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51. ASEAN and the Asian Crisis
- ISEAS–Yusof Ishak Institute
- Chapter
- Additional Information
ASEAN and the Asian Crisis 243 By: ROS Size: 7.5" x 10.25" J/No: 03-14474 Fonts: New Baskerville 51. ASEAN AND THE ASIAN CRISIS JÜRGEN RÜLAND Reprinted in abridged form from Jürgen Rüland, “ASEAN and the Asian Crisis: Theoretical Implications and Practical Consequences for Southeast Asian Regionalism”, Pacific Review 13, no. 3 (2000): 421–51, by permission of the author and Taylor and Francis Limited . AFTER THE FINANCIAL MELTDOWN: ASEAN IN SEARCH OF DAMAGE CONTROL Processes of economic cooperation are central to the institutionalist argument. It rests on the axiomatic premises that economic cooperation produces gains for all and enhances national welfare. Trading states are therefore interested in a peaceful international environment. In ASEAN, however, economic cooperation has never reached the critical density that is needed to provide a secure empirical basis for institutionalist explanations of regional politics. Institutional arrangements in the field of economy are a late development and have been preceded by those in the security sector. Only in the 1990s, with the establishment of the ASEAN Free Trade Area (AFTA), has economic cooperation reached a higher level. But even so, ASEAN has hardly gone beyond what Fritz Scharpf — borrowing from Jan Tinbergen1 — calls ‘negative integration’. Negative integration refers to inter-state agreements on deregulation and liberalization,2 while ‘positive integration’ signifies commonly agreed interventions in specific policy fields through the setting of rules and their subsequent implementation. The poor state of ASEAN’s functional cooperation and, as will be shown below, the long absence of any meaningful financial cooperation , seem to support such an assumption.3 ASEAN’s economic cooperation — though playing a great declaratory role throughout the grouping’s history — has always been subordinated to the national security agenda. From the very beginning, economic development was perceived as a vehicle to ward off communist and ethnic rebellions. Even more importantly, it served as the foundation for ‘national resilience’ (ketahanan nasional), an Indonesian concept later also transferred to ASEAN in the form 051 AR Ch 51 22/9/03, 12:50 PM 243 244 Jürgen Rüland By: ROS Size: 7.5" x 10.25" J/No: 03-14474 Fonts: New Baskerville of ‘regional resilience’. Defined as ‘the ability of a nation to cope with, endure and survive any kind of challenges or threats she meets in the course of her struggle to achieve her national goals’,4 ‘national resilience’ breathes genuine realist spirit. True, ‘national resilience’ also includes an institutionalist dimension because it stresses peaceful international relations and the principle of pacific settlement of disputes as necessary conditions for economic development . Yet, peace is not an end in itself, rather a means to buy time for modernization . In such a context economic strength becomes a crucial power resource in the hands of the nation-state. According to this belief, only an economically successful nation will be able to pursue a free and active foreign policy (bebas dan aktif).5 Behind such reasoning stands a thinly veiled desire for national greatness which can only be saturated through a regional or — even better — global leadership role.6 Viewed against this theoretical background it is hardly surprising that initial reactions of ASEAN to the unfolding financial drama were very much conditioned by the grouping’s earlier handling of economic affairs. Accordingly, in a first stage of responses, the emerging symptoms of crisis were regarded as purely national problems. The Thai government, for instance, battled in vain against several attacks on the baht. An ASEAN intervention mechanism on which to rely under such circumstances — such as the European Monetary System (EMS) — did not and could not exist due to the limited size and diversity of ASEAN economies. When in May 1997, several Asian central banks intervened in support of the baht against another speculative attack,7 this was neither an ASEAN initiative, nor a fullfledged act of cooperation, as these central banks did not operate with their own funds, but rather with those provided by the Bank of Thailand.8 How much a coordinated effort to deal with the worsening current account deficits and the skyrocketing private sector debts was lacking, is perhaps best illustrated by the fact that until March 1997 not even an ASEAN finance ministers meeting had been established. Even worse, when the finance ministers finally met for the first time in Phuket, in typical ASEAN fashion, they sidestepped the painful issues. If the joint communique is a reliable guide, it seemed that, if at all, only a minor...