Oleh/BY		:	DATO' SERI DR. MAHATHIR BIN MOHAMAD 
Tempat/Venue 	: 	NEW YORK CITY 
Tarikh/Date 	: 	26/09/91 
Tajuk/Title  	: 	THE COUNCIL OF FOREIGN RELATIONS 
			ASEAN IN THE 1990S AND BEYOND: THE 
			CASE FOR EXPANDED ASEAN-BASED 
			REGIONAL COOPERATION 




 Distinguished members of the Council,
Ladies and Gentlemen,
    I  thank  you for your kind invitation to me to address
your distinguished body.  The Council of  Foreign  Relations
has established a reputation of being a leading and influen-
tial  forum  for fostering understanding and cooperation be-
tween  the  United  States  and   other   members   of   the
international  community of nations.  Your role is even more
crucial today than ever before.   The  radical  and  complex
changes that are taking place and the dominant role that the
United States is called upon to play require that the United
States  fully understand the imperatives of the policies and
interests of other states, large or small.
2.   I am, therefore, pleased to have  this  opportunity  to
share  with you some thoughts on "ASEAN in the 1990s and Be-
yond: The Case for  Expanded  ASEAN-based  Regional  Cooper-
ation."
Ladies and gentlemen,
3.   The world has undergone truly radical changes in recent
years.   The collapse of the Communist system and the ending
of the great East-West divide led many to  believe  that  we
are  all  set  to reap the peace dividend.  But the Gulf War
and the attempt of the hard-liners in Russia to stage a coup
should remind us that dividends are not there for the  pick-
ing but must be worked at.
4.   There is a great need to understand the aspirations and
sentiments  of national, ethnic, social and political groups
and the problems they must face when political changes  take
place.     Above all there is a need to appreciate that dif-
ferent situations call for different  remedies.    The  idea
that  there  is  one solution to all problems, and that what
serves one situation should serve  all  situations  must  be
discarded  promptly  if there is going to be any dividend at
all from the peace we have apparently achieved.
5.   Democracy and the free market have become the sole ide-
ology and system for the world.  Anything other than this is
taboo.  There is no real disagreement about accepting democ-
racy or the free market.  But while everyone agrees  on  the
principle,  the details are another matter.  Democracy lends
itself to many interpretations and reinterpretations.    The
advocates  and  practitioners  of  democracy in the West are
wont to add new criteria for democracy which the newer prac-
titioners are not quite ready for.  But the new converts are
not to be allowed to differ or defer.
6.   Thus originally democracy simply meant  majority  rule.
Everyone  accepts  that.    But  then  minorities  must have
rights.  This too is fairly reasonable.   But  now  minority
rights and even individual rights are to be regarded as more
important  than the rights of the majority.  More than this,
individuals from the senior democratic countries  apparently
must  be  accorded  the  right  to  break  the  law of other
allegedly less democratic countries.
7.   When Mr. Gorbachev started  talking  about  perestroika
and  glasnost and indicated his desire to reduce tension be-
tween East and West there was a great  deal  of  scepticism.
But  his subsequent action in releasing the Eastern European
countries from Soviet military  hegemony  not  only  brought
undisguised  jubilation  in  the  West  but also among those
countries which were the targets of Communist subversion.
8.   Today we all  know  that  the  process  that  Gorbachev
started  was  not  some  Communist  trick but an earnest and
total rejection of the Communist ideology.  We all have rea-
son to celebrate, the West, the non-Communist world and  the
peoples who had long been oppressed by Communist rule.
9.   In  South East Asia, the countries which comprise ASEAN
are glad to welcome the end of the Cold War.  Without excep-
tion the six countries had all felt the full brunt of Commu-
nist subversion and insurgency.   It  was  only  with  great
difficulty  and  debilitating  cost that they all managed to
overcome their insurgents even while they develop democratic
systems with free market economies.
10.  With the end of the Cold War they fully expect to  grow
and prosper in a period of political stability.
