Issn 0143-6597 print/issn 1360-2241 online/03/020235-19

Conclusion

Aside from its empirical insights into the dynamics of 

ASEAN

economic

regionalism in the 1990s, this paper is of wider analytical significance. Theo-

retically it confirms the domestic level as a key level of analysis in explaining the

relationship between globalisation and economic regionalism. Thus regionalism

may be one of three basic types, namely, open regionalism, a resistance model, or

a developmental version. Which project ultimately emerges is determined at the

domestic level, where the domestic social and political setting mediates global-

isation in significant ways. The analysis of 

AFTA

has demonstrated that the

particular domestic setting influences the way international events are interpreted

by policy makers and other groups, their potential impact assessed and policy

choices made. In short, while the systemic level—globalisation—may well

provide the initial trigger or impulse for regionalism, domestic political dynamics

that shape the nature of domestic coalitions mediate the final outcome. It is

precisely this form of interaction that gave rise to the distinct approaches to

economic regionalism we have seen in 

ASEAN

. 

250

ATTEMPTING DEVELOPMENTAL REGIONALISM THROUGH AFTA

Notes

This paper, a revised version of an earlier article, is drawn from the author’s PhD dissertation, and has

benefited from valuable comments made by Richard Higgott, Shaun Breslin, David Camroux, John

Ravenhill, Kevin Hewison, Kanishka Jayasuriya and Philip Creighton at various points in its writing.

1

Vietnam, Laos, Burma and Cambodia acceded to 

AFTA

when they formally became members of the

Association of Southeast Asian Nations (

ASEAN

), later in the decade.

2

The analysis focuses on the original 

ASEAN

members—Indonesia, Malaysia, the Philippines,

Singapore and Thailand.

3

The term ‘open regionalism’ originally meant a form of regionalism that was based on the principles

of unilateral liberalisation as well as non-discrimination in tariff preferences between members and

outsiders (Drysdale & Garnaut, 1993: 187–188). The term is now used in a more general sense to

characterise regionalist schemes that are fundamentally about engaging with the global market

(Gamble & Payne, 1996: 251).

4

The conceptual distinctions between the two variants of open regionalism are discussed in Nesadurai

(2001: 60–70).

5

The conventional treatment has been of segments of capital distinguished by their market orientation,

either towards the domestic market or the international market. See, for instance, Gourevitch (1978).

6

This insight comes from Paul Krugman’s ‘import protection as export promotion’ variant of strategic

trade theory, which reveals that when a domestic firm is given a privileged position in the home

market, it enjoys an advantage in scale over foreign rivals that enables the firm to realise ‘learning by

doing’ benefits. A larger protected home market offers greater dynamic scale and learning effects to

the privileged firm. See Krugman (1986).

7

See Crouch (1996) for Malaysia and Habir (1999) for Indonesia.

8

Growth is defined here as the expansion of economic wealth of a country, irrespective of its distribu-

tion among different groups, firms or individuals. Distribution, on the other hand, involves the

conscious allocation by governments of income, rents and other economic benefits to particular

individuals, groups or firms who would otherwise not have received these gains through the workings

of the free market.

9

See, among others, Ravenhill (1995) and Bowles & MacLean (1996).

10

Menon (1998:18) subscribes to this view.

11

Only in Indonesia were the restrictions on

FDI

minimal, which made the 

ASEAN

/non-

ASEAN

investor

distinction in this country somewhat irrelevant. See Nesadurai (2001: 164–172).

12

Interview with Ong Hong Cheong, former coordinator of Malaysian participation in 

OECD

workshops,

May 2001.

13

See Ali Abul Hassan (1992), and Abdullah Tahir, quoted in Felker (1998: 247).

14

‘Malaysia against restrictive investment rules: Rafidah’, Business Times, 10 July 1996.

15

‘Malaysia, seven others jointly oppose new 

WTO

rules’, Business Times, 5 November 1996.

16

Interview with Karun Kittisataporn, a senior official on 

ASEAN

from the Thai Commerce Ministry,

August 2000.

17

Interview, July 2000.

18

Bisnis Indonesia, 10 October 1998.

19

Interview with Karun Kittisataporn.

20

Interview with an official of the Singapore Trade Development Board, conducted via e-mail in June

2001.

21

See ‘Hopes vary for investment area’, Bangkok Post, 11 September 1996.

22

See the argument put forward by economists at these meetings (Chia, 1996: 20).

23

‘Investment area plan proceeding’, Bangkok Post, 9 January 1998.

24

‘BOI backs 30% as level for national treatment’, Bangkok Post, 17 January 1998.

25

‘Proposal aims to classify 

ASEAN

investors as locals’, Bangkok Post, 21 March 1998.

26

Discussion with then 

ASEAN

Deputy Secretary General, Dr Suthad Setboonsang, July 2000.

27

‘

ASEAN

cuts deeper into trade, investment barriers’, Business Times, 8 March 1999.

28

‘Region’s ministers reaffirm plan’, Bangkok Post, 6 March 1999.

29

Joint Press Statement, First Meeting of the 

ASEAN

Investment Area Council, 5 March 1999.

30

Habibie had presided over Indonesia’s state-driven high-technology programme under Suharto’s

tenure. He took over as President in 1998 when Suharto was ousted from power.

31

In any case, it is not clear that developmental regionalism through the

AIA

would have been feasible as

a means to help develop indigenous Indonesian capital. It was more likely that the larger, more

advanced ethnic Chinese businesses would have been the project’s main beneficiaries.

32

Joint Press Statement, Thirty-third 

ASEAN

Economic Ministers Meeting, 15 September 2001.

33

‘

ASEAN

set to liberalise investment within region’, Business Times, 30 September 1999.

34

‘Investment in Southeast Asia plunges’, International Herald Tribune, 27 July 2000. Later informa-

tion revealed a higher 1999 figure of US$16 billion. See 

UNCTAD

(2000).

251

HELEN E S NESADURAI

35

‘Foreign investors desert Southeast Asia for China’, Financial Times, 13 October 2000.

36

Interview with a senior Malaysian trade official, December 2001.

37

See Chairman’s Statement, Seventh 

ASEAN

Summit, 11 November 2001.

38

Press Release of the US–

ASEAN

Business Council, 13 September 2001.

39

See Press Statement, Fourth 

AIA

Council Meeting, 14 September 2001.

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253

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