"Japan and ASEAN: Cooperation for Peace and Prosperity in the Asia-Pacific Region"

Preface

The Global Forum of Japan (GFJ) aims to contribute to peace and prosperity in the world by helping to build international consensus to be commonly shared by a transnational network of epistemic communities which include opinion leaders. For this purpose, GFJ has been actively engaged for the past 20 years in organizing 3 to 5 policy oriented bilateral and multilateral exchanges every year between Japan and the rest of the world.

It is against this background that GFJ held Japan-ASEAN Dialogue “Japan and ASEAN: Cooperation for Peace and Prosperity in the Asia-Pacific Region” in Tokyo on 20-22 February 2002. This report intends to summarize the achievements of these three day discussions between Japanese and their ASEAN counterparts. Though the printed version of the report will be made available to only the restricted number of people such as members of GFJ and their counterparts from ASEAN, the full text of the report will be shown at the website of GFJ as well.

The Japan-ASEAN Dialogue “Japan and ASEAN: Cooperation for Peace and Prosperity in the Asia-Pacific Region” was held under the joint auspices of GFJ and ASEAN ISIS and was attended by 75 Japanese and 22 ASEAN participants, including 11 panelists representing ASEAN. Participants exchanged opinions on matters of significance related to the future of Japan-ASEAN relationship. We would like to take this opportunity to express our gratitude to the Japan-ASEAN Exchange Projects, which generously supported this Japan-ASEAN Dialogue.

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1. Program / Agenda

"Japan and ASEAN:
Cooperation for Peace and Prosperity in the Asia-Pacific Region"

February 20, 2002/ANA HOTEL TOKYO
and
February 21-22, 2002/International House of Japan
Tokyo, Japan

Supported by Japan-ASEAN Exchange Projects

Co-sponsored by The Global Forum of Japan (GFJ), ASEAN ISIS

[Note] English-Japanese simultaneous interpretation provided

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2. Participants List

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3. Biographies of the Mediators and Panelists

[ASEAN Panelists] [Japanese Panelists]

(In order of appearance)

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4. Outline of Discussions

Session I


Session II


Session III


Session IV


Policy Recommendations

Although it was not planned for this Dialogue to come up with policy recommendations, a number of points have emerged out of discussions in four sessions which could be viewed as policy recommendations to both the Japanese and ASEAN authorities. They

I. With regard to Session I

1. The challenge posed by emerging China is unavoidable and it is a common task both for Japan and ASEAN to cope with it. Although China is a formidable competitor but China's emergence as an economic power also means opportunities. ASEAN should try to seize such opportunities.
2. In order for ASEAN to get revitalized and to play a leading role in ASEAN+3, it is imperative for ASEAN to increase competitiveness. To be more competitive, ASEAN should make further efforts toward real economic integration, toward full liberalization of trade and investments in the region.
3. ASEAN+3 is a very important scheme not only economically but also its potential contribution to peace and stability of the region and should be further strengthened. ASEAN should take the leadership in strengthening ASEAN+3 by integrating itself further and regaining competitiveness.
4. Japan should present its policy toward ASEAN more clearly.


II. With regard to Session II

1. Japan should continue to support CLMV in their efforts to catch up with the other 6 members of ASEAN.
2. CLMV should step up efforts to develop human resources, which is a key for economic development. In this regard, Japan should extend support to CLMV to establish more human resources development centers.
3. Japan and ASEAN should apply the principle of constructive engagement to Myanmar to help it in its struggle toward economic development.
4. Japan should reexamine its policy to reduce ODA, taking note of the fact that China and India started pledging funds to ASEAN.


III. With regard to Session III

1. To strengthen social and cultural relations between Japan and ASEAN, the following measures should be implemented in addition to a wide variety of measures already taken; strengthening of network between Japanese and ASEAN universities, further exchange of TV programs and films, encouragement of Japanese students to study in ASEAN and short-term training tours for students like tours to visit cultural heritages.
2. As there are so many areas for cooperation, priority has to be given in implementing programs.
3. A number of institutions should be established including Japan-ASEAN People's Assembly following the example of ASEAN People's Assembly, a Japan-ASEAN Joint Committee to prioritize programs and to monitor achievements, a Social Council to discuss such issues as family problems, and a Cultural Council to discuss such issues as cultural diversity, cultural rights and religion.
4. The Japanese society should be more open so that more ASEAN visitors will be welcome in Japan.
5. Illegal pirate copying of CDs should be controlled in some ASEAN countries so that Japanese musicians can perform in such countries.

