The immediate predecessor to the Association of Southeast Asian Nations (ASEAN) was the Association of Southeast Asia (ASA) which was formed in July 1961 by Malaya, the Philippines and Thailand. Their purpose in organizing was, through consultation, to improve their relations with one another and with third parties. The three nations sought to broaden cultural exchanges and to move toward modified economic integration. Original proposals called for a common shipping line or shipping pool, and joint development programs in the fields of industry agriculture, education and health. Concrete results were direct railway communications between Malaya and Thailand and a number of immigration and customs agreements. Further implementation was halted by a territorial dispute between Malaya and the Philippines.

In 1962 Malaya proposed to incorporate Singapore and the British dependencies of Sarawak and Sabah in Borneo into a new state. Both the Philippines and Indonesia took exception to the proposed merger as a violation of the principle of self-determination. The Philippine Government also claimed sovereignty over Sabah which, in its view, had only been leased and not ceded to the British by the Sultan of Sulu. Malaya agreed to a referendum to ascertain the wishes of the people of Sabah and Sarawak to be conducted by the United Nations and when the vote was in favor of union, proceeded to form the Federation of Malaysia, including Sarawak and Sabah. Indonesia questioned the adequacy of the referendum and launched a "confrontation" against Malaysia. Diplomatic relations between Malaysia and the Philippines were broken.

Pressure on Malaysia by the Philippines and Indonesia continued until Singapore—which had also entered into the Federation of Malaysia in September 1963—separated from the Federation in August 1965. While the Philippines did not formally shelve its claim to Sabah this was implicit in its restoration of diplomatic relations with Malaysia in June 1966.

In April and again in August 1966 ASA met to discuss specific economic and cultural projects that the three nations might mutually undertake. The 33 projects finally agreed upon included a shipping line, telecommunication links, airfield and port improvements, fisheries and highway development, and expanded trade. The ASA nations agreed to seek commodities price agreements and eventually to form a common market, but few steps were taken to carry out these policies.

The following year, 1967, Indonesia and Singapore were invited to join ASA. Singapore was now an independent city-state, while in Indonesia President Sukarno—who had instituted the "confrontation" against Malaysia—had fallen from power and the new government had dropped his aggressive stance. Indonesia, however, expressed its preference for a new association rather than joining ASA. Burma and Cambodia (Kampuchea) were also invited but both declined. The foreign ministers of the five participating countries met in Bangkok and on August 8, 1967 formed the expanded Association of Southeast Asian Nations. Ceylon (Sri Lanka) apparently considered joining but never applied for membership.

The objectives of ASEAN were to: "1) accelerate economic growth, social progress and cultural development in the region, 2) promote regional peace and stability through abiding respect for justice and the rule of law, 3) promote active collaboration and mutual assistance on matters of common interest in economic, social, cultural, technical, scientific and administrative fields, 4) provide assistance to each other in the form of training and research facilities in the educational, professional, technical and administrative spheres, 5) collaborate more effectively for greater utilization of agriculture and industry, expansion of trade, improvement of transportation and communication facilities, and raising living standards, 6) promote Southeast Asian studies, and 7) maintain close cooperation with existing international organizations and explore avenues for closer intra-regional cooperation."

Signing this historic document were Deputy Prime Minister Tun Abdul Razak for Malaysia and foreign ministers Narciso Ramos for the Philippines, Sinnathamby Rajaratnam for Singapore, Adam Malik for Indonesia and Thanat Khoman for Thailand.

The decision of these five non-communist states to create a regional organization must be viewed against the background of the increased intensity of fighting in Vietnam; the proposed pullout of British forces from Malaysia and Singapore; and the unsuccessful attempt by the Indonesian Communist Party to seize control of Indonesia. In organizing they were seeking, as Tun Abdul Razak said at the time, "to stand on our own feet, firmly determined to shape our future and our destiny by our own efforts," adding, "our joint efforts to eradicate poverty, hunger, disease and ignorance should be our main preoccupation and these problems should be tackled with all our energy and our resources and in a determined manner by our association." He also pointed out that, "unless we take decisive and collective action to prevent the growth of intra-regional conflicts our nations will continue to be manipulated one against the other."

Ramos emphasized that the main thrust of ASEAN would be against "economic backwardness, want, ignorance and disease," and noted that ASEAN was not meant to supplant any existing regional organization.

Rajaratnam commented that creation of the association was easy; the difficult part would be to put "flesh and blood on the skeleton." He reminded the others that 20 years of decolonization had shown that nationalism and independence alone do not provide a healthy economic and political climate and that regional thinking is necessary to prevent "Balkanization" (i.e. splintering of the area into mutually antagonistic segments).

Malik spoke of the need for mutual security from outside aggression, overt or covert, and referred to a possible defense role in the future for ASEAN. In this he was supported by Abdul Razak. Thanat refused to comment on this possibility, but admitted that the states of the area had to rely on themselves for mutual help because "our friends in the U.S. don't seem to have faith in themselves, and if they don't, how can others have faith in them?"

