WASHINGTON, May 24 (IPS) - This year the Association of Southeast Asian Nations celebrates its 40th birthday, and it has big plans. After four decades of being largely a political and security alliance, ASEAN is accelerating its plans for economic integration.

ASEAN leaders are so eager to pull together into an economic community that they recently decided to move the goalposts. The economic benchmarks originally planned for 2020 have been moved up to 2015.

"The mission of this economic community is to develop a single market that is competitive, equitably developed, and well integrated in the global economy," says Worapot Manupipatpong, principal economist and director of the office of the Secretary-General in the ASEAN Secretariat. He was speaking last week at an Asian Voices seminar in Washington, DC, sponsored by the Sasakawa Peace Foundation.

The single market of 2015 would encompass all ten members of ASEAN: Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar (Burma), Philippines, Singapore, Thailand, and Vietnam. According to the projections of the ASEAN Secretariat, the single market will be accomplished by removing all barriers to the free flow of goods, services, capital, and skilled labor. Rules and regulations will be simplified and harmonised. Member countries will benefit from improved economies of scale. Common investment projects, such as a highway network and the Singapore--Kunming rail link, will facilitate greater trade.

Although there will not be a single currency like the European Union's euro, the ASEAN countries will nevertheless aim for greater currency cooperation.

"ASEAN's process of economic integration was market-driven," says Soedradjad Djiwandono former governor of Bank Indonesia, and it was influenced by the "Washington consensus" favoring increased liberalisation. "It is a very different framework from the closed regionalism of the Latin American model," he continues. With multilateral talks on trade liberalisation stalled, efforts have largely shifted to bilateral negotiations. "There has been a proliferation of bilateral agreements that developed countries use as a way to push a program for liberalising different sectors," Djiwandono concludes.

So far, ASEAN points to increased trade within the ten-member community as an early sign of success. But, overall trade share -- 25 percent -- pales in comparison to the 46 percent share of the North American Free Trade Agreement countries or the 68 percent share of EU countries. And with intra-ASEAN foreign direct investment rather low -- only 6 percent in 2005 -- financial integration lags behind trade integration.

The ASEAN approach differs in several key respects from the EU model, which originated in a 1951 coal and steel agreement among six European nations. ASEAN's origins, in contrast, have been primarily political and security-oriented, observes Donald Emmerson, director of the South-east Asia Forum at the Shorenstein Asia-Pacific Research Center at Stanford. "The success attributed to ASEAN is that it presided over an inter-state peace ever since it was formed. There's never been a war fought between ASEAN members."

Also distinguishing ASEAN from EU is the latter's institutionalisation. "ASEAN is radically different," Emmerson continues. "The much discussed ASEAN way is consultation, not even voting, since if they vote, someone will lose. Sometimes the consultation goes on without result. Sometimes decisions are reduced to the lowest common denominator. It also means that rhetoric predominates." This consultative process will be tested in November, when ASEAN leaders gather to adopt a charter, something that the EU has so far failed to accomplish.

Another difference with Europe is the enormous economic disparities among the ASEAN members, with Singapore and Brunei among the richest countries in the world and Laos among the poorest. These economic disparities are reproduced within the countries as well.

Worapot Manupipatpong points to two ASEAN initiatives for closing the gap. There is help for small and medium-sized enterprises. And the Initiative for ASEAN Integration,"basically provides technical assistance to Cambodia, Laos, and Myanmar so that they can catch up with the rest of the ASEAN members," he says. "Attention will be paid to where these countries can participate in the regional networks, what comparative advantage they have, and how to enhance their capacities to participate in the regional development and supply chain."

Then there are ASEAN's efforts to address "public bads," according to Soedradjad Djiwandono. "When there is a tsunami or a pandemic," he argues, "the worst victims are the marginalised or the poor. Addressing that kind of issue has some positive impact on reducing inequality."

