A.S.E.A.N. links with East and West

Press, 24 October 1978, Page 16

A.S.E.A.N. links with East and West

By

G. N. FORSYTH

in Bangkok

The five-nation Association of South-East Asian States has become used over the years to finding itself the subject of severe criticisms from Moscow and its allies. But things are changing. Not only has the association been wooed over recent months by Soviet-oriented Vietnam, but there are signs that the Russians, themselves, are keen to open a dialogue with it. Previously, Moscow has refused to regard A.S.E.A.N. as an entity. Soon, however, the Deputy Foreign Minister in charge of Asian affairs, Mr Nikolay Firyubin, will visit three of its member countries, Thailand, Indonesia, and the Philippines, and diplomatic sources in Bangkok suggest that the Soviet Union now wishes to discuss the association’s proposal for a zone of peace.

In addition, the Vietnamese Premier (Pham Van Dong) has been touring Thailand, Indonesia, the Philippines, and Malaysia recently recently, although the association’s fifth member, Singapore, evidently refused to receive him. The initiative for the tour came from the Vietnamese side, in what observers here regard as an effort to preempt the forthcoming visit to the A.S.E.A.N. area, including Thailand and probably Malaysia, by the Chinese Deputy Premier (Ten Hsiao-ping) in November. During a visit to Malaysia in late July, the Vietnamese Vice-Foreign Minister (Phan Hien) hinted that his country might even be willing to join A.S.E.A.N. in the future in some capacity. But in spite of all this activity, A.S.E.A.N.’s members remain wary of the Soviet

Union's motives. They fear that Vietnam may be., trying to undermine the association’s stability, nad to take advantage of the grouping’s economic prosperity. C.0.M.E.C.0.N., which Vietnam joined in July, is known to be unwilling and perhaps even unable to bear the full strain of subsidising the newcomer’s under-devel-oped agricultural economy. Meanwhile, A.S.E.A.N. is concentrating on the consolidation of its own economic strength and political cohesion, and on developing its links with the nonCommunist world. Founded in 1967 to promote economic, social, scientific, and technical co-operation, the association has displayed a new dynamism since the fall of Cambodia and South Vietnam to the Communists in 1975. With a combined population of about 250 million, the association represents an enormous market. It straddles the main shipping

routes between the Middle Eastern oil producers and the United States and Japan. It possesses huge natural resources, including rubber, tin, timber, palm oil and, in the case of Indonesia, oil and gas. Singapore’s economy is relatively industrialised, while the other members are basically primary producers. At a meeting attended by A.S.E.A.N. leaders in Washington in August, which included talks with President Carter, the United States undertook to expand trade, with all the member countries, and to recognise A.S.E.A.N. as a potential growth area. In particular, it was agreed that the large-scale private American investment in the region would be encouraged, and that A.S.E.A.N.’s own industrial projects should be supported by the United States ImportExport Bank. (the first ever at this level) between A.S.E.A.N. and the

E.E.C. will take place on November 20, at which the A.S.E.A.N. participants will aim to attract additional technological assistance and investment, in return for minerals and other raw materials. At the beginning of this year, A.S.E.A.N. and the E.E.C. agreed to undertake a major comprehensive study of the possibilities for further liberalising trade and promoting economic ties between the two areas. Other countries with which closer economic relations are being explored include Australia, New Zealand, India, and Canada. By contrast, A.S.E.A.N. is becoming disturbed about its growing trade deficit with Japan, with which the association conducts over a quarter of its total foreign trade. However, Japan has offered to consider some extra tariff reductions; and just over a year ago it pledged not only substantial sums in bilateral assistance, but a’so SUSIOOOM worth of

aid for A.S.E.A.N.’s own five complementary industrial projects: urea fertiliser projects in Indonesia and Malaysia; a diesel engine project in Singapore; a phosphate fertiliser plant in the Philippines; and a soda ash plant in Thailand. In each case, the host country is to own 60 per cent of the project, the remaining equity being shared among the other four members. Feasibility studies for the Thai and Indonesian enterprises have been completed. Each project’s output is to be guaranteed a preferential market throughout A.S.E.A.N. The member countries are also inaugurating the second stage of their preferential arrangements for mutual trade this month, extending their coverage to over 800 items. Goods must have a foreign content of less than 50 per cent, or 40 per cent in the case of Indonesia, to qualify. — World Feature Series, copyright.