11.  The countries of ASEAN all rejected the kind of extreme
and restrictive nationalism which elsewhere had hampered the
development  of  newly-independent  nations.    Instead they
opted to trade freely with the rest of the world and  indeed
to  welcome  foreign  involvement in their economies.  Where
others restrict foreign  investments,  the  ASEAN  countries
provided incentives to attract them.
12.  They  have  a  right to think that a world free of East
West confrontation would boost their  trade  and  contribute
towards faster economic development.
13.  But  what  they see happening is not entirely what they
had expected.  They see doors being slowly closed.  They see
funds being diverted away from them.   They  feel  pressures
being  applied  against them not by Communist enemies but by
democratic friends.  They see, in fact, deliberate  attempts
being made by their perceived friends to stifle their growth
and keep them forever at the state of developing nations.
14.  The ASEAN countries are democratic.  As colonies of the
Western  powers  they were only familiar with the autocratic
system of their colonial masters.   Yet when  they  achieved
independence  they  were  expected  to practise a democratic
system of government with all  the  sophistications  of  the
erstwhile  democracies  of  the  West.    Shortcomings  were
promptly criticised as were failures to  keep  up  with  the
latest in democratic concepts.
15.  With  populations  which do not understand the workings
and the limits of democratic freedom, with  ethnic  and  re-
gional divisions, with religious sensitivities, it is a won-
der  that any of the developing democracies survived at all.
But a few did survive.
16.  Those that survive should really be  congratulated  and
given  an  occasional pat on the back by the established de-
mocracies.   Despite their clumsiness  with  the  democratic
system  some have not only survived but have actually devel-
oped economically.  But instead they were harrassed all  the
way.
17.  They  were  harrassed  before  the end of the Cold War.
They are harrassed even more now.  It may sound like an  ex-
aggeration  but  for  a developing country even the smallest
obstacle is sufficient to retard development.
18.  Today human rights, labour rights, extractions of  tim-
ber,  eating rice, minority rights, individual rights, death
penalties, intellectual property,  export  processing  zones
and incentives and a host of other subjects are used to curb
the growth of developing countries.
19.  At one time countries which industrialised rapidly were
classified  as Newly Industrialising Countries.  These coun-
tries were very happy to be so categorised until they  found
that  being  so  classified  involved  withdrawal of trading
privileges and impositions of measures such as currency  re-
valuation,  upward revision of workers' pay and scrutinising
labour practices and human rights records, all of which were
calculated to retard the process  towards  developed  nation
status.
20.  Only Japan got through, having caught the developed na-
tions of the West napping.  Clearly no other Eastern nations
are going to be allowed to achieve developed status.
21.  The  four Asian NICs, in a way, caught the West unwares
also.  Now apparently any eastern  nation  must  be  stopped
even  earlier.    And  so  the  ASEAN nations like Thailand,
Indonesia and Malaysia are already  suspect  although  their
per  capita, one of the major criteria for classification as
NIC, are less than half of the present NICs.  Threats of re-
duction of loans, withdrawals of GSP rights,  countervailing
duties,  reduction  of  quotas  are already being heard.  It
would not be long before those threats are  translated  into
deeds.      The  ASEAN  countries,  with  the  exception  of
Singapore, stand a real chance of becoming  permanently  de-
veloping countries.
22.  The  countries  of South East Asia need trade much more
than they need aid.  They have all developed by utilising to
the full the free international trading system.  Their  com-
petitive  advantage  is  their  skilled and highly trainable
labour force.  With low cost of living and a  low  level  of
expectations,  wages need not match those of developed coun-
tries for equivalent work.
23.  Freedom  to  unionise  and  to  strike   may   be   the
inalienable  right of workers.  But when jobs are scarce and
strikes may reduce investments and make jobs  even  scarcer,
it  is  questionable whether the exercise of the traditional
rights of workers which reduces job opportunities will bring
them a better life.
24.  Yet workers in the developing  countries  of  East  and
South  East Asia are being instigated to demand for more pay
and to disrupt production.  Are their enthusiastic  support-
ers in the developed countries trying to help them or to re-
duce  the  competitiveness  of  their  products  against the
products of Western workers?