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5. Keynote Papers

Session I
"ASEAN's Relations with Major Dialogue Partners with Emphasis on Its Relations with U.S., China and India, and Their Implications on Japan-ASEAN Relations"

Keynote Paper on "The Impact of an Asean-China Combination
On the Asean + 3 Process"

Presented by WIRYONO Sastrohandoyo
Senior Fellow, Center for Strategic and International Studies, Republic of Indonesia

The Asian financial crisis of 1997-98 caught Asean by surprise and weakened it to such an extent that the Association lost all its reputation for economic dynamism and a great deal of its appeal to foreign investors and other economic partners.

For over three decades before the Asian financial crisis, Asean had achieved considerable success in economic and political cooperation through a slow and patient buildup of one accomplishment after another. As the Javanese saying goes, "Alon-alon waton kelakon" - slow but sure. In some Southeast Asian circles, this was unsatisfactory, but every time an advocacy was raised for swifter action, holders of the prevailing view would point out the success that Asean achieved through cautious deliberation.

Not built for a crisis. Thus Asean did not evolve into an Association that could stand up to the shocks of a regional financial crisis such as the one that swooped upon the region in 1997-98. The achievement of Asean10, bringing together all ten countries of Southeast Asia countries into the same fold, with all their differences in stages of economic development and in their political and economic systems, compounded the crisis. It diminished Asean coherence at a time when coherence, as well as quick and resolute action, was what the doctor ordered for the region.

Since then, the Asean economies have achieved some measure of recovery from the crisis, albeit in an uneven way, with Indonesia, the hardest hit, still very much challenged. It is clear that on the whole, the Asean economies have become considerably less dynamic than their Northeast Asian counterparts.

Lessons not learned. Perhaps the first signs of recovery came too soon. Had they come a little later, the Asean economies might have taken to heart the lessons of the Asian crisis. They might have forged ahead more resolutely with structural economic reforms and reforms in governance. Instead, they became complacent. Believing that the crisis was already behind them, they no longer felt any need for penetrating and far-reaching reforms. Thus the valuable lessons from the crisis, which could have made Southeast Asia more resistant to future crises if taken to heart, were simply wasted.

Investors flock to China. Foreign investors had not been as complacent. At a time when the Asean economies needed a heavy infusion of new foreign direct investments, the investors were staying away. They were instead finding their way into a resurgent Indian economy or to the fast-expanding Chinese economy, with its vast market, that had recently opened itself to foreign investors. At one time, foreign investors who could not go to China had to settle for Southeast Asia, but now that they could go direct into the house, why should they be satisfied with standing at the gate?

At the same time, there was a perception of weakness on the past of the Southeast Asian economies: investors were not quite convinced of the commitment of Southeast Asian governments to reforming their economic structures, particularly their banking and financial sectors, and in general to achieving a high level of governance.

Unprepossessing as the Asean situation already was, it got even worse in the face of a global recession that saw old reliable markets for Southeast Asian exports sharply reduced. The economy of the United States, which is the consumer of last resort to many export-driven Asian economies, contracted. So did most of the economies of the Western world, except for France and the UK, which showed two percent growth. Japan had been in recession for more than a decade. Worldwide tourism had been in decline for some time, further eroding the revenues of the Asean economies.

The impact of 911. Then came the terrorist attacks of 11 September 2001 in the United States and the economic prospects for Southeast Asia degenerated from bad to dreadful. Economic activities all over the world went into a paralysis of conservatism. The two kinds of people whose money could provide relief to the Southeast Asian economies, investors and consumers, sat tight on their wallets.

Today, with widespread perception of an Al Qaeda terrorist network actively operating in Southeast Asia, particularly in Malaysia, Singapore, Indonesia and the Philippines, and anticipations of US military strikes against terrorists in the region, as presaged by the involvement of US troops in the Philippine Government's fight against the Al Qaeda-linked Abu Sayaff group in southern Philippines, any hope for a rise in investor confidence in the region would be unrealistic.

Troubled landscape. Thus the Asean economic landscape is a troubled one. The Cambodian, Lao and Myanmar and Vietnamese economies grew in 2001 at rates ranging from four to 6.1 percent (with Myanmar releasing no official figures on the state of its economy), but these are small economies that need a higher rate of growth just in order to catch up with the rest of the region.*
(* Only the GDP growth rates of Indonesia and the Philippines are official figures. The rest are as reported by Far Eastern Economic Review.)

Brunei Darussalam reeled as crude oil prices plunged after the 11 September terrorist attacks and would be lucky to achieve 2.5 percent growth in 2001.

The trade-driven Malaysian economy, which grew by an impressive 8.3 percent in 2000, was considered fortunate to show zero growth in 2001.

Indonesia, after attaining a lackluster 4.8 percent growth in 2000, came down to a disappointing 3.3 percent growth in 2001-which hardly figures in the face of an unemployed force that could be as large as 40 million.

The Philippines, saddled with a peace-and-order problem, had resigned itself to a 3.3 percent growth and was grateful to actually achieve a 3.4 percent expansion.

Singapore sank into recession in 2001 and suffered a 2.6 percent negative growth.

Like Singapore, Thailand saw its export markets shrivel and was expected by the end of the year to sustain a negative growth, but actually came up with a 1.2 percent growth.

Robust Northeast Asia. In contrast, the Northeast Asian economies-Japan, South Korea and China-have remained dynamic. Japan has been swarmed with economic problems but remains one of the world's greatest industrial powers.

Although South Korea today does not have much to show in terms of growth (2.5 percent in 2001), it has outperformed the rest of Asia in terms of reform and its banking system is now the healthiest among the countries hit by the financial crisis. It has also succeeded in reshaping its economy from one that is dependent on exports and investments to one where consumption has a more vital role.

China, of course, remains the fastest growing economy in the region (7.4 percent in 2001) and an irresistible magnet to foreign investors. And the more it has become attractive to foreign investors since after 11 September 2001. During 2000, China's total trade amounted to $4.743 billion, with exports valued at $2.492 billion and imports at $2.251 billion. Since it is the high-tech export sectors that were badly hit by the global recession, China's exports were not so badly affected, and could recoup whatever losses it suffered by making the most of its recent entry into the World Trade Organization.

A China-Asean FTA. In November 2001, China stole a march on Japan at the Asean Summit in Brunei Darussalam by securing an agreement with Asean to establish an Asean-China free trade area within ten years. It does not seem to be a partnership of equals: on one hand, here is Asean, which is a declining economic power, still struggling to recover from the impact of the Asian financial crisis and very much in need of external help; on the other hand, here is China, the fastest growing economy in the region, which has recently joined the WTO and therefore integrating with the international rule-based trade system,

But even a weak Asean on its side would add to China's weight as an economic power and would certainly amplify its credibility as a benign political force. That can only be the reason it promoted the idea of an Asean-China Free Trade Area with such audacious speed. On the whole, however, there is as much pessimism, even cynicism, as optimism about China's role in the region's future.

A flood of cheap goods. A recent World Bank study on China's accession to the WTO came to the conclusion that China and its major trading partners will benefit from China's joining the WTO. But the competing economies would - in the short term - experience minor benefits and suffer small losses. And Southeast Asian states will have to compete against China in low value-added manufacturing and will find themselves no match to this giant, with all its advantages of cheap labor and low industrial cost (some 30 to 40 percent lower than Indonesia's). It will simply flood these Southeast Asian markets with cheap commodities, while there is no realistic reason to expect that Chinese investments in Asean will increase in the next ten years.

In the ensuing competition with China, those that will have the hardest time are the economies that have taken the most severe beating from the Asian crisis and have yet to fully recover from it: Thailand, the Philippines, Malaysia and especially Indonesia where the financial and economic crisis had been compounded with so much social and political turmoil.

China beefs up its military. At the same time, the Southeast Asian countries still have to be fully reassured of China's intentions on the South China Sea-in spite of current joint efforts between China and Asean to formulate a Code of Conduct in the South China Sea. The fact is that China has been observed to have become the world's largest arms importer, buying ships, combat aircraft, and military computer equipment from various sources all over the world, but mainly from Russia and Israel. It has been estimated that China spends something like $60 billion a year for military hardware even while it is developing its own military industrial complex.*
(* Data on Chinese arms imports are from the Far Eastern Economic Review, 24 January 2002 issue)

In going through this buildup, China may only be thinking of Taiwan, but there is no guarantee that it will not also use its newly acquired military capacity to project its power all over the South China Sea and beyond. China may also be worried that the war against international terrorism could inordinately increase American military presence in Southeast Asia, and that the same war against terrorism could bring about a Japanese military resurgence. All of these will make the situation in Southeast Asia economically and politically so much more complex.

Asean + 3: An Idea Deferred. A rapid development of the Asean-China free trade arrangement could also impact adversely on another process that is just as important if not even more important to Asean: the Asean + 3 process.

The idea of an East Asian economic cooperation has been around for some time. In 1990, Malaysia proposed the establishment of an East Asia Economic Group (EAEG) as a way of coordinating the East Asian position in the wavering Uruguay Round of multilateral trade negotiations. This was opposed by the United States, effectively discouraging Japan from supporting it.

Soon after the Asian financial crisis, Japan proposed an Asian Monetary Fund but this, too, was shot down by the United States. Nevertheless, the idea of East Asian cooperation lived on in the discussions of regional government leaders and business circles on what to do to hasten recovery and prevent recurrence of the Asian crisis.

In any case, economic cooperation between Northeast Asia and Southeast Asia has been a reality for many decades now: Japanese foreign direct investments in Southeast Asia and the vast financial and business networks of the overseas Chinese created that reality. Now all it needed were the formalities.

