Foreign Relations of the United States, 1977–1980, Volume XXII, Southeast Asia and the Pacific

149. Paper Prepared in the Central Intelligence Agency¹

PA 81–10002

Washington, January 1, 1981

Regionalism in Southeast Asia: The Growth of ASEAN

[portion marking not declassified]

Overview

The Association of Southeast Asian Nations (ASEAN)—consisting of Indonesia, Malaysia, Singapore, the Philippines, and Thailand—was founded in 1967 as an economic, social, and cultural organization, but its main achievements have been political and diplomatic. Initially, it devoted its energies to preventing bilateral squabbles from escalating into serious conflict; in the process member states developed the common objective of preserving ASEAN even at the cost of leaving some problems unresolved. In 1975 the emergence of Vietnam as a potential threat to regional stability, combined with ASEAN’s perception of declining US interest in the area, gave the association the momentum and cohesion it previously lacked. As a result, its leaders began to try to exert direct influence on policy and events affecting the region. [portion marking not declassified]

The association’s political successes, however, rest on a weak foundation. The ASEAN method of decisionmaking through gradual consensus has enhanced unity but resulted in inaction in some areas. The difficulties in translating policies established at summit meetings into coordinated and effective joint efforts are most obvious in the economic arena. [portion marking not declassified]

ASEAN’s common philosophy of economic development has enhanced close economic cooperation, but—except for Singapore—the dependency of its member states on commodity and labor-intensive industry exports makes for competition. Efforts to develop joint economic projects founder because short-term national benefits still take precedence over potential long-term regional gains. Elaborate structures for economic interaction thus produce no substantive cooperation. In part, the economic successes of the individual member states during the 1970s work against cooperation by making it less crucial to short-term development. Growing cooperation in the private sector in recent years, however, could hold the key to greater regional economic integration. [portion marking not declassified]

ASEAN’s image as an influential grouping has been enhanced since the mid-1970s by the series of dialogues established with major trading partners. These began in 1972 with the ASEAN-EC dialogue and now include most states with important economic interests in the region. Through these discussions, ASEAN seeks to end tariff restrictions against its manufactured goods, promote greater trade, and encourage foreign private investment. Although efforts to obtain liberal tariff concessions have been disappointing, the dialogues have promoted investment and trade generally and have made ASEAN’s trading partners much more sensitive to regional economic concerns and often to political ones as well. [portion marking not declassified]

In recent years, growing foreign policy cooperation among the ASEAN states has made the organization an effective interest bloc in international political forums. This was recently demonstrated by its response to the Vietnamese invasion of Kampuchea in late 1978.² The invasion has also heightened security concerns among the ASEAN states and encouraged greater cooperation among them. Although ASEAN leaders continue to reject a formal multilateral defense grouping, bilateral and occasionally trilateral cooperation in military training and intelligence has intensified and led to discussions of standardization and joint production arrangements for military equipment. ASEAN states, however, continue relying on the West, particularly the United States, for defense against potential external threats. [portion marking not declassified]

ASEAN states are ambivalent toward the United States. On the one hand they wish to avoid too close identification with one of the superpowers; on the other, they believe US economic and security cooperation is crucial to regional development and stability. Some of them believe the United States is not doing as much as it should or could to meet regional economic and political wishes. The ASEAN states want Washington to consult with them before making key foreign policy decisions that will affect the region. [portion marking not declassified]

ASEAN’s continued success will depend on many factors, some of which are beyond the control of member states. During the 1980s the leadership in many member states will pass to a new generation. It is not certain that these leaders will be as committed to the regional concept as are the present ones who helped create ASEAN. The association needs to intensify the sense of regional identity among its peoples. Increasing contacts among the political, economic, and military elites of the five states create a sense of common interests at the leadership level, but this has not spread to the public at large, which in many cases does not yet have a firm national, much less a supranational, sense of identity. [portion marking not declassified]

Continued domestic stability of the member states is also crucial to regionalism; the appearance in any of them of serious opposition groups based on an inward-looking nationalism or radical economic philosophies could destroy the basis for cooperation in a regional framework. Outside events and threats could also play their part. Serious differences among member states over the role of China in the region, increased activism of local Muslim groups in response to currents from the Middle East, or efforts by Vietnam to drive a wedge between members will continue to test the commitment of member states to the privacy of regional unity over national fears. [portion marking not declassified]

But unity and regional stability can only be assured by expanding the commonality of political interests to encompass economic, social, and cultural bonds. An act of political will is required to overcome the inherent conflict between national and regional interests. [portion marking not declassified]

[Omitted here is the table of contents.]

The Context of Regionalism

A Slow Beginning. Indonesia, Malaysia, Singapore, the Philippines, and Thailand founded the Association of Southeast Asian Nations (ASEAN) in 1967 to promote regional economic, social, cultural, and technical cooperation. The driving force behind its formation, however, was political—the need to cope with the problems and conflicts that emerged in the 1960s between non-Communist Southeast Asian countries. The founders believed ASEAN could unite the region through negotiation and compromise, thus enhancing peace and stability. Except for Thailand, member states had achieved independence from colonial rule since the end of World War II and, unsure about how to deal with external uncertainties, hoped that a regional grouping would give them collective strength. [portion marking not declassified]

ASEAN achieved little measurable success in its first eight years, largely because of bilateral disputes between members, and was dubbed “The Foreign Ministers’ Club.” ASEAN’s most significant achievements in these early years were preventive. The mediating structure that ASEAN provided prevented serious bilateral problems—many inherited from earlier years—from erupting into open conflict. The animosity between Singapore and Malaysia (following Singapore’s ouster from the Federation of Malaysia in 1965) and that between Malaysia and Indonesia (caused by former President Sukarno’s bellicosity in response to Malaysia’s formation in 1963) were largely dissipated. Although other bilateral territorial and ethnic problems still plague ASEAN, the existence of the organization has kept them from becoming serious challenges to regional cooperation. [portion marking not declassified]

Two interrelated problems continue to impair relations between Malaysia and the Philippines. The Philippine Government, using historical and tenuous linkages based on alleged overlordship by the now-defunct Sultanate of Sulu, claims territory in the Malaysian state of Sabah, formerly the British colony of North Borneo. Although Philippine President Marcos assured Malaysian leaders in 1977 that he was willing to settle the issue, he has done nothing, and the 1973 Philippine Constitution still claims Sabah as national territory. In the 1960s the Malaysian Government, in retaliation for Manila’s revival of the claim, began actively aiding Muslim insurgents in the southern Philippines, acting as a conduit for assistance and providing training facilities and safehaven for the rebels. Although this official support has ended, Kuala Lumpur maintains links with the insurgents, who apparently have bases and supply points in Sabah. Indonesia has tried to mediate the problem in the interests of ASEAN unity and, although unable to solve the dispute, has prevented it from becoming more serious. [portion marking not declassified]

Similar ethnic and religious strains exist between Malaysia and Thailand. Several hundred thousand ethnic Malay Muslims live in southern Thailand and have strong bonds to the Malays of northern Malaysia. They have a long history of opposition to Bangkok, and small Muslim secessionist groups are using sporadic violence to contest Thai rule. The Malaysian Government so far has carefully refrained from overt involvement, but Thailand rightly suspects that some Malay Muslim groups in Malaysia support and protect the secessionists. [portion marking not declassified]

Friction also arises between Thailand and Malaysia because 2,000 to 3,000 guerrillas of the Communist Party of Malaya have sanctuaries in southern Thailand. Malaysia complains that Thailand does not try hard enough to oust these guerrillas and yet constrains Malaysian forces from doing the job. Thai military leaders, who consider the Communists in the south a low security priority, are reluctant to allow Malaysian forces to operate there regularly because their presence might encourage Thai Muslim separatists. [portion marking not declassified]

