Philippine Graphic: You have assumed the post of Secretary-General of ASEAN at this very difficult period in the history of the Association following the regional economic crisis and other issues. What, in your view, are the challenges facing ASEAN today?
Severino: ASEAN is faced with challenges such as it has not faced before – the challenge of enlargement, the challenge of scope, and the challenge of integration.
An enlarged ASEAN means not only a richer and more diverse ASEAN but also a more complex and divergent ASEAN. The challenge here is to make use of our diversity and strengthen our solidarity even more, so that our complexity and our diversity do not become centrifugal forces for us.
As the world becomes smaller, as our region becomes smaller, more and more of the concerns and endeavors of people and nations are becoming transnational in nature. These include, for example, environmental pollution, trade and investment, capital flows, information technology, movement of workers, and criminal activities of transnational nature. The challenge for ASEAN is to promote, support, and manage ASEAN cooperation in these increased areas without over-stretching the resources of the Association or of its member states.
Recent events in our region and the emerging trends for the future have demonstrated the imperative of approaching ASEAN cooperation in an integrated manner. It is important that social issues are addressed even as we engage in economic cooperation and integration. On the other hand, economic development can only be sustained if we conserve our environment and develop our research and development capability through HRD. All of these can take place only in an environment of peace and stability. This is the challenge of integration that faces ASEAN today.
Graphic: How did ASEAN respond to the financial crisis that hit the region since July 1997?
Severino: Many in ASEAN give credit to the liberal and open policies for the region’s economic successes in the past. The question was: Would they now blame those same polices for the severe setback to their economies and abandon them in favor of more timid and restrictive one? Would they at least retreat into greater caution and waver in their commitment to the ASEAN Free Trade Area or AFTA and on their enthusiasm for the World Trade Organization (WTO) and Asia Pacific Economic Cooperation (APEC)?
ASEAN has responded with a resounding NO. This was not a matter of bravado or of recklessly choosing to live dangerously in an economically dangerous world. It was a calculated, rational response to the new economic situation in East Asia. Our leaders knew that the long-term response to the currency and financial crisis afflicting their economies was to draw in investments of the long-term kind, investments in productive facilities that turn our goods and services, create jobs, stimulate trade, and earn incomes for their countries and peoples. And they knew that the way to bring back investments was to enlarge their markets faster through more rapid integration and open them wider to the world.
Graphic: What has ASEAN done to prevent another regional contagion?
Severino: ASEAN has established a monitoring and surveillance mechanism as an early-warning system for impending financial and currency problems. Such a mechanism should help ASEAN countries to avoid crises like the one from which they are now recovering.
Graphic: You were quoted to have openly criticized those who are lukewarm to the ideal of regional integration. What are the imperatives for regional integration?
Severino: I said at the Eighth Southeast Asia Forum, which was held in Kuala Lumpur on 15 March 1998, that some in ASEAN seem to pay mere lip service to the ideal of regional solidarity and cooperation. The financial crisis, the haze problem cause by massive forest fires in Kalimantan and in Sumatra, and the recently resolved Cambodian situation have brought home to all of us the need to forge a stronger sense of unity in ASEAN if our most serious problems are to be addressed.
The financial crisis has shown – once and for all – how seamlessly interwoven the fates of the countries of Southeast Asia have become. The financial crisis that has swept the region infected all countries with small regard for the objective conditions in each individual country. Movements in the exchange rate for the currency of one country have affected the values of the currencies of the other countries. The level of investor confidence in one economy has influenced the level of confidence in all.
Intra-ASEAN trade now accounts for about 25 percent of ASEAN’s total trade. Any weakening in an ASEAN country’s capacity to import can diminish to one degree or another the market for the other countries’ exports. For some countries, particularly the newer members, other ASEAN countries are important sources of investments. ASEAN nations account for more than half of foreign direct investments in Laos and Myanmar – two newer members of ASEAN. The economic slowdown in capital exporting ASEAN nations cannot but reduce the flow of such investments.
