Corporate and Regulatory Drivers
- New Horizons in International Business series
Edited by Philippe Gugler and Julien Chaisse
Chapter 2: The Competitiveness of the ASEAN Economies: Business Competitiveness and International Challenges
Philippe Gugler and Pavida Pananond1 INTRODUCTION Since its beginnings in 1967, the Association of Southeast Asian Nations (ASEAN) has served as a strong core for regional integration in Asia.2 As a regional grouping whose initial purpose was more security-related than economic, the significant changes brought about by the end of the Cold War and the deepening of globalization make it necessary for ASEAN to reassess its future direction (Chaisse and Gugler, 2009). From being a region whose main focus was on politico-security matters right up until the late 1980s, ASEAN now needs to evolve into a regional grouping with a more comprehensive range of regional issues. It was not until the early 1990s, and especially after the 1997 economic crisis, that ASEAN members agreed that its economic agenda should receive a substantially enhanced focus. As explained by Julien Chaisse and Philippe Gugler in Chapter 1, the ASEAN Free Trade Area (AFTA) and the ASEAN Investment Area (AIA) served this purpose. In addition, ties between member countries are expected to accelerate ASEAN trade and investment cooperation and integration as argued by Siow Yue Chia in Chapter 5. The increased regional integration, together with other economic liberalization schemes, has enabled ASEAN to become more deeply involved in global economic competition. With the increasing role of fast-growing and large emerging economies like Brazil, Russia, India and China,3 ASEAN member countries are faced with intensified competition from developed and developing countries alike. A serious concern for the ASEAN economies should thus be how...
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