The Impetus of Indochina. Although founded as an economic and social organization, ASEAN has achieved prominence through political and diplomatic cooperation. ASEAN’s unity has derived largely from its shared political goals and fears, within a basic framework of anti-Communism, and in reaction to the growing Communist influence in Indochina. The course of the war in Indochina and the desire to insulate the region from superpower rivalries provided the stimulus for greater political consultation and adoption of a common front in international forums. In November 1971, the ASEAN states issued their first joint political statement—a call for creation of a Zone of Peace, Freedom, and Neutrality in Southeast Asia to be guaranteed by the great powers. The statement called for the ultimate removal of all foreign military bases from the region, and for local states to preserve their independence through economic development and improved political institutions. [portion marking not declassified]

The emergence in 1975 of Vietnam as a regional power and a potential security threat, concern about US withdrawal from the region, and, most recently, the Vietnamese invasion of Kampuchea and the resulting threat to Thailand have given ASEAN the momentum and cohesion it previously lacked. The first ASEAN heads-of-state meeting occurred in 1976,³ almost a decade after the association’s founding, and a second was held the following year.⁴ At the first summit, the members agreed to a Treaty of Amity and Cooperation in Southeast Asia and issued a Declaration of ASEAN Concord that explicitly recognized the paramountcy of political cooperation. [portion marking not declassified]

The new political unity enabled ASEAN to present a united and consistent stand during visits to the area in 1978 of leaders from China, the USSR, Vietnam, and Kampuchea—all of whom pressed their cases in the growing rivalry among the Communist states over Indochina. The Vietnamese invasion of Kampuchea in December 1978, followed by the Chinese invasion of Vietnam in February 1979, again impelled ASEAN to seek a firm unified position in the face of new threats to regional security. ASEAN has been able to convince most other Third World states to respect its position in opposition to Vietnam’s actions in Indochina, and ASEAN members have lobbied effectively in the UN General Assembly for ASEAN resolutions on the region, despite opposition from the Soviets and Vietnamese. Thus far, ASEAN has maintained this effective and unified pressure despite differences of opinion among its member states about the nature of the long-term threat to the region and how to meet it. [portion marking not declassified]

Structural Shortcomings. Despite the multiplicity of contacts both between members and with nonmember states, ASEAN has yet to create a coherent supranational bureaucracy capable of reacting to the increasingly wide range of demands. The method of arriving at decisions through gradual consensus has enhanced unity, but the diffusion of power that results has led to a lack of recognizable decisionmaking authority for ASEAN-wide bureaucratic structures. Committees and other units set up to tackle problems sometimes exist only on paper or are unable to function. Hierarchical interrelationships between the various meetings, committees, and secretariats remain undefined and, in many cases, the subject of conflict. The great degree of overlap and lack of coordination between all of these levels leads to inertia and procrastination. [portion marking not declassified]

Structurally, ASEAN is officially divided into decisionmaking and implementing bodies (figure 1). The heads-of-state meeting, although formally the highest authority, rarely makes policy but rather provides leadership and sets the tone for unity. The annual ministerial meeting of foreign ministers is responsible, on paper, for “the formulation of policy guidelines and coordination of activities,” but, in fact, ASEAN has yet to reconcile this seemingly sweeping charter with the authority of the other ministerial meetings—economic, labor, social welfare, education, and information. [portion marking not declassified]

The Standing Committee, which is responsible to the foreign ministers meeting, is the final stage of the ASEAN decisionmaking process. It is a floating group chaired by the foreign minister of the country[portion marking not declassified] that hosts the next foreign ministers meeting and includes the resident ambassadors of the other four countries as members. It ostensibly is responsible for the conduct of ASEAN affairs until the next foreign ministers meeting, for budgetary allocation, and for economic cooperation with nonmembers. It also acts as the communication channel between member countries. [portion marking not declassified]

Organizational Structure of ASEAN

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The major shortcoming of this system is that in practice the work of the Standing Committee overlaps and often conflicts with that of ASEAN’s central Secretariat. The ASEAN Secretariat—based in Jakarta and chaired by a rotational secretary general—theoretically has the mandate for coordinating and implementing joint ASEAN activities, but in practice has insufficient authority to do its job. [portion marking not declassified]

Each member state also has its own national secretariat, headed by a director general, to handle ASEAN-related affairs. The secretariat is supposed to coordinate ASEAN decisions at the national level, but the director general has veto power over any joint project proposed in ASEAN forums. The national secretariats apparently will soon be transformed into so-called preparatory committees whose task will be to prepare the way for Standing Committee meetings. [portion marking not declassified]

ASEAN also has nine permanent committees operating under the auspices of the Economic Ministerial Meeting. Five are divided among the members—Thailand is responsible for finance and banking; Malaysia for transport and communications; Singapore for trade and tourism; Indonesia for food, agriculture, and forestry; and the Philippines for industry, minerals, and energy. The remaining four are not linked to any specific ASEAN member. The economic committees have spawned a number of subcommittees, which meet several times a year. Their chains of command frequently are crossed because of conflicting responsibilities. [portion marking not declassified]

Members of ASEAN are aware of these structural problems and have begun a gradual reform program, spearheaded by pressure from the economic ministers and with agreement from the heads-of-state meeting. The economic ministers recommended in 1977 that the ASEAN Secretariat be strengthened and the ASEAN machinery be revised so that they—and presumably other ministerial meetings—report directly to the heads-of-state summits. This would end the present system by which the annual foreign ministers meeting reviews the decisions of the other ministerial meetings. The proposed reorganization would entail abolition of the Standing Committee and strengthening of the ASEAN Secretariat. So far no decision has been made because the foreign ministers oppose this curtailment of their authority. [portion marking not declassified]

Economic and Social Cooperation

However significant its political accomplishments, ASEAN needs greater economic cohesion and its people must develop a broadly shared sense of common interests if the organization is to endure over the long haul. Structures and formats have been established to help forge greater economic and social unity, but ASEAN is still a long way from achieving significant progress in either field. [portion marking not declassified]

Joint Economic Programs. Joint economic development is crucial to ASEAN’s long-term success. During the past decade, however, each member has achieved impressive individual economic progress in comparison with many other developing countries, and this has become a disincentive to intra-ASEAN economic cooperation. The members have made some progress recently toward creating an appropriate structural framework for economic integration, but formidable obstacles remain. [portion marking not declassified]

Member states are increasingly aware of the economic benefits to be gained from speaking with one voice and of the enormous economic potential represented by a regional market of 236 million people. They also believe that intra-ASEAN economic cooperation would make them less vulnerable to the increasing protectionism of developed countries because it would reduce their dependence on external markets. [portion marking not declassified]

The similarity of economic systems and development philosophies helps provide a foundation on which to build economic cooperation. Each member uses a free market model controlled by central planning that ideally ensures economic efficiency in allocating resources. The leaders of all ASEAN countries believe firmly that public order and stability are prerequisites for economic development, and they emphasize the interrelationship between socioeconomic progress and political stability. [portion marking not declassified]

National interests, however, often work against the impetus for regional cooperation. Pressure from domestic sectional interests for protective and preferential treatment causes most ASEAN states to assign greater priority to achieving short-term benefits for their own economies than to the potential long-range gain from regional economic integration. As the Malaysian Finance Minister has pointed out, ASEAN will need “economic statesmanship, purposeful long-term planning, and greater political will” to overcome this obstacle. Some leaders suggest signing a formal economic treaty to provide a legal framework that would link together—and simultaneously resolve conflicts between—national and regional development. Any attempt to force compliance with economic directives, however, would run counter to the ASEAN concept of consensus and thus might cause new strains. [portion marking not declassified]

