ASEAN Economies: The Tasks Ahead

Abstract

The Association of Southeast Asian Nations (ASEAN) comprises six free enterprise economies, namely, Brunei, Indonesia, Malaysia, Philippines, Singapore, and Thailand. The ASEAN economies com bined are considered to be quite large by world standards. In 1983 the total popula tion of the ASEAN states was about 270 million, and the combined gross national product was just above US$200 billion. All of the countries have come a long way from being agriculture and primary product pro ducing economies to much broader based economies with rapidly growing manufac turing sectors and modernized trading and financial sectors. The economic achievement of the ASEAN countries over the last three decades has been due to the conscientious policy of opening up the countries to for eign trade and investment, and to strong commitment to economic growth and development. The results have been high real GNP growth averaging 5 per cent to 10 per cent, rising per capita income, improv ing productivity in agriculture and industry, rapid modernization in infrastructure, and growing urbanization. In fact, the pace of economic change has been so rapid that even a close watcher of ASEAN develop ment has found it very difficult to keep up with all the changes. The development of the ASEAN econ omies has not of course been without problems. Because of their close link to the world economy, the ASEAN economies have been subject to the world economic depression of the mid-1970s and the early 1980s. The recent recession has hit ASEAN economies very hard. The GNP growth rates have all slowed down. For some econ omies, the experiences with financial instability have been very difficult. While most ASEAN economies managed to recover from the recession in 1983 and 1984, it has become clear that the experiences of rapid growth with relative stability as in the recent past cannot be expected in the remaining years of the 1980s. In addition, there are still many other problems which require the attention of all parties con cerned. Highest on the list of the largest ASEAN countries are the problems of unemployment and poverty followed by the problems of security in food and energy in some countries. Thus the tasks which lie ahead for the ASEAN economies are how to manage the economies such that reasonable growth is attained while the problems of instability are minimized, and to continue to improve the equity situations at the same time. To do so ASEAN will rely on its strength in terms of natural resources and economic dynamism.