Asian Development Experience Vol. 3: Regional Co-operation in Asia

5 Japan’s Role in ASEAN-10 Under Globalization: A Japanese Perspective

Japan’s Role in ASEAN-10 Under Globalization: A Japanese Perspective 97 5 Japan’s Role in ASEAN-10 Under Globalization: A Japanese Perspective Ryokichi Hirono 97 1. In trodu ction During the last three decades leading up to mid-1990s, ASEAN countries have in general recorded sustained economic growth while undergoing fundamental changes in terms of per capita income, economic structure, foreign trade composition and foreign capital participation. They have also made an enormous progress in the social dimensions of development as expressed in longevity, literacy, school enrolment and poverty reduction. Political reforms have also followed these economic and social achievements, enabling in a varying degree among its member countries to move further to multi-party system, people’s participation in national and community decision-making processes and smooth changes in political leadership. Two extraordinary events have taken place since the mid-1990s. One was the enlargement of the ASEAN-6 consisting of Brunei, Indonesia, Malaysia, Philippines, Singapore and Thailand to the ASEAN-10, bringing into the family Cambodia, Laos PDR, Myanmar and the Socialist Republic of Vietnam. While these newcomers to ASEAN have contributed to the enlargement of the ASEAN market and the strengthening of the ASEAN’s bargaining position vis-à-vis the rest of the world, they have also brought in a series of new problems that ASEAN has had to grapple with. These include among others the need for adjustments in intra-ASEAN trade, tariffs and investment rules, establishing mechanisms for narrowing the gap between the ASEAN-6 and the new ASEAN-4 and reformulating ASEAN’s collective positions vis-à-vis the rest of the world in the light of the new ASEAN-4 having been under the socialist political regime in transition to market-oriented economies. 98 Asian Development Experience, Vol. 3 The other was the painful experience of the Asian Financial Crisis of 1997–98 and the consequent negative economic growth which all of a sudden the ASEAN countries had to go through, with lingering effects still felt today. It has been argued that behind the abrupt changes in the course of economic development of the ASEAN countries since the mid1990s lay the increasing pressures of economic globalization both promoted by the World Trade Organisation (WTO), successor to the General Agreement on Tariffs and Trade (GATT) in 1994 and assisted by International Monetary Fund (IMF) and the World Bank and the inability of these countries to adjust to the relentless challenges of globalization particularly in the financial sectors. This joint study 2002–2003 has followed our preliminary study 2000– 2001 which in the main had analyzed both the major development performance, issues and policies in the original ASEAN-5 countries during the last four decades including the painful experiences of the Asian Financial Crisis of 1997–98 and its aftermath and the role of external assistance and in particular Japanese official development assistance (ODA) in their development process from both Japanese and ASEAN perspectives.1 The new joint study has attempted to review what domestic reforms have so far been effectively introduced in these ASEAN-5 countries as a result of the Asian Financial Crisis and what more to be done to accelerate and consolidate such reforms at home on one hand and, given the new ASEAN-4, to strengthen both intra- and extra-ASEAN regional co-operation framework on the other. Through these domestic reforms the ASEAN-10 countries will hopefully be able during the first decade or two of the 21st century both, to make a smooth economic and social transformation under the increasing pressures of globalization and to accommodate the two highly competitive giant economies of Asia, China and India, which are now partners under WTO’s regime. The study has also sought to identify what could be the role of Japan in promoting its economic relations with the ASEAN-10 countries under the ongoing framework of the WTO and the ASEAN + 3 in the first few decades of the new century in the light of the current trend toward greater regionalism seen in Europe and the Americas that should hopefully be consistent with the WTO regime. 2. Advan ce of Globalization an d its Econ om ic Im plication s to th e Old an d Origin al ASEAN-5 an d th e New ASEAN-4 as Late-com ers In the analysis of the ASEAN-5 development experiences during the last four decades or so, a late-comer hypothesis has been advanced. [3.17.128.129] Project MUSE...