Had countries turned their backs on foreign investments and exports, it would have impoverished them and weakened the region. Fortunately this has not happened. There have been understandable nationalistic sentiments against selling distressed companies at low prices to foreigners. But all ASEAN countries continue to seek foreign investments and trade. Their people are eager to learn English, and to exploit the internet. They know that plugging into the global economy is still the best way to sustain growth, and to create jobs and prosperity for their citizens. They also know that competition has become keener, and that they have to make their economies more attractive to foreign investments. As Malaysian Finance Minister Daim Zainuddin acknowledged in his recent Budget speech: “In a borderless world, large international conglomerates have greater choices in their investment decisions.” Accepting globalisation means progressively deregulating and liberalising ASEAN economies, easing rules on foreign ownership and participation, and opening up hitherto protected sectors. By exposing their economies to the winds of change and the pressures of global competition, countries will strengthen their own players, who will learn to hold their own without crutches or protection. Of course the process has to be managed. Sudden deregulation of a controlled economy may lead to chaos and collapse, as happened in Indonesia in 1998, when the IMF pressed the Suharto government to dismantle everything overnight. But properly implemented, opening up will lead to substantial long term benefits and prosperity, despite the short term social and economic costs.

They need to cushion the social impact of globalisation, to help industries that are no longer viable make the change, to equip the population with the necessary skills for the new economy, and to provide a social safety net for those at the bottom. There is no real alternative to accepting globalisation in order to improve the lives of our people. BIS Review 111/2000  4  ASEAN economic cooperation It is also important for ASEAN countries to work together, both to strengthen cooperation among themselves, and to address international issues of common concern to all of us. ASEAN economic cooperation was progressively gaining momentum before the crisis. Major initiatives had been launched, especially the ASEAN Free Trade Area (AFTA) and the ASEAN Investment Area (AIA). These promised to increase significantly the flow of trade and investments among ASEAN countries. However the crisis has caused some countries to hold back, in order to give struggling domestic industries more breathing space. These pressures are real, but in their anxiety to protect individual industries, countries should not lose sight of the wider benefits of ASEAN cooperation to their economies as a whole. It is therefore important for ASEAN members to reaffirm their commitment to regional economic cooperation and integration, and implement AFTA and the ASEAN Investment Area in letter and spirit. The ASEAN members which are doing relatively better, such as Thailand, Malaysia, Singapore and Brunei, should take the lead, and work together to put ASEAN cooperation on track again.