25.  But as if this attempt to reduce the competitiveness of
our exports is not enough, a whole series of other  measures
have  been  taken to stifle growth in the dynamic nations of
South East and East Asia.
26.  The freeing of  the  Eastern  European  countries  from
Russian  hegemony  is  a  welcome  result of the collapse of
Communism.  But it is clear that the Europeans and the Amer-
icans are much more  sympathetic  to  the  plight  of  their
European  kins and are ready to channel funds for their eco-
nomic rehabilitations.
27.  Of course we are assured  that  the  countries  of  the
South  will continue to get funds.  However we all know that
there is only so much money available and if  some  are  di-
verted  elsewhere  then there will be less for those who be-
fore were the sole recipients.  And because we know this  we
have a right to suspect that the assurances are hollow.
28.  Then there is the European Community.  Slowly but inex-
orably all the countries of Europe are being drawn into this
exclusive  club.   There is every indication that the former
COMECON countries will join the club as well.
29.  By itself the enlarged European Community will be  suf-
ficiently  big  to be totally independent, economy-wise from
the rest of the world.  They would have all the raw  materi-
als  and  all  the manufacturing technology to sustain their
economic growth and well-being.  With no threat of  an  East
West  War  they will need no allies outside their community.
A Fortress Europe is not a far-fetched idea.  It is  a  dis-
tinct  possibility.   Asians may be kept out of the European
market.
30.  Perhaps this is too pessimistic  a  picture.    But  in
business we always have a worse case scenario.  And if ASEAN
nations think of this scenario, they cannot be condemned for
being alarmist.  After all when we predict a worse case sce-
nario  we  know some part of it is likely to come true.  And
even some part can do a lot of damage.  Certainly a Fortress
Europe will damage the growth rate of ASEAN nations.
31.  Then we have the NAFTA and the germ of an idea  for  an
Enterprise of the Americas.  We are told that NAFTA will not
be a trade bloc and that the members would continue to trade
with the rest of the world.
32.  The  United  States is the biggest single market in the
world.  Malaysia's trade with the United States makes up  18
percent  of  its total trade.  While some Malaysian manufac-
turers enjoy GSP  status,  others  compete  unaided  in  the
United  States'  markets.   On the other hand some products,
such as palm oil, are actually discriminated against.    The
other  ASEAN  countries have nearly the same trade relations
with the United States.
33.  What NAFTA does is to let Mexico enjoy unrestricted and
tax-free access into the United States.  Mexico is a  devel-
oping  country  with  a huge low-cost labour force.  Mexican
tax-free goods should enjoy  competitive  advantage  against
similar  goods  coming  from  distant South East Asian coun-
tries.  Attracted by this advantage, American  manufacturers
have  already invested in Mexico.  Soon the Japanese and the
Taiwanese will be investing in all  kinds  of  manufacturing
facilities in Mexico.
34.  We  wish  Mexico  well.  But  investments  by American,
Japanese, Taiwanese and possibly  the  Europeans  in  Mexico
will  divert  much needed funds from South East Asia.  Worse
still what Mexico produces for  the  United  States'  market
would  be  cheaper  and more competitive than what the South
East Asian countries can produce.  Imports into  the  United
States  and  Canada  from  Mexico  would cut into the export
earnings of South East Asian countries, even if  they  still
get GSP status.
35.  Now  consider  the  Enterprise of the Americas.  If the
privileges of the NAFTA are extended to all the Central  and
South  American  countries,  not  only  will the Americas be
self-contained and independent of all resources and products
from the rest of the world but the bloc can use its economic
strength to bludgeon the non-EC countries into economic sub-
mission.
36.  Again this may  sound  too  exaggerated.    The  United
States  and  Canada  would not want to do this.  But in many
instances the United States, in subtle  and  not  so  subtle
ways, have already been doing a lot of economic armtwisting.