Although the Preamble of Declaration of ASEAN stated that all foreign military bases in member states' territory were there on a temporary basis only, and that such bases would not be used against member states, it did not call for their removal. The bases referred to were U.S. bases in Thailand and the Philippines and British or Commonwealth bases in Malaysia and Singapore. None of the member states were, in fact, eager to see them evacuated.

The declaration also called for Permanent Committees to be established which would have the responsibility to examine how to exploit agricultural and industrial potentials and expand trade, tourism, fisheries and shipping. ASEAN was prepared to take over the joint development and trade projects already begun by ASA.

ASEAN today has an annual Ministerial Meeting held in each member country in turn, and a Standing Committee which meets regularly between ministerial meetings. The Standing Committee rotates between member states, presided over by the foreign minister of the host country and with the resident ambassadors of the other four as members. A central ASEAN Secretariat was established in Jakarta in 1976 and a "Headquarters Agreement" was signed in September 1978. Nine permanent committees have been set up, distributed among the five capitals and rotated at two to three year intervals. The committees are: 1) Trade and Tourism, 2) Industry, Minerals and Energy, 3) Food, Agriculture and Forestry, 4) Transportation and Communications, 5) Finance and Banking, 6) Science and Technology, 7) Social Development, 8) Culture and Information and 9) Budget.

There are eight Ad-Hoc committees, all economic in nature: 1) Special Coordinating Committee responsible for negotiating better trade terms with the European Common Market (EEC), 2) ASEAN Brussels Committee made up of the five representatives accredited to the EEC, 3) Special Committee of Central Banks and Monetary Authorities, 4) ASEAN Coordinating Committee for Reconstruction and Rehabilitation of Indochinese States, 5) Senior Officials in Sugar, 6) Senior Trade Officials on Synthetic Rubber, 7) ASEAN Geneva Committee and 8) Senior Trade Officials in Multilateral Trade Negotiations.

At the outset the five states of ASEAN were not used to cooperation. They had been more often at odds over border problems (boundary disputes, smuggling, insurgency) and fishing and oil rights than in agreement on regional economic development. During the first five years the renewed rebellion by Muslims in the Philippines' southern island of Mindanao gave rise to Philippine charges that Muslim Malaysia was giving aid to the rebels; guerrilla activity along the Thai-Malaysia border was a thorn in their relationship; Malaysia and Singapore were still faced with economic and political differences growing out of their brief partnership and ethnic and philosophic differences. ASEAN members agreed, however, that politically sensitive situations must not be allowed to interfere with the economic cooperation which was the principal purpose of their association.

In 1971 the ASEAN Ministers' Conference drew up the Kuala Lumpur Charter which called for the recognition of Southeast Asia as a "zone of peace, freedom and neutrality." The Thai military government was not sympathetic to the concept, so for several years the idea was not pushed. In 1974 ASEAN formed the ASEAN Motion Picture Producers Association with headquarters in Jakarta and proposed establishing an ASEAN News Service.

1975 was a "year of decision" and the turning point in ASEAN mutual cooperation. The fall of South Vietnam to communist North Vietnam on April 30, 1975—after the withdrawal of American troops from the former—led the ASEAN states to turn their eyes away from the west, rethink their position on regional affairs and seek to mend their fences with China and Indochina. Indicative of their changed attitude was the comment of Lee Kuan Yew, Prime Minister of Singapore: "From a symbol of power and security (the Americans) have become obstacles to a change in posture which must precede a change of relationships with the other great powers."

When Phnom Penh had fallen to the communist Khmer Rouge earlier in the month ASEAN had made a joint decision to recognize the new government (Royal Government of National Union). Malaysia recognized the new Provisional Government of South Vietnam on May 2, but the other ASEAN member states did not immediately follow suit. However, when the two Vietnams were officially amalgamated as the Socialist Republic of Vietnam on June 24, 1976, all the ASEAN states accorded it diplomatic recognition within the next month and a half. Thailand's recognition of Vietnam on August 6, 1976, brought an end to over a decade of overt hostility between the two states.

On June 12, 1975 North Vietnam proposed a Southeast Asian "common market," and a long article in Nhan Dan, the official newspaper of the ruling communist party, played on the theme "Southeast Asia belongs to the Southeast Asians." The gist of the article was that North Vietnam wanted the region "safe from Americanism"; it attacked American bases and influence in Thailand and the Philippines, and American influence in Indonesia. After consulting Indonesia's President Suharto, Thailand's Prime Minister Kukrit Pramoj responded to North Vietnam's suggestion of a common Southeast Asian market by inviting North and South Vietnam and Kampuchea to join ASEAN. Asserting that he felt ASEAN nations were strong enough to maintain their independence and identity in the face of the communist states Kukrit said: "We must rid ourselves of past fears and doubts, and face the future with confidence in our abilities to keep peace and make new friends." On July 27 he announced complete withdrawal of the U.S. forces from Thailand by March 20, 1976. The communist nations, however, refused the hand of friendship. By October Thanat Khoman, Thailand's former foreign minister, was warning ASEAN nations to be prepared to protect themselves from the "new imperialism" under the guise of "liberation." He publicly regretted that Thailand had asked for the withdrawal of U.S. troops from its territory without getting a prior agreement from North Vietnam to live in peace with the rest of the region. These were Thai, not ASEAN, positions for ASEAN functions strictly on a basis of consensus.

