Economic Integration

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  • Topic: ASEAN, Economic integration, Southeast Asia
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  • Published : May 15, 2013
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ECONOMIC INTEGRATION IN THE ASEAN REGION

By: Noha Abu Mousa (4037856)

TBS983 International Business Economic Environment
Professor’s name: Dr. Gwendolyn Rodrigues
University of Wollongong in Dubai

Economic Integration in the ASEAN Region
Introduction
The Association of Southeast Asian Nations (ASEAN) is a political, as well as economic and cultural intergovernmental integration in geographical region of the countries in Southeast part of Asia. It should be noted that this form of integration in the region was needed for strengthening the position of the member-countries worldwide by means of facilitating its economic development, as well as fostering stability and peace, including enforecement of cooperation in terms of economy, science, technology, and culture in the region (ASEAN official website n.d.). ASEAN includes 10 countries: Indonesia, Malaysia, Laos, Thailand, Brunei, Cambodia, Philippines, Myanmar, Vietnam and Singapore. In total, these countries are home to 600 million people. ASEAN was founded in 1967 by Indonesia, Malaysia, the Philippines, Singapore and Thailand. Key strategic attributes of ASEAN countries are recognized in the geographic proximity regarding pivotal sea lanes and also in the economic potential of the region (ASEAN official website n.d.). The map that presents geographical boundaries of ASEAN is given below. [pic]

Source: Federation of ASEAN Shipowners' Associations, www.fasa.org.sg

It should be highlighted, that the first steps to interstate cooperation in Southeast Asia can be found in the years of the "cold war", but then it had a clearly marked military-political character and came down to participate in the global confrontation between the two systems. ASEAN managed to develop into a non-military regional association with the high international standing. This paper describes and furthers analyzes both weaknesses and strengths of the ASEAN unity in terms of economic, political, scientific, cultural cooperation. This report investigates the milestones of integration in the ASEAN region providing statistical data on the integration’s influence on the economy of the countries-members with a further focus on the specific areas such as monetary and fiscal integration, infrastructure and further regional integration. Moreover, existing threats and challenges for further ASEAN integration are described.

Integration
The supreme body of ASEAN is the Heads of State and Governments. Annual meeting of foreign ministers is the coordinating authority. ASEAN Standing Committee chaired by the Minister of Foreign Affairs exercises daily operations guidance (ASEAN official website n.d.). It should be noted that the main objectives of the regional integration were the following: - Fostering of economic and political, as well as social and cultural development of Southeast Asia (SEA) - Promoting of the peace and stability in the region.

- Expansion of co-operation and mutually beneficial assistance in economy, technology, science, culture, as well as education and training. - Encouragement of effective cooperation, both in industry and agriculture. - Fostering of mutually beneficial trade and raising of living standards of the population of the member countries. - Promotion of lasting and bilateral cooperation with outside regional and international organizations and countries (ASEAN Fact Sheets on the trade facilitation 2010). Economic cooperation within ASEAN concentrates mainly in the trade and aim to establish the ASEAN Free Trade Area. Singapore and Malaysia have the most developed trade links in the region. It was decided in 2003 to create a single market for goods, under which tariffs on industrial products would not exceed 5% and would be completely eliminated in the future. Agreement regarding certain tariffs covers provisions as follows: - Tariffs are minimized; however, the period when they come into force is...
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