I. BACKGROUND AND GENERAL PRINCIPLES
The government of the Kingdom of Cambodia and the Lao Peoples Democratic Republic have unreservedly stated their political commitment to join ASEAN and both countries will become members of ASEAN in July 1997. Since participating as observers in ASEAN both Cambodia and Laos have developed a new quality of relations with ASEAN. While this positive state of relations will contribute to the smooth integration of both countries in ASEAN, the difficulties and obstacles standing in the way of integration should not be underestimated.
As previously discusses, both Cambodia and Laos are among the least economically and socially developed countries of the world. Both countries have emerged only recently from decades of civil conflict, neglect, suffering and isolation. The removal of poverty, and all the social ills that it gives rise to, remains the paramount task of the two governments. Development is impeded not only by scarce human and financial resources but by the existence of huge members of land mines and bombs. A legacy of suspicious and misunderstanding, the product of a long history of conflict, remains among neighbours in mainland Southeast Asia. Cambodia and Laos are states in transition to a better future.
We believe that despite these obstacle both Cambodia and Laos have a good future in and with ASEAN. Since 1986 Laos has embarked on a comprehensive programme of reforms domestically based on the market-system, and broadened its relations with other countries on the basis of promoting peace, independence, friendship and co-operation. Since the UNTAC-held elections in 1993, Cambodia has formed a government of national reconciliation, established a democratic political system and a market-driven economy. Both countries share in common the aspirations and goals of ASEAN.
We believe that against this background of pragmatic realism both Cambodia and Laos, despite their less advantaged positions compared to their ASEAN neighbours, can look forward to becoming equal partners in ASEAN. ASEAN is a community built upon the contributions of its member-states. At best, ASEAN can help and encourage members to find solutions to their own problems. We believe that following this line of thinking, and using the ASEAN experience, Cambodia and Laos are in a position to take two steps forward.
We have reaffirmed, in the first part of our report, our commitment to create a Southeast Asian community, that is a pluralistic community of equal and sovereign states, bound together by a sense of common destiny and shared valued, enjoying peace and prosperity, a community that should endeavour to be a major political, economic, cultural and moral entity on the world stage in the twenty-first century.
ASEAN, Cambodia and Laos will collectively face these new and complex challenges with confidence and optimism, in the realisation that the ultimate benefactor of a free and united Southeast Asia will be the future generations of Southeast Asians.
However, we believe that the following general principles, as stated in PART ONE of this report, must underlie the policy recommendations for Cambodia and Laos.
Firstly, these recommendations are guided by the concept of shared responsibility: that the member states must, and should, play active roles to assist the new member.
Secondly, the priorities are to be set by the Cambodians and Laotions as the direction and pace of Cambodias and Laoss future social and economic development is of crucial relevance for promoting the cause of ASEAN regionalism and addressing the challenges described above.
Third, is the need to maximise the potentials unique to Cambodia and Laos as a means of accelerating their development and enhancing their contributions to the region.
Based upon these principles we believe that Cambodia and Laos should be encourage to undertake the following measures: firstly, to continue their present social, economic and legal reforms; secondly, to consider new reforms, backed by appropriate infrastructure development, especially where the rural-agricultural sector is concerned, in order to make a frontal attack on poverty and to lay the foundation for long-term economic development; thirdly, to consolidate the trend towards a market system, guided by the principle of market discipline with a social face, and the encouragement of domestic savings and private sector investment as the twin engines of growth; and fourthly, to focus on developing the full potential of their peoples.
Furthermore, Cambodia and Laos are to be encourage to improve the prioritisation of their development programmes and projects, taking into consideration the short and medium-term requirements for foreign exchange as a means of financing their development plans.
At the same time, we recommend that due to the special circumstances of Cambodia and Laos the present ASEAN members, individually and collectively, should engage in the task of "constructive intervention". This means that, while non-intervention remains, and should remain, the cardinal principle for the conduct of intra-ASEAN relations, should the countries concerned feel a need for assistance and appeal for it, the present ASEAN members should be prepared to play "proactive" roles in removing both the short-term constraint on Cambodias and Laos development and regional participation.
Furthermore, we believe that while Cambodias and Laos accession to AFTA would be beneficial for the two countries in the longer term, there would have to be regular and systematic assessments of the short-term consequences resulting therefrom and full preparation for managing them. Given the two-countries limited revenue bases, special attention should be paid to losses in revenue arising from liberalisation of trade.
In accordance with these principles and in the spirit of partnership, we are therefore proposing this list of policy recommendations for Cambodia and Laos. Due to the great sense of urgency related to some issues, these recommendations have been divided into two categories. The first consists of urgent and immediate measures, which should be implemented as soon as possible, to prepare for the two countries entry into ASEAN in July 1997. The second provides medium-term policy options to strengthen the two countries fundamentals of development and guidelines for longer-term policy directions which will lead them into an era of peace and well-being along with the rest of Southeast Asia.