Moreover, in the Asian Europe Meeting (Asem), the Asian participants, not coincidentally, are Asean countries and their Northeast Asian partners, China, Japan and South Korea. Within Asem these Asian countries have formed an effective caucus and in that sense, Asem may be regarded as a driving force for Northeast-Southeast Asian cohesion.

The idea is realized. In 1997, Japan proposed an Asean-Japan summit; Asean responded by proposing an Asean summit not only with Japan but with China and South Korea as well. Such a summit took place that year. But it was not until the Asean informal summit in Manila in 1999 that the idea of an Asean + 3 arrangement began to take hold and to gather momentum. Thus the idea of East Asian cooperation saw the light of day in that form: a dialogue process involving the ten Asean countries and China, Japan and South Korea.

Of course, not all considerations in this arrangement are economic. Strategic political considerations include the emergence of China as a global power and the question of whether it would be a benign global power or a source of trouble; the deteriorating relations between China and the United States over the issue of Taiwan and the projected National and Theatre Missile Defense system; the dormant but still combustible nuclear issue on the Korean peninsula; the unspoken and unacknowledged but real rivalry between China and Japan for leadership of the East Asian region; and, especially, the uneasy relations between Japan and the rest of Asia over its inability to expunge the stigma of its region-wide aggression more than half a century ago. These are the factors preventing the formation of a sub-regional cooperative arrangement in Northeast Asia that might be the equivalent of Asean in Southeast Asia.

Asean makes dialogue possible. It is with regard to the strategic political realities that Asean can be most useful to the Asean + 3 arrangement. The presence of Asean in that arrangement assures that meaningful dialogue can be carried out among the three Northeast Asian members of the grouping. For it would be unlikely for China to allow Japan to assume leadership of any East Asian process just as it is against heavy odds that Japan would acquiesce to Chinese leadership of the same process. Neither would be happy to see South Korea take leadership. But none of the three would take umbrage at Asean serving as the driving force in East Asian cooperation, a role in which Asean has a great deal of experience, having assumed similar roles in the Asean Regional Forum (Arf) and in the Apec. Many a bilateral dialogue, not possible in the framework of other forums, could be pursued with good results in the fringes of the multilateral dialogue within Asean + 3.

An economic boost. The Northeast Asian components of Asean + 3 have their own contributions to make. There is no doubt that the centre of economic gravity in East Asia today lies in the north. For one thing, the combined economies of China, Japan and South Korea are five times the combined Asean economies. Moreover, the Asean economies, as noted earlier, have become considerably less dynamic in the wake of the Asian crisis and, with their weaknesses exposed by the crisis, have become considerably less competitive in attracting foreign direct investments. Japan and South Korea have had considerable experience investing in Southeast Asia.

At least one course of development is certain for East Asian cooperation: a set of arrangements in the field of monetary and finance policies is now on its agenda. A major step in this direction was taken when Asean + 3 agreed to adopt a system of currency swaps that would enable members troubled by attacks on their currencies or other problems to gain access to the reserves of the financially stronger members in order to buy up their own currencies and thus stabilize exchange rates.

This currency swap agreement is but an expansion of the currency swap agreement reached among Asean countries much earlier. The difference is that with the involvement of their Northeast Asian partners, there is so much more money now available for the rescue of currencies under attack or in trouble. The successful implementation of this currency swap agreement can serve as the foundation for wider cooperation in the economic and other fields.

As the main forum of 13 East Asian countries, Asean + 3 can truly speak for the region and could serve as a counterbalance for any undue influence of the West on this part of the world. There is a strong political will to maintain the forum based on a healthy sense of interdependence among the 13 nations that it encompasses.

A long way to go. However, the forum is still in an embryonic stage, still more of a process than an organization, still subject to formidable inhibitions emanating from the political problems of the region. Moreover, the region is one of vast diversity - of cultures, political and economic systems and military capabilities - that it would take some time for the countries within it to develop a strong sense of community. It is more likely that tensions and apprehensions at potential conflict will persist in the region, although these will continue to be manageable.

The East Asian countries do need to develop a sense of community out of a deeper sense of awareness, appreciation and trust of one another; that goal can only be achieved over a long period of time. For the moment it is enough that they are drawn closer by a sense of practical need for one another. They have many common problems and they are beginning to deal with these problems as a unified group. East Asian cooperation can therefore grow steadily, naturally.

No favour to Asean. But if Asean went too strongly bilateral with China, it would only be at the expense of the development and maturation of the Asean + 3 process. Given the economic decline of the Asean countries and their inability to expand their intra-Asean trade, they do not seem to have any viable alternative but to explore new fields of economic cooperation, and China is one field that has opened itself wide to Asean. And the idea of the world's largest free trade area, with an aggregate population of 1.7 billion, is indeed very tempting. But the arrangement could work only in China's favour.

