This work is concerned with two main issues: emerging trends in industrial relations systems in the member countries of the Association of Southeast Asian Nations (ASEAN), and inter-country variations in the systems of industrial relations of these countries. The purpose of addressing these issues is to work out a basis for reflecting on prospects for co-operation among the member countries of ASEAN in the field of industrial relations.

ASEAN is an association of five Southeast Asian countries, namely. Indonesia, Malaysia, the Philippines, Singapore, and Thailand. It has experienced a healthy development in its less than two decades of existence. The member nations have defined and redefined the scope of their common interest over the years. They have identified various areas for co-operation, and have actively promoted the idea of regionalism. The area of labour and industrial relations has also come under the purview of ASEAN in the last few years.

A regional approach to labour and industrial relations has become an important theme to the governments, labour and employers in the ASEAN countries. This approach has the undertone of being different in mode and method from that prevalent in the more developed countries. The ASEAN Labour Ministers Meetings, the ASEAN Council of Trade Unions (ACTU), and the ASEAN Confederation of Employers (ACE) are the formal organizations through which this concern is being expressed, and plans of action for co-operation and co-ordination in the field of labour and industrial relations are being proposed. The idea of seeking common ground for co-operation in this area is a welcome one. But we should note with some frustration that not much concrete progress has been made in this respect yet.

Since co-operation or integration or convergence is facilitated by similarities and prohibited by dissimilarities in national industrial relations systems of member countries, the extent of their diversities and their enduring nature will ultimately determine the scope for co-operation. It becomes, therefore, necessary to examine, firstly, the emerging trends in or patterns of evolution of the industrial relations systems of the member countries, and then to look at the enduring nature of the variations among them.

National industrial relations systems are the products of interactions between actors and environments.

INTRODUCTION

Regional economic co-operation among the less developed countries (LDCs) has been receiving increasing attention as a means of achieving “collective self-reliance” in the context of South-South co-operation for promoting a “New International Economic Order”. In line with this is the recently mooted idea for the promotion of an integration scheme in South Asia, where almost a fifth of the world's population lives with a per capita GDP (gross domestic product) of only about US$150 – which is perhaps among the lowest in the world. In the same vein, one can also examine the possibilities and prospects for greater trade and investment co-operation between South Asia and the relatively richer and faster growing neighbouring countries of the Association of Southeast Asian Nations (ASEAN). This study is directed, to a limited extent, towards that end and with particular reference to Bangladesh. Specifically, an effort is made here to assess the current state of trade and tariff co-operation between South Asia and ASEAN in so far as it relates to the position of Bangladesh. This exercise, along with the knowledge on the current investment co-operation (see the paper by Siddiqi in this volume) will hopefully help to identify and formulate selected schemes for strengthening economic relations among the above-mentioned countries.

This study consists of four main sections. In Section II, projections relating to some major components of Bangladesh's balance of payments up to 1990 are presented. An attempt is made next in Section III to analyse the existing trade relations between the two regions with special reference to Bangladesh, providing in particular, a number of measures on trade intensities. Finally, such collaborative measures in the region as the Bangkok Agreement and the Asian Clearing Union are discussed in Section IV. Some observations are also made here on tourism in Bangladesh and on the country's national airlines and shipping facilities.

Banks have always engaged in international business. They have dealt in foreign exchange, extended credit in connection with foreign trade, traded and held foreign assets, and provided travellers with letters of credit. All this and some other types of business the banks historically have carried out from their domestic locations. There was no need for a physical presence abroad. Business that could not be carried out by mail or telecommunications was handled by correspondent banks abroad.

Some banks began to establish a physical presence abroad in the late 19th and early 20th century. This move abroad mostly was part of colonialism. Under the umbrella of the home country's colonial government, banks from Britain opened branches in the Indian subcontinent, Africa, Hong Kong, and Singapore; European and North American banks moved into the Caribbean and Latin America. These banks provided modern banking services to economies which previously had no or only a relatively rudimentary financial industry.

Multinational, also sometimes called transnational, banking is of relatively recent origin. Its development coincided and accelerated with the technological improvements and cost-reductions in international travel and communications in the post-war period. This type of banking involves the physical presence of a bank abroad.

