In 1998 Asia's financial and economic crisis impacted on Southeast Asia at a time when ASEAN member states were facing new challenges to regional unity. The economic crisis also tested the political stability of states that had relied on high levels of economic growth to shore up their legitimacy. This overview analyses the region's response to the challenges posed by ASEAN's enlargement, the stresses on regime legitimacy arising from the Asian financial crisis, and other challenges to regional security.

Regional Unity

In 1998, Myanmar and Cambodia posed challenges to ASEAN's longstanding policy of non-intervention in the internal affairs of member states. As early as June 1997, for example, Jusuf Wanandi, a member of Indonesia's Center for Strategic and International Studies, argued that ASEAN should make an exception to its non-interference principle in the case of Myanmar “but” he wrote, “it should be done quietly, in the right way, the ASEAN way”. A month later, no less than the then Deputy Prime Minister of Malaysia, Anwar Ibrahim, called for ASEAN to adopt a policy of “constructive intervention” towards Cambodia.

These proposals lay dormant until 1998 when they were revived and given a new spin by the Thai Foreign Minister, Surin Pitsuwan. In June, Surin argued that ASEAN's principle of non-interference should be replaced by “constructive intervention” in those cases where “a domestic concern poses a threat to regional security”. Surin's views reflected the frustration of the Thai national security bureaucracy over the failure of its policy of constructive engagement towards Myanmar to achieve any positive results.

As other ASEAN members objected, Surin modified his proposal. He replaced the expression “constructive intervention” with the phrase “flexible engagement”. This new formulation was spelled out in a short “non-paper” that was circulated at the July ASEAN Ministerial Meeting in Manila. Surin argued that if ASEAN failed to address the Asian economic crisis and the challenges of globalization and interdependence, its credibility and capacity to promote and protect its interests would erode.