For better or for worse, the last half of 1997 was an extraordinary period in the annals of East Asia. The financial turbulence that engulfed the region from July onwards served as a catalyst to rekindle the spirit of co-operation among countries in Northeast and Southeast Asia. Amid a global trend towards more integration, the crisis accentuated the importance of closer cooperation among Asian countries. The idea of sticking together in difficult times is no longer a choice but a necessity. But this newfound feeling of solidarity also carries the latent danger of the emergence of a siege mentality and closed regