Introduction

The Association of Southeast Asian Nations (ASEAN) was founded in August 1967 in response to the threat of communism in Indochina. Although a stated goal of the Bangkok Declaration and many of the succeeding ASEAN pronouncements was to “accelerate economic growth … through joint endeavours”, and to “promote active collaboration and mutual assistance on matters of common interest in the |field of economics]”, little concrete action was taken to promote economic co-operation. In fact until 1977, regional Economic Ministers failed to meet on a regular basis; ASEAN had rotated around the annual meeting of its Foreign Ministers. Yet, despite the neglect, the ASEAN economies have all prospered.

This paper addresses the question of ASEAN economic co-operation and integration from a politico-economic framework. The primary question asked is: is the ASEAN Free Trade Area (AFTA) the aberration that it appears to be from the slow and reluctant progress of ASEAN economic co-operation over the past twenty-five years? If so, why is this the case? The changing political and economic environments in Southeast Asia are the principal factors positively affecting the attitude of the ASEAN leaders towards co-operation. Although scepticism persists over the will of ASEAN leaders to make due on their promises, evidence suggests that economic co-operation has become less of a political liability.

At the macro level the ASEAN leaders are in a stag hunt situation where all can gain through co-operation; if one party pursues its narrow national interests outside of a regional context, however, the others may lose relatively and absolutely. In the past, the gains from co-operation were perceived to be minimal, thus the ASEAN states were not compelled to co-operate with genuine conviction. But as the gains from co-operation are perceived to increase, the opportunity cost of not participating grows and co-operation becomes more attractive.