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The Impact of Greater Economic Integration among the ASEAN Countries

Introduction

Discussion

The leaders of ASEAN have always focused on integrating the economies of every member so that each of them could benefit from the economic developments taking place. Even during the 1997 crisis when people thought the alliance would disintegrate, its leaders revealed their plan for an integrated economy in their Vision 2020. In this vision, the members committed themselves to a deeper level of economic integrity and cohesion. They declared to create a prosperous, competitive, and competitive economic region where socio-economic disparities and poverty will be reduced, and an increase in the free flow of services, goods, investments, and capital.

Apart from these long term plans, ASEAN also focused on some short term plans during the times of crisis. The members decided to move forward despite the crisis by accelerating all its programmes to integrate the economies of the members and liberalise investment and trade. They wanted to make the region a free-trade zone although at that time, the tariffs were not more than 5%.

Apart from liberating the flow of goods and services, ASEAN also planned to liberate the flow of investment in each other's economy. This would lead to a reduction in burden on the governments to invest in the development of infrastructure. The ultimate goal was to develop a linkage between the infrastructures of each other such as the ASEAN power grid and Trans-ASEAN gas pipeline. They also setup a process to monitor each other's fiscal and monetary conditions in order to maintain transparency and predict any sudden crisis.

Throughout the years, the goal of the association has developed into detailed goals. The first goal was to form an alliance to discuss and solve common problems and to work for mutual interests. Currently, their goal is much more detailed focusing on free trade, and liberating investments (Recent developments in ASEAN economic integration, 1999, n.d.).

The similarities in their level of development and geographical proximity have made the member countries realise that their location can facilitate each other in areas of commerce and trade. By linking each other, they can complement each other's growth. Globalization has forced the world to change the way they conduct business. ASEAN countries have also realised this fact and have presented themselves a benchmark in order to survive this economic change. The only way to succeed in today's world is to cooperate with each other in terms of trade, investment and human capital; and this is exactly what ASEAN is doing.

The Asian crisis of 1997 has placed ASEAN well in the world of commerce and has brought the member countries closer to each other. The developments that took place during this period of economic downfall led to the strengthening of ties. It was during this period that they set themselves their goal for 2020 and they have actually moved several steps towards achieving their goal.

Impact on the Malaysian Economy

ASEAN has a potential to help every member country to develop. Although they have ...