Similarity in the economic bases of member states, which with the exception of Singapore depend on the export of a few primary commodities, often leads to competition rather than complementariness. In at least one area, however, the long-established emphasis—again with the exception of Singapore—each country places on developing agriculture could provide a basis for intraregional trade. Cooperation could lead to more efficient production methods, enhance regional specialization and complementarity, reduce competition and repetition, reduce unplanned migration to urban areas by providing work in rural areas, increase productivity through better nutrition, and diminish the need for food imports from outside ASEAN paid for with scarce foreign currency reserves. The ASEAN agricultural ministers agreed at their February 1980 meeting to create an Agricultural Devel[portion marking not declassified]opment Planning Center to exchange knowledge and experience, harmonize planning, and act as a regional data bank. They also have established a soil and land resources utilization program through a Food, Agriculture, and Forestry Committee. Greater involvement of multinational agrobusiness firms, if properly monitored, could stimulate agricultural cooperation; such multinational investment is already important to developing the export of pineapples, bananas, seafood, and poultry. [portion marking not declassified]

The private sector may play a major role in stimulating economic integration in those areas in which ASEAN has a genuine potential for developing efficient production (figure 2). Numerous private sector committees and industry clubs have made promising progress. The ASEAN Banking Council, for example, wants to establish both an ASEAN Financial Corporation and a Bankers Acceptance Market to provide cheaper financing for intraregional trade and to act as a conduit for overseas investment funds. The ASEAN Chamber of Commerce and Industry persistently lobbies for an ASEAN-wide tariff classification and for tariff cuts; the Federation of ASEAN Shipowners Association is trying to develop intra-ASEAN shipping; and the ASEAN Automotive Industry Club has started to implement an officially approved exchange of locally produced complementary automotive components. After much deliberation and criticism, ASEAN has finally moved to coordinate its official activities with the private sector, especially with the ASEAN Chamber of Commerce and Industry, which is now permitted to attend certain ASEAN deliberative meetings. [portion marking not declassified]

ASEAN has taken the first cautious steps toward joint economic ventures, although the political and economic obstacles are sizable. Such cooperation necessarily entails some loss of sovereignty, and constraints on domestic production. Moreover, the various economic infrastructures differ greatly in efficiency and technological level—with Singapore the most advanced by far. The individual economies also are geared bilaterally to industrialized countries such as the EC, Japan, and the United States. Intra-ASEAN trade in 1977 was only some 16 percent of the total trade of all five countries. [portion marking not declassified]

The 1976 Bali summit set up committees to promote cooperation in trade, industry, agriculture, and energy. In 1977, ASEAN instituted a system of common tariffs called the Preferential Trading Arrangements, but so far the long list of items has been inconsequential relative to overall trade. The preferential arrangements have not succeeded in promoting ASEAN economic cooperation. Indeed, the attempts at cooperation illustrate a basic failing of ASEAN: its leaders accept broad concepts at their various summit meetings, but efforts to implement them soon lead to disagreements on details because of nationalist pressures, bureaucratic rigidity, and the frequently limited economic gains to be derived from such schemes. [portion marking not declassified]

[portion marking not declassified]

ASEAN industrial cooperation is a case study of the problems involved. Individually, all ASEAN countries are trying to industrialize, and most have advanced beyond import substitution toward export production. All find it difficult to obtain external markets, but they have not yet fully developed a regional market. The Committee on Industry, Minerals, and Energy, one of the many committees spawned by the Bali summit, has tried to promote an ASEAN industrial complementation scheme but with little success. Individual countries have been unwilling to commit resources to the scheme because they fear a possible loss of efficiency and restrictions on productivity. Furthermore, domestic pressures require protection for key manufacturing industries, because of persisting uncertainty over the viability of these enterprises. Indonesia, Malaysia, and the Philippines, for example, are all constructing their own aluminum smelters, thus setting the stage for future competition. These simultaneous undertakings are an even more conspicuous failure to cooperate or coordinate because they are public sector ventures. The bureaucracy of the Committee itself retards progress because it regulates and controls rather than promotes and encourages industrial complementarity. [portion marking not declassified]

Singapore, which alone of the five countries has reached a capital-intensive, middle-technology stage of industrialization, is particularly unhappy at the slow rate of progress. Singapore’s superior efficiency gives it an obvious edge over the others (which inhibits cooperation), but Singapore is willing to reduce its role to allow the rest to develop their labor intensive program. At the ASEAN economic ministers meeting in April 1980, Singapore proposed a “five minus one formula” to accelerate industrial cooperation; it would permit agreement even if one ASEAN country did not wish to participate in a particular proposal. This was politely disregarded by the others, who believe, perhaps with justification, that it would undermine unity. [portion marking not declassified]

Maritime Affairs. According to a Southeast Asian saying, “the land divides, the water unites,” but modern economic considerations are making the seas of Southeast Asia a potentially divisive issue. Over the past decade, ASEAN countries, like littoral states elsewhere in the world, have intensified their interest in Law of the Sea issues such as rights to fishing grounds, offshore oil, and seabed minerals. A complexity of archipelagoes, narrow international straits, fringe islands, and deeply indented coastlines, plus the fact that no point in the South China Sea is more than 200 miles from land, makes the entire area subject to overlapping national claims. Individual states have not yet fully formulated their maritime claims. In the process, they do not consider themselves automatically bound by international law as defined by the West, but have yet to agree on guidelines of their own for negotiations. [portion marking not declassified]

Malaysia issued a map in late 1979 unilaterally delineating new maritime boundaries, which drew immediate and strong reactions from its neighbors. Indonesia protested Malaysia’s claim to two islands off the coast of Sabah and a sea area off Sarawak. Jakarta hopes to reach a compromise relying on a 1976 Indonesia-Malaysia memorandum of understanding, in which Malaysia accepted Indonesia’s archipelagic concept in return for recognition of Malaysia’s right to unrestrained air and sea passage between east and west Malaysia. Singapore protested the inclusion on the Malaysian map of a small uninhabited island with a lighthouse that has been administered by Singapore for 150 years. Manila protested Malaysia’s inclusion of part of an island group and sea area southwest of Sabah that the Philippines also claims. [portion marking not declassified]

In 1980, both Thailand and Singapore announced extension of their respective territorial waters to 12 miles and creation of a 200-mile economic resources zone. Malaysia’s continental shelf proclamation in 1966 claimed sovereignty over an area also claimed by Thailand, but in 1979 the two entered a 50-year agreement for joint offshore oil exploration, with profits to be shared equally. This arrangement, if successful, could set the pattern for the resolution of future maritime resource problems within ASEAN. [portion marking not declassified]

There is no end in sight to disputes over the potentially oil-rich area around the Spratly and Paracel Islands in the South China Sea; China, Taiwan, Vietnam, the Philippines, and Malaysia, all claim some part of the area by virtue of conflicting historical and geographical precedents. Malaysia and the Philippines, Malaysia and Vietnam, and Indonesia and Vietnam have rival claims to certain islands and reefs. The lack of mutually acceptable guidelines will make these difficult to settle. So far none of the parties involved has been willing to use force to dislodge another, but in view of regional tensions this remains a possibility. [portion marking not declassified]

Sociocultural Cooperation. The countries that now form ASEAN had little contact with each other during the colonial period in Southeast Asia. Except for Thailand, their external relations were an extension of the colonial relationship with the metropolitan centers. Since independence, Southeast Asian regionalism has progressed rapidly from a mere geographical concept to a sense of common identity, at least among the elites. This sense of regionalism, however, needs a mass base of popular acceptance to play a significant role in ASEAN integration. So far, few Southeast Asians see themselves as part of a greater regional whole; indeed, for many the identification with a nation state is not yet fully developed. [portion marking not declassified]

Social and cultural cooperation within an ASEAN framework can enhance the growth of regionalism. The 1978 foreign ministers meeting called for an integrated strategy for sociocultural development. ASEAN has tried several different formats to encourage such cooperation, including a cultural fund and committees for social development, culture and information, and the mass media. Several joint programs have already been established to:

• Combat increasing drug abuse and trafficking.

• Provide mutual assistance in cases of natural disaster.

• Cooperate in social work, archaeology, museum activities, arts and crafts, and mass communications.

• Exchange news items through government-controlled agencies, and publish ASEAN journals.