The Japanese initiative. Japanese Prime Minister Junichiro Koizumi, during his tour of five Asean countries, launched his own proposal for a comprehensive economic cooperation framework among Japan and Asean, which will ultimately also include Australia and New Zealand, centering on free trade agreements (FTA's), the first being with Singapore. But free trade agreements between Japan and other Asean countries are bound to be more difficult as, unlike Singapore, these other countries will be offering agricultural products that compete with those of Japan's politically powerful farming sector.

In any case, Asean would be doing itself a great disservice if it pursued a tack that would make it look like it was playing China against Japan. After everything has been considered, an Asean-China bilateral arrangement or, on the other hand, a set of Asean-Japan bilateral arrangements, would not be half as valuable as an Asean + 3 process that is evolving as it should. That may be the only viable way by which Asean, with its membership economically weakened and in the face of regionalization in full swing all over the world, can broaden its trade and investment base.

Aim for competitiveness. Asean countries need to realize that to become successful members of a free trade area, they must be able to build up their competitiveness. Free trade areas are as much about competition as they are about cooperation. They therefore have to put their individual economic houses in order, and resume pursuit of structural reforms and reforms in governance in order to restore the confidence not only of foreign investors but also domestic investors.

They must develop a capacity for creating added value, renewable added value, and develop it to a high degree. That means that their human resources must have a high level of managerial skills and proficiency with information and communication technology (ICT).

That also means a capacity to innovate, to create new knowledge when the current stock of knowledge no longer leads to solutions to problems, or to the opening of opportunities.

With such a capacity, the Asean countries will not only be able to compete in other markets but could also expand their intra-Asean trade.

They need to develop strong and viable networks, within and among themselves, and beyond the Southeast Asian region. Some of these networks are the sub-regional growth areas that the Asean countries are already committed to develop. One major network that will do Asean a great deal of good is Asean + 3.

Asean must move faster. And, to go back to the original problem of Asean, they need to be able to move faster than they have ever done. They have to abandon the rigidities that made it difficult for them to change and assume a flexibility that will allow them to adjust to new circumstances, new challenges. And while they see to it that the law is upheld and there is a level playing field for all players in their respective economies, they must guard against over-regulation that brings about not only rigidity but also confidence-destroying corruption.

If they had this capacity to move fast, to adjust and to be flexible in the first place, the Asean economies might have been spared from the devastation of the Asian financial crisis.

When they are capable of doing all that, then they will be able to make Afta work and be competitive enough to join any free trade arrangement, whether it be with China, with Japan or with all three Northeast Asian economies.



Session II
"Japan-ASEAN Cooperation to Resolve 'Divides' within ASEAN"

Keynote Paper

Presented by OTA Hiroshi
Governor, The Global Forum of Japan, Japan

I. The Importance of Resolving "Divides" within ASEAN

Resolving "divides" within ASEAN is one of the most important policy issues in ASEAN. The "ASEAN Vision 2020 adopted in The Second ASEAN Informal Summit raised "moving towards closer cohesion and economic integration, narrowing the gap in the level of development among Member Countries Members" as the essential task toward achieving dynamic development in ASEAN in 2020. Thus, resolving or reducing divides within ASEAN is important not only for the economic development for later joined ASEAN Members which joined it later, but also an indispensable condition for economic integration of ASEAN as a whole.

II The Occurrence and Substance of "Divides" within ASEAN

"Divides" within ASEAN occurred with the expansion of ASEAN. Today's ASEAN 10 was established after participation of Viet Nam in July 1995, Laos and Myanmar in 1997, and Cambodia in April 1999. These four countries are often referred to as CLMV, taking English initials of their countries. The common characteristic of CLMV is that the level of economic development is extremely low. Their per capita national incomes are as follows: (Unit: US dollar, Data of Viet Nam and Myanmar are as of 2000, others as of 1999)

Socialist Republic of Viet Nam 372: Laos P.D.R. 273: Union of Myanmar 300: Kingdom of Cambodia 253
Just for reference, per capita incomes of the 6 older members of ASEAN and the Least Developed Countries in other areas in the World are as follows:
(Data of Brunei, Malaysia, and Philippines are as of 2000, others as of 1999)

Republic of Singapore 23,436: Brunei Darussalam 14,094: Malaysia 3,516: Kingdom of Thailand 2,045: Republic of Philippines 1,007: Republic of Indonesia 682: (It was 1,155 in 1996 before economic crisis.)

People's Republic of Bangladesh 380: United Republic of Tanzania 220

As the above-mentioned data prove, the level of the economic development of CLMV is lower than old ASEAN members, standing more or less as the LLDC in the World. It would be difficult to maintain unity of ASEAN and achieve its economic integration without reducing these gaps as much as possible.


