Southeast Asia's Growing Trade Relations with Socialist Economies

Abstract

THE LAST TWO DECADES have witnessed a phenomenal growth of economic ties between countries-i.e., COMECON countries and China-and the less developed countries. Such a rapid growth of economic relationships gained the attention of the UNCTAD IV (UN Conference on Trade and Development), which actually placed on the agenda for its May 1976 Nairobi meeting actions and programs that would foster a continued expansion of trade on a multilateral basis between countries with different economic and social systems. In 1953, trade between socialist countries and the less developed countries was only 4.8% of the socialist countries' total trade. Twenty years later, the proportion had increased to 15%. Likewise, the developing world's trade turnover with socialist groups had increased from 1.8% in 1953 to 4.7% in 1972. Southeast Asia has been very much a part of this overall trend. In 1964, the five Southeast Asian countries which today form the Association of Southeast Asian Nations (ASEAN) had no direct trade links with the Soviet Union and other Eastern European countries; and of these five ASEAN nations, only Malaysia/Singapore and Indonesia maintained somewhat tenuous and precarious trade relations with China with a relatively small trade turnover of US $210 million. Ten years later, in 1974, ASEAN's total trade with the socialist countries as a whole had jumped to $1,500 million, or 3.3%0 of ASEAN's total world trade. Furthermore, taking advantage of international detente, trade between ASEAN and socialist countries has now been firmly established, with the ASEAN nations having removed the institutional barriers that in the past had stood in the way of direct commercial contact with socialist countries. Admittedly the relative share of the region's trade with socialist countries is still small; but the growth over the years has been impressive and favorable preconditions for continued growth in the future are clearly present. What is the nature of this