ASEAN nations had individually associated themselves with the Non-Aligned Nations, that group of "third world," developing states which originally sought to remain outside the major power bloc struggle but which were now more concerned with restructuring the world economic system. In January 1976 Indonesia hosted a meeting of ministers of 23 Asian developing countries, part of the so-called Group of 77. The delegates called for redressing the imbalance between the industrialized and developing world. The Jakarta meeting preceded the conference in Manila, February 2-6, which included the African and Latin American members of the group.

The Group of 77 in Manila adopted the Manila Charter on the New World Economic Order, which was presented to the United Nations Conference on Trade and Development (UNCTAD) meeting in May. It called for restructuring international trade in commodities in order to stabilize fair prices for raw materials, restructuring world industrial production, reforming the international monetary system, and in general assisting the developing countries by all means possible.

Immediately following these two major third world conferences held in ASEAN capitals, the five heads of government of the ASEAN nations met at Denpasar, Bali, Indonesia. This first ASEAN summit was attended by: Suharto, Lee, Kukrit, Ferdinand Marcos of the Philippines and Hussein Onn of Malaysia. A Declaration of ASEAN Concord was issued on February 24, 1976 enjoining all to "expand ASEAN cooperation in the economic, social, cultural and political fields."

In the political field the declaration specifically called for a meeting of the heads of government whenever necessary; signing of a Treaty of Amity and Cooperation; settlement of intra-regional disputes by peaceful means; promotion of the "zone of peace, freedom and neutrality"; improving machinery to strengthen political cooperation; undertaking a study to develop judicial cooperation, including drawing up a treaty of extradition if possible, and "a strengthening of political solidarity by promoting the harmonization of views, coordinating positions and where possible and desirable, common approaches and action dealing with national groupings and individual economic powers." The Treaty of Amity was the first legally binding agreement among the ASEAN nations.

An Agreement on the Establishment of the ASEAN Secretariat was signed by the ASEAN foreign ministers.

In economic affairs the Declaration of ASEAN Concord set strong guidelines for joint action in interregional trade and called upon the five nations to extend relief to one another in case of natural disaster, supply one another's commodity needs in an emergency and cooperate in regional industrialization. It affirmed the Manila Charter on the New International Economic order.

In regard to security the declaration stated only that there would be a "continuation of cooperation on a non-ASEAN basis between the member states in security matters in accordance with their mutual needs and interests."

In discussing the declaration the participants made it clear that ASEAN was an economic and diplomatic body and had no plans to become a military alliance. Indeed ASEAN intended to continue to seek normalized relations with the communist states of Indochina.

Hanoi responded by ridiculing the policy of neutrality and rejected improved relations with ASEAN until all U.S. bases had been removed from the area. It accused the conferees of publicly talking cooperation but privately discussing "mutual collusion" and charged that they "together with the U.S. imperialists sought to oppose the democratic, independence and nationalist movements of the peoples in these five countries and to check the influence of the revolution in the three Indochinese countries."

The Bali Conference was followed by the ASEAN Economic Ministers Meeting in Kuala Lumpur in March 1976 to discuss the establishment of regional industries based upon the raw materials and potentials of each of the five member nations. A decision was made to build ASEAN urea (fertilizer and animal fodder) factories in Indonesia and Malaysia, a superphosphate (fertilizer) plant in the Philippines, a diesel engine factory in Singapore and a soda ash (powder used in a number of manufacturing processes) plant in Thailand. In the fall of 1977 Japan promised US$1 billion in low interest loans for these projects, to be made available upon the completion of feasibility studies.

The proposed projects proved to be ambitious and not altogether economically sound. By 1979, in spite of numerous meetings between representatives of ASEAN and Japan, only the two urea projects were ready to be implemented. It was agreed that the Indonesian plant would be built first (at Aceh in northern Sumatra), to be in production in 1981. Indonesia would contribute 60 percent of the necessary capital with Japanese help, and the other states 13 percent, with the exception of Singapore, which as a small city-state with minimal fertilizer needs, would contribute 1 percent.

Recognizing the validity of Indonesia's fears of too much fertilizer coming onto the market within a short period of time, Malaysian production (at a plant on Sarawak, North Borneo) would be withheld until 1983 or 1984. For the same reason the Philippines is considering a pulp and paper project instead of a third fertilizer plant. Singapore, responding to the complaint of Indonesia that it was already manufacturing small diesel engines and did not welcome competition, announced that it would not undertake the diesel project as an ASEAN venture, but would undertake it on its own in conjunction with a foreign firm. And Thailand has not resolved the problems it faces in developing its soda ash plant. Its rock salt deposits, from which soda ash is extracted, are in a remote area in the northeast; to get the product to market necessitates developing rail transport to a new port.

