The Regional Organizations of the Asia Pacific

The Regional Organizations of the Asia Pacific

Also by Casualties of the New World Order

The Regional Organizations of the Asia Pacific Exploring Institutional Change Edited by Senior Lecturer, School of Politics and International Relations, University of New South Wales, Australia

Editorial matter and selection and Chapters 1, 2, 6, 7, 10 and 12 2003 Remaining chapters Palgrave Macmillan 2003 2003 Softcover reprint of the hardcover 1st edition 2003 978-1-4039-0363-1 All rights reserved. No reproduction, copy or transmission of this publication may be made without written permission. No paragraph of this publication may be reproduced, copied or transmitted save with written permission or in accordance with the provisions of the Copyright, Designs and Patents Act 1988, or under the terms of any licence permitting limited copying issued by the Copyright Licensing Agency, 90 Tottenham Court Road, London W1T 4LP. Any person who does any unauthorised act in relation to this publication may be liable to criminal prosecution and civil claims for damages. The authors have asserted their rights to be identified as the authors of this work in accordance with the Copyright, Designs and Patents Act 1988. First published 2003 by PALGRAVE MACMILLAN Houndmills, Basingstoke, Hampshire RG21 6XS and 175 Fifth Avenue, New York, N.Y. 10010 Companies and representatives throughout the world PALGRAVE MACMILLAN is the global academic imprint of the Palgrave Macmillan division of St. Martin s Press, LLC and of Palgrave Macmillan Ltd. Macmillan is a registered trademark in the United States, United Kingdom and other countries. Palgrave is a registered trademark in the European Union and other countries. ISBN 978-1-349-50890-7 ISBN 978-1-4039-4402-3 (ebook) DOI 10.1057/9781403944023 This book is printed on paper suitable for recycling and made from fully managed and sustained forest sources. A catalogue record for this book is available from the British Library. Library of Congress Cataloging in Publication Data The regional organizations of the Asia Pacific : exploring institutional change/edited by. p. cm. Includes bibliographical references and index. 1. Asian cooperation. 2. Pacific Area cooperation. 3. Regionalism Asia. 4. Regionalism Pacific Area. 5. Asian Development Bank. 6. ASEAN. 7. Asia Pacific Economic Cooperation (Organization) 8. ASEAN Regional Forum. I. Wesley, Michael, 1968 HC412.R463 2003 337.1 5 dc21 2003044160 10 9 8 7 6 5 4 3 2 1 12 11 10 09 08 07 06 05 04 03

Contents Preface Contributors Abbreviations and Glossary ix xi xii 1. Introduction 1 Comparing Asia Pacific regional organizations 2 Approaches to institutional change 5 The organization of this volume 8 Conclusion 13 Notes 13 Part I The Organizations 2. The Asian Development Bank 19 The contexts of changes to the Asian Development Bank 21 Institutional Change in the Asian Development Bank 30 Conclusion 37 Notes 38 3. The Association of Southeast Asian Nations: Challenges and Responses 40 M.C. Abad, Jr The Evolution of ASEAN 40 Recent regional challenges 43 Long-term implications for regional principles and practices 51 Conclusion 57 Notes 57 4. Asia Pacific Economic Cooperation: Institutional Evolution and the Factors Driving Ongoing Change 60 Colin Heseltine Stimuli and shapers of APEC s evolution 61 APEC s origins and evolution 64 An expanding agenda 65 The consequences of an expanding membership 67 v

vi Contents Reviews and reforms 69 Integrating the business perspective 72 APEC and the World Trade Organization 73 The challenges ahead 73 Notes 75 5. The ASEAN Regional Forum 76 Akiko Fukushima Introduction 76 The prevailing security environment in the Asia Pacific 78 The birth of the ARF 80 The evolution of the ARF 84 The ARF s challenges and beyond 89 Notes 93 Part II Perspectives on Institutional Change 6. Membership Expansion and Change 97 Formal guidelines for membership expansions 98 Two logics of organizational expansion 101 Types of membership expansion 104 The conditions of organizational expansion 107 Widening versus Deepening 112 Conclusions 114 Notes 115 7. The Nature of Change 117 Types of change 118 Evidence of incremental change 120 Evidence of episodic change 134 Conclusions 143 Notes 144 8. The Conditions of Change 148 Julie Shannon Theoretical perspectives on institutions and change 149 Windows of opportunity: understanding change in regional institutions 154 Macro windows of opportunity 157 Micro windows of opportunity 163 Conclusion 170 Notes 171

Contents vii 9. The Dynamics of Change 177 Steve Bates The driving forces of regionalism 177 Retreat and defend explanations 178 Advance and compete explanations 182 Rivals all explanations 186 Domestic and the region explanations 192 The influence of ideas and learning 194 Conclusion 197 Notes 197 10. The Direction of Change 206 Determining the direction of regionalization 207 Scope 209 Authority 215 Capability 221 Diffusion 225 Conclusion 229 Notes 229 11. Conclusion 233 A portrait of change in Asia Pacific regional organizations 233 Asia Pacific regional organizations and the challenge of relevance 239 Conclusion: change and the future of Asia Pacific regional organizations 241 Notes 242 Index 243

Preface This project may appear to be motivated by the pursuit of objective explanations of institutional change to regional institutions in the Asia Pacific. In reality, it has been driven by a shared belief in both the inevitability and the desirability of further regionalization and more developed regional organizations in the Asia Pacific. The project probably would not have emerged had not the Asian economic crisis occurred in 1997. Pre-crisis beliefs were of an inevitable teleology of regional development, cooperation and advancing institutionalization; by implication the processes of regionalism and institutionalization were generally thought to be readily understandable, and in little need of explanation. The Asian economic crisis changed a number of things. Most basically, it removed all complacent beliefs in smooth improvements and inevitable, benign change. It also altered many of the rationales for regionalism, removing some existing ones and adding others as imperatives. And importantly for the genesis of this project, it left all four prominent regional institutions looking less than adequate in their responses to the collective crisis. Consequently, the intention of the contributors to this project is to advance understandings of processes of change in regional organizations of the Asia Pacific as a way of promoting the development of institutions that are more effective at responding to crises such as the Asian economic crisis, and preventing the widespread suffering and unrest that it caused. The project was made possible by a very old regional practice in the Asia Pacific: the easy interaction and socialization among informal networks of officials, scholars and businesspeople, all with common interests in regionalism. It has been able to gather together a mix of contributors from each of these fields, drawing strength from the different perspectives they bring. The origins of this research developed from a conception launched at the Asia Australia Institute at the University of New South Wales in Sydney, Australia. It planned a two-day research workshop, designed to gather together officials from regional organizations and governments, businesspeople and academics to examine the process of institutional change in Asia Pacific regional organizations. The meeting took place in September 1999 in Bangkok, Thailand, co-hosted by the Institute of ix

x Preface Strategic and International Studies, Thailand. It was also made possible through funding provided by Greenspot, Thailand, Ltd. All participants in that workshop have been valuable contributors to this volume, even if their names do not appear on the contents page. They are: M.C. Abad; Steve Bates; Suchit Bunbongkarn; Stephen FitzGerald; Kiki Fukushima; Colin Heseltine; Federico Macaranas; Edgardo Rodriguez; Julie Shannon; Rizal Sukma;. For their support and help we must also thank Mr Rudolfo Severino, Secretary-General of ASEAN, Mr Tadao Chino and the staff of the Asian Development Bank, and the staff of the APEC Secretariat. Our hope is that this volume in some way responds to the original intention of this project and does justice to the contributions and commitment of those who took part in its development. Sydney, April 2002

Contributors M.C. Abad, Jr is the special assistant to the Secretary-General of ASEAN, assisting the Secretary-General on matters relating to ASEAN s political and security cooperation. Before joining the ASEAN Secretariat in January 1993, Mr Abad served as Chief Presidential Staff Officer in the office of the President of the Philippines, from 1987 to 1992. Steve Bates is a policy adviser in the International Regional Unit of the Department of the Environment and Heritage, Australian Federal Government. From 1994 to 1998 he was executive officer of the Australian Member Committee of the Council for Security Cooperation in the Asia Pacific (AUS-CSCAP). He has a PhD in international relations from the Australian National University. Akiko Fukushima is a senior researcher at the National Institute for Research Advancement (NIRA) in Japan. Formerly working for the Japanese Ministry of Foreign Affairs, she has also been a member of the Committee on International Economy of the Japanese Prime Minister s Office since 1995. Colin Heseltine is currently the Australian ambassador to the Republic of Korea. He was First Assistant Secretary in the North Asia Division of the Department of Foreign Affairs and Trade, Australia between 1997 and 2000. His diplomatic postings include Santiago, Chile (1970 73), Madrid (1975 78), Beijing (Minister and Deputy Head of Mission, 1982 85, 1988 1992) and Taipei (Head of Mission, 1992 97). Julie Shannon teaches in the School of Politics and International Relations at the University of New South Wales in Sydney, Australia. is a senior lecturer in the School of Politics and International Relations at the University of New South Wales. He was previously a research fellow at the Asia Australia Institute, also at the University of New South Wales. xi

