ASEAN in the Aftermath: The Consequences of the East Asian Economic Crisis

Abstract

Beginning in May 1997, East Asia was caught in grip of a progressively worsening financial and economic crisis. The crisis involved collapse of many of region's currencies, accompanied by economic upheaval and political instability, particularly in Indonesia. After more than two years, crisis came to an end. The affected Asian states (with exception of Indonesia, which is still wracked by political upheaval and instability) appear to be on road to recovery. (1) Nonetheless, crisis will have long-term effects. This discussion focuses on Southeast Asia and analyzes effect of crisis on institutional development of Association of Southeast Asian Nations (ASEAN). As an organization, has been at forefront of Asia Pacific regional politics for much of past thirty years. has attracted a great deal of attention as an organization that aspires to be an instrument of regional governance and political management. (2) In post-Cold War period, has been active in advancing its organizational interests in Asia Pacific region. However, ASEAN's apparent impotence during recent regional economic upheaval has raised serious questions about its continued utility.3 In this article, I argue that economic crisis undermined in three interconnected ways. First, it shattered confidence that allowed to pursue leading roles in Asia Pacific's institutional and political development. Second, it revealed weakness of ASEAN's ambition to redefine itself as an economic organization. Third, crisis demonstrated limits of ASEAN's established method of interaction, the way. Nonetheless, despite its detrimental effects, crisis may have created new possibilities for as a regional economic actor. I divide this article into four sections. In first section, I critically evaluate ASEAN's historical development. Next, I describe East Asian economic crisis. In third section, I look at harmful effects of crisis on ASEAN. Finally, I examine new possibilities for that crisis may have created. The crisis exposed limitations that were already present in and that are a necessary part of its institutional survival. Within those limits, however, may have found new ways to evolve. A Historical Evaluation of was created in 1967, (4) in aftermath of Konfrontasi between Indonesia and Malaysia (and, by extension, Singapore). Indonesia, under President Sukarno, challenged legitimacy of Malaysia. Konfrontasi ended when Suharto overthrew Sukarno, but it taught involved states important lessons about their mutual vulnerability and need for a politically stable regional environment. was created, in part, to construct intraregional economic and social ties between its members and to foster a sense of regionalism. In response to Konfrontasi, a fundamental part of ASEAN's mandate was alleviating tensions between its members. Relations between states were too fragile for these intramural tensions to be explicitly addressed; instead, expressed this purpose through its commitment to principle of nonintervention in any state's internal affairs. (5) The states were also united by their common opposition to regional communism, although again political considerations made i t impossible to state this openly. In principle, was opposed to regional interference from any external power. In practice, however, all states (except Indonesia) depended on external alliances with Western powers to help ensure their security. (6) A defining characteristic of is ASEAN way, process of interaction through which reaches organizational decisions. The way encourages decisionmaking through consultation and consensus building. …