• Create an ASEAN satellite network by mid-1982, based on the Indonesia Palapa satellite.

• Plan an English-language ASEAN university. [portion marking not declassified]

The ASEAN Inter-Parliamentary Organization, formed in 1977 and composed of leading parliamentarians from each country intends to form a permanent secretariat to study the possibility of establishing an ASEAN parliament. Such an assembly, which could take years to create, would be a vehicle for establishing common institutions—in education, communications, and justice—around which ASEAN regionalism could focus. [portion marking not declassified]

Formidable obstacles must be overcome if ASEAN is to create a true regional identity. The colonial powers, for instance, fostered religious divisions by introducing Christianity to compete with established local beliefs and reinforced other ethnic differences in pursuit of a divide-and-rule policy. The independent governments that succeeded colonial rule are relatively new and still much concerned about preserving national autonomy and territorial integrity. Indonesia, Malaysia, and, to a lesser extent, Singapore have not yet succeeded in creating strong national identities out of a hodgepodge of cultural and ethnic diversity. ASEAN’s attempt to forge a supranational regional identity will thus be slow, and—by encouraging people to identify with others outside their own nation state—could even be counterproductive to the creation of national consciousness over the short term. [portion marking not declassified]

The ASEAN Dialogues

The various dialogues set up between ASEAN and its major trading partners have reinforced its image as an influential grouping and reduced to manageable levels the conflict inherent in economic intercourse between the producers and consumers of primary commodities. These dialogues generally have given ASEAN’s chief trading partners a greater appreciation of its members’ aspirations and fostered sincere negotiations about restructuring primary commodity markets, establishing a fair system of pricing and tariffs, creating a Common Fund and buffer stocks to prevent price fluctuations, rescheduling certain debt repayments, transferring technology, and maintaining private investment. Participation in the dialogues has stimulated self-confidence among the ASEAN states about their ability to handle development and has increased the willingness of potential foreign investors to do business with ASEAN. On a broader scale, the dialogues have reinforced ASEAN’s reputation as a moderating influence in the North-South dialogue by fostering negotiation and compromise rather than confrontation. [portion marking not declassified]

The inevitable evolution of the economies of the ASEAN states will affect ASEAN’s relations with its partners in the developed world. The ASEAN states formerly depended on sales of primary commodities unhampered by tariff restrictions, but they are beginning increasingly to rely on the sale of cheap manufactured goods in highly competitive markets partially closed by protectionist tariffs. The production of export-oriented manufactures offers new opportunities but opens new risks of economic conflict, not only with developed states but also with other developing countries with similar economic ambitions. [portion marking not declassified]

Japan. The dialogue with Japan is conducted primarily through the ASEAN-Japan Forum, first formed in March 1977. In addition, the Japanese Prime Minister and other Cabinet ministers regularly attend ASEAN heads of state meetings. ASEAN’s relations with Japan, however, are ambivalent. On the one hand, the Southeast Asians recognize that long-term interdependence is inevitable, because Japan is one of their chief trading partners, a main source of financing and expertise for regional projects, and a potential major market for the region’s products. On the other hand, some ASEAN leaders feel that the benefits from ASEAN-Japan economic cooperation are too one-sidedly in Japan’s favor. Southeast Asian attitudes are colored by World War II experiences and by the often ruthless way some Japanese companies conduct business. Many see Japan [less than 1 line not declassified] foreign policy driven by Japanese business interests. [portion marking not declassified]

ASEAN’s misgivings were reinforced by the experience with the Fukuda doctrine, outlined by the former Prime Minister at the 1977 heads of state summit. Fukuda, who was attempting to change Japan’s image as an exploiter of ASEAN’s resources, defined Japanese interaction with ASEAN as resting on three pillars:

• Japan is not a military power and will never again become a threat.

• Relations between Japan and ASEAN are improving rapidly because of increased mutual confidence.

• Japan is willing to be an equal—not dominant—partner in the relationship, but it will not form an exclusivist bloc with ASEAN because of Japan’s worldwide interests. [portion marking not declassified]

The Fukuda doctrine was intended to ensure a stable and prosperous market for Japanese goods, as well as safe transit for Japanese shipping. Fukuda announced that Japan would lend ASEAN $1 billion on concessional terms to promote intra-ASEAN industrial cooperation on five regional projects. Since then, however, there has been minimal progress. ASEAN has been unable to resolve which country would take the lead in what project. At the same time, ASEAN was dismayed to find that Japan had established a timetable for implementing the projects, including feasibility studies, and attached to the loan financing terms that were contrary to ASEAN policy. ASEAN members saw these arrangements as a ploy to give Japanese suppliers the advantage in bidding on contracts; ASEAN is now seeking alternative financing from the European Community. [portion marking not declassified]

ASEAN continues to press Japan to liberalize its trade tariffs to afford greater access for manufactured and semimanufactured goods, although Japan is constrained from doing so by powerful domestic interests. Furthermore, ASEAN now fears that increasing Japanese cooperation with China could adversely affect its attempts to improve political and economic relations with Tokyo. [portion marking not declassified]

These disagreements probably will be reconciled in time because Japan too increasingly recognizes that its relations with ASEAN must have a political as well as an economic framework. The Afghanistan and Indochina situations caused Japan to reappraise its world and regional roles, and to modify its previous omnidirectional foreign policy that had been motivated by the desire to maintain good relations with everyone in order to facilitate trade. Tokyo now believes it must make better use of its economic power to integrate its political and economic foreign policies in a way that will strengthen its friends among the developing countries. [portion marking not declassified]

Japan thus now takes ASEAN more seriously as a regional organization. Prime Minister Suzuki recently stated that Asia is Japan’s top priority, and ASEAN is gratified at Japan’s increasing willingness to work in tandem with ASEAN. A tangible result of this is Tokyo’s decision to abandon its former neutrality in the Indochina situation and support the ASEAN position. [portion marking not declassified]

Australia. ASEAN’s institutional relations with Australia, handled through the ASEAN-Australia Forum, date from 1974. Australia reoriented its foreign policy that year to give it an Asian emphasis. Recognizing the enormous importance of ASEAN’s strategic location and natural resources, Australia was the first country to offer ASEAN aid on a regional basis. ASEAN wants Australia to lower its trade barriers for manufactured goods from Southeast Asia on the grounds that reciprocal trade rather than increased aid is essential for good relations. Another difficulty in the relationship is the fact that Australia is also a commodity exporter and therefore a competitor. [portion marking not declassified]

Over time, Australia has adjusted its approach, perhaps in response to ASEAN pressures. In 1977, Canberra focused on aid, promising money, skills, and other resources to further joint ASEAN development programs; now Canberra has agreed to promote ASEAN exports to Australia and encourage Australian investment in ASEAN. ASEAN private sector groups have convinced Australian businessmen to form an ASEAN-Australian Business Council. It remains to be seen whether Australia will follow up on these proposals and demonstrate its commitment to a reciprocal long-term economic relationship; ASEAN recognizes that Canberra cannot foster the expansion of ASEAN’s exports at the expense of Australia’s own burgeoning industry. [portion marking not declassified]

New Zealand. ASEAN has consulted regularly with New Zealand since 1975. The volume of trade between them is not large, but ASEAN believes that New Zealand can provide additional investment and market opportunities. New Zealand so far has not agreed to ASEAN requests for tariff liberalization. A small country with limited resources, New Zealand wishes to reserve most of its developmental assistance for the South Pacific, to enable it to play a major role in that area. [portion marking not declassified]

Canada. ASEAN consultations with Canada were formalized in 1977, when Canada agreed to provide assistance in such areas as satellite communications and scientific research. Canada has not yet responded to pleas for liberalized tariffs on ASEAN goods, however, and some ASEAN officials have complained about Ottawa’s reduced interest in ASEAN. In June 1980, Canada reaffirmed that relations with ASEAN were a fundamental part of its foreign policy and exchanged a memorandum of understanding with ASEAN for the first joint project. The two sides also announced that additional programs were being planned. [portion marking not declassified]