A. URGENT AND IMMEDIATE Cambodia and Laos are handicapped by a severe shortage of competent and trained human resources. While the solution to this is long-term goal of the governments educational and training programmes, the current shortages of personnel, particularly in the government sectors, will hamper the two countries participation in all the ASEAN processes. Traditionally the elites of these countries have been and are French-speaking. With the growing importance of English in ASEAN, and with English as the main language of communication in ASEAN official circles, the imminent membership of Cambodia and Laos in ASEAN has put pressure on them to accelerate not only the learning of English and other skills, but to strengthen ASEAN and AFTA-related governmental agencies as well.
Five basic areas of assistance have been identified as being in need of urgent attention. Some of these have already been recognised in the ASEAN Secretariat Paper, "Road Map Towards Membership in ASEAN".
1. English-Language Training
2. AFTA-related Training Programmes
3. AFTA Impact Study
4. Information Dissemination on ASEAN
5. Documentation and Translation
6. Institutional Capacity Development
B. MEDIUM TERM (1997-2000) AND LONG TERM (200-2010)
7. It is also important that ASEAN implement the ASEAN-Mekong Development Co-operation with interested countries taking the lead. The agreed activities under the Project, particularly the proposed option of building on Express Railway linking Singapore and Kunming through Laos, should be implemented. The project should help the countries in the Makong Basin upgrade their socio-economic development to the level of the other countries in the region.
In the medium term, further discussion should be held between the present ASEAN members and the two prospective members concerning the financing of full participation in ASEAN activities.
In the longer term, priority should be given to co-operation in these areas:
FIRST is the development of free market mechanism to increase the efficiency and competitiveness of the economies of Cambodia and Laos bearing in mind considerations of equity and sustainability; here special attention should be paid to continued institutional and legal reforms, establishment of sound financial and banking system including necessary domestic fiscal, monetary and savings instrument, promotion of domestic private entrepreneurship, and encouragement of "responsible" direct investment on the part of the foreign private sector, especially from the ASEAN countries.
SECOND is human resources development, which should involve not only the extension and improvement of formal education at the primary and skills level, but also continuing education for the less educated and professionals or on-the-job skills training for workers. The private sectors role in this area should be encouraged.
THIRD is infra-structural development, where the role of private sector should be actively promoted.
FOURTH is co-operation in developing such sectors as agriculture, power generation and resource-based manufacturing where both Cambodia and Laos have potential comparative advantage. Consideration should also be given to the relocation of industries from the ASEAN countries where factor endowments are no longer favourable to Cambodia and Laos.
FIFTH is the development of trans-national power grids which will increase foreign exchange earnings of the two countries and help accelerate the process of development and promote integration with their neighbours.
SIXTH is the promotion of bilateral co-operation both between the two countries which have close and cordial ties and between the two countries and their ASEAN neighbours, in order to strengthen the fabric of peace and prosperity in the region. Existing mechanisms for the conduct of bilateral relations should be improved upon, and new arrangements established where necessary and appropriate.
In addition to the priorities which are pertinent to both Cambodia and Laos, there are other policy guidelines which are relevant to the two countries separately, as follows:
For Cambodia, urgent measures should be taken to promote co-operation in protecting and enhancing Cambodias rich cultural heritage including policing its national treasures from unscrupulous commercial exploitation. This heritage is Cambodias unique and most precious contribution to the cause of Southeast Asias cultural identity and regionalism. This heritage is not only a legacy valuable in itself but it is also a monument to the durability and resilience of the regions past and present common cultural wealth. This cultural heritage is a strong foundation for building the regions future.
For Laos, measures should be taken to promote co-operation in safeguarding and extending her legitimate rights as a land-locked state, as stipulated in a variety of international laws. Particular attention should be paid to her concerns in communication and transportation links through neighbouring countries which give her access to the sea. Moreover, should progress be made on the question of the international development of maritime resources in the South China Sea, discussions should be held to examine ways and means of ensuring Laos enjoyment of the benefits thereof in accordance with international law. The same should also be applied to Cambodia.
Furthermore, the possibility of helping to transform Laos geographical constraints into a strategic advantage by promoting her role as a "land bridge" between Southeast Asia, possibly through Cambodia, and South China should be explored. Here, co-operation between Cambodia and Laos on the one handed, in infra-structural development and establishment of growth areas in the Makong sub-region should be actively promoted.
[This report is divided into three interrelated parts. Part One contains the SGCLs vision of the Southeast Asia; this is intended to spell out the Study Groups ideas and perspectives, regarding not only the future of the region and the general direction in which it should develop, but also Cambodias and Laos "places" in this Southeast Asian of the future. Part Two identifies the problems and challenges, which are or may be obstacles to the realisation of this vision, especially with respect to the integration of Cambodia and Laos as full partner in regional co-operation. Part Three puts forward various policy options for managing, alleviating, or resolving these problems and challenges in the immediate, the medium and long term.]