On August 8, 1967, in Southeast Asia, the unification of states into one organization took place. The ASEAN member countries have identified two statutory goals of the Association: to promote the development of cultural and socio-economic cooperation among the members of the organization and stability and strengthening of peace in Southeast Asia.
Intro Sequence
Initially there were five members of the Association: Malaysia, Indonesia, Thailand, Singapore, Philippines. Only in 1984, the ASEAN member countries accepted the state of Brunei Darussalam into their ranks.
In 1995, Vietnam was added, in 1997 - Myanmar and Laos, and in 1999 - Cambodia. At the moment, the ASEAN member countries have ten members of their Association. Plus Papua New Guinea with special observer status.
Association Tasks
The organization faced a rather difficult task, with many components: to turn this regional grouping into the world economic and political center of a multipolar world, and it was this task that was at the headcorner, it is necessary to form free trade zones and investment zones.
But this is impossible without the introduction of a single monetary unit and the creation of an economic infrastructure of a deployed type. And in order to fulfill all of the above, it is necessary to form a special management structure. It was decided to start with this.
Crisis of 1997
The world monetary and financial crisis in 1997 could not but affect Southeast Asia. The ASEAN member countries have gone through serious trials, as the consequences of the crisis have had a negative impact on the economic and political course. Singapore and Brunei got a little less, but they also overcame all sorts of difficulties for two years. The rest of the ASEAN countries were on the verge of leaving the Association.
However, the "ten" continued the policy of economic integration, overcoming this test and strengthening the determination not to leave what was conceived in the middle of the road. Their perseverance was rewarded: by the end of 1999, many negative trends were overcome, and, considering in general, there was even a noticeable start of some economic growth, which reached a little less than six percent in 2000.
Structure
The supreme body of the organization, which was established by the ASEAN countries, is the meetings of governments and heads of state, which resolve all the main issues posed to the Association. Leads and coordinates the activities of the annual meeting, which is held at the level of the Ministry of Foreign Affairs, in eachcountry by turn (SMID). The current management is carried out by a standing committee, chaired by the Minister of Foreign Affairs of the country where the next Ministerial Council is currently being held.
In addition, the Secretariat, headed by the Secretary General, is constantly working in the city of Jakarta. There are eleven specialized committees in each area of activity. As part of ASEAN, the participating countries listed above hold more than three hundred events a year. The legal basis was laid back in 1976 (the Bali Treaty supporting friendship and cooperation in Southeast Asia).
Economy
The area of the economy in the SEA region is subject to great risks, therefore the countries of the Association are pursuing a line for liberalization and integration, based on the Agreement on the establishment of free trade areas (AFTA), the Framework Agreement on Investment Areas (AIA) and the Basic Agreement on Schemes Industrial Cooperation (AIKO).
Because the development program has a long-term option, which is developed by an expert group of leading scientists and politicians, businessmen and military leaders, ASEAN plans to achieve higher integration than the European Union. And this is: the unification of the banking sector of states completely, uniform armed forces and police for the entire Association, uniform departments, both foreign policy and scientific and technological. And these are far from all the plans that the ASEAN countries have built for themselves. Their list is not updated yet, but everything is possible.
AFTA
The most consolidated grouping of Asian countries, united by the same economic objectives, is the ASEAN free trade area. It "ripe" for the fourth meeting of governments and heads of state in 1992. At first, only six countries were included, and this continued until 1996, when Vietnam joined AFTA with its entry into ASEAN. Gradually, until 1999, the line-up grew to ten members.
Which countries are in ASEAN - known. And who else can join the Association in the near future? Papua New Guinea is still looking at the prospects. The free trade area was created with an eye on sub-regional trade in order to intensify trade within ASEAN. The conditions for the growth of such mutual trade should have affected the competitiveness of the economies of their own countries. Plus, political consolidation and the involvement of even less developed countries of Southeast Asia in such cooperation.
SEPT
Free trade area requires special economic tools. ASEAN has a General Effective Preferential Tariff Agreement (CEPT). All participating countries signed this agreement at the Singapore summit in 1992. The adopted CEPT scheme subdivides all goods into four categories. The first - with the level of tariffs subject to reduction according to the usual or accelerated schedule. This group of goods makes up 88% of the total product range of all ASEAN countries and is still expanding.
The following two categories of goodsare on the exemption list. One of them represents goods important to the national. security, protection of morals, for the he alth and life of people, as well as fauna and flora, all artistic, archaeological and historical values. The second category of goods for withdrawal is not subject to tariff reductions for reasons of domestic economy, and a steady reduction in the number of such goods is envisaged. The fourth category - agricultural raw materials - was initially completely excluded from the CEPT scheme. But in 1995, special conditions were defined for lowering tariffs for these groups of goods as well.
Industrial cooperation
In order to increase the competitiveness of goods produced in the ASEAN zone and, accordingly, attract investment to this region, new forms of industrial cooperation have been attracted. The Basic Agreement (AICO) was signed by the ASEAN member countries in 1996.
Under this scheme, AICO is intended to regulate production, except for products included in the CEPT Exemption List. Now this applies only to industrial production, but it is planned to intervene in other sectors of the economy. Moreover, a number of parameters in industrial cooperation programs have been changed. Tariff and non-tariff methods of regulation have become more widely used.
AIKO Goals
First of all, the course is taken to increase production, increase the number and quality of investments in ASEAN countries from third countries, deepen integration, expand domestic trade, improve technologicalbases, conquest of the world market with competitive products, encouragement, growth and development of private entrepreneurship. The condition for the creation of each new company was the participation of at least two enterprises from different countries with at least thirty percent of the national capital.
There are a number of preferences here - preferential tariff rates from the moment of creation, which gives an advantage in comparison with producers, which, according to CEPT, will reach this level only in a few years. In addition to this, non-tariff preferences are also provided - including the receipt of investments. If a manufacturer shifts a business from raw materials and semi-finished products to the final product, AIKO provides additional incentives - preferential tariff rates and unlimited trade in ASEAN markets, while access to intermediate products, as well as raw materials, is severely limited.
AIA
The creation of the investment zone was conditioned by the 1998 Framework Agreement. This zone covers all ASEAN territories, and domestic and foreign investments are attracted through franchising: investors are provided with national treatment, tax incentives, the abolition of restrictions on many parameters, even investments are allowed in inaccessible sectors of the economy, except for those that are on the List of temporary exceptions or in Delicate list.
The peculiarity of this Agreement is that it concerns only direct investments, without affecting portfolio investments. ASEAN member countries have significant differences in the leveleconomic development of states, therefore, the Framework Agreement was drawn up taking into account the gradual reduction of the List of temporary exceptions to complete failure - but not for everyone, but only for Indonesia, Brunei, the Philippines, Malaysia, Thailand and Singapore - in 2010. Later, the countries that joined ASEAN had to use the List for much longer. The AIA Council eliminated the lists for everyone in 2003.