37.  The  United  States have threatened to limit imports or
apply countervailing duties or penalise countries  for  any-
thing  that  the  United  States  unilaterally decide as in-
fringements of the many regulations that govern  trade  with
the United States.  Trade is restricted severely until coun-
tries  sign  the  protection of intellectual property agree-
ments.  Countries are put on the "Watch List" which  is  not
different  from criminals being put under surveillance.  GSP
privileges are examined every year as are the quotas on  im-
ports,  a  practice that creates uncertainty and discourages
investments in productive facilities.
38.  Unrelated to trade, yet indicative of the  attitude  of
the  United  States  towards international laws and norms is
the arrest of the  leader  of  a  country  through  military
action and then charging him under the United States laws in
the United States courts. This is the first extraterritorial
enforcement  of  a national law.  If a country is willing to
ignore world opinion, what guarantee is there that  it  will
not,  when it becomes the sole world power, do what it likes
in order to protect what it considers as its own interests.
39.  If the countries of ASEAN feel that  the  international
market  place  is about to be divided between the great eco-
nomic entities and  closed  to  them,  can  they  really  be
blamed?
40.  ASEAN  cooperation  in  the  economic field is minimal.
But the performance of ASEAN countries in  developing  them-
selves is not unconnected with their regional cooperation.
41.  The Association has helped to stabilise the region pol-
itically  and militarily.  It is this atmosphere of regional
peace and stability which enables the ASEAN nations  to  de-
velop.    While intra ASEAN trade is minimal and contributes
little to the members' economies, learning from  each  other
the skills of economic and development management has helped
them  grow rapidly.  The ASEAN formula for growth is identi-
cal.  That is why all ASEAN  countries  have  open  markets,
welcome  foreign  investments and look towards an export led
growth.
42.  This last strategy is important and  is  the  cause  of
their fear and anxiety over the trend towards the setting up
of de facto trade blocs in Europe and America.  Clearly they
have to do something about it.
43.  ASEAN  can expand.   Right from the beginning ASEAN was
meant for all South East Asian  countries.    Obviously  the
Indochina countries and Myammar are geographically eligible.
So far they have not been invited for obvious political rea-
sons  as well as the fact that they are not open free-market
economies.
44.  The ease with which Brunei was admitted  is  indicative
of  the openess of ASEAN.  It is most likely that ASEAN will
welcome Vietnam, Cambodia and Laos in the near future.   All
three  countries are beginning to appreciate the benefits of
a free-market system or at least the importance of  national
development over territorial acquisition.
45.  The  Vietnamese  leaders  have  been visiting the ASEAN
countries and it is unlikely that they failed to notice  the
prosperity  of  these countries.   That they have noticed is
evidenced by their request for information  on  banking  and
administration in these countries.  They have asked for for-
eign investments although from selected countries at the mo-
ment.
46.  Still  it  must be remembered that ASEAN is not an eco-
nomic community.  ASEAN came about because  the  South  East
Asian  countries  in  the  early days of their independence,
faced many border problems.   Claims and  counterclaims  and
the eventual Confrontation by Indonesia against Malaysia had
to be resolved.  Military solutions were not successful.  As
a  result an association of neighbours was formed to provide
a forum for settling problems between  members.    ASEAN  is
therefore  more a political grouping than an economic group-
ing.
47.  Politically there is a need for ASEAN to establish good
relations with the Indo-China states in order to ensure  re-
gional stability.  For this reason alone ASEAN would welcome
membership of the Association by the Indo-China states.  The
Prime  Minister of Thailand has already openly welcomed mem-
bership by the Indo-China states.
48.  Papua New Guinea has  already  been  accorded  observer
status.  Sri Lanka has expressed interest to join.  Possibly
Myanmar might get interested.
49.  So  expansions  of  ASEAN  are in the cards.   But what
would be the benefit of enlarging the membership  of  ASEAN?
It  will  be  noted  that the potential new members are weak
economically.  The combined economic strength and  political
influence  of the enlarged ASEAN is unlikely to be improved.
