THE POSSIBILITY OF REGIONAL ECONOMIC INTEGRATION IN SOUTHEAST ASIA

Abstract

The long-heralded state of Malaysia was inaugurated on September 16, 1963, with the proclamation by Prime Minister Tengku Abdul Rahman of the Federation of Malaya. The inauguration of Malaysia was aimed at organizing' a sub-regional economic confederation in an area embracing the Federation of Malaya, Singapore, North Borneo, and Sarawak. It has long been argued that Malaysia would face many complex problems-political, social, and especially racial. If the new merged state develops steadily and achieves its envisaged economic objectives, then the new experiment could lead to the creation of a stable but small . economic sphere, with as its centre the Malayan peninsula. In a series of negotiations conducted in Tokyo and Manila Lrom June to July 1963 between the Federation of Malaya, the Philippines and Indonesia, the con~ept of Maphilindo I was made public. This development gave rise to hopes that co-operative relations might develop among the three countries with Malaysia as its centre. In connection with the problem of regional economic integration in Southeast Asia, it may be recalled that the idea of establishing an Organization for Asian Economic Co-operation (OAEC) was discussed by Asian countries prior to the 18th General Conference of the Economic Commission for Asia and the Far East (ECAFE) held in Tokyo in March 1962. This idea, which envisaged the establishment of a 100se organization embracing all Asian countries affiliated with the ECAFE, was shelved at the Tokyo congress on the ground that the project was premature. It clearly proved the difficulty of establishing a joint organization embracing all countries in the region. But the concept of the OAEC is not completely forgotten. An