In May 1977 at the third meeting between ASEAN and Australian officials held in Solo, Indonesia, it had been decided to study grain handling and storage in order to minimize losses of paddy which ran from 15 to 25 percent; in the case of Malaysia the losses were "almost equal to the amount of rice imported each year." It was hoped to find ways to reduce loss by at least five percent, partly by mechanization. Australia agreed to provide a total of US$1.5 million for this study and for others, including studies on new ways to utilize rice hulls and on improved handling of meat, fish, fruit and vegetables. Australia also agreed to consider ASEAN's complaint that protectionist policies keep ASEAN manufactured goods out of the Australian market, limiting ASEAN exports to Australia to raw materials.

At the Third Meeting of the ASEAN Economic Ministers held in Manila on January 20-22, 1977 a "Basic Agreement on Establishment of ASEAN Preferential Trade Arrangements" was initialed for signature by the ASEAN foreign ministers. The intent was to introduce preferential tariffs on ASEAN products within ASEAN on a product by product basis. The Philippines, Thailand and Singapore concluded bilateral agreements to lower a wide range of tariffs 10 percent and to sell or buy at preferential rates such basic commodities as rice, sugar and crude oil in time of glut or shortage; Indonesia was reluctant to go along. In February, however, the Agreement was signed in Manila by the five foreign ministers to confirm preferential trade arrangements and to work to extend them. Responsible officials were to meet every three months to consider 100 (later 500) items for tariff reduction to bring the number of products covered by preferential tariffs to 1,326 by March 1979. In October 1977 the 3rd Annual ASEAN Council on Petroleum, meeting in Manila, agreed to develop a common offshore oil policy, setting up feasibility studies. Malaysia and Indonesia as producers, and Singapore as a refiner, agreed to give priority to ASEAN members in time of shortage; the others in turn agreed to buy from them in time of glut.

ASEAN was also seeking to expand its economic relationship with Europe. In 1975 it had sought to "examine areas of agreement" between it and the European Economic Community (EEC). A study group had been agreed to by both organizations and appropriate committees established. In April 1977 the first conference of ASEAN with EEC and European banking and industry representatives took place and proved an important forum for an exchange of ideas; the Europeans became more aware of ASEAN, its problems, goals and potentials.

This initial contact led to further discussions as ASEAN sought tariff adjustments for ASEAN exports and recognition from the European bloc of ASEAN as a Southeast Asian bloc. By 1978 trade with the EEC was 14.12 percent of total ASEAN trade with the rest of the world. At a ministerial meeting between the two blocs held in Brussels in November 1978 the EEC agreed to finance feasibility studies for a Post-harvest Grain Research and Training Program, a follow-up to the Australian-financed study, and an ASEAN Timber Industry Research, Development and Training Center.

A major move was taken by three of the five ASEAN nations in February 1977 when the foreign ministers of Singapore, Indonesia and Malaysia signed the Malacca Strait Accord. The Accord established an under-keel clearance limitation for ships in the Malacca Strait of 3.5 meters, and a safe speed for tankers in dangerous waters of 12 knots per hour. It also established an anti-pollution fund to clean up oil spills (there had recently been two). Japan, as the largest user of the strait, agreed to set aside US$1.3 million for the fund; the ASEAN states did not specify their own contributions.

In further political moves, at the Islamic Conference in Libya in June 1977 Indonesia and Malaysia supported the Philippines in its handling of the Muslim rebellion in its southern provinces. They advocated a continuation of the ceasefire and continued peaceful negotiations to resolve the differences between the rebellious Muslim minority and the government, ruling out outside intervention. In similar fashion ASEAN members supported Indonesia in international forums when the issue of Timor (a former Portuguese enclave) arose. Within ASEAN Malaysia and Thailand continued cooperating to solve the guerrilla problem along their common border.

A second ASEAN Summit was held in Kuala Lumpur in August 1977. The ASEAN heads of government reaffirmed the unanimous decision—taken at the ministerial conference in February—to try to develop peaceful relations with Vietnam, Kampuchea and Laos (which had fallen to pro-Hanoi communist forces in December 1975), to refrain from assigning to ASEAN a defense or security role, and to continue their commitment to economic goals. They also sought to improve political and economic relations with Japan, Australia and New Zealand, and the prime ministers of these three nations were invited to Kuala Lumpur to meet with ASEAN heads of government following the summit meeting. All three accepted, an indication of the importance they ascribed to ASEAN.

ASEAN sought improved political relations with these states because, according to an observer, it was concerned over the "diminishing U.S. role in the region after the Communist takeover in Indochina and [the] increasing superpower [Chinese-Soviet] rivalry"; it was hoped that these states could help bring about better relations between ASEAN and Indochina.