The European Community. The formal ASEAN-EC relationship dates from the establishment in 1972 of the Special Coordination Committee of ASEAN for liaison with the EC. The catalyst was British admission to the EC, which caused concern that ASEAN would lose the preferences in British markets derived from Malaysia’s and Singapore’s membership in the Commonwealth. [portion marking not declassified]

Because the ASEAN-EC dialogue involves so many countries—five and nine respectively—it is conducted through numerous committees within the framework of a Joint Study Group formed in 1974 and renamed the Joint Cooperation Committee in 1980. ASEAN-EC relations are the most complicated of all the dialogues because each side represents a group, and all decisions made at the bureaucratic level must be ratified by individual governments with varied self-interests. [portion marking not declassified]

Nonetheless, the dialogue has made considerable progress. A Nonpreferential Framework Cooperation Agreement was signed in March 1980, to be implemented by the Joint Cooperation Committee assisted by an EC delegation based in Bangkok. The agreement confers most-favored-nation status on the signatories under the General Agreement on Tariffs and Trade, making ASEAN the largest beneficiary of the EC’s General System of Preferences. It also provides for development and diversification of trade, elimination of trade barriers, economic development, multilateral solutions to trade problems, and access to and processing of raw materials. Despite its far-reaching implications, the agreement merely establishes enabling provisions for future economic relations. Two contentious issues must be resolved first—discriminatory trade barriers in the EC and the EC’s desire to obtain protection for its investments. [portion marking not declassified]

ASEAN has achieved a greater political understanding with the EC than with its other dialogue partners. The EC, because of its own experience and its belief that its existence has preserved stability in Western Europe, consistently emphasizes in its dealings with the Third World that regional integration is a means of ensuring political stability. EC officials thus believe they must buttress economic relations with political encouragement. The strong joint statement issued after the ASEAN-EC foreign ministers meeting in June 1980, attacking the Soviets and the Vietnamese for the invasions of Afghanistan and Kampuchea, is a prime example of this. [portion marking not declassified]

India. ASEAN and India took formal steps in May 1980 to begin talks on economic cooperation, the first such dialogue between ASEAN and a developing country. The action was based on political as well as economic motives. [portion marking not declassified]

Because of ASEAN’s zone of peace proposal for Southeast Asia, India sees ASEAN as a potential supporter of its own goal to exclude major powers from the Indian Ocean. India also is interested in forging ties with the influential Indian minorities in Malaysia and Singapore. Although it would encourage them to be good citizens of their adopted countries, India probably also hopes it can persuade them to remit more money to India. India, whose trade with ASEAN is small, is seeking to boost its trade by providing heavy machinery—railroad stock, power stations, agricultural equipment—and technical expertise for ASEAN development projects. [portion marking not declassified]

ASEAN also had a political motive for instituting the dialogue—the need to persuade India to support ASEAN’s position in the Kampuchean conflict. In addition, Malaysia and Indonesia may see India as balance against growing Chinese influence in the area. In economic terms, ASEAN considers increased trade with India as a way to diversify markets. [portion marking not declassified]

Political issues already have disrupted the dialogue process. The Indian Foreign Minister declined an invitation to attend the discussions that followed the ASEAN foreign ministers meeting in June because the meeting seemed intended to blame Vietnam for the Kampuchean situation. In July, India announced it would extend full diplomatic recognition to the pro-Vietnamese Heng Samrin regime in Kampuchea as promised by Prime Minister Gandhi during her election campaign. ASEAN states had lobbied intensively with India to postpone recognition, and they reacted sharply, putting off further talks in the ASEAN-India dialogue. [portion marking not declassified]

Despite persisting concern over India’s apparent pro-Soviet stance, ASEAN probably wants good relations with India. It recognizes that India still plays a moderating role in international forums and that in this and other ways New Delhi could become a natural political and economic ally. [portion marking not declassified]

The United States. ASEAN has mixed feelings toward the United States. On the one hand, many ASEAN leaders consider the United States the embodiment of all that prevents developing countries from realizing their hopes of a new international economic order with more equitable distribution of wealth between the developed and developing states. They see their countries dominated by the West’s economic system and are dismayed by the protectionist sentiment arising in the developed world just when their own infant industries are beginning to take root. Because the United States exercises world leadership, ASEAN expects Washington will set the tone—one way or another—on this major issue in North-South relations. In the political arena, ASEAN leaders wish to avoid the appearance of political collusion with the United States lest this tarnish their nonaligned credentials with other Third World nations. [portion marking not declassified]

On the other hand, most ASEAN countries appreciate that the United States represents their best hopes for political and economic security. Nevertheless, they view relations with Washington in their totality rather than in their political, strategic, and economic parts. They consider regional security, for instance, as a function not only of external threats but of the domestic political stability of the various ASEAN states. Thus ASEAN wants an integrated economic and political commitment from the United States that will encourage regional stability. Their expectations of what the United States can do for them may be too high, however, for they fail to understand that the situation has changed since the 1950s and 1960s, when the United States could and would commit vast resources to further its foreign interests. They may thus be unreasonably disappointed when demands are not met. [portion marking not declassified]

ASEAN is unhappy because Washington took longer than other key trading partners to establish and implement an economic dialogue; formal discussions did not start until September 1977,⁵ although the dialogue now is fully active. Some ASEAN leaders also sense that US support, although stated in the strongest terms, is more political than economic. They are looking for Washington to translate this political support into concrete economic assistance and cooperation. In particular, ASEAN is seeking:

• Increased access for ASEAN products to US markets.

• Systematic encouragement of US-ASEAN trade; Japan, the EC, and Australia, for example, all sponsor and partially finance centers for ASEAN trade promotion in their countries.

• Greater encouragement for private sector investment in ASEAN, similar to the industrial cooperation conferences sponsored for ASEAN by the EC and Australia.

• Concessional financing for regional ASEAN projects.

• Initiative in designing regional development projects; ASEAN’s other dialogue partners are ahead of the United States in this form of economic cooperation. [portion marking not declassified]

Because US policy decisions often have a broader and more direct impact on Southeast Asia than those of other dialogue partners, ASEAN leaders feel strongly that Washington should hold prior discussions with them before making important policy decisions that might affect the region. With their growing strength as regional collective, ASEAN leaders expect to be treated as equal partners. Observing the symbolic niceties of ASEAN-US discourse could be as important to good relations as political, economic, and military assistance and thus could minimize the effect of any adverse US actions. [portion marking not declassified]

Cooperation on Foreign Policy

The increasing ability of ASEAN to develop a common approach on important international issues often makes it an effective interest bloc within Third World, UN, and other multilateral forums. Nonetheless, differing perspectives and self-interests—often the same kinds of issues that tend to divide ASEAN internally—still affect the way the association conducts its relations with countries with which it does not have a formal dialogue. Similar ethnic and historic experiences make Malaysia and Indonesia, for example, natural partners both within ASEAN and their relations with nonmember states. Both have long been active in Third World and nonaligned forums. Thailand, Singapore, and the Philippines, on the other hand, do not have a strong identification with the Third World and its causes. [portion marking not declassified]

Malaysia and Indonesia have large Muslim populations, which leads to a natural link with fellow Islamic nations. In international forums they geneally vote with the Islamic bloc on matters of Islamic interest and would be in a quandary if these conflicted with the interests of a fellow ASEAN state—such as a showdown between Islamic countries and Manila over the Muslim insurgency in the southern Philippines. On the other hand, Malaysia and Indonesia are also in a position to mediate between the Islamic countries and other ASEAN states on Islamic matters and have, for example, prevented the Islamic countries from adopting radical positions in the Philippines case. [portion marking not declassified]