If in fact the trade blocs of Europe and America become  in-
ward  looking,  the  ASEAN  group  is unlikely to be able to
prise open the rich markets on which their economy  depends.
Indeed  they  may  not  even  enhance their influence in the
trade negotiations in the GATT.
50.  Consequently ASEAN  needs  to  enlarge  its  circle  of
friends  if not its membership.  In the Far East there are a
number of dynamic countries which can help amplify the voice
of ASEAN.  These are China, Taiwan,  Hong  Kong,  Korea  and
Japan.
51.  These  countries are also very dependent on world trade
and the free market.  It would be in their interest  to  add
their voices to those of ASEAN.  The proposed East Asia Eco-
nomic  Group (EAEG) would bring the ASEAN countries, the po-
tential members and  the  dynamic  economies  of  East  Asia
together.  This will not be a trade bloc for the simple rea-
son that their economies largely compete with each other and
trade between them is a very small proportion of their total
trade.    The usefulness of the EAEG lies in the strength of
their combined voice in the GATT Rounds in particular and in
international trade negotiations, in general.   A  forum  of
East Asian Countries is all they need for this.
52.  All these countries are expected to vote for free trade
with  as  few  conditionalities as possible.  Their combined
economic strength will lend  weight  to  their  views.    Of
course  a  self-sufficent  Europe  and the Enterprise of the
Americas can still ignore the EAEG.  But the  EAEG  combined
market  will be too attractive for Europe and America not to
negotiate with.
53.  Assuming the worse  scenario  again,  i.e.  Europe  and
America  do  not care, the East Asian market can support the
members of the Group to a considerable extent.    Investment
in each other's country, using the considerable technologies
and  marketing  skills  that  they  have, can stimulate East
Asian growth sufficiently.  Certainly by learning from  each
other as the ASEAN countries have done, the chances of their
achieving  high  growth  rates are good.  And if they should
grow in a world divided into trade blocs, the imperatives of
growth will eventually force the trade blocs to open up  and
free trade will be restored.
54.  The  United States oppose the EAEG and are known to ap-
ply pressure  on  various  countries  including  members  of
ASEAN.  Vice President Quayle was reported to have said that
there should be no grouping in the Asia Pacific region which
does  not  include  the United States.  Obviously the United
States can be members of NAFTA and any Pacific grouping  but
East Asians may not even talk to each other.
55.  The  United  States  is especially concerned that Japan
does not join the EAEG.  The United States  feel  that  this
will allow Japan to dominate East Asia economically and pol-
itically.  The Greater East Asia Co-Prosperity Sphere touted
by  Japan  in the last war was resuscitated to frighten East
Asians of the possibility of Japanese hegemony.
56.  I think East Asians are  mature  enough  to  think  for
themselves.    The stand of the United States suggests a de-
sire on the part of this great nation to  exercise  hegemony
over East Asia.  We think of the United States as a friendly
country  but  domination by a friend is no more welcome than
domination by an enemy.
57.  If East Asians are not afraid of Japan, why should  the
United States worry about it?  The United States is the most
powerful  nation  in  the world.   Modern Japan on the other
hand has gained more through trading  with  the  world  than
through  war.  It is unlikely for Japan to exchange the eco-
nomic approach for the dubious chances  of  military  adven-
tures.
58.  More likely the United States' stand is due to a desire
to  prevent  Asian countries from achieving developed status
through working together.  If one does not know  better  one
would  say  there is a racist element in this attitude.  But
of course the United States has a proven record of being ra-
cially liberal.
59.  Malaysia and ASEAN will press on for the  formation  of
the EAEG.  We assure you that we have no intention of becom-
ing  a trade bloc or to commit economic suicide.  As nations
and as peoples we have a right to associate with whoever  we
like  and  to  develop.   If the West cares for human rights
then do not deny us the right to progress to  the  level  of
the  Caucasian  Europeans.   If we are denied this while the
East Europeans are helped to achieve developed  status  then
we  must  conclude  that colour and race still influence the
thinking of the West.