On the economic side ASEAN sought greater access to the markets of the developed countries, particularly for semi-processed and manufactured products. Marcos cited Japan as needing to liberalize its policies, claiming it limited its imports almost entirely to raw materials and to products produced by Japanese manufacturing firms that had been exported by Japan to Southeast Asia because they were either labor intensive or polluting.

On a positive note Marcos commented that "the most notable achievement of this conference is finally and at last the transformation of this region that has been preoccupied with conflict, haunted by mistrust and suspicion, into a region of cooperation and solidarity beyond our most sanguine hopes." To aid in this spirit of cooperation the Philippines dropped its 14-year-old claim to the Malaysian state of Sabah.

Observers generally agreed that the second summit was a success and the second decade was off to a strong start in the field of intra-ASEAN cooperation. However, events proved that cooperation with the communist states of Indochina was still out of reach. Hanoi continued to refuse to recognize ASEAN as such and in 1978 countered ASEAN's proposed "zone of peace, freedom and neutrality," calling instead for a "zone of peace, independence and neutrality." The ASEAN nations read "independence" to mean the kind of independence and liberation Hanoi had brought to South Vietnam and Laos.

1977 and 1978 saw ASEAN and the U.S. moving toward greater economic and political cooperation. In September 1977 ASEAN foreign ministers met for the first time as a group with U.S. officials to discuss economic affairs. The joint statement issued at the end of the conference said that the two sides agreed that "commodity stabilization agreements should be continued and intensified" and both sides would address the problems of foreign investment taxation and protectionism. In 1978 a second ASEAN-U.S. dialogue was held at the ministerial level. There was no joint formulation of policies but both sides began to reconsider their immediate post-1975 political positions because of the continued intransigence of Hanoi and the increasing role played in Southeast Asia by the Soviet Union—its naval presence in the Indian Ocean and South China Sea, its military advisors and position as purveyor of arms and military equipment in Vietnam. The entire area was being destabilized by the flight of hundreds of thousands of Vietnamese, mostly ethnic Chinese many of whom were leaving by boat to Malaysia and Thailand, and to a lesser degree to Indonesia and the Philippines. The plight of the refugees, particularly the "boat people," was of international concern. At the same time the communist government of Kampuchea was creating widespread starvation within Kampuchea and a second flow of refugees by vigorously enforcing its totalitarian communist agrarian economic policies.

In May Prime Minister Lee, in a change of mind from three years earlier, announced: "Our best policy is to keep our economic and political links with America, Japan and Western Europe." He pointed out, however, the very real role played by ASEAN itself: "ASEAN can provide cohesion and coherence for five non-Communist countries in the midst of great changes in the great power balance between America and Japan, the Soviet Union and China . . . . There is increasing consultation on important regional issues, leading to more approximate attitudes and policies. It has lessened the dangers of Communist or minority irredentist guerrillas growing in strength in sanctuaries across the borders. The flow of arms to such groups has become more difficult. ASEAN can become a stronger force for regional stability and cooperation."

In August 1978 in Washington for the second US-ASEAN conference on economic cooperation and consultation, both Carlos P. Romulo of the Philippines and Rajaratnam of Singapore told the U.S. that it must accept responsibilities in Southeast Asia as the result of its role as "leader of the free enterprise system." At the National Press Club Rajaratnam expanded his earlier remarks saying that the U.S. could prove the value of democracy and the free enterprise system by supporting both in Southeast Asia through the medium of ASEAN. "All that is required is the will and the imagination and a fraction of the money expended in Indochina to help the ASEAN countries prove that the non-communist system can work." U.S. Secretary Cyrus Vance responded, saying "that" today no Asian reality is more striking than the success of ASEAN in promoting the growth and vitality of the region," and pledged support from the U.S. Export-Import Bank for ASEAN industrial projects and from the Overseas Private Investment Corporation for private investment. He also agreed to the creation of a joint US-ASEAN business council and promised increased aid for the Asian Development Bank.

In late December-early January 1979 Vietnamese troops overthrew the pro-Chinese communist government of Pol Pot in Kampuchea and set up the pro-Soviet and pro-Vietnamese government of Heng Samrin in a move that again set thousands of refugees fleeing into Thailand and brought 180,000 Vietnamese troops to the Thai border in pursuit of Pol Pot forces. In the Joint Statement issued on January 13, 1979 after the Special Conference of ASEAN Foreign Ministers which was called to show solidarity with Thailand, the ministers recalled the promises to ASEAN countries by Vietnamese Prime Minister Pham Van Dong on his swing through Southeast Asia in September 1978. In each country he had sought to allay past suspicions and had signed a joint agreement to seek peaceful solutions to problems, promising to "cooperate in the maintaining and strengthening of peace and stability in the region." The ASEAN ministers strongly deplored the "armed intervention against the independence, sovereignty and territorial integrity of Kampuchea" and "affirmed the right of the Kampuchean people to determine their future by themselves, free from interference or influence from outside powers." In calling for the "immediate and total withdrawal of the foreign forces" they urged the United Nations Security Council "to take the necessary and appropriate measures to restore peace, security and stability in the area."