Abbreviations and Glossary ABAC ADB ADBI ADF AFTA AIA AIJV AMF AMM APEC APTA ARF ARIC ASA ASEAN ASEAN-ISIS ASEM ASPAC BAAIJV BMC CBM CEPT CER CSBM CSCAP CTI DAC DMC DPRK EAEC EMEAP EC Ecotech EEC EPG APEC Business Advisory Council Asian Development Bank Asian Development Bank Institute Asian Development Fund ASEAN Free Trade Area ASEAN Investment Area ASEAN Industrial Joint Ventures Asian Monetary Fund Proposal ASEAN Ministerial Meeting Asia Pacific Economic Cooperation ASEAN Preferential Trading Arrangements ASEAN Regional Forum Asia Recovery Information Centre Association of Southeast Asia Association of Southeast Asian Nations ASEAN Institutes for Strategic and International Studies Asia Europe Meetings Asian and Pacific Council Basic Agreement on ASEAN Industrial Joint Venture Budget and Management Committee (APEC) confidence-building measures Common Effective Preferential Tariff (AFTA) Closer Economic Relations (Australia New Zealand) confidence and security-building measure Council for Security Cooperation in the Asia Pacific Committee on Trade and Investment (APEC) Declaration of ASEAN Concord developing member country (ADB) Democratic People s Republic of Korea East Asia Economic Caucus Executives Meeting of East Asia Pacific Central Banks European Community Economic and Technical Cooperation (APEC) European Economic Community Eminent Persons Group xii

Abbreviations and Glossary xiii EU EVSL FDI FPDA FTA GATT GCI GDP IAP ICJ IMF INTERFET ISG ITA KEDO MAPA Maphilindo Mercosur MNLF MoF MTSF Mufakat Musjawarah NAFTA NATO NGO NIC OAA OCR OECD OSCE PAFTAD PBEC PECC PMC PRC SEACDT SEACEN SEANWFZ European Union Early Voluntary Sectoral Liberalization (APEC) foreign direct investment Five Power Defence Agreement Free Trade Agreement General Agreement on Tariffs and Trade general capital increase (ADB) gross domestic product Individual Action Plan (APEC) International Court of Justice International Monetary Fund UN International Force for East Timor Inter-Sessional Support Group Information Technology Agreement (WTO) Korean Peninsula Energy Development Organization Manila Action Plan for APEC Malaysia, Philippines, Indonesia Cooperation Organization Common Market of the South (Mercado Comun del Sur) Moro National Liberation Front (Philippines) Ministry of Finance (Japan) Medium Term Strategic Framework (ADB) Consensus Consultation North American Free Trade Agreement North Atlantic Treaty Organization non-governmental organization newly industrializing country Osaka Action Agenda (APEC) ordinary capital resources (ADB) Organization for Economic Cooperation and Development Organization for Security and Cooperation in Europe Pacific Trade and Development Conference Pacific Basin Economic Council Pacific Economic Cooperation Conference Post-Ministerial Conference (ASEAN) People s Republic of China Southeast Asia Collective Defence Treaty Southeast Asian Central Banks Association Southeast Asia Nuclear Weapons Free Zone

xiv Abbreviations and Glossary SEATO SLORC SME SOM SPL TAC TILF UN UNECAFE UNESCAP UNDP UNTAET WTO ZOPFAN Southeast Asian Treaty Organization State Law and Order Restoration Committee (Myanmar) small or medium enterprise Senior Officials Meeting Special Programme Loan (ADB) Treaty of Amity and Cooperation Trade and Investment Liberalization and Facilitation (APEC) United Nations United Nations Economic Commission for Asia and the Far East United Nations Economic and Social Commission for Asia and the Pacific United Nations Development Programme United Nations Transitional Administration in East Timor World Trade Organization Zone of Peace, Freedom, and Neutrality