Mr K Kesavapany, Director, ISEAS,

Excellencies and distinguished guests,

Ladies and gentlemen,

INTRODUCTION

1. 2007 is a special year for ASEAN. We are celebrating 40 years of unity. ASEAN has come a long way since the Bangkok Declaration in 1967. Against the backdrop of the Cold War, and with regional disputes still fresh in memory, ASEAN began with the modest aim of keeping the peace in Southeast Asia. It was a mechanism for member countries to manage common threats like Communist insurgencies, while balancing internal sensitivities and conflicts. In short, ASEAN was born out of the strategic imperatives of its times.

2. What is ASEAN today? Some describe it as one of the world’s most successful regional groupings; others are quick to highlight its shortcomings – ASEAN is imperfect, ineffective and mostly unwieldy. Let me start by giving you a snapshot of ASEAN in 2007.

3. Politically, ASEAN is an organisation of the ten member countries encompassing geographical Southeast Asia. Not only are we at peace with one another, but we are also linked up to all the major powers through forums like the ASEAN Plus Three, the ASEAN Regional Forum (ARF) and the East Asia Summit (EAS). These forums have also provided a platform for the major powers to engage one another, and helped to keep ASEAN relevant.

4. Economic-wise, ASEAN has a combined market of 550 million with a GDP that is the third largest in Asia. We have progressively integrated our economies through initiatives like the ASEAN Free Trade Area (AFTA) and the ASEAN Investment Area (AIA). We are also linking up to other major economies, in Asia and the world. ASEAN is at various stages of negotiating FTAs with other regional countries, including China, Japan, and South Korea in Northeast Asia, India in South Asia, and Australia and New Zealand to the South.

5. Culturally, we have built up people-to-people linkages through cultural exchanges and regional community projects. A common ASEAN identity is very gradually emerging, although more can still be done to make ASEAN relevant to the lives of its ordinary people, and instil in them a deeper sense of belonging and community.

ASEAN’S NEW CHALLENGE

6. ASEAN has thus come a long way in its 40 years of history. It is more successful than its creators ever expected. But we cannot be satisfied with what we have achieved. The challenges facing us have grown. ASEAN has both the necessity and the potential to become more than what it is today. We have set the goal of a strong and cohesive ASEAN Community. Year by year, we have gradually come closer to this ideal. But we are still far from attaining it. For example, intra-ASEAN trade in the region still only forms around one quarter of the total foreign trade of the member countries. This proportion has remained about the same for well over a decade, despite the ASEAN Free Trade Area.

7. Compared to more established groupings such as the EU, ASEAN is still a long away from becoming a fully integrated community. Far more than the European countries, Southeast Asia is characterised by political, economic and cultural diversity rather than natural coherence. We must make greater efforts to pool our resources and deepen regional integration. Why must we work so hard for closer ASEAN integration? Let me offer two reasons.

8. The first is simply that we do not have a choice – ASEAN must integrate to survive. This may be a stark and blunt way to put it, but it is the cold reality. The rise of China and India has transformed the strategic landscape and created new dynamics within Asia. Companies and investors around the world are paying attention to what is happening in Asia, but they are focussing their energies on these two emerging giants. Elsewhere in the world, regions like the Gulf States and Eastern Europe are also reforming their economies and becoming attractive investment destinations.

9. To stay in the game, ASEAN must take decisive action. We must become a strong and effective grouping, able to partner China and India effectively. Many investors today see ASEAN as ten isolated, scattered national economies, too small to be worth paying attention to. If ASEAN’s integration stagnates while the rest of Asia forges ahead, we will be left behind and become irrelevant.

10. Virtually all ASEAN countries recognise that integration is important and that time is not on our side. However, there are differing priorities and perspectives. Countries are at different stages of development. For some, the priority is to narrow this development gap. They worry that faster integration will mean more direct competition at their doorsteps. Other governments are preoccupied with pressing domestic issues. They have to deal with myriad interest groups and constant political pressures at all levels. Not surprisingly, closer integration is not uppermost on their agendas, as its rewards are spread out and long-term. These are realities we must confront to move ASEAN forward.

11. To keep our efforts on track, the pace of ASEAN integration should not be set by its slowest members. The more developed ASEAN members can and should take the lead in setting the pace of integration for the rest to follow. We should look for creative and flexible approaches to accelerate integration, despite the diversity of the region. One way is for ASEAN countries which are ready to move ahead first, either bilaterally or as a smaller sub-group. Others can join in later when they are ready. This will give regional integration a much needed boost.

12. At the same time, governments must take a long-term view of their national interests. This calls for leadership and political will, to explain to the people what is at stake, and why ASEAN is important. They must understand concretely what integration means to them: more choices, more opportunities and, ultimately, better lives. Only thus can governments create more space for themselves to take rational actions, and muster the political consensus needed to accelerate regional integration.

13. The second reason for integration is an aspirational one – creating a united and coherent ASEAN organisation so that we are favourably positioned as the basis of the new regional architecture.