In February the situation further darkened when China invaded Vietnam. Romulo spoke for the others when he said on February 13: "The Indochinese situation has, without doubt, affected the stability of the region. The speed of developments in that area and its implications have raised the question of possible threats to other countries of Southeast Asia."

Exacerbating the situation was the already severe refugee crisis. According to the UN High Commission for Refugees, by June 1979, over 1 million refugees had fled from their home countries in Indochina, 550,000 of them to other nations in Southeast Asia. Of that number 200,000 had been resettled outside the area and 350,000 were awaiting resettlement. Over 245,000 had crossed the border by land into Thailand, 81,000 of whom had been resettled. Of the 201,950 "boat people" who had fled to Southeast Asian nations, 132,850 remained to be resettled, 75,000 of them in Malaysia and 43,000 in Indonesia. Political and economic pressures on ASEAN states were intense. In December 1978 Malaysia—at that time still seeking to deal reasonably with Vietnam, fearing to accept an organized influx of refugees, and attempting to gain world-wide recognition of the gravity of the problem—had refused to accept the refugees aboard the ship Hai Hong. It accused the U.S. and Australia, as well as other developed nations, of "selective acceptance" of the refugees, leaving Malaysia with "the crumbs." Malaysia succeeded in arousing an increased sense of urgency and international responsibility for the resettlement of these displaced persons.

Following the fall of Kampuchea to Vietnam—and the resultant new wave of refugees—Indonesia, with Singapore's approval, offered Galang and another island 40 miles from Singapore, as refugee processing centers, and the Philippines offered a small island off Luzon. The United Nations agreed to do an immediate feasibility study on how best to utilize these sites. At their Bangkok meeting in February ASEAN ministers had laid down the conditions that: a) the inmates must be resettled in a reasonable time, b) the country providing the site should determine the number of refugees accepted and have administrative and security control over them, and c) the costs of housing, processing and resettling must be borne by third countries.

The period between the January 1979 Special Meeting of Foreign Ministers and the Bali Ministers Meeting in late June was marked by intense political negotiations among the ASEAN states and with Burma. There was much visiting among the states—what one observer called "piecemeal summit"—because the leaders did not want to overreact by calling a formal summit. Prime Minister Kriangsak of Thailand went to Indonesia to talk to Suharto and apparently won Indonesiar recognition of Thailand's vulnerable position as a "frontline" state

In the meantime, according to the Far Eastern Economic Review, "Hanoi was delivering its strongest blast yet against the five-nation grouping which for years has doggedly tried to make friends with the Vietnamese. The ASEAN countries, snarled Hanoi's Nhan Dan, 'should refrain from colluding with the Chinese reactionaries and other imperialist forces against Vietnam, Laos and Kampuchea.' "

ASEAN, still trying to take a conciliatory position, at the United Nations called for all foreign troops to leave the states of Southeast Asia—i.e. Chinese forces from Vietnam and Vietnamese forces from Laos and Kampuchea. The proposal was strongly opposed by the Soviet Union. Although the Chinese forces voluntarily withdrew, Vietnamese forces remained in place. In late May Hanoi offered to sign a Treaty of Friendship, Cooperation and Non-Aggression with Thailand, but was turned down by the Thai on the grounds that they "lacked a common border" and so such a treaty was unnecessary. Hanoi made similar offers to the other four ASEAN nations on the eve of the Bali conference in an apparent attempt to split ASEAN, but had no takers. No offer was made to end the refugee exodus.

At the Bali Foreign Ministers Meeting of June 28-30 Singapore's Rajaratnam spoke bluntly against Vietnam's conquest of Kampuchea and its alleged policy of forcing refugees, most of them ethnic Chinese, to flee Indochina. He is quoted as describing the refugees as "human bombs" which Vietnam's leaders were purposefully loosing on the ASEAN nations, knowing full well that "almost all ASEAN countries have delicate problems with their Chinese minorities [some 50 million]. The massive unloading of Chinese refugees on to these countries can only exacerbate racial sensitiveness and, if the flow is sustained long enough, lead far more effectively than an invading Vietnamese army . . . . In no time, ASEAN prosperity, ASEAN stability and ASEAN cohesion would vanish into thin air, and conditions of life would soon be on a par with those now prevailing in Indochina . . . . It then needs only a small twist to convert racial wars throughout Southeast Asia into a massive anti-China movement, (China being) the common foe of the Vietnamese and the Soviet Union."

His colleagues were apparently unprepared for such forthrightness and backed off from his suggestion for a strong stand—which included arming the ousted Pol Pot regime. The public statements at the end of the conference only reiterated "support for the right of the Kampuchean people to determine their future by themselves . . . and called for the immediate and total withdrawal of the foreign forces from Kampuchean territory."