In recent years ASEAN has become aware of how a coordinated approach dramatically enhances its collective bargaining ability. Its members now meet regularly to coordinate their position prior to meetings of such forums as the UN Conference on Trade and Development (UNCTAD), the developing countries’ UN caucus—the Group of 77, the General Agreement on Tariffs and Trade (GATT), the International Monetary Fund (IMF), and the international rubber and tin groups. The responsibility for handling key foreign contacts has been informally divided among the members, with Thailand taking the lead on the United Nations, Malaysia on Australia and the Middle East, Indonesia on Japan and the EC, Singapore on New Zealand, and the Philippines on the United States and Canada. [portion marking not declassified]

Indochina. The effort to maintain a common front against Vietnam is both an example of ASEAN effectiveness at its best and a case study of its internal divisions. Vietnam’s long-term intentions toward ASEAN are unclear, and its attitude sometimes contradictory, but it probably sees a strong ASEAN as a major obstacle to its ambitions for greater regional influence. Vietnam is well aware of the differences within ASEAN and continues to try to exploit them. In 1975, Vietnam bitterly attacked ASEAN as a neocolonial, US-backed successor to the Southeast Asia Treaty Organization and chastised some of its members for their participation in the Vietnam war. At the same time, Hanoi tried to establish cordial bilateral relations with the other ASEAN countries. Hanoi took a softer propaganda line during Pham Van Dong’s visits to the ASEAN capitals in 1978, but recently it has returned to an oppositionist approach, blaming ASEAN for continued tensions in the region. [portion marking not declassified]

At present, ASEAN-Indochina relations are at a stalemate. Vietnam seems confident it will consolidate its position in Kampuchea and Laos whatever the costs, and ASEAN—despite the misgivings of Malaysia and Indonesia—toughened its stance after the Vietnamese incursion into Thailand on 23 June 1980. The region will face-long-lasting instability if the ASEAN-Vietnam confrontation continues unresolved. A change in policy, however, depends on Thailand. If Bangkok, as the frontline state, were willing to accept a solution, even one that involved only cosmetic concessions by Hanoi, other members of ASEAN probably would defer to Thai wishes. Malaysia and Indonesia probably would be the most enthusiastic supporters of compromise; Singapore would be likely to oppose it but with only limited effect; and the Philippines would reluctantly acquiesce, provided a consensus was reached. [portion marking not declassified]

Strains within ASEAN over Indochina policy stem largely from differences over the nature of the security threat to the region. Malaysia and Indonesia, which have large and potentially subversive Chinese minorities, view China as the primary long-term threat. This by no means diminishes their concern about a Soviet-backed Vietnam—a concern that was heightened by the Soviet invasion of Afghanistan. Malaysia and Indonesia believe, however, that China’s method of dealing with Kampuchea—with which Thailand agrees—enhances the position of the Soviet Union in the region. They fear that Vietnam will grant permanent military facilities to the Soviets in exchange for aid in confronting the Chinese. Some Malaysian and Indonesian leaders believe a Vietnamese-dominated Indochina would serve as a buffer against Chinese expansionism. Privately they have already conceded Vietnamese hegemony and would prefer to reach a face-saving accommodation with Hanoi, before its victory in Kampuchea becomes absolute. [portion marking not declassified]

Thailand, Singapore, and the Philippines, on the other hand, are less fearful of China. Thailand and the Philippines do not have large unassimilated Chinese minorities, and Singapore has an ethnic Chinese majority. All three believe the Soviets and their Vietnamese client pose the main long-range threat. Singapore and Manila feel particularly threatened by the Soviet capability to interdict Asian sea lanes. [portion marking not declassified]

China. If a collective ASEAN dialogue with China ever evolves, it will come cautiously and hesitantly. Singapore and Indonesia do not yet have normal diplomatic relations with Beijing. Four issues color ASEAN’s relations with China:

• Beijing’s insistence on maintaining “fraternal relations” with and giving verbal support to Communist parties in ASEAN countries. China tries unsuccessfully to reassure ASEAN that such support is on only a party-to-party and not state-to-state basis and claims that to renounce these parties would invite the Soviets or Vietnamese to try to fill the void.

• China’s determination to “bleed” Vietnam, which some ASEAN leaders feel will ultimately draw them into a wider superpower conflict.

• The Chinese minorities in ASEAN countries and concern about Beijing’s possible involvement with them. Although China has renounced its former insistence on jus sanguinis over jus soli, Southeast Asians fear that China still considers all overseas Chinese to be its responsibility—if not its citizens.⁶

• The growing US-China relationship, which the ASEAN member states fear could lead the United States to try to limit Soviet expansionism by acquiescing in an arrangement conceding Southeast Asia to China’s sphere of influence. [portion marking not declassified]

China, which during the Cultural Revolution denounced ASEAN as an “anti-Communist alliance,” has become pro-ASEAN in its foreign policy. If China’s leaders continue to support its current modernization plans and its foreign relations remain pragmatic, ASEAN may be prepared to enter a broader relationship, including economic cooperation. This could pose difficulties because ASEAN, although welcoming the political benefits of a more stable relationship, fears potential economic competition from China in areas such as export-oriented light industrial products, the export of skilled and semiskilled labor to other countries, and the acquisition of capital, aid, and technology from Japan and the United States. [portion marking not declassified]

Another factor inhibiting closer ties with China is the connections most ASEAN states have with Taiwan. Singapore, for instance, sends members of its armed forces to Taiwan for training. ASEAN states would be reluctant to sever these ties, and even though Beijing at present turns a blind eye to such relations if conducted discreetly, it strongly opposes them. [portion marking not declassified]

The Soviet Union and Eastern Europe. The ASEAN states maintain cool but correct relations with the Soviets and East Europeans. Most trade consists of purchases of primary commodities by the Soviets and their allies from Southeast Asia, and the balance of trade is heavily in ASEAN’s favor. The Soviet side produces little of interest to ASEAN importers, but as ASEAN industrialization proceeds and its agriculture becomes more mechanized, the Soviets could become alternative sources of technology and equipment. So far ASEAN countries have politely rebuffed Soviet aid overtures. [portion marking not declassified]

The Soviets do not assign a high priority to relations with ASEAN. Moreover, Moscow’s support for Vietnam in its Kampuchea policy makes closer relations difficult. The USSR almost certainly would try to exploit any evidence of a serious split in ASEAN along pro- and anti-Chinese lines. The Soviets have little if any potential to encourage domestic insurgency or subversion under present circumstances; there is only one pro-Soviet Communist party in an ASEAN country—the Philippines—and it is small and ineffective. [portion marking not declassified]

The Middle East. The world energy shortage has significantly affected ASEAN’s relations with the Middle East and, in turn, with the developed world. The Middle East Muslim states have transformed their economic wealth into political power, and developing countries such as those in ASEAN, whether Muslim or non-Muslim, find it difficult to act in the UN and elsewhere contrary to Middle East sensitivities. [portion marking not declassified]

Singapore, for example, recently voted—against the wishes of Washington—to grant the Palestine Liberation Organization observer status at the IBRD and IMF. Singapore’s special circumstances as the third largest refining center in the world, using oil chiefly from the Middle East, might have made support for the US position a costly gesture. Similarly, Bangkok was upset at US pressure on Thailand over the same issue. All ASEAN states prefer to keep a low profile on contentious issues between the United States and Middle Eastern countries, but if forced to choose would reluctantly either abstain or vote against Washington. [portion marking not declassified]

A decade ago, ASEAN’s trade with the Middle East was inconsequential. Oil price rises in the 1970s, however, changed this pattern, and today over 10 percent of the total value of ASEAN’s imports come from the Middle East—almost entirely crude petroleum and petroleum products. Only around 2 percent of ASEAN’s exports, however, flow back to the Middle East. ASEAN wants increased and more favorable economic relations but so far has initiated no collective discussions with Middle Eastern states. ASEAN countries seek to channel some of the vast financial surpluses of the oil producers into aid and investment projects in Southeast Asia. The oil boom in the Middle East represents a potentially enormous consumer market for ASEAN food and manufactured items. The construction boom and demand for services of all kinds in the Middle East offer excellent opportunities for skilled and semiskilled labor from ASEAN countries, and indeed many Southeast Asians are already working in the Middle East. [portion marking not declassified]