The most prevalent and versatile legal form of this presence is a branch, which uses the home-country bank's name and organization. It is usually an independent corporate entity with limited liabilities, whose shares are owned by the parent. Other legal forms used in foreign physical presence are agencies and representative offices, which have limited legal operational authority but also limited liabilities. Subsidiaries are used if ownership is shared with other firms or individuals, mostly residents of the country hosting the foreign bank. These subsidiaries are mostly corporations with limited liability. In addition, of course, banks have maintained networks of correspondent banks for doing business in locations where they have no physical presence.

The theory of multinational banking explains why these banks find it profitable to have a physical presence abroad.

Since this manuscript was completed around the middle of 1983, there have been several developments which have increased the urgency for enhancing economic relations between the countries of ASEAN and South Asia.

It has become increasingly clear that the industrial countries in general, and the United States and Japan in particular, will continue with their mercantilists and self-centred economic policies for some time to come. Therefore, neither ASEAN, in terms of access to markets and technology transfer, nor South Asia, in terms of access to markets and to concessional development finance, can expect much satisfaction from the industrial countries. This development, in conjunction with the continuing balance of trade, payments, and budget deficits in many of the ASEAN and the South Asian countries, has increased the urgency for these countries to expand their economic relations. Such relations can take the form of not only conventional trade but also barter trade, investment, technology transfer, and technical co-operation. Slower growth rates expected in the ASEAN region in the next decade, and the desire to expand agriculture and small-scale industry in several ASEAN countries, such as Indonesia, the Philippines, and to some extent Malaysia, provide new opportunities for technical co-operation with some of the South Asian countries, such as Pakistan and India. The Malaysian Prime Minister Datuk Sri Mahathir Mohamad's visit to Pakistan in March 1984, and the recent signing of the trade agreement between India and Thailand may be regarded as recognizing the need to expand economic relations. Malaysia has also increased its contacts with Bangladesh as a part of its effort to strengthen trade and investment links with the Islamic countries.

Since the completion of the manuscript, contacts among the South Asian Regional Co-operation (SARC) grouping have become more intensified, with the first summit of the heads of member countries scheduled to be held towards the end of 1985. The SARC countries appear to have realized that co-operative rather than conflictive relations among themselves are a precondition for improving their economic performance.

The complex interplay between workers and their organizations, employers and their representatives or associations, and government agencies concerned with relationships between the two has become a subject of great concern and of inquiry over the last several decades. Scholars have researched into and elaborated on various themes of this important subject. However, the facts have remained scattered and a series of empirical findings disjointed in the absence of a cohesive conceptual framework. The realization of this state of the art has led some scholars to attempt to develop some conceptual frameworks for the analysis of the phenomena of industrial relations.

A conceptual framework is necessary in order to develop a systematic body of knowledge in a field. It provides tools of analysis which help to select relevant information from “mountains of facts” and to analysis them in a meaningful way. But a researcher's values and convictions play a major role in his or her search for relevant information, or selection of variables for analysis, and thereby the development of a conceptual framework. Naturally, such has been the case with the conceptual frameworks developed by researchers of the “Western culture” realm to analysis and to understand industrial relations systems of the Western, more developed countries.

However, these frameworks have serious limitations in so far as their applicability to the analysiss and characterization of industrial relations systems evolving in many non-Western industrializing countries is concerned. This means that there is a need to reformulate or to reconstruct the prevalent views on the matter. To do so in a modest way for the purpose of analysing the evolution of industrial relations systems of the ASEAN countries is the objective of this chapter.

The chapter is organized into two parts. The first part presents a brief review of the literature on the evolution of patterns of labour movement and industrial relations. The second part reconstructs the history of thought on the matter in the light of the structural transformation taking place in the industrializing countries. From this exercise will follow a set of propositions, or hypotheses.

Some international banks have branches abroad that compete with the local banks for the traditional retail banking business. Thus, we can find the large British banks in South Africa and Kenya; Canadian banks are in the Caribbean; banks from England and Japan are in California; U.S. and French banks are in some Latin American and Caribbean countries.

These banks often introduced modern banking to these countries at an early stage of economic development. Since the end of World War II and the growth of economic nationalism, these banks have been on the retreat. In some cases they were forced to close down by legislative actions. In others more subtle tax measures were used to encourage the development of a competitive, domestically owned and operated banking industry, which reduced or ultimately drove out these foreign banks.

