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Observers may have been surprised by the extent to which current relations among ASEAN countries have deteriorated, and the rapidity of the deterioration. The main cause has been the ASEAN economic crisis, which has precipitated bankruptcies, unemployment, and an economic downturn within individual member countries, and has encouraged intolerance, suspicion, and lack of cooperation between them.
Friction has been particularly acute between Malaysia and Singapore. Malaysia complained that Singapore has not done enough to help it through the crisis, then banned foreign trade in the ringgit, adversely affecting Simgapore, where most offshore ringgit accounts are held. Malaysia also campaigned to get its companies to use Malaysian ports instead of Singapore, threatened to impede Simgapore's water supply, banned automatic agreement to use of its air space by Singapore, and cancelled Five Power Defence Arrangement military exercises.
The release of Lee Kuan Yew's compelling memoirs, 'The Singapore Story', has poisoned relations futher. Lee paints an unflattering picture of Malay leaders and shows how deep-seated racial tension between Chinese and Malays caused the breakup of the original Malaysian Federation after only two years. (The Federation with Singapore as a member lasted from September 1963 to August 1965).
Lee claims that the Malay leaders were determined to form a Malaysia in which they would be predominant in important economic and social issues. Furthermore, the United Malays National Organisation (UMNO) was to operate unfettered in Singapore, while the Peoples Action Party (PAP) was to be banned from operating outside Singapore.
Lee portrays the then Prime Minister of Malaysia, Tunku Abdul Rahman, as an autocrat who expected Lee to do his bidding and to pay him respect as a social superior, and also as someone not espectially bright or decisive. He quotes the Tunku as having repeatedly said that the Chinese were cleverer at making money than the Malays, but that to compensate for that, the Malays must dominate the new Malaysian Federation by running the government, the police and the security forces. Dr Mahathir bin Mohamad also gets a serve for having shown anti-Singapore prejudice and hositlity, starting with his pronouncements in a famous parliamentary debate in Kuala Lumpur in May 1965, in which he attacked both the PAP generally and Lee Kuan Yew personally.
Until the present regional economic crisis, ASEAN had almost convinced the rest of the world that it was a tightly-knit group of economic achievers sharing special Asian values and living in harmony. Lee's book shows how deep-seated social, racial, and religious differences between at least two of ASEAN's members and close neighbours make the ASEAN mystique illusory and its future uncertain.
WATCHPOINT: The APEC meeting in Malaysia in November may widen rifts between some ASEAN countries.
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.
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