Aware that there were some 150-180,000 Vietnamese troops on the Thai-Kampuchean border, the ministers noted that any escalation of the fighting in Kampuchea or any incursion of Vietnamese forces into Thailand would endanger the peace and security of the whole region. They reiterated their "firm support and solidarity" with the government and people of Thailand and called upon Vietnam to show its good intentions by withdrawing from the Thai-Kampuchean border. At the same time they promised to "strengthen their cooperation with each other in all fields, thereby enhancing their respective national resilience as well as ASEAN resilience."

Pinpointing Vietnam as the cause of the deluge of refugees from Indochina "which has reached crisis proportions and has caused severe

political, socioeconomic and security problems in ASEAN countries and will have a destabilizing effect on the region" they announced that they would not take any new arrivals and would expel those in existing camps if they were not resettled elsewhere or allowed to return to their respective Indochinese states. They concluded by calling upon the international community to persuade Vietnam "to stop the exodus."

Immediately following the Foreign Ministers Meeting the ministers met with U.S. Secretary of State Vance and the foreign ministers from Japan, Australia, New Zealand, and Ireland as a representative of the EEC, and discussed both political and economic matters. In a political vein, Vance commented in his prepared address: "Since your summit in Bali three years ago ASEAN has achieved an impressive degree of cohesion. It has withstood political and economic challenges to that cohesion. It has gained international recognition, respect and support, and it has contributed significantly to the rapid growth of its member states." Discussing the threat to peace in Southeast Asia posed by Hanoi's repeated aggressions, Vance stated that the U.S. had promised to support Thailand and added: "We are committed morally and by treaty to support the ASEAN states. We have made this clear to all concerned—and directly to the Soviet Union and Vietnam." In the matter of refugees, he said the U.S. promises to continue to help by accepting "double the number of refugees, increasing the number to 168,000," and by working with the international community to find ways to alleviate the pressures on ASEAN. Although Vance said that the U.S. was "increasing and accelerating military assistance for individual ASEAN states," he pointed out that the U.S. position on Kampuchea differed from the stand taken by ASEAN, asserting that "neither of the two governments claiming power represent the people of Kampuchea." He thus undercut the support ASEAN was giving the overthrown Government of Democratic Kampuchea, it being the government recognized by the United Nations.

For its part Japan agreed to double its contribution to refugee relief and said it would like to see an international conference to discuss Kampuchea.

Three weeks later ASEAN took its complaints about the refugee situation to the Geneva conference which had been called to discuss the problem. Fifty-seven countries including China, the USSR and Vietnam were in attendance. The UN High Commissioner for Refugees (UNHCR) had promises from the assembled governments to accept 233,000 of the 372,854 refugees in Southeast Asian camps of temporary asylum. (Indicative of the dilemma facing ASEAN the number in the camps had increased by 25,000 since the Bali meeting three weeks earlier.) The ASEAN ministers minced no words in pointing out that they could absorb no more. As Romulo said after announcing the Philippine government's readiness to make available a second island to accommodate temporarily up to 50,000 more displaced persons, after a certain point, "humanitarianism—like charity—begins at home." Viet nam, for its part, offered to set up processing camps for those who wished to leave the country under UNHCR supervision, but offered neither to stop the outflow nor to resettle those in foreign camps. As observers noted, "even UNHCR did not sound very optimistic about the offer."

ASEAN's firm and united stand at the Geneva meeting on the need for international assistance in handling the massive influx of refugees, and its willingness to condemn Vietnam for its role in creating the problem, enhanced ASEAN's status in the international community. It was seen as a political force to be reckoned with.

In economic affairs as well, ASEAN has in recent years been better able to present a united front. It has met frequently with Japan, its largest trading partner. In 1977-79 Japan accounted for a 25 percent average of ASEAN's total trade, and between 1951 and 1977 Japan invested 20.6 percent of its total direct overseas investment in the ASEAN area, more than half of it in Indonesia. When Japan signed a treaty with China in 1978 ASEAN feared that this role might be reduced. Indonesia, with 65 percent of its oil going to Japan, worried that Japan might buy oil from China and divert its investments to that potentially massive market. Japan and ASEAN held their "Third Forum" in May 1979 at which Japan assured ASEAN that it was "simply unthinkable" that it would develop Chinese relations at the expense of ASEAN, and promised instead to continue to increase both trade and the transfer of technology in the ASEAN area. It expressed an in- terest in raw material price stabilization and the common fund, but offered no concrete proposals to secure these goals.

