Economic Tensions Worry ASEAN

The Assn. of South East Asian Nations was looking north this week as foreign ministers of the six countries discussed their economic prospects.

“We see the Americans and Japanese visiting Peking and the Chinese going to Washington,” Indonesia’s Foreign Minister Mochtar Kusumaatmadja said, explaining ASEAN’s concern that this region may be playing second fiddle in the economic dynamics of the Pacific Basin.

Malaysian Prime Minister Mahatir Mohammed made the same point in opening the annual ASEAN ministerial meetings here, saying:

“We still are part of the engine of growth and the days ahead are by no means dark.

“We must make sure that the economic tensions between our friends--the United States and Japan--are not escalated; indeed that they are dissipated. Above all, we must ensure that the solution of their problem should not be at our expense.”

Foreign trade, particularly the fear of protectionism in the developed world, was the main topic in economic discussions here.

Commodity Producers

In their communique, the ministers talked of increasing productivity and efficiency in the “face of growing protectionism and blatant commodity market manipulation.”

With the exception of Singapore, the ASEAN countries are commodity producers, and they are looking for expanded markets in Asia, the United States and Europe.

U.S. imports from ASEAN countries rose 18.3% in 1983 and another 21.9% in 1984. But some regional exports, particularly textiles, remain a matter of protectionist concern here.

Secretary of State George P. Shultz tried to allay some of the anxiety on his arrival at midweek.

He pointed out that the United States had recently decided to designate 150,000 tons of its 180,000-ton strategic tin stockpile as a permanent holding and to sell off the remaining 30,000 tons in an orderly manner after consulting with big tin producers like Malaysia and Thailand.

The decision removes the whole 180,000 tons as an “overhang” on the market, he said.

ASEAN as a group is the United States’ fifth-largest trading partner. Japan is the largest exporter and importer in the region and the ministers commended Tokyo’s recent market-opening measures affecting ASEAN products--and asked for more.

The ASEAN states--Thailand, Malaysia, Singapore, Indonesia, the Philippines and Brunei--are eagerly seeking foreign investment, though the opportunities vary from country to country.

The ministers also called for more domestic investment.

Missing Reality of ASEAN Market

Mahatir called attention to the prospects: “We now see our entrepreneurs and traders eyeing the ‘vast’ China market but missing or dismissing the reality that is before their very eyes--the ASEAN market,” he said.

“Statistics tell us what our deflected imaginations fail to grasp: that the ASEAN market is four times the size of the China market (and) not in a faraway land whose business practices and systems are uncertain, and, in some areas, still an unknown quantity.”

Mahatir also pressed for improvement on a traditional problem of the ASEAN group--intra-ASEAN trade.

Many of the countries’ exports are competitive with each other, and he urged the member nations to seek areas of “complementarity.”

“Is it not time,” he asked, “for our private sector to know as much about the markets of each of the ASEAN states as we know about the markets of Japan, of Europe and of the United States?”

Economic growth in the region remains by far the strongest in the developing world, but the economic planners clearly see a need to prepare for a global downturn, and they worry that a Washington-Peking-Tokyo axis might leave them on the outside in the Pacific.