All this history has a simple analytical explanation. At an early stage of economic development local entrepreneurs did not have the technical know-how or human capital to establish and operate modern banks. The banks in the developed countries brought this know-how and human capital from their home operations, using well established and proven managerial, marketing, accounting and other procedures. However, these sources of comparative advantage eventually became accessible to domestic entrepreneurs in the developing countries, either through education abroad, the imitation of foreign banks or purchase from consultants. At such a point, the innate advantages accruing to local entrepreneurs became dominant, and it was natural that they should eventually come to dominate the industry. In the case of some British banks, their continued operations in countries like South Africa and Kenya are British only in name. They have almost complete local autonomy and are run dominantly by local people with very limited perspectives on the global maximization of the parents' profits.

The growth of foreign retail banking in California in recent years has a slightly different explanation. Its origin stems from the ability of banks to offer differentiated packages of services appealing to specialized segments of consumers. Thus, Japanese banks in California appeal to Americans with Japanese backgrounds and others with similar tastes.

The beneficial welfare effects of multinational banking have been as follows. First, the retail and service banking activities have permitted the spreading of the fixed costs of investment in managerial control, marketing, and other know-how over a broader base. It has lowered the average cost of these investments to consumers in the home country. It has also resulted in overall lower costs of banking to consumers in the host country. Therefore the productivity of investment has been raised in the world as a whole.

In many countries domestic banking is oligopolistic and competes mostly through non-price mechanisms, such as product differentiation and tied-in sales. Through this mechanism oligopolistic rents are dissipated in real resource expenditures and even though bank profits are not excessively high, consumers face a larger spread between lending and borrowing rates than they would under greater competition. Multinational retail and service banks entering a country typically are not members of the domestic cartel and therefore can compete on price. In doing so they bring pressures on the domestic banks to do the same and the result is a more efficient system for the benefit of consumers.

Second, the global network of multinational banks and centres has integrated the world's capital markets, assuring that savings generated anywhere in the world are more likely to be used most productively in another part of the world. In addition, by causing narrower spreads, they have encouraged some lenders who would otherwise have kept their funds idle to make them available for loans. At the same time, the lower borrowing rates have encouraged some borrowers from entering the capital market who would not have done so otherwise.

Third, the benefits from diversification on the stability of bank earnings have raised the welfare of wealth-holders.

Fourth, the growth of multinational banking has forced governments to re-examine the merit of banking regulation and taxation. As a result, the regulatory and taxation system of a number of countries has been made more efficient and made consistent with the mandates of modern technology.

The largest proportion of all foreign bank presences is not for participation in the local retail or the international service markets. Foreign banks exist for two main reasons: the evasion of domestic taxes and regulations, and the participation in global money and capital markets. It is a striking characteristic of banks in this type of business that they are often found in the upper floors of office buildings and have only very small areas for servicing customers through tellers and other typical retail banking facilities.

During the 1960s there developed so-called paper banking centres. These are typically located on small islands with sovereign governments, such as Bermuda and the Cayman Islands. Favourable legislation encouraged foreign banks to open “brass plate” offices, which establish nothing but a legal presence there. A foreign bank would buy a licence for as little as $20,000 a year, hire a lawyer, and rent a postal box. Local lawyers represent many banks in this fashion and signify their commitment by attaching brass plates with the banks' names outside their offices. From this practice stems the name of the undertakings.

Banks keep separate books on their paper centre operations in their domestic offices. One advantage of doing this has been that the business escapes certain domestic regulations and taxes. It also assures depositors and lenders anonymity from domestic legal and taxation authorities, which the banks cannot offer otherwise. The growth of this business has been curtailed sharply by legislation in the major industrial countries, especially the United States, which deliberately was aimed at closing these tax-havens for ordinary business and the refuge possibilities for criminal dealings. Of course, it is not possible to legislate away all such activities, but the relative importance of paper centres has declined since the early 1970s.

Euro and Asian Currency Markets

The main business of multinational banks now consists of participation in global money and capital markets functioning in all of the traditional major industrial cities of the world such as New York, London, Paris, Frankfurt, Zurich, Milan, Tokyo, and Montreal.

INTRODUCTION

Trade contacts between the South Asian sub-continent and the Philippines date back to the pre-Christian era. The late Dr Otley Beyer, an eminent anthropologist and historian, believed that traders from South Asia reached the Philippines as far back as the second or third century BC. The other view is that more lasting Indie influences in Philippine thought, literature and languages came with traders and religious missionaries through intervening cultures around the tenth or eleventh century. These cultural and linguistic influences have remained largely intact beneath the overlays of later Islamic, Christian, and Hispanic influences.