ASEAN's economic and political relations with Australia have steadily improved through the 1970s, primarily as a result of initiatives by ASEAN. Access to the Australian market increased by 300 percent between 1969 and 1980, although the starting base was low. Australia is accepting some, but in ASEAN's view not enough, processed goods—such as textiles, apparel and shoes—as well as raw materials. In February 1979, however, Australia introduced a new civil aviation policy which was a threat to ASEAN airlines and tourist trade. It established a reduced "point to point" air fare between Sydney and London on British and Australian airways—with no stopovers permitted. For tourists taking advantage of this reduced fare this both ruled out free stopovers in Southeast Asia especially Singapore where London-Sydney flights normally transited, and eliminated transfers to Southeast Asian airlines. At a special meeting on February 22 of ASEAN economic ministers Singapore charged that Australia's policy was "a manifestation of the tendency of developed countries to change the rules as soon as the developing countries have mastered their old rules and overcome the obstruction posed by them. " ASEAN ministers agreed to negotiate with Australia—as a group—for a change in the policy and for a fair share of the airline business, although Singapore was the prime victim. After six months of talks Britain and Australia agreed to allow the five regional airlines a total of 350 seats a week in each direction. The concession was minimal but ASEAN's right to participate in the air traffic was upheld, and ASEAN stood firm and was accepted as a bargaining unit. It was proof to ASEAN that a unified stand was both possible and profitable.

In the field of banking ASEAN has been slow to move, although it has recognized the need for regional trading firms and financial institutions to provide risk capital and long term loans for regional enterprises. In August 1977 ASEAN central banks and monetary authorities entered into a "Swap Arrangement," establishing standby credits— each country setting aside US$40 million—to assist member states with liquidity problems. The money can be exchanged or "swapped" for domestic currency for three months, with one three-month renewal, and a country can borrow a maximum of US$80 million at a time. A Clearing Union is presently being established to clear trade transactions between ASEAN countries, and private banks within the area are experimenting in exchanging officers in order to encourage cooperation and to develop an interest in intra-ASEAN loans. The Asian Bankers' Council, formed in Singapore in August 1976, is exploring the possibility of establishing a Bankers' Acceptance Market as a means for financing short-term business needs. To date the Bankers' Council has concentrated on financing agriculture and agro-industries, measures to stimulate trade and investments, and banking education and training.

In the spring of 1979 Sixto Roxas, a Filipino international banker, put together the private ASEAN Investors Group—representing ASEAN-wide interests—to promote regional ventures. The Private Development Corporation of the Philippines announced a change in its by-laws to enable it to lend to any ASEAN nation; in the past it has been a funnel for World Bank funds to the Philippines.

In other ways ASEAN has enhanced intra-regional cooperation. In mid-1979 Thailand had a -shortage of agricultural and military diesel fuel; every member of ASEAN diverted oil to Thailand within a week of its need becoming known. To provide against a similar shortage of food, the First ASEAN Agricultural Ministers' Meeting in Manila in August 1979 set up plans to establish an emergency rice reserve of 50,000 metric tons to be available to member countries on three-day notice, and drew up proposals toward a common agricultural policy. The ministers also agreed to appoint a council to coordinate agricultural research and to train scientists, teachers and administrators. The ASEAN states have also agreed to hold trade fairs every two years to promote intra-regional trade. The first was held in 1978, the second is scheduled for Singapore in 1980.

In the cultural field, since 1978 ASEAN has offered scholarships to promote educational and cultural exchanges within the region, and Singapore has offered its own scholarships to citizens of the other four countries. An ASEAN Network of Development Education Centers has been proposed, and the ASEAN Book Publishers Association, after a series of seminars in June 1979 on ways to encourage intra-area cultural cooperation, drew up plans to hold an ASEAN Book Week. The conference of ASEAN Journalists has met annually since 1976.

Telecommunications within the area have improved, with a submarine cable linking Singapore and the Philippines completed in 1978; the section to join Singapore and Indonesia is under construction. It is hoped that all five states will be linked by 1982. There is talk of an ASEAN communications satellite and at present all but Singapore have contracts to use Indonesia's second satellite.

ASEAN is more and more seen as a viable force by outside powers. The USSR had to recognize ASEAN strength when ASEAN, refusing to condone or ignore what it considers Vietnam's responsibilities in creating the massive refugees exodus from Indochina and its invasion and overthrow of the government of Democratic Kampuchea, persuaded the United Nations to take cognizance of its position. The U.S. sees ASEAN as a stable political group in an unstable region and an example of economic and political pragmatism in an ideologically motivated area of the world. Japan, Australia, New Zealand and the European Economic Community see ASEAN as an emerging economic bloc controlling needed raw materials and able to take united stands in achieving common economic goals. In the Joint Declaration issued at the end of the EEC/ASEAN Ministerial Conference in Brussels in November 1978 the EEC recognized ASEAN "as a factor of stability and balance which contributes to the maintenance of peace in Southeast Asia."

ASEAN in turn sees itself as a "non-ideological, non-military, non-antagonistic" bloc of five Southeast Asian Nations which, according to Zain Azraai, Malaysia's ambassador to the United States, does not intend "to be anybody's surrogate"; we are not going to "defend anybody's interest but our own."

January 1980 Manila

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