"The gap between the early joiners and the later joiners will continue to be substantial because ASEAN has always been more of a forum and less of a problem-solving organisation," observes Karl Jackson, director of the Asian Studies Program at the School for Advanced International Studies at Johns Hopkins University. "As a result one would expect that these gaps would be closed only as individual countries increase their rates of growth." He attributes the inequality within countries to the middle stage of growth experienced by almost all societies: "Inequality increases before the state becomes strong enough to redivide some of the pie and take care of the gross inequalities caused by rapid economic growth."

ASEAN is banking on financial and trade liberalisation increasing the overall regional pie. On paper it is an ambitious project. But "the low hanging fruit have been plucked," says Donald Emmerson. Tariffs on the "easy commodities" have already been reduced to less than 5 percent. But non-tariff barriers to trade remain, and member countries are very protective of certain sectors.

Also tempering the region's optimism is the memory of the Asian financial crisis. The crisis began in Thailand in 1997 and spread rapidly to other countries in the region. One school of thinking holds that capital mobility -- "hot money" -- either caused or considerably aggravated the crisis. Since the ASEAN integration promises greater capital mobility, will the region be at greater risk of another such crisis?

"One consequence of the economic dynamism of the Asia-Pacific region," notes Donald Emmerson, "is that the accumulation of vast foreign exchange reserves -- obviously in China, but in other countries too -- more than anything else represents an asset that can be brought into the equation as a stabilising factor in the event of a financial crisis." Also, he continues, as a result of the ASEAN plus Three network, which adds China, South Korea, and Japan to the mix, the 13 countries have "made serious headway toward establishing currency swap arrangements that would come into play in an emergency on the scale of an Asian financial crisis."

Karl Jackson also looks to currency reforms as a hedge against future crisis. The Thai baht and the Indonesian rupiah are now unpegged currencies. "You will not have a situation in which the central bank of Thailand loses 34 billion US dollars defending the baht," Jackson argues. "Instead, the baht will appreciate or depreciate according to market forces."

But Jackson still remains cautious about the future. He points to the large number of non-performing loans in the Chinese banking sector. Also, there is "this anomaly of the U.S. absorbing two-thirds of the savings coming out of Asia, plugging it mostly into consumption rather than direct investment," he observes. "Eventually there has to be some kind of readjustment. The real value of the dollar must fall." (END/2007)

Reprinted by permission from IPS Asia-Pacific.

In April, a delegation from the Shorenstein Asia-Pacific Research Center (Shorenstein APARC) traveled to China. The visit was part of Shorenstein APARC's broader effort to introduce the work of the center to Asia by connecting with scholars, policymakers, business leaders, and journalists across the region.

The delegation, which included center director Gi-Wook Shin, Michael H. Armacost, Jean C. Oi, Daniel C. Sneider, and Neeley Main, visited three cities, Shanghai, Hangzhou, and Beijing. The group participated in roundtable discussions on foreign policy issues facing U.S. and China with the Shanghai Institute for International Studies and with scholars at Zhejiang University in Hangzhou; visited a steel plant; and met with executives and leaders from Baosteel Group Corporation, PetroChina, Cybernaut, and the People's Bank of China; journalists from Chinese media outlets; and development and research foundations of the Chinese government.

FSI Director Coit D. Blacker joined the group for several meetings in Beijing, including a roundtable discussion of pressing international policy issues with the Central Party School's foreign affairs research group, the China Reform Forum; meetings with both the School for International Studies and the School of Government at Peking University; and meetings with Stanford alumni.

Ten 2007 POSCO NGO Fellows were selected by the Fellowship Admission Committee during the first POSCO NGO Conference held on April 26 and 27, at George Washington University.