During the Spanish regime (1521-1898), direct trade and cultural links between the Philippines and the rest of Asia were practically cut off except for interaction through the southern islands. However, the British East India Company, operating from its base in Madras, India, together with the English free merchants gradually developed and maintained maritime trade known as “country trade” with countries in the Indian Ocean and the South China Sea. The British merchant ships sailing regularly from Madras and Surat brought cargoes of Indian textiles – “piece goods” – and other products to Manila for onward shipment to Acapulco. “The Manila trade” became an important factor in the British maritime trade in Asia and it also strengthened the British position in Manila vis-a-vis the Chinese traders.

During the American regime that supplanted the Spanish rule, the bilateral free trade between the Philippines and the United States gradually diverted the Philippine foreign trade to the American market. However, trade with India continued to develop even though it remained insignificant in volume.

Between 1905 and 1939, the principal commodities imported from India in order of value included piece goods, gunny bags, cotton twist and yarn, fodder, bran, cattle feed, and husked rice. The exports to India were raw hemp, tobacco, and cordage. The volume of trade remained rather low and the balance of trade was uniformly in favour of India.

INTRODUCTION

This paper assesses the level, structure, and prospects concerning economic relations between Singapore and South Asia. While the main emphasis is on trade and investment relations, other economic relations, such as flow of tourists, presence of financial institutions, labour flows, and so forth, are also briefly discussed. For the purpose of this study, South Asia consists of Bangladesh, Bhutan, India, Nepal, Pakistan, and Sri Lanka. Singapore has, however, no economic relations with Bhutan.

The selected economic indicators of Singapore and South Asia (see Table 1) indicate the basic dissimilarities in the economies of Singapore and South Asia. Singapore's per capita GNP (gross national product) is about twenty-one times that of South Asia, while the average annual growth rate of its per capita GNP for the period 1960-81 is slightly more than two and a half times that of Pakistan, the country with the highest growth rate in South Asia. The low level of participation by South Asia in the international merchandise trade is also evident from the data in Table 1. In spite of South Asia's GDP (gross domestic product) being about seventeen times that of Singapore, the percentage of world exports and imports accounted for by Singapore is greater than that of South Asia. The importance of the agricultural sector in the South Asian economies is also evident from the data in Table 1.

In spite of the above dissimilarities, it may be pertinent to examine economic relations between Singapore and South Asia to assess their prospects. As far as Singapore is concerned, South Asia may provide an additional avenue for diversifying its sources of trade, investment, and technology. Moreover, for differing reasons, the South Asian countries, such as Bangladesh, India, and especially Sri Lanka, have adopted much more outward-looking development strategies in recent years. This is likely to increase the level of participation in international economic relations. Singapore may want to avail itself of the trade, investment, and other opportunities which may arise from such increased participation by these South Asian countries.

INTRODUCTION

The ongoing discussions within the Group of 77 and at the United Nations Conference on Trade and Development (UNCTAD) on economic co-operation among the developing countries (ECDC) has created considerable interest in promoting economic relations between South Asia and the Association of Southeast Asian Nations (ASEAN), formed in 1967 and consisting of Indonesia, Malaysia, Philippines, Singapore, and Thailand. More recently, the interest in Sri Lanka-ASEAN economic relations was regenerated by the application of Sri Lanka to join ASEAN. However, Sri Lanka's application was rejected by ASEAN.

The objective of this paper is to assess the benefits of closer economic co-operation between Sri Lanka and the ASEAN countries and to identify possible schemes to further strengthen economic relations between them. In this context, it is necessary to assess – within the context of the historical background, especially since about 1970 – the state of economic relations between Sri Lanka and the ASEAN countries and also the present policy perceptions of the Sri Lanka Government which could have an impact on future economic co-operation among these countries.

The following section attempts to assess the present state of trade between Sri Lanka and the ASEAN countries by examining the trade balance and commodity flows and by calculating export intensity, import intensity, reciprocity and intra-industry trade indices. The third section reviews the state of investments and joint ventures in Sri Lanka which originate from the ASEAN countries, and the reverse flow of investment, if any. The fourth section describes the infrastructural and service links between Sri Lanka and the ASEAN countries. The final section attempts to identify the schemes to strengthen economic relations between the two sides, in the light of the preceding discussion.

Sri Lanka, traditionally dependent primarily on the export of three commodities, namely, tea, rubber, and coconuts, for its foreign exchange earnings, was forced to impose restrictions on imports and on international trade in general in the late 1950s, due to persistent balance of payment crises.