14. Asia has become a new focus for the great game of international relations. It is prosperous and brimming with opportunities, and more countries are entering the fray. Both regional and extra-regional players are keen to engage, yet at the same time, are wary of one another. Moreover, the presence of multiple players in the region, and their complex power relations make the shape of the new Asia both critically important and difficult to settle.

15. All East Asian countries place growth as their basic priority. But regional stability must underpin growth. Thus the ongoing search for a robust framework of cooperation within which countries can cooperate and compete peacefully, and manage disagreements and disputes.

16. Here is where ASEAN has an opportunity to play a constructive role. ASEAN is non-threatening, enjoys good relations with all the major powers, and provides a neutral core around which to develop the regional architecture. ASEAN, for now, has gained some relevance, because of the success of forums like the ASEAN+3, ARF and EAS. If we can strengthen these ASEAN-

based processes, they have the potential to form the core of the evolving architecture for regional cooperation. This is what we mean when we say that ASEAN must strive to be in the driver’s seat. The rules of the game in our region should be determined from within, not without.

17. However, we cannot take it for granted that this favourable state of affairs will persist. If ASEAN is disunited or ineffective, we will lose the privileged position of being courted by various players. Credibility begins from within. ASEAN needs to show that it is able to look beyond narrow short-term interests in the pursuit of broader strategic goals.

18. By presenting ourselves coherently, we will show ourselves to be capable of pursuing our interests and engaging the world. We will convince others that ASEAN can be relied upon to play an active, fair and constructive role in providing the platform for their interaction within Asia. Only then will other powers take us seriously. Only then can ASEAN establish its standing and take its rightful place in the region. This is the broader reason for our Chairmanship theme – “One ASEAN at the Heart of Dynamic Asia”.

SINGAPORE’S CHAIRMANSHIP

19. Singapore is honoured to take over as ASEAN Chair at this crucial point of ASEAN’s development. We will be in the Chair for just a year – not a very long time. But with broad consensus and clear directions by ASEAN Leaders, we hope to set in place processes that will guide ASEAN on the right track well beyond our chairmanship.

20. First, we will focus on strengthening ASEAN internally. Our key reference point will be the ASEAN Charter, which will be signed at the 13th ASEAN Summit in Singapore this November. It will be a bold and far-sighted statement of the political will within ASEAN to transform itself into a stronger and more effective organisation, where commitments are honoured and obligations fulfilled. We will also be signing the Economic Blueprint for the establishment of the ASEAN Economic Community by 2015. This blueprint will set out specific goals and targets for a single ASEAN market and production base. It will make ASEAN more competitive as a region, and more attractive as an investment destination. At the same time, we will continue with our efforts to bridge the development gap within ASEAN, through programmes like the Initiative for ASEAN Integration (IAI).

21. Second, we will deepen our community building efforts to create an ASEAN that is embraced by its people. We want to build an ASEAN Community that everyone is proud to belong to. To do so, we must encourage more active bottom-up participation. This means opening up for more diverse views and ideas, so as to create a sense of ownership and belonging. In this endeavour, we must balance between celebrating the diversity of ASEAN and preventing this diversity from causing weakness and discord. We may not be able to follow through on every single idea, but we will relentlessly pursue every effort to advance the common interests of ASEAN and its people.

22. Third, we will deepen ASEAN’s engagement of external powers, both regionally and outside the region. We will continue with efforts to build an East Asian community, so as to maintain ASEAN’s role in the evolving strategic environment. At the broader level, ASEAN will continue to strengthen external linkages, including the intensification of existing ASEAN+1 dialogue relationships. We will push for the early completion of FTA negotiations, and in particular work on expediting negotiations on the newly-launched ASEAN-EU FTA. Besides celebrating the 10th Anniversary of the ASEAN+3 process and the 3rd EAS, we are happy to host in Singapore the inaugural ASEAN-EU Commemorative Summit, a milestone celebration of 30 years of relations between our two regions.

23. Fourth, we will pursue global issues and ensure that ASEAN remains relevant and constructive within the wider international discourse. The Summits in Singapore will be addressing the inter-related issues of energy, environment, climate change and sustainable development. This broad and inclusive theme marries our response to global issues with our internal efforts to cope with a changing world. These pressing issues have already been taken up by regional and international organisations such as the UN and APEC. It is timely that ASEAN makes a concerted effort to recognise these issues, and contribute suggestions towards the global consensus on the way forward. Environmental protection cannot be ignored or sacrificed, for the sake of development and economic growth. The world, and not just ASEAN, needs to protect and preserve its natural endowments for present and future prosperity.

CONCLUSION

24. As ASEAN turns 40, we can look back with satisfaction at what we have achieved so far. But we must also look forward to the task ahead. We will build a diverse yet stable community, where individual differences are tempered by broader strategic considerations. We will grow as a strong region that engages the world and takes advantage of what we have to offer. We will be a credible and effective organisation, trusted and respected by other parties, and working with them to shape the regional and international order. This is the way to secure ASEAN’s place in the world, and a brighter future for all our peoples.