Cambodia: The Dubious Benefits of Joining ASEAN

2002

Dr Ian Wilson

When war-torn and impoverished Cambodia joined ASEAN it was with the expectation that the enlarged grouping might have more leverage in regional trade and aid negotiations. Alas, the economic crisis of 1997 only highlighted the gap between the older members and the poorer newcomers - Cambodia, Laos, Vietnam and Myanmar. There were almost no immediate benefits for them.

Instead, the principle of economic cooperation through solidarity was jettisoned last July in favour of the opportunistic ‘Ten minus X’ principle whereby fortunate members were allowed to liberalise some economic sectors ahead of the rest and thus enhance their competitive advantage in the struggle for direct foreign investment and market share in financial services, transport, telecommunications, air travel and logistics. Since the original six ASEAN members already share some 95 per cent of the grouping’s regional trade, they are now well located to compete with China’s increasing economic power without having to wait for the newer members to catch up with reform measures. The end result will be much wider rather than narrower spread of economic earnings. Malaysia and Singapore will benefit immediately.

The next change in the organisation, also to the disadvantage of the poorer members, is the ‘ASEAN plus Three’ [APT], proposal which would bring in China, Japan and South Korea on a close consultative rather than integrative basis and embrace political and security issues in addition to economic consultations. The APT scheme is strongly backed by the fin de siecle Malaysia seeking to replace Indonesia’s leading regional role. It is in a direct line of succession from other proposals by Dr Mahathir Mohamad, such as the EAEC, which would outflank APEC and exclude the US, the IMF and Australia.

Unfortunately for Cambodia, in none of its configurations has ASEAN shown any signs of promoting genuine redistribution of income in the direction of the poorer states. The World Bank and the Asia Development Bank, along with Japan, Australia and some of the Scandinavian donor states do appreciate the desperate need for funding, if law and order are to take root and if Phnom Penh is to join in and contribute to regional growth and prosperity. Unless this happens, low pay and a low level of respect for anti-corruption drives will infect Laos, Thailand and Vietnam and hamper their efforts towards self-improvement. Already Cambodia is a conduit for drug trafficking, child pornography and exploitation and smuggling on a large scale. Yet in terms of a nascent free press, fairly open electoral procedures, partial demobilisation of a bloated army and the emergence of autonomous non-governmental organisations, Cambodia is doing at least as well, and in some cases spectacularly better than, most of its neighbours. It is important that its leadership not become swamped by the much larger and well-endowed states, most of which have long histories of dominating and exploiting the Khmer. Practical assistance in terms of governance, economic management and education, which does not derive from self-interest, must be given a high priority if Cambodia is to survive, let alone prosper.

WATCHPOINT: Progress towards the rule of, and respect for, the law should be gauged in the ongoing dilatory attempts to bring to justice the perpetrators of the killings during 1975 to 1978. In 2003 new elections are due and may provide pointers as to the success of current reform measures.

 

About our company:

AFG Venture Group is an Asia and Australia based corporate advisory and consulting firm with over 20 years experience in creating alliances, relationships and transactions in Australia, South East Asia and India; including a 15 year history of corporate and equities advisory in Australia, undertaking merger, acquisition, divestment, fund raising and consulting for private and public companies.

Go to top