III ASEAN's Own Measures to Resolve "Divides" within ASEAN

1. ASEAN Vision 2020 and Hanoi Plan of Action

The Second ASEAN Informal Summit adopted ASEAN Vision 2020. While it is a mid-term plan prospecting development of the ASEAN region for 20 years till 2020, it raised "moving towards closer cohesion and economic integration, narrowing the gap in the level of development among Member Countries" as one of the basic action guidelines. This first action plan to achieve ASEAN Vision 2020 was adapted as Hanoi Plan of Action (6-year-plan from 1999 to 2004) at The 6th ASEAN Summit. While Hanoi Plan of Action raises plans such as the acceleration of the implementation of the AFTA, enhancement of food security and global competitiveness of ASEAN's food, agriculture and forestry products and development of the infrastructure for enhancing ASEAN's greater economic integration, it also emphasizes various plans for promoting human resource management such as strengthening regional networking of Human Resource Development centers.

2. IAI (Initiative for ASEAN Integration)

At the fourth ASEAN Informal Summit, ASEAN Heads of Government said "In order for ASEAN to have competitiveness and achieve regional integration, ASEAN countries must take a comprehensive approach, seeing the region as a single economy" and agreed to begin IAI (Initiative for ASEAN Integration). IAI is to narrow the divide within ASEAN and enhance ASEAN's competitiveness as a region, and focuses on education, skills, development and worker training, which are the key factors of the competitiveness.

3. Hanoi Declaration

Hanoi Declaration for correction of gaps of development for closer ASEAN integration was adopted at the ASEAN PMC in Hanoi, July 2001.
Hanoi Declaration, following ASEAN Vision 2020, Hanoi Plan of Action and IAI , stated that ASEAN will commit to narrow the gap of development among ASEAN countries for ASEAN's dynamic and sustainable prosperity, and they will provide special efforts and resources for infrastructure, human resources development and Information Technology, among others, in order to promote development of newer members of ASEAN (CLMV).


IV Japan's Cooperation

1. Economic Cooperation for CLMV in the Past

(1) Kingdom of Cambodia
(i) Cumulative total up to 1998 (Unit : US million dollars)
Grant aid 424.30 Technical Cooperation 118.26
Grant aid includes building infrastructure of transportation (e.g. road, bridge), social infrastructure, (e.g. water supply, electric power,) agricultural projects, and support for election management. Technical cooperation includes preservation of the health of mothers and children, measures against tuberculoses and upgrading of the legal system.
(ii) Japan played a central role in peace-making, reconstruction and stability of Cambodia, and served as the co-chairperson for the International Conference on Reconstruction of Cambodia (ICORC) and has been pledging aid at every Consultative Group as its essential member.

(2) Lao People's Democratic Republic
(i) Cumulative total up to 1998 (Unit : US million dollars)
Grant aid 469.33 Technical Cooperation 149.60
(ii) Grant aid includes aid for the field of basic human needs such as agriculture, rural development and medical treatment, and also the building of infrastructure of transportation, in cooperation with other donors such as the international organizations. Technical cooperation includes human resources development, maintenance of social infrastructure, agricultural/rural development, preservation of forests, and medical insurance.

(3) Union of Myanmar
(i) Cumulative total up to 1998 (Unit: US million dollars)
Grant aid 1,177.54 Technical Cooperation 155.51
Government Loan 1,296.59
(ii) After the cooperation was actually stopped after the political change in 1988, aid has been on a case by case basis.
Grant aid includes aid for increasing food production in order to support cultivation of products that would replace drug production, Plan for Improvement of the Health of Mothers and Children. Technical Cooperation includes cooperation related to basic human needs, and aid needed for democratization and liberalization of the economy.

(4) Socialist Republic of Viet Nam
(i) Cumulative Total up to 1998 (Unit : US million dollars)
Grant Aid 469.65 Technical Cooperation 278.39
Government Loan 783.57
(ii) The priority areas of aid include: (a) human resources development and systems development, (b) building of infrastructure such as electric power, transportation and others, (c) agricultural/rural development, (d) education, health care/medical service, (e) environment


2. Cooperation with ASEAN to resolve "divides" within ASEAN

(1) Japan's Cooperation in regards to Hanoi Plan of Action
The Eminent Persons Group established based on the proposal of Prime Minister Obuchi (then) submitted the final report on Japan-ASEAN Cooperation for Hanoi Plan of Action in October 2000, and manifested that Japan possesses its will and ability to cooperate in efforts to resolve divides within ASEAN that have become difficult as a result of the Asian financial crisis. Main emphasis was put on the building of basic infrastructure of transportation, energy, and communication, Mekong Sub-region development as the related project, realization of "East-West Corridor," infrastructure, and pilot plan of human resource development.

