Feature | Beating the Odds : The Creation of ASEAN
Economic Progress
If ASEAN were one single country , it would already be the seventh-largest economy in the world and according to the latest International Monetary Fund World Economic Outlook figures , ASEAN countries have a combined GDP of USD3.08 trillion . It is predicted that by 2050 , they will rank as the fourthlargest economy in the world .
In 1992 , ASEAN members created the ASEAN Free Trade Area with the goals of creating a single market , increasing intra-ASEAN trade and investments , and attracting foreign investment . Under the agreement , the bloc prioritised the integration of 11 sectors , including electronics , automotives , rubber-based products , textiles and apparel , agrobased products , and tourism . As a result , intra-ASEAN trade grew from 19 percent in 1993 to 23 percent in 2017 .
After the 1997 Asian financial crisis , many felt that the volatility that came with the territory would impact the effectiveness of the bloc , but the region continued to prove remarkably resilient in the aftermath . The 1997 financial crisis impacted Indonesia , South Korea , and Thailand the most and though most of the governments of Asia had seemingly sound fiscal policies , the International Monetary Fund ( IMF ) stepped in to initiate a USD40
▴ Fourth ASEAN Summit , Singapore , January 27 – 28 , 1992
Image : asean . org
▾ Friend or foe ? Mahathir Mohamad and George Soros smile for the cameras at the press conference after their private meeting in Kuala Lumpur , 2016
Image : Wikipedia
billion programme to help stabilise the currencies of the countries whose economies were hit the hardest .
What started out as an exchange rate crisis swiftly became a banking and financial crisis and by late 1997 , it had infected the sectors that produce goods and services , due to rising interest rates , higher costs of imports , credit crunches in the banking sector , and the resultant bankruptcies of firms that became insolvent .
In the wake of the crisis , the foreign ministers of the ASEAN countries believed that the well-coordinated manipulation of their currencies was a deliberate attempt to destablise the ASEAN economies . Malayisan Prime Minister Mahathir Mohamad even accused George Soros , the Hungarianborn American billionaire investor and philanthropist , of using the wealth under his control to punish ASEAN for welcoming Myanmar as a member .
At the 30th ASEAN Ministerial Meeting held in Subang Jaya , Malaysia , in 1997 , the foreign ministers came together to issue a joint declaration to express their serious concern about the crisis and called for further intensification of ASEAN ’ s cooperation to safeguard and promote the bloc ’ s interests .