bangkok
Declaration came only ten years after the Treaty of Rome, which laid the foundation of
1
Centre for ASEAN Studies, University of Antwerp, Belgium; North-West University (Potchefstroom Campus),
South Africa; and United Nations University Institute for Comparative Regional Integration Studies (UNU-CRIS),
Bruges, Belgium. Email: ludo.cuyvers@uantwerpen.be.
2
Economic Research Institute for ASEAN and East Asia (ERIA), Jakarta (Indonesia). E-mail:
lurong.chen@eria.org.
3
NEOMA Business School, Rouen (France); and UNU-CRIS, Bruges (Belgium). Corresponding author. E-mail :
philippe.de-lombaerde@neoma-bs.fr.
European economic integration. Brunei Darussalam joined on 8 January 1984, Vietnam on 28
July 1995, Laos and Myanmar on 23 July 1997, and Cambodia on 30 April 1999. This special
issue presents therefore a stocktaking exercise of 50 years of the ASEAN integration process
and a reflection on its future development. They are conducted by experts with different
backgrounds and focusing on a variety of aspects of the economic integration process, as well
as its political and international context in order to better understand the relevance of ASEAN
for business activities in Southeast Asia.
2. The early days
At the establishment of ASEAN, the aims and purposes were on the one hand to bring
about cooperation in the economic, social, cultural, technical, educational and other fields, and
on the other hand, in the promotion of regional peace and stability through abiding respect for
justice and the rule of law and adherence to the principles of the United Nations Charter. As
Baharumshah, Onwuka and Habibullah (2007) have rightly stressed, one of the fundamental
objectives of ASEAN was to unify the Southeast Asian countries to resist the communist
ideology from China, and that the creation of ASEAN was a response to hostile external
developments such as the escalating and expanding Vietnam War and the reverberations from
the Cultural Revolution in China.
In the beginning, the five ASEAN pioneer countries pursued particularly political goals,
striving for peace and security in the Southeast Asian region. They learned to trust each other,
to develop the habit of working together and to foster trust and goodwill. During the 1st ASEAN
Summit in Bali on 24 February 1976 the member countries signed the Treaty of Amity and
Cooperation (TAC) in Southeast Asia. The importance of this Treaty resides in the definition
of the basic principles for their mutual relations, for instance the settlement of differences or
disputes by peaceful means and the non-interference in the internal affairs of one another
(ASEAN Secretariat, 1976).
According to the Bangkok Declaration of 8 August 1967, the aims of the Association
are:
1. To accelerate economic growth, social progress and cultural development in the
region through joint endeavours in the spirit of equality and partnership in order to
strengthen the foundation for a prosperous and peaceful community of South-East Asian
Nations;
2. To promote regional peace and stability through abiding respect for justice and the
rule of law in the relationship among countries of the region and adherence to the
principles of the United Nations Charter;
3. To promote active collaboration and mutual assistance on matters of common interest
in the economic, social, cultural, technical, scientific and administrative fields;
4. To provide assistance to each other in the form of training and research facilities in
the educational, professional, technical and administrative spheres;
5. To collaborate more effectively for the greater utilization of their agriculture and
industries, the expansion of their trade, including the study of the problems of
international commodity trade, the improvement of their transportation and
communication facilities and the raising of the living standards of their peoples;
6. To promote South-East Asian studies;
7. To maintain close and beneficial cooperation with existing international and regional
organizations with similar aims and purposes and explore all avenues for even closer
cooperation among themselves.
Although economic cooperation between the countries of South-East Asia is mentioned
explicitlyi, until the early 1990s ASEAN was not showing an impressive record of economic
achievements. ASEAN’s success, at that time, was to be found primarily in international
politics. Thanks to ASEAN, for instance, the member countries could take a common political
stance regarding Cambodia and the events in that country following the overthrow of the Khmer
Rouge regime.
In fact, economic cooperation between the ASEAN countries was neglected until 1976,
the First ASEAN Summit of Heads of Government. But even after 1976, doubts remained with
the policy makers in the ASEAN countries about the benefits of economic cooperation. These
doubts were justified. By and large, the ASEAN countries were hardly, if at all, complementary
economies, and followed widely differing development strategies, from free trade in Singapore,
to export promotion strategies in Thailand and Malaysia, and to import substitution in Indonesia
and the Philippines. We must wait until the economic liberalisation policies in Indonesia,
Malaysia, the Philippines and Thailand in the second half of the 1980s, to find the economic
policy priorities between the ASEAN-countries as sufficiently converging, to allow for the next
steps in economic cooperation (Akrasanee and Stifel, 1992: 29-37; Naya and Imada, 1992: 5558).