ASEAN leaders also hope closer cooperation with Middle East states could help prevent the confrontational and often violent politics of the Muslim Middle East from spilling over into Southeast Asia, which also has a large Muslim population. If rival Middle Eastern countries, such as Saudi Arabia and Libya, begin vying for influence among Southeast Asia’s Muslims, ASEAN unity and stability could be affected. [portion marking not declassified]

The Pacific Basin Concept. The idea of a Pacific basin community uniting North and South American and Asian states through economic and possibly political cooperation is slowly gathering adherents, especially in Japan. Japanese Prime Ministers Ohira and Suzuki have promoted the concept as a way to maintain free trade. Other nations also are giving it thought as the economy of the Pacific region continues to expand. Some academics believe that the economic center of gravity in the world will shift to the Pacific by the end of this century or the beginning of the next and that growing interdependence will accompany this. Some believe a de facto trans-Pacific community already exists. Efforts to institutionalize this, however, are only in the talking stage and are complicated by questions over membership, especially the role of Communist countries, whether the community is to be government sponsored or private, and possible linkages with security issues. [portion marking not declassified]

ASEAN is lukewarm toward the concept because of several concerns. It fears that Japan and the United States would dominate the community and would seek to perpetuate ASEAN’s subordinate role as a supplier of raw materials and market for manufactured goods, thus retarding ASEAN’s modernization and industrialization plans. Discussions on the nature of the community could thus turn into a variation of the North-South dialogue. ASEAN is worried that the exclusion of Communist countries might be seen as alignment with the West, but that if the Communists are included difficulties would arise from the incompatibility of the different economic systems. Finally, and perhaps most important, a Pacific basin community might submerge ASEAN’s own identity and threaten the basis for its unity. [portion marking not declassified]

Although ASEAN will continue to explore the proposals, the association argues that it can consider joining only after it has constructed a secure political and economic base of its own. ASEAN favors a gradual approach, possibly beginning with a triangular ASEAN-Japan-Australia relationship. In any event, it may be decades before the Pacific basin community becomes a reality, if at all. [portion marking not declassified]

Promoting Regional Security

ASEAN’s concept of security is unique, depending less on armed strength than on regional resilience, that is, the “collective will to survive.” It presupposes continued intra-ASEAN political and economic interdependence on an equal basis as distinct from dominance by one member. This innovative and indigenous concept reflects ASEAN’s awareness of its basic military weakness. Over the long term, ASEAN hopes that its policy will not only be more acceptable and successful but also less dangerous than collective military action. [portion marking not declassified]

Despite repeated denials by members that ASEAN will become a mutual security organization, recent events have led to a reappraisal of the outside threat and how to meet it. ASEAN states link the Soviet invasion of Afghanistan with the regional threat posed by the Soviet-backed Vietnamese occupation of Kampuchea. As a result, member states have taken steps not only to forge and maintain a united stand in the face of the new threat but also to strengthen their individual armed forces. [portion marking not declassified]

ASEAN faces a dilemma. It realizes that it is only as strong as its weakest link and thus must continue to assign high priority to combating internal subversion and insurgency. On the other hand, ASEAN countries must take steps to meet the increased threat from outside. Most ASEAN states have organized their armed services to meet the internal threat, and it would require considerable reorganization and additional expenditures to counter external threats. [portion marking not declassified]

Bilateral Cooperation. Although each member makes its own internal security arrangements, there is some cooperation in areas of mutual concern. Thailand and Malaysia, for example, have taken joint action for over two decades against the guerrilla sanctuaries of the Communist Party of Malaya in the border area, an effort that has been only spasmodically successful. The scope of these operations is limited, however, by Thai fears of possible Malaysian involvement with Thai Muslims in the south and by Bangkok’s unwillingness to commit Thai forces to an area it considers of low priority. Malaysian-Indonesian cooperation along the Sarawak-Kalimantan border against the remnants of Communist guerrillas in Sarawak has slackened in recent years as the threat has declined. [portion marking not declassified]

Other forms of cooperation have been less successful. Malaysia will not let Singapore’s armed forces use its training facilities because it fears that Singapore’s military buildup over the past decade is designed to defend it against Malaysia and Indonesia. Singaporean armed forces, therefore, must go to Taiwan, Brunei, and Thailand to train. Problems between Kuala Lumpur and Manila over the Muslim insurgency in the southern Philippines and Manila’s claim to Sabah have precluded joint sea patrols and antismuggling agreements. [portion marking not declassified]

Despite differing perceptions of the threat, security cooperation against external enemies has increased rapidly, if quietly, since the onset of the Kampuchean conflict. All five countries in 1980 participated in a series of combined land, sea, and air exercises, training programs, intelligence exchanges, and limited cooperation on production and standardization of their military equipment. Cooperation, however, has been explicitly bilateral, or at most involving only three member states at a time to avoid the appearance of collusion as a military bloc. Nevertheless, ASEAN made contingency plans to aid Bangkok should Vietnam invade Thailand. [portion marking not declassified]

Continued military cooperation—even without an explicit defense agreement—would have several advantages. Defense expenditures generally constitute a major portion of the ASEAN members’ budgets; any reduction in defense spending as the result of standardization of equipment, specialization of roles to eliminate duplication, and shared maintenance would free money for economic development. The increased range of contacts between military personnel would aid ASEAN unity by giving them a heightened sense of regional identity. [portion marking not declassified]

Western Support. Despite the increase in bilateral military cooperation among ASEAN states and the organization’s avowed goal of neutrality, it continues to rely for protection chiefly on security guarantees from the West, principally the United States. It wants the United States to maintain and even increase its presence in the Pacific as a defense against possible Soviet or Vietnamese aggression. Malaysia, for example, was previously lukewarm about a US military presence but now favors strengthened security links with the United States. [portion marking not declassified]

There is nonetheless concern within ASEAN about relying on US support. Some ASEAN leaders are afraid that the strength of the US military and the capability of the US defense industry have declined in recent years, reducing the ability of Washington to project its power overseas. They doubt that the United States could protect them if an escalating conflict in Indochina coincided with US involvement in military action elsewhere. Thailand’s attempt in early 1980 to revitalize the Manila Pact⁷ thus received a tepid response from some ASEAN leaders, perhaps because they feared that it might give the Soviets a pretext to extend the Warsaw Pact⁸ to Vietnam and ultimately to establish permanent military facilities there. [portion marking not declassified]

For these and other reasons, cooperation by ASEAN states with US military policies is likely to be limited and only on a bilateral basis. US policies, and the effectiveness of their implementation, will nonetheless influence ASEAN actions—for example, by making the association more willing to take strong political initiatives on relations with Vietnam if the United States has a credible defense policy. All ASEAN countries will seek to obtain increased military sales credits and training from the United States, and will interpret the US response to such requests as indicative of the level of Washington’s commitment to the region. [portion marking not declassified]

Cooperation with other Western states creates fewer problems. Malaysia and Singapore belong to the Five-Power Defense Arrangement, along with the United Kingdom, Australia, and New Zealand.⁹ In the past Malaysia was an unenthusiastic participant and believed the pact afforded little real protection. Changing security needs now have led Malaysia—and other ASEAN states—to view the agreement more positively. Because the United Kingdom, Australia, and New Zealand are not superpowers, ASEAN is comfortable with a relationship that does not tarnish its nonaligned credentials and might even reduce the potential for interference by the superpowers in the area. [portion marking not declassified]