Similarly, tourists from ASEAN countries themselves have been an increasingly important portion of tourism in ASEAN. In 1996, of the 28.6 million tourist arrivals in ASEAN, 11.2 million, or almost 40 percent, came from within ASEAN itself.
The haze problem is only the most prominent and most dramatic of the environmental challenges that ASEAN expects to face in increasing numbers and gravity. Many of these challenges, particularly as they pertain to the marine and atmospheric environment, are essentially transboundary in nature and hence require regional solutions.
In an increasingly global world economy, ASEAN members must realize that they must work more closely as a group in international negotiating forums if they are to have any influence in shaping the emerging architecture of the global economy and the new structure of international finance. Otherwise, they will have to resign themselves to having their destiny determined by others.
Graphic: We understand that few months before the Foreign Minister of Thailand proposed the concept of “constructive intervention” at the Foreign Ministers meeting held in Manila in July 1998 you had expressed your own views on the subject. Is ASEAN’s policy of non-interference in each other’s internal affairs still relevant? Is ASEAN ready for more open, transparent, and accountable organization?
Severino: ASEAN is emerging as a true community or even family. There are differences within the family, even serious ones; but there is also the underlying consciousness that, in some cases, the problem of one is the problem of all, that the group must stick together to better deal with the world outside, and that, as in a family, the troubles of one can legitimately be the concern of the rest. Because the Southeast Asian community will be more closely integrated, a new equilibrium may have to be sought between national sovereignty and regional purpose.
ASEAN has now shown a willingness to express or demonstrate concern over internal developments in one country – whether they be economic upheavals, environmental disasters, or political change – if they are likely to spread to others,
to produce results that are in tolerable to neighbors’ well-being, or to legitimize violent methods of effecting internal change. At the same time, ASEAN has also shown that its preferred method of manifesting concern is that of friendly, quiet advice, searching but respectful questions, and mutual assistance, rather than that of public posturing or intrusive action.
Graphic: ASEAN has been criticized for its inability to respond quickly and effectively to recent problems confronting the region. Are these criticism justified?
Severino: ASEAN is not and was not meant to be a supranational entity acting independently of its members. It has no regional parliament or council of ministers with law-making powers, no power of enforcement, no judicial system. ASEAN has to be measured against the purposes that it has set for itself and the limitation that it has imposed upon itself. ASEAN has to be judged by the results that it has produced in pursuit of those purposes and under those limitations, not against the wishes or expectations of others.
Graphic: In your speech at the Pacific Economic Cooperation Council meeting in Manila last month you called the APEC’s annual leaders meeting a “hindrance” to progress in APEC. Could you elaborate on your views? Why is the ASEAN Secretary-General expressing views on another and different organization? Is there a relationship between ASEAN and Asia Pacific Economic Cooperation or APEC?
Severino: I was invited by PECC to speak on the future of APEC, and among the many things I talked about were the advantages and disadvantages of having leaders meet on the occasion of the annual ministerial meetings. Among the disadvantages I cited was the tendency for public attention to be distracted from APEC’s original purpose. I did not call for the immediate termination of APEC leaders meetings. However, I pointed out that, of late, public discourse on APEC and media coverage of it, as well as much of the discussions within APEC itself, have tended to focus almost exclusively on the liberalization agenda and, within that agenda, on the products of particular interest to certain developed economies. Thus, in 1996, it was information technology. In 1998, it was the products in the list for so-called Early Voluntary Sectoral Liberalization. The most heated debates in the APEC meetings were on these subjects. The media and other commentators viewed the success of a particular APEC leaders’ meeting as depending on whether consensus could be achieved on these sectors. The result is a distorted focus.
ASEAN would like to see greater balance. They would like to see the liberalization agenda encompass also the goods that are of interest to most of the APEC members. This is why, at the last APEC leaders’ meeting, they supported the inclusion of tariffs on industrial goods, as well as agriculture and services, in the agenda of the next round of World Trade Organization negotiations. ASEAN countries would also like to see the liberalization agenda balanced by the two other pillars of APEC – trade and investment facilitation and economic and technical cooperation.
This is why ASEAN countries support the intention of Brunei Darussalam to emphasize, when it host the APEC meetings next year, human resource development, the acquisition of the ability to compete in and benefit from the knowledge-based industries, and small and medium enterprises. This would, to some extent, redress the growing imbalance in the APEC agenda.
Graphic: What in your view in the most important achievement of ASEAN since its establishment more than three decades ago?
Severino: Today, tensions between Southeast Asian countries may occasionally surface. Some issues between them remain unresolved. A degree of mutual suspicion lingers. But no conflict has erupted between ASEAN members. The long period of peace and stability in Southeast Asia made possible the three decades of unprecedented economic and social progress in the region, unprecedented in Southeast Asia and unprecedented in the developing world. This, I think, is the most important achievement of ASEAN.
The main reason for ASEAN’s enduring strength has been the stake that each member has in the viability of the association. This stake goes beyond the results of the economic and other forms of cooperation that ASEAN has been undertaking over the past three decades. ASEAN is more than an association of states. It is also a process, a spirit, a state of mind.
ASEAN is building on its achievements through deeper cooperation on broad range of transnational concerns – environment, drugs, regional economic competitiveness, and, most recently, e-ASEAN.
Graphic: How does the Philippines benefit from the various ASEAN economic cooperation schemes?
Severino: The ASEAN Free Trade Area or AFTA and other forms of regional economic integration heighten competition in the Philippines and intensify competitive pressures on firms catering to the domestic market. But they also open other Southeast Asian markets to competition from Philippine goods and thus offer immensely larger, regional opportunities for Philippine companies. There is a market of half a billion people with a gross domestic product of more than US$700 billion out there.
I am confident of the ability of Philippine companies to compete on the same playing field as those of Indonesia, Malaysia, Singapore and Thailand, particularly at home, where conditions and markets are familiar.
Since the AFTA process started in 1993, the Philippines’ trade with the rest of ASEAN has expanded more than three-fold, from US$2.7 billion in 1993 to US$8.2 billion in 1998. This is faster than the expansion of the Philippines’ total global trade, which itself has been growing at a torrid pace. The result is that the share of ASEAN in the Philippines’ foreign trade has risen from 9.2 percent in 1992 to almost 14 percent today. Contrary to fears spread by some in the Philippines, this shift is accounted for more by the rise in Philippine exports to ASEAN than by the influx of ASEAN goods into the Philippines. Thus, since AFTA’s implementation started, Philippine exports to ASEAN have grown at 39.5 percent a year, much faster than the growth of Philippine imports from ASEAN at 21.1 percent a year.
Graphic: What is ASEAN’s vision for the future of the region?
Severino: The next two decades of ASEAN will be marked by much closer integration – integration in various senses and dimensions. Part of that vision is an ASEAN that is ever more closely integrated as economies and societies. In the ASEAN Vision 2020 statement that the ASEAN Heads of State and Government issued at their second informal summit in Kuala Lumpur in December 1998, they projected the emergence of such a Southeast Asian community in the first two decades of the next millennium. It is up to the officials, the business leaders, the scholars, and all the people of ASEAN to bring that vision to reality.
Graphic: What are your priorities for the remainder of your term as Secretary-General of ASEAN?
Severino: ASEAN’s major adversaries are the perceptions of our situation that drive away confidence. Accordingly, we must respond by creating a perception that inspires confidence. Since perceptions are crucial in promoting the region’s economic recovery, then we are called upon to
utilize our best communication skills to bring this about.
The audiences that we must reach are varied. We need to communicate to governments and legislatures of countries the world over, to international financial institutions and investment houses, to the business community, and more importantly to our own peoples – for it is with them that confidence begins and ends. We do need to reassure our own citizens that their sacrifices will be neither in vain nor too long.
It is time for ASEAN to raise a higher profile and project a sharper image for the Association and its member nations in the world, as well as to be better known among its own people. In good times and bad, a positive image is something that can serve us all well.
The correct story of ASEAN must be told to all. It must be told to the peoples of our region to whose lives the work of ASEAN must be made relevant. Otherwise, ASEAN will miss its mission. Ours is a good story to tell. END.