3. ASEAN Free Trade Area
From the start of the 1990s, the ASEAN countries armed themselves against several
changes in the international environment, that were perceived as a threat. Among these changes
mention should be made of the decline in foreign investment in the ASEAN countries (due to
foreign investment diversion to China and some other Asian countries), and regional integration
in the European Union (EU) (the European Single Market, the European Economic Area, the
EU association agreements with Central and Eastern Europe) and North-America (the USCanada Free Trade Agreement, NAFTA), of which the trade and investment diversion effects
were feared (Naya and Imada, 1992: 56).
The Fourth ASEAN Summit of Heads of Government that was held in Singapore on 2728 January 1992, is a milestone in the history of the ASEAN. It was decided at this summit to
reform the institutional framework of ASEAN, and to create the ASEAN Free Trade Area
(AFTA) by 2008. The institutional reforms entailed: (1) the creation of a formal governing
body, the “ASEAN Heads of Government” that would be convened every three years, (2) a
transformation of the ASEAN Secretariat and the extension of its competence, and (3) the
dissolution of the former “ASEAN Economic Committees” and the delegation of all matters
related to economic cooperation within ASEAN to a “Senior Economic Officials Meeting”
(SEOM).
With the aim of the liberalisation of intra-ASEAN trade, but according to key witnesses
even more to stimulate investment in the region, the AFTA agreement was concluded,
providing for a carefully staged trade liberalization during a period of 15 years (starting 1
January 1993), a period which afterwards was reduced to 10 years.
It will be clear that the decision to arrive at the AFTA, as well as the timing and
instruments, was a political decision at the highest level. Once this decision taken, the respective
national administrations were responsible for the implementation, which due to lacking
accompanying guidelines was often slow (Cuyvers and Pupphavesa, 1996: 8). According to
Dee (2007), AFTA did not create much preferential trade.
The ASEAN leaders adopted on 15 December 1997 the ASEAN Vision 2020 (ASEAN
Secretariat, 1997), a long-term road map to lead the member states to the year 2020. They
envisaged the Southeast Asian region to be an ASEAN Community by 2020 with the causes of
conflict eliminated and all disputes solved by peaceful means. In the Bali Concord II, adopted
on 7 October 2003, ASEAN leaders formally expressed their intention to establish an ASEAN
Community made up of three pillars, namely an ASEAN Economic Community (AEC), an
ASEAN Security Community (ASC) and an ASEAN Socio-Cultural Community (ASCC).
Like with AFTA before, the target date of the establishment of the ASEAN Community was
advanced to 2015 (ASEAN Secretariat, 2007).
4. ASEAN Economic Community
At the 13th ASEAN Summit on November 20, 2007, the ASEAN Economic Community
(AEC) Blueprint was agreed. The establishment of the ASEAN Economic Community is the
ultimate goal of economic integration as originally outlined in the ASEAN Vision 2020. The
AEC is meant to be a single market and production base with a free flow of goods, services,
investments and a freer flow of financial capital. The AEC should also promote equitable
economic development, reduce poverty and socio-economic disparities, and strengthen the
ASEAN institutional mechanisms, including the improvement of the Dispute Settlement
Mechanism (ASEAN Secretariat, 2003).
On 12 December 2005 in Kuala Lumpur, the ASEAN leaders committed themselves to
establish the ASEAN Charter, to serve as a legal and institutional framework of ASEAN to
support the realization of its goals and objectives. Moreover, it gave a legal statute to ASEAN
and aimed also to protect the region’s environment and human rights. The ASEAN member
states signed the Charter on 20 November 2007 at the 13th ASEAN Summit in Singapore.
However, the institutional framework of ASEAN has remained very weak. One of the results
is the lack of integration-supportive institutions at the ASEAN level, which in turn is due to its
member states’ aversion to strong regional institutions for decision-making, co-ordination and
monitoring. And this is unlikely to change any time soon.
In spite of all progress in ASEAN regional economic integration which was only
possible by adhering to the “ASEAN Way” ii, i.e. adopting a flexible approach to integration
and opting for not giving in on issues of national autonomy and independence, it became
increasingly clear in the early 2010s that “2015” was too ambitious and it was soon
acknowledged that the 2015 deadline could not possibly be met. The so-called successor
blueprint adopted in November 2015 laid out the work for regional integration in the next 10
years. It was stated that “2015” should instead be regarded as a “benchmark for progress”, rather
than a target year. At that time, and still today, many non-tariff barriers remain. In fact,
ASEAN’s much-heralded flexibility has too often been an excuse by individual countries for
non-compliance with their commitments. Today, ASEAN’s levels of intra-regional trade,
investment or migration/mobility are close to global averages and suggest therefore that further
deepening of the economic integration process is certainly possible. What sets ASEAN apart
from other regions is rather its external openness (Chen, Cuyvers and De Lombaerde, 2017).