In September 1980, the Australian Prime Minister proposed rejuvenating the Five-Power agreement through a joint exercise in conventional warfare; the last such exercise took place in 1970 and stressed counterinsurgency tactics. Malaysia surprisingly agreed, and even suggested including Indonesia. Privately, Kuala Lumpur was enthusiastic, although publicly it said the proposed exercises “were not new and had little to do with the Sino-Soviet rivalry or the presence of superpowers in the region.” Whatever else it achieves, the joint exercise may help overcome the mutual suspicions that inhibit Malaysian and Singaporean defense relationships. In another action indicative of ASEAN’s increased interest in external defense relationships, Malaysia in September asked Australia to continue to station two squadrons of warplanes in Malaysia for “several more years.” [portion marking not declassified]

Future Security. At present, ASEAN’s security awareness is at a higher level than in the early 1970s. Any Soviet plans to establish a major military presence in Southeast Asia or any Vietnamese aggression against ASEAN states could overcome the unwillingness of several ASEAN leaders to establish a formal ASEAN defense grouping or to sign explicit defense arrangements with the West, especially the United States. [portion marking not declassified]

Differences among ASEAN states about security threats and how to deal with them, however, could lead to less rather than more cooperation. In particular, problems could arise from the growth of Chinese influence in the region brought about either by a greater Thai tilt toward China or by US encouragement to Beijing that it act as a counter to the Soviet presence in the area. Malaysia and Indonesia would be most concerned about such a development. Nevertheless, the Thai could well decide that greater cooperation with China offered the best protection against Vietnamese aggression, particularly given their doubts about the reliability of US defense guarantees. Concern by Jakarta and Kuala Lumpur that the United States is prepared to concede Southeast Asia to China’s sphere of influence as part of a secret agreement to oppose the Soviet Union could prompt them to renewed efforts to improve relations with Vietnam. They worry that China may reassert its role as the protector of overseas Chinese, who play a major role in their economies, and lead Beijing to interfere in their domestic affairs. [portion marking not declassified]

A proposal to the United States by an ASEAN member, such as Singapore or the Philippines, to establish a formal NATO-type defense arrangement or additional US military bases might create problems among some of the other member states. Although such a proposal probably would be made only in response to an increased threat from the USSR or Vietnam, Malaysia and Indonesia in particular would fear an adverse reaction from their Third World friends to any security arrangement perceived as dominated by the United States. [portion marking not declassified]

ASEAN in the 1980s

ASEAN is a unique international organization developing according to its own pattern. Its continued growth depends on transforming national economic, political, and security interests into regional ones. Both internal and external factors, many beyond the members’ control, will determine ASEAN’s future prospects. [portion marking not declassified]

The ability of each member to maintain its own national identity and unity will play a part in regional integration; indeed, ASEAN will remain only as strong as its weakest member. To be effective, regionalism must be based on positive nationalism and a high level of political maturity in each country. Severe domestic unrest that alienates large numbers of people from their government will inevitably adversely affect regional unity. Many ASEAN countries are beset by domestic uncertainty because of demographic pressure, unemployment, migration to the urban areas, a growing gap between rich and poor, uneven growth rates between regions, and ethnic animosities reinforced by the rise of militant Islam. At present, these stresses are within manageable limits, but the future is less clear. [portion marking not declassified]

The development of ASEAN in the second half of the decade will hinge in large part on the way each member resolves succession problems caused by institutional rigidity and generational change. Since the founding of ASEAN, there has been remarkable continuity in the ruling regimes of four of the five members, and even in the fifth, Thailand, the political elite has been constant despite government upheavals. The leaders of the next generation may not be motivated by the same values as the current ones. Some may promote external ties—to the Middle East for example—that could upset intra-ASEAN relations. Similarly, the emergence of a nativistic, anti-Western nationalism would adversely affect ASEAN unity, as well as its relations with states outside the region. [portion marking not declassified]

Growing interaction among all levels of the civil and military bureaucracies of member states could help cushion the potentially adverse impact of succession crises on ASEAN unity. These contacts, whether within an ASEAN or a bilateral framework, help new generation politicians and officials to understand each other’s problems and thus nourish the concept of regional identity. [portion marking not declassified]

ASEAN’s external relations in the 1980s may be based less on its own initiatives than on the need to react to outside circumstances over which it has little control. Above all, ASEAN must achieve a modus vivendi with its Communist neighbors in Indochina or risk being drawn into a widening conflict. ASEAN has a larger population and is richer in economic resources, while Vietnam has military strength and authoritarian discipline. ASEAN must find a way to translate its “collective political will” into a rough balance of power, or detente, with Indochina. [portion marking not declassified]

Greater economic integration among ASEAN states also depends in part on outside countries, especially those participating in the ASEAN dialogues. For example, ASEAN economic integration would be furthered if its major trading partners shifted from a bilateral to a regional perspective in dealing with Southeast Asia. In the future, ASEAN will encourage projects that complement rather than supplant indigenous capabilities and that benefit all ASEAN countries. [portion marking not declassified]

Intra-ASEAN economic development will be painfully slow over the next few years and at best will include growing intra-ASEAN trade liberalization and occasional industrial complementarity. ASEAN’s economic projects with outside countries are likely to mature more quickly than intra-ASEAN schemes. Such external relationships, however, will be somewhat inhibited by the continuing conviction of ASEAN leaders that cooperation between ASEAN and other countries or international institutions should not undermine existing bilateral arrangements. [portion marking not declassified]

For the next few years, the need to cement existing bonds and establish a secure sense of regional identity among the founding members of ASEAN will outweigh any arguments in favor of increased membership. ASEAN members first seriously discussed possible expansion of the organization in 1975. The debate centered on the admission of the Indochina states, which was part of the ASEAN proposal for a Zone of Peace, Freedom, and Neutrality in Southeast Asia. Ideological and economic incompatibilities would have precluded the addition of the Indochinese countries, however, even if the issue of Vietnamese aggression had not arisen. Nevertheless, the question of future expansion of membership to include other countries in the immediate area continues to be widely debated. Special political, economic, and cultural relationships are being established between ASEAN and Burma, Brunei, Papua New Guinea, and, less closely, Sri Lanka. Such ties eventually could pave the way for inclusion of some of these countries in ASEAN. [portion marking not declassified]

The success of ASEAN does not of itself guarantee stability in Southeast Asia, which depends essentially on domestic tranquility in individual countries and nonaggressive neighbors. Nevertheless, it helps create an environment that promotes stability and serves as an effective mediating structure for solving local problems without drawing in outside powers. This is especially important for the United States, which has close relations with each of the ASEAN states and would not wish to choose sides in bilateral squabbles. Continued ASEAN unity in the face of Vietnamese expansionism will help frustrate any attempt by Vietnam to expand its influence in the region. Finally, a united ASEAN, nonaligned but friendly to the West, serves US interests in other ways, among them by the association’s willingness to act—within certain constraints—as a moderating influence in Third World forums. [portion marking not declassified]

1. Source: Central Intelligence Agency, Office of Support Services (DI), Job 82T00150R: Production Case Files, Box 3, Folder: Regionalism in Southeast Asia: The Growth of ASEAN. Secret; [handling restriction not declassified]. Prepared in the National Foreign Assessment Center. A map of the ASEAN states is not printed.
2. See footnote 2, Document 40.
3. February 23–24, 1976, in Bali.
4. August 4–5, 1977, in Kuala Lumpur.
5. September 8–10, 1977, in Manila. See footnote 5, Document 196.
6. Jus sanguinis is a rule of common law determining allegiance or citizenship by the citizenship of the parents, while jus soli determines allegiance or citizenship by place of birth. [portion marking not declassified] [Footnote in the original.]
7. SEATO was also known as the Manila Pact. See footnote 2, Document 70.
8. The Warsaw Pact was the collective defense treaty among the Soviet Union and the nations of the Soviet bloc, signed on May 14, 1955.
9. Signed in 1971, the Five Power Defense Arrangement established the principle of consultation in the event of or threat of an armed attack on Malaysia or Singapore to determine what measures to take jointly or separately in response.