The Economies of Southeast Asia, Second Edition

The Economies of Southeast Asia, Second Edition

Before and After the Crisis

Jose L. Tongzon

This updated and fully revised second edition provides a comprehensive examination of issues of paramount importance for Southeast Asian economies including: the economic implications of the 1997 Asian crisis for both older and newer members of ASEAN; the role of government and FDI in ASEAN economic growth and development; trade patterns with the US, Japan and the EU and the economic implications of China’s accession to the WTO for ASEAN countries; the environmental consequences of industrialisation and growth; the emergence of economic growth triangles and their contribution to ASEAN growth and regional cooperation; the prospects and challenges of ASEAN economic cooperation before and after the crisis; and the key challenges facing ASEAN member countries in the aftermath of the crisis.

Chapter 4: Sub-regional economic cooperation

Jose L. Tongzon

Subjects: asian studies, asian economics, development studies, development economics


Perhaps another significant development in the area of ASEAN economic cooperation is the emergence of economic growth triangles (GTs). This development is part of the overall emergence of several subregional economic cooperation zones in Asia since the 1980s (see Figure 4.1 for other subregional development zones in Asia). Min and Myo (1993) define growth triangles as transnational economic zones spread over large but defined, geographically proximate areas covering three or more countries where differences in factor endowments are exploited to promote external trade and investment.1 Since growth triangles are increasingly becoming an important form of ASEAN economic cooperation, this chapter will examine the rationale for their emergence, their costs and potential benefits, lessons for successful and sustainable growth triangles and how they can facilitate the achievement of a regionwide economic cooperation under ASEAN. To date, in Southeast Asia SIJORI (consisting of Singapore, Johore of Malaysia, Indonesia’s Riau Province of Batam and Bintan, covering 20 000 sq km) is the oldest, having been operational since 1989. It has successfully integrated Singapore’s technology and infrastructure with cheap land and labour offered by Johore and the Riau islands, giving rise to proposals for growth areas in other parts of the region (see Figure 4.2). Three more GTs are in the making: (i) Northern Triangle or IMTGT (comprising North Sumatra of Indonesia, Northern Peninsular Malaysia, and Southern Thailand, covering 180 000 sq km of land), has passed the feasibility study stage, and the recent intergovernmental and joint business council meetings on this GT have...

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