A 'BOLD' BAND OF BROTHERS

Opinion Malaysia's Abdullah Badawi on "the ASEAN way"

Interview Indonesia's Ali Alatas speaks his mind

Notebook On the trail of the ASEAN spirit in Hanoi

The Great Divide The Haves and Have-nots

THE SUREST WAY to raise doubts about the boldness of any plan is to label it "bold." But that is exactly what ASEAN leaders chose to do at the Hanoi summit when they endorsed a "Statement on Bold Measures" outlining the organization's approach to the economic crisis. The package aims to make member nations more enticing to investors and traders by accelerating trade liberalization and offering various incentives. ASEAN's leaders had no doubt that the measures matched the label. Indonesian Foreign Minister Ali Alatas called them "urgent" and "concrete." Said Alatas: "Within ASEAN, we want to go even faster, which shows that, as a whole, we realize that precisely because we are in crisis, we should not look inward, but open up even more." But a question arises - are all ASEAN members ready to be bold?

At the heart of the package is an acceleration of the ASEAN Free Trade Area (AFTA) scheme, the centerpiece of the group's effort to increase cooperation in the face of economic globalization. The original six members will aim to cut tariffs to 0%-5% by 2002, instead of 2003. Newer members will follow - Vietnam by 2006 and Laos and Myanmar by 2008. Where incoming member Cambodia will fit in is not certain. The rest of the package includes short-term incentives for investors, such as a three-year corporate tax exemption, 100% foreign equity ownership, and domestic market access. The leaders also pledged to move faster to launch the ASEAN Investment Area (AIA). Separately, they agreed on a Hanoi Action Plan that will study the possibility of an ASEAN currency, press cooperation on infrastructure and promote bond markets.

There were no major departures in policy, but Thai Deputy Prime Minister Supachai Panitchpakdi said the package was more than adequate if enacted. "You can't expect dramatic measures under the trying circumstances," he said. "These are not normal circumstances. You have unemployment everywhere, high interest rates and bankruptcies."

Not everybody is completely happy about ASEAN going bold. The newer - and poorer - members, for three. Laos, Myanmar and Vietnam knew what they were signing on to when they joined last year, but faster liberalization amid the Crisis is likely to raise the challenge of keeping up membership. According to insiders, in ministerial discussions prior to the summit, the three each voiced concerns about the accelerated free-trade plan, insisting on a clause allowing "flexibility." Hanoi and Vientiane were also wary of a proposal to set the target date for the launch of the AIA at 2003, seven years ahead of the original goal. Under the scheme, investors from any ASEAN country will be accorded "national treatment," or the same privileges local investors receive, when they put funds into another ASEAN economy. Vietnam and Laos had previously been given until 2013 and 2015, respectively, to comply. At the summit, both agreed "to achieve early realization of AIA no later than 2010."

In true ASEAN style, the below-the-surface griping is unlikely to bubble up. Economic disparity within the organization is not a new issue. But there remains concern that ASEAN, already troubled by disputes among the older members, could split further between "have" and "have-not" economies, possibly straining its ability to shape a consensus. "There are two tiers, with more-developed on one and less-developed on the other," Myanmar minister David Abel told Asiaweek in Hanoi. But he reckons that the benefits of mixing with the rich exceed any disadvantages. "The fact that the less-developed are together with the more-developed means the more-developed must help the others. We feel we can do much better by cooperating. Everybody can express their own views."

Says Indonesia's Alatas: "The newer members participate in all our talks so they know where we are going to, and they are happy with some of the grace periods to which we have been able to agree." Besides, he adds, the newer members are catching up fast. Perhaps in 10 years, nobody will remember a debate on disparity.