George Washington University:

Mr. Sanghoon Lee, Korea Federation for Environmental Movements

Ms. Mi-Kang Yang, Asia Peace and Historical Education

Indiana University:

Ms. Jin Young Park, Korean Women Workers Associations United

Mr. Chang Sun Kim, Ulsan Citizens' Coalition for Economic Justice

Columbia University:

Ms. Hee Sun Park, Civil Solidarity for Open Society

Mr. Sung Bong Kang, The Educational Foundation for Koreans Abroad

University of British Columbia:

Ms. Jungok Chun, Easy Access Movement for People with Disabilities in Korea

Mr. Kangbaek Lee, Beautiful Store

Stanford University:

Ms. Kyungsook Lee, Korean Women's Association United

Mr. Ji-hoon Lee, Jeju Solidarity for Participatory Self-government and Environmental Preservation

On April 27, Dr. Gi-Wook Shin presented a paper entitled "North Korea and Contending South Korean Identities: Analysis of the South Korean Media and Policy Implications for the United States," co-authored with Kristin C. Burke, at the Korea Economic Institute in Washington, D.C. This paper is part of a larger study of American and Korean media coverage of the U.S.-ROK alliance and the DPRK.

This paper argues that while U.S. officials approach the alliance and the DPRK as matters of national security policy, these issues are fundamental to the evolution of South Korean national identity in the post-Cold War, post-authoritarian era. Using data on media frames used by two prominent Korean newspapers from 1992 to 2003, this paper examines how Korean conservatives and progressives have advocated their views of North Korea and how the terms of this debate have changed since the implementation of the Sunshine Policy.

As South Koreans seek to redefine their national identity in the context of a developing regional and global order, there is deep and bitter division within South Korea over North Korea and the alliance. The process of reformulating national identity can be contentious and conflict-ridden and is not likely to be resolved soon. The nature of this political division on the question of identity, explored in this paper, means that even if South Korean conservatives win the upcoming presidential election, there is not likely to be a dramatic change in policies or attitudes. The debate over North Korea is a durable feature of the political landscape in the South, and the U.S. faces distinct policy challenges in coordinating with a government that represents a starkly divided polity.

For the full text of this paper, please visit the link to KEI, KEI Academic Paper Series.

On Thursday, June 7, 2007, Daniel I. Okimoto, director-emeritus and co-founder of the Shorenstein Asia-Pacific Research Center in the Freeman Spogli Institute at Stanford University was awarded The Order of the Rising Sun, Gold Rays with Neck Ribbon. Professor Okimoto was chosen for "his contribution to the promotion of scholarship and academic exchange between Japan and the United States."

According to the Consulate General of Japan in San Francisco, Professor Okimoto was chosen for the following contributions to Japan:

1. Walter H. Shorenstein Asia Pacific Research Center

In 1978, Prof. Okimoto established a multi-disciplinary research center called the Shorenstein Asia-Pacific Research Center (Shorenstein APARC) at Stanford University which focuses on the study of key issues in public policy involving the United States and Asia. Prof. Okimoto served as the Director of APARC for 12 years from 1985 to 1997 during which time he held many conferences and seminars on the political economy of both Japan and the United States. Through those activities, Shorenstein APARC contributed to deepening the mutual understanding for people in the field of politics and economics of both countries.

2. Japan-U.S. Legislative Leaders Meeting and Asia Pacific Roundtable

Prof. Okimoto approached some U.S. Congressmen and organized a Japan-U.S. Legislative Leaders Meeting. For 14 years from 1984 to 1998, this annual meeting helped to promote exchanges between political leaders in Japan and the United States and advance mutual understanding between the two countries. In 1999, the Japan-U.S. Legislative Leaders Meeting became the Asia Pacific Roundtable and included leaders from the entire Asian region as well as from Japan and the United Sates. The Asia Pacific Roundtable has been instrumental in enhancing exchange among the political leaders of Japan, the United States and other Asian countries.

3. Asia Pacific Scholarship Program

Prof. Okimoto established the Asia Pacific Scholarship Program at Stanford University in 1997. Stanford University selected the best and brightest college graduates from Asian countries as well as from Japan and gave them an opportunity to study in graduate programs at Stanford University on scholarship. Highly promising young Japanese scholars were also selected and had an opportunity to study at Stanford University through this scholarship program.