5. ASEAN Political-Security Community
The second pillar of the ASEAN Community is the ASEAN Political-Security
Community (APSC). Security cooperation in ASEAN is based on the principles of the 1976
Treaty of Amity and Cooperation in Southeast Asia (TAC). The TAC stipulated the peaceful
settlement of all intra-regional disputes as part of ASEAN’s political cooperation (Shoji, 2008:
20). After the end of the Cold War and the resolution of the Cambodian conflict, ASEAN
countries were increasingly confronted with China’s territorial expansion, to which the group
responded by initiating a region-wide security dialogue encompassing the Asia-Pacific region
and the establishment of the ASEAN Regional Forum at the ASEAN Ministerial Meeting of
July 1993 (Shoji, 2008: 21-22). With the reduced national defense budgets due to the Asian
financial crisis of 1997, dramatic political changes in member countries and the terrorist attacks
in the world, as well as in ASEAN countries in 2001 and after, voices within ASEAN for closer
security cooperation became louder. Discussions relating to the formation of the APSC began
in 2003, stemming from Indonesia and from the 2003 Declaration of ASEAN Concord II (the
Bali Concord II), which called for the establishment of the ASEAN Security Community. This
was followed by the Vientiane Action Programme of 2004, which put forward the policy
challenges to be overcome, and the establishment of the ASEAN Defence Ministers’ Meeting.
Indonesian proposals for the establishment of an ASEAN peacekeeping force were shelved by
the other member countries as being in contradiction with the principle of sovereignty. In the
Vientiane Action Plan, adopted in November 2004, five strategic thrusts of the ASC were
adopted: political development; shaping and sharing of norms; conflict prevention; conflict
resolution; and post-conflict peace-building (ASEAN Secretariat, 2004). However, in the
discussions relating to the ASEAN Charter, any change in the non-interference principle of
ASEAN (for resolution of internal problems of a member) was opposed (Shoji, 2008: 30-31).
Finally, at the January 2007 ASEAN Summit in Cebu (Philippines), it was agreed that the ASC
would be formed by 2015, five years earlier than originally planned. Subsequently, it was
announced in the chairman’s statement of the November 2007 ASEAN Summit in Singapore
that the ASC should evolve into a “Political-security Community.”
In the build-up of the ASEAN Community by 2015, an ASEAN Political-Security
Community Blueprint 2009-2015 was adopted. It aimed at deepening and expanding political
and security cooperation within ASEAN and strengthening ASEAN’s capacity in responding
to regional and international challenges. This was followed by the APSC Blueprint 2025.
Notwithstanding the Blueprints for achieving the APSC, the ASEAN initiatives of
regional security dialogues through the ASEAN Regional Forum (since 1994) and the ASEAN
Defense Ministers’ Meeting Plusiii (since May 2010) have successfully evolved into platforms
for policy coordination (Baviera, 2017: 11). But within ASEAN it seems that there is still a long
way to go. The Council has not been established, conflict resolution remains with the member
states, and commitments are not binding. ASEAN has created a “regional security partnership”
rather than an ASEAN security community (Boisseau du Rocher, 2017). As Baviera stated:
“Translating such a vision into reality at the regional level presumes, in some cases, major
normative and behavioural transformations amongst domestic elites and social groups, and
ASEAN thus far contributes little to encouraging such changes amongst its member states,
constrained in part by the principle of non-interference in internal affairs” (Baviera, 2017: 17).
Consequently, the creation of the APSC will imply, not only institutional reforms at the regional
level, but in particular also evolving policies and practices in the member countries in support
of human rights and fundamental freedoms, as well as good and democratic governance, and of
regional identity. However, considering present day geopolitical challenges in Asia, some have
doubts whether ASEAN is the appropriate platform to establish a regional security community
(e.g., Boisseau du Rocher, 2017: 51).
