Part III



The government of the Kingdom of Cambodia and the Lao People’s 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 Cambodia’s and Laos’s 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 Cambodia’s and Laos’ development and regional participation.

Furthermore, we believe that while Cambodia’s 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

The immediate and urgent task is to provide English-language training to those officials whose daily responsibilities concern ASEAN matters. These should be in the form of intensive, short-term cources conducted either in the ASEAN countries or in Cambodia or Laos. There are currently a number of such training programmes offered by some of the ASEAN countries as well as third countries but these programmes should be expanded and co-ordinate with the support of more countries in ASEAN, and through third country support.

2. AFTA-related Training Programmes


Training for government personnel to develop skills and expertise about AFTA so that the countries can take advantage of the opportunities created by AFTA. Priority should be given to the training of personnel in the ministries involved with the implementation of AFTA, that is, Ministry of Finance (Customs and Tax Department) and Ministry of Commerce.


Laos has identified urgency in the training of 20 officers at the Customs office in Vientiane, and another 30 officers in 8 other border custom points in such areas as customs valuation, harmonisation of tariffs nomenclature, certificates of origin, administration of GSP, harmonisation of laws, regulations and procedures, liberalisation of services, protection of intellectual property rights, etc. Cambodia has also recognised urgency in the training of a similar group of officials.

These training programmes should include study visit to ASEAN countries to enable these officials to learn at first hand how other member countries have implemented the AFTA-CEPT scheme.

3. AFTA Impact Study


ASEAN should assists in the undertaking a study on the impact of AFTA on the two economies, especially where the process of accession, bureaucratic preparedness and losses of revenue are concerned so as to enable Cambodia and Laos to prepare the terms of joining AFTA.

4. Information Dissemination on ASEAN


The ASEAN governments, through the ASEAN Secretariat and other governmental and non-governmental entities, should sponsor the organisation of more seminars and workshops about ASEAN and functional aspects of ASEAN co-operation for the "training" of officials and experts as well as to disseminate such information to the public in Cambodia and Laos.

5. Documentation and Translation


There is an urgent need for all agreements, regulations, procedures and other relevant documents pertaining to ASEAN and AFTA to be translated into Khmer and Laotion languages to enable Cambodian and Laotion officials understand and properly implement such agreements and procedures, especially in the economic fields, as well as to comply with the principle of transparency in ASEAN economic co-operation. Such efforts should include, amongst others, the following:

a. products list under CEPT scheme

b. a Lao Homepage and a Cambodian Homepage that are linked to the ASEAN countries

c. the establishment of an integrated customs data system that will include the streamlining of forms and other technical documents

6. Institutional Capacity Development


ASEAN countries, individually and collectively, should provide assistance to initiate, where necessary, and to strengthen, where appropriate, institutions or agencies of the governments of the two countries which deal with ASEAN and AFTA matters in order to alleviate their short term financial constraints. The following forms of support are required:

a. office equipment such as photocopy machines, facsimile machines, computers and telephones;

b. Basic training in the use of such modern office equipment; and

c. For the first three years after becoming members of ASEAN, Cambodia and Laotion officials attending official ASEAN meetings should be given basic support for travel and accommodation by ASEAN host countries. Opportunities should also be given to Cambodian and Laotion diplomats based in host countries to attend ASEAN-sponsored meetings.

B. MEDIUM TERM (1997-2000) AND LONG TERM (200-2010)

1. The establishment of an ASEAN Centre in Cambodia that will undertake systematic training in public and business management, translation and publishing activities including an information and documentation centre.

2. The awards of scholarships in the disciplines of management, economics, engineering, technology, environmental and health studies, and other relevant disciplines to Cambodian and Laotions to study at tertiary institutions in the ASEAN countries.

3. The establishment of an ASEAN English Language Training Centre in Vientiane, Laos to train teachers and ‘trainers’ of English as a second language. This is to build the capacity of Cambodians and Laotions to undertake their own training.

4. Technical assistance in the form of scholarships to educate and train Cambodians and Laotions in ASEAN countries in various specialised disciplines, including teacher educational administration.

5. Technical assistance for the establishment of a joint Cambodia-Laos Centre for ASEAN Studies that will undertake research and teaching about the ASEAN countries.

6. Assistance in the sponsorship of, and the provision of experts for, the following:

(a) A study on the Laotion transportation requirements and implications in accordance with the decision of the recent ASEAN Ministerial Meeting to assist Laos to become a "land-linked" country;

(b) A study on Cambodian transportation (including the use of the Mekong waterway) and telecommunications requirements;

(c) A study on Eco-tourism potentials in Cambodia and Laos. Both countries want to develop tourism as a major industry but are concerned about its impact on the environment and the cultural heritage of their respective countries. With their wealth of experience in the area of tourism, tourist resort development, and the hospitality industry, the ASEAN countries are in a position to provide proper advice, including the training of personnel in the tourism industry;

(d) A study on the ASEAN experiences in poverty alleviation and strategies for the poverty eradication in Cambodia and Laos. The problem of poverty is serious especially in remote mountainous and rural areas. Slash and burn cultivation, the main form of livelihood for the people in these isolated areas, continue to affect the environment. Disorder in the irrigation systems, moreover, have worsened the floods in the rainy season.

(e)A study on the resource potentials of Cambodia and Laos, with a view to developing appropriate policies and strategies for maximising the benefits from their development in a sustainable way;

(f)A study on the landmines and unexploded ordinance in Cambodia and Laos, with view to systematically tackling the problems and challenges of landmine clearance and prevention. If these problems can be resolved in the future, there will be more arable land for development and a fewer lives lost.

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 sector’s 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 Cambodia’s rich cultural heritage including policing its national treasures from unscrupulous commercial exploitation. This heritage is Cambodia’s unique and most precious contribution to the cause of Southeast Asia’s 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 region’s past and present common cultural wealth. This cultural heritage is a strong foundation for building the region’s 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 SGCL’s vision of the Southeast Asia; this is intended to spell out the Study Group’s ideas and perspectives, regarding not only the future of the region and the general direction in which it should develop, but also Cambodia’s 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.]

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