(2) Mekong Sub-region Development
The Mekong area includes CLMV, and so the Mekong Sub-region development would contribute to the development of CLMV and to the correction of the divides within ASEAN. Although Japan has traditionally considered the development of this area important and promoted projects such as the "East-West Corridor" plan, and it has recently stepped up cooperation. Specifically, it has been actively supporting both hard (building of infrastructure) and soft (development research, etc), such as the "East-West Corridor" plan.

(3) Others
(i) Japan-ASEAN South-South Cooperation Program
Prime Minister Hashimoto (then) advocated it at the Japan-ASEAN Summit in December 1997, announcing Japan's cooperation for resolving divides within ASEAN.
(ii) Obuchi Plan
When Prime Minister Obuchi announced a series of cooperation (Obuchi Plan) including cooperation for ASEAN's development at the ASEAN+3 Summit in November 1999, he specifically referred to the establishment of a human cooperation center for training personnel to promote the market economy, and strengthening those divisions of new ASEAN Members, for cooperation for the ASEAN as an institution. Following this, the Japanese government implemented grant aid for establishing human cooperation centers in Hanoi, Ho Chi Minh City, and at the National University of Laos.
(iii) Japan-ASEAN Exchange Fund
Japan-ASEAN Exchange Fund was established to implement the Obuchi Plan and began support for projects such as training at the ASEAN Secretariat of young diplomats of new ASEAN Members, holding IAI workshops, and supporting IT in new ASEAN Members.
(iv) Prime Minister Koizumi's pledge
Prime Minister Koizumi recently visited ASEAN countries and pledged in his policy speech in Singapore that "Japan will continue to cooperate in such areas as Mekong Sub-region Development so that Cambodia, Laos, Myanmar and Vietnam may accelerate their economic development."


V. Questions to be Asked

1. CLMV stand at a very early stage of development trying to move out of the poorest or near-poorest condition, and their economic development is not easy. Meanwhile, the economies of the 6 earlier members of ASEAN will surely continue to develop. Would narrowing and resolving the divides really be possible?

2. CLMV will be integrated into the AFTA by 2015 in principle. If they join the AFTA with insufficient economic development, would there not be a risk for their economies to be absorbed into those of earlier ASEAN members?

3. How should Japan and ASEAN support Myanmar which is the target of international economic sanctions?

4. Is there any room for the improvement in Japan's cooperation for resolving divide within ASEAN? Are there any specific requests to Japan from the ASEAN side?



Session III
"Ways to Make Japan and ASEAN Socially and Culturally Closer"

Keynote Paper

Presented by LEONG Stephen
Assistant Director-General, Institute of Strategic and International Studies, Malaysia


I. ENHANCING SOCIAL RELATIONS

People-to-people exchange for interaction is the most effective way. Population of Japan: 127 million ; population of 10 ASEAN countries 500 million. Must create more opportunities for meetings of cross-section of Japan-AEAN societies. Otherwise present categories of exchanges will remain elitist in nature. Some measures already undertaken but much more needs to be done to satisfactorily achieve closer social relations between Japan and ASEAN.

(1) Promoting Japan-ASEAN Tourism
This general category can contribute greatly to mass exchange of visitors from both sides. Relevant bodies should endeavor to encourage more Japanese tourists to visit more ASEAN countries rather than just a select and popular few (e.g., Singapore, Thailand, Philippines and Malaysia). ASEAN-Japan joint tourism bodies should create attractive packages for Japanese visitors. Because of lower incomes in the CLMV countries (new members of ASEAN), visits to Japan could be encouraged by some forms of discount incentives.

(2) Expanding Exchange to Cross- Sections of Society
(a) Youths
Annually, thousands of Japanese high school students go on overseas tours. Big effort should be made to steer them towards ASEAN countries. Other categories of youth include boy scouts, girl guides and undergraduates.
(b) Adult Groups in Society
Target segments include journalists, teachers (kindergarten, primary and high school level), policemen, postmen, firemen, mayors, members of women organisations, other non-government organisations/ civil society organizations.

(3) Social Exchange Among Politicians
Exchange visits by Japanese parliamentarians and local assembly members with counterparts in ASEAN countries. Although can exchange views on political and economic issues, main objective is to encourage socialising among the parliamentarians. Should ensure that various age groups and gender are well represented. Prefectural governments should also undertake similar exchanges with ASEAN counterparts.

(4) Sports
An excellent means for promoting relations between ASEAN-Japan. Friendly tournaments and demonstrations could be organised for popular sports such as golf, football, rugby, volley ball, badminton, karate, kendo and aikido, etc.

(5) Cyber Exchange
In the age of information and communication technology where societies are becoming increasingly connected via the Internet, Japanese and ASEAN citizens have a new means for interacting socially with one another. For example, since 2000, the website for Community Plaza Taman Malaysia-Japan (www.members.tripodasia.com.my) has been visited by both Japanese and Malaysians expressing interest in exchanging views with one another through the net. Similar websites could be set up linking Japan with other countries in ASEAN.

(6) Education
(a) Southeast Asia University
Proposed by Malaysia and supported by Prime Minister Koizumi in most recent visit to ASEAN countries, Japan could hasten the setting up of the university. Malaysia has offered venue for institution which will also utilise Japanese specialists.
(b) Increase Number of ASEAN Students in Japan
Japanese government should encourage more intakes of students from ASEAN countries into Japanese tertiary institutions: Aim at realising target of Prime Minister Yasuhiro Nakasone (1983) to attain 100,000 foreign students in Japanese institutions by year 2000. Total number as of May 2000 was 64,000. Half or one-third of remaining 36,000 could come from ASEAN countries.
(c) Japanese Education Exhibition
Currently held in Malaysia annually (participated by numerous Japanese universities) should be extended to other ASEAN countries so that more students from the region could seriously consider attending tertiary institutions in Japan. With decreasing university-age student population in the decades ahead (resulting from expected demographic decline), present Japanese institutions of higher learning will face problem of insufficient student enrolment to continue operations. Recruiting students from ASEAN countries could help alleviate this problem.
(d) Japan - related Organisations
The Centres for Japanese Studies and Japan Graduates Associations in ASEAN countries have been organising activities to promote better understanding of Japan in the older member countries of ASEAN. Japan Graduates' Association of Malaysia (JAGAM) and CJS, ISIS in Malaysia have been playing this role for over a decade. More of such activities could be encouraged for the newer members of ASEAN.


II. ENHANCING CULTURAL TIES

(1) Multinational Cultural Mission (MCM)
Set up jointly by Japan and ASEAN in 1997 resulting from Prime Minister Ryutaro Hashimoto's Visit to ASEAN countries in January 1997. Comprising ASEAN and Japanese government and private sector representatives. Objectives:


After visiting ASEAN countries, the MCM's proposal for "A New Vision for Regional Cultural Cooperation" made following recommendations:



(2) Performing Arts
Exchange of stage performances, dramas, dance, music (both traditional and modern expressions) between ASEAN and Japanese groups. Exchange of famous pop groups for younger generation. We hardly see Japanese rock bands in ASEAN countries. Need to encourage cross-national multicultural theatre collaborations.

(3) Exhibitions
Organise more traditional and contemporary arts exhibitions. Also children's art, handicrafts, photography, cartoons. Exhibitions / demonstrations of recent Japanese achievements in robotics (including household uses of robots) would be popular among ASEAN peoples.

(4) Film Festivals
An effective medium for helping Japanese and peoples of ASEAN to understand daily lives and cultures of both parties. A good variety of films from 10 ASEAN countries for Japanese audiences and numerous great Japanese classics and modern movies could be shown to variety of ASEAN audiences.

(5) Public Lectures
By Japanese experts/specialists for ASEAN audiences and vice versa. Topics could vary from Japanese architecture, drama (kabuki and noh), traditional tea ceremony, Japanese gardens, bonzai, ikebana, making of tatami, kimonos, lacquerware, paper, bamboo products and ceramics.

(6) Food Fiestas
Demonstrations by Japanese chefs on preparing popular Japanese dishes e.g. sushi, suki yaki, tempura, sashimi, unagi, yakitori and matcha ice cream. ASEAN chefs could visit various parts of Japan to demonstrate how diverse ASEAN dishes are made, e.g., satay, tom yam soup, gado-gado and chicken adobo.

(7) Exchange of TV Programmes
More exchanges needed for excellent Japanese documentaries and popular programmes. Even Nihongo lessons could be taught on TV in ASEAN countries. More programmes with cross-cultural themes and participation such as "Asia Bagus " should be created and promoted.

(8) Language and Song Contests
Nihongo essay and speech contests to be conducted in ASEAN countries and in Indonesian, Thai, Vietnamese or Tagalog for Japanese in Japan. Japanese song contests could also be promoted in ASEAN countries. Friendly karaoke contests could become popular at ASEAN-Japanese gatherings.

(9) Japan-ASEAN Festivals
Replicate Japan Festival in Malaysia in other ASEAN countries. For past decade, Malaysia has organised festival with over 20 events (e.g., including world's biggest Bon Odori with 40,000-50,000 participants).


CONCLUDING REMARKS

To successfully enhance Japan-ASEAN social and cultural ties in the 21st century, it is necessary to have four basic requirements: (1) need conscious and sustained efforts by both ASEAN and Japan; (2) need monitoring body or agency to collect and update data on activities and programmes pertaining to social and cultural relations between the two sides, (3) need to include as part of wider (national) development agenda for Japan and ASEAN countries, and (4) great need of funding.

As closer Japan and ASEAN social and cultural ties can contribute immensely to mutual understanding of the various societies involved thus enhancing peace and stability in the wider region in this new century, serious consideration is warranted for this noble endeavor.