6. ASEAN Socio-Cultural Community
The third pillar of the ASEAN Community is the ASEAN Socio-Cultural Community
(ASCC). Maramis (2017: 179) calls the ASCC “by a wide measure the most adaptive, reengineered, and reinvented pillar of the ASEAN Community.” To promote better quality of
life for the peoples and their communities in ASEAN, the ASCC aims at cooperation between
the member states in areas such as culture and information, education, sports, social welfare
and development, but also labour, women and gender, environment, poverty eradication,
disaster management, and science and technology. With such a varied area to cover, it will
come as no surprise that the community building process has often baffled both researchers and
the general public, giving rise to a large number of initiatives from study days and conferences
to action plans and reports. The ASCC was initiated by the Philippines at the 6th ASEAN
Summit (Hanoi, December 1998) to complement the ASEAN Economic Community (Amador,
2011: 15). At the 13th ASEAN Summit (Singapore, November 2007), the Leaders agreed to
develop a blueprint for the ASCC for which the Philippines drafted a Plan of Action. The
Roadmap for an ASEAN Community 2009-2015 contained an ASCC Blueprint in which it was
stated that “[t]he primary goal of the ASCC is to contribute to realising an ASEAN Community
that is people-centred and socially responsible with a view to achieving enduring solidarity and
unity among the nations and peoples of ASEAN by forging a common identity and building a
caring and sharing society which is inclusive and harmonious where the well-being, livelihood,
and welfare of the peoples are enhanced” (ASEAN Secretariat, 2009: 67). The ASCC Blueprint
2015 listed actions to be taken in the field of human development, social welfare and protection,
social justice and rights, ensuring environmental sustainability, building the ASEAN identity;
and narrowing the development gap in ASEAN.
The ASCC Blueprint 2025, that followed the previous one, envisions an ASEAN SocioCultural Community, where people feel the benefits of being part of ASEAN, and that is
inclusive, sustainable, resilient and dynamic. Former President Fidel Ramos of the Philippines
stated: “The ASEAN Socio-Cultural Community is at once the easiest and the most difficult for
the ASEAN Leaders to organise. The lesson of the European Union teaches us that elite
arrangements – made over the heads of ordinary people – have limited effectiveness. There is
no way an ‘ASEAN Community’ can be built without engaging the interests of ordinary
ASEAN peoples” (Ramos, 2017: 43). Therefore, building the ASCC is increasingly about
creating an ASEAN identity. The problem is that, in practice and by design, this is top-down
identity building with the governments of the member-states determining the end-state,
objectives and processes (Amador, 2011: 30, see also Quayle, 2013:110-111).
7. Contents of this special issue
In the articles of this special issue, the authors, coming from various disciplines, have
investigated the progress that has been made in Southeast Asian regional integration under the
aegis of ASEAN. The first three articles evaluate the depth of the economic integration process
and reflect on the state of the ASEAN Economic Community, i.e.; the extent to which ASEAN
has become/is becoming an integrated market. Pelkmans presents an assessment of the AEC,
which has aimed at building a ‘single market’ while ‘enhancing the production base’ for global
and regional value chains since its formal enactment in 2003, thereby adopting a double
approach: a conceptual one, and a pragmatic one. The author also assesses the 2025 Blueprint
and finds that the pragmatic conduct of the economic integration process, thereby avoiding
stronger common/supranational rules, might well have a cost in terms of the internal dynamics
of ASEAN but that this cost is small compared to the importance of the extra-regional drivers
of economic growth in ASEAN, and too small to expect major policy reorientations.
Degelsegger-Márquez and Remøe have a closer look at science, technology and innovation
policies in ASEAN, and the extent to which the regional governance level adds value. The
authors show that STI cooperation within ASEAN remains relatively weak and they find a
mismatch between national and intergovernmental STI policies and dynamics. They identify
multilateral research funding and cooperation in patent regimes as examples of new regional
cooperation in this field. Laplace, Lenoira and Roucollea focus on another aspect of
ASEAN’s single market, namely the single aviation market. As various concerns have been
raised in ASEAN members states, the authors investigate the economic impact of liberalizing
air transport and the effects of new (multilateral) agreements with partner states. They show
potentially considerable effects on economic growth in the region. They also show a declining
market share of ASEAN airlines vis-à-vis Chinese airlines in the context of ASEAN’s external
liberalization program.
The next two articles look into the bridges between the business and economic aspects
of integration, on the one hand, and more political aspects, on the other. Cuyvers addresses the
issue of the persistent ‘development gap’ between Cambodia, Laos, Myanmar and Vietnam
(CLMV) and the other ASEAN members, and observes that efforts to reduce that gap have been
limited. He further shows how this is related to the dominant “ASEAN Way” to organize
interstate relations and cooperation in the region. The author calls for more intra-regional
redistribution of wealth via the direction of more development funds to these countries, which
could be pooled from the Asian Development Bank, other regional and multilateral financial
institutions, and national financial institutions. Jetschke addresses the question why states
commit to the regional protection of human rights in an environment of low/unequal degrees of
democracy. The author argues that the willingness to commit to human rights is affected by
large amounts of transnational refugees. Given the costs of receiving refugees, commitment to
human rights is used as a signal to repressive countries of origin of the refugees.
Finally, the last two articles look at ASEAN in its international and global context. Chen
and De Lombaerde focus on the relationship between globalization and regionalization in the
case of ASEAN and inquire whether ASEAN is different from other regions on this point. The
authors find that ASEAN member states have shown rising economic globalization indicators
on average, even if there is considerable variation. They also find that extra-regional trade is
relatively more important for ASEAN and that, even if intra-regional trade shares have gone
up, they did not do so more than in other regions. Statistics on trade in parts and components
and on GVCs show relatively intense production sharing patterns, both intra-ASEAN and extraASEAN. Investment flows seem to echo the findings based on trade flows. From a comparative
perspective, regional integration in ASEAN reveals three core features that are intertwined:
gradualism, open regionalism, and market-driven regionalization. The final article of this
special issue by Rüland focuses on how ASEAN member states project the ‘ASEAN brand’
internationally. Using data derived from United Nations General Assembly (UNGA)
proceedings, the author concludes that an explicit overarching ASEAN role conception is
missing. At the same time, he identifies areas in which collective role conceptions could be
built, including: “advocate for developing countries,” “promoter of peace,” or “institutional
reformer.”
Notes on contributors
Ludo Cuyvers is emeritus professor in international economics of the University of Antwerp
(Belgium), where he is still Director of the Centre for ASEAN Studies, and professor
extraordinary at the North-West University (Potchefstroom Campus, South Africa). He is also
Associate Research Fellow at UNU-CRIS, Bruges (Belgium), and visiting professor at the
NIDA Business School, Bangkok (Thailand). For three decades Ludo Cuyvers has been doing
research on economic development in East and South East Asia. He published two books, five
textbooks and scholarly articles in many peer-reviewed international journals, and edited four
volumes with international publishers. He was consultant for the Belgian and Flemish
government, the European Commission, the ILO and the Department of Trade and Industry
(South Africa), and director of international development co-operation projects in Thailand, the
Philippines, Vietnam, Cambodia and Laos.
Lurong Chen is an Economist at the Economic Research Institute for ASEAN and East Asia
(ERIA) (Jakarta, Indonesia). He received his PhD in international economics from the Graduate
Institute, Geneva. His current research interests are centered on Asian regionalism, digital trade,
global value chains, regional integration, and trade in services. His recent book, Emerging
Global Trade Governance: Mega Free Trade Agreements and Implications for ASEAN, was
published by Routledge in 2018.
Philippe De Lombaerde is currently Associate Professor of International Economics at Neoma
Business School (Rouen, France). Previously, he has worked as Associate Director at United
Nations University (UNU-CRIS), Associate Professor of International Economics at the
Universidad Nacional de Colombia (Bogotá, Colombia), lecturer and researcher at the
University of Antwerp, and researcher at the NIDA Business School (Bangkok, Thailand). He
has published widely on comparative, Latin American and Southeast Asian regionalism; on
trade and investment policy; and on globalization and regionalization indicators.
https://www.researchgate.net/profile/Philippe_De_Lombaerde
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i
Apparently, the Bangkok Declaration is not mentioning economic integration as a goal, at a time when this was
very fashionable in Latin America, as evidenced e.g., by the agreements on the Central-American Common Market
of 1961, the Latin American Free Trade Agreement of 1960 and the Andean Pact of 1969.
ii
The major principles of the “ASEAN Way” are spelled out for the first time in the Treaty of Amity and
Cooperation (TAC) of 1976. The TAC was adopted by the Heads of State/Government at the 1st ASEAN Summit
in Bali, Indonesia, on 24 February 1976. The “ASEAN Way” relates to interstate relations based on respect for
national sovereignty, non-interference in the domestic affairs of other states and conflict avoidance. As a result,
the ASEAN member countries are reluctant to agree on measures that would restrict their sovereignty, such as e.g.
the creation of a supranational institutional body. The “ASEAN Way” involves a decision-making approach which
has its roots in the Malay cultural practices in village communities and is based on consultation and consensus
building (Narine, 2002, 31).
iii
The ADMM-Plus is a platform for ASEAN and its eight Dialogue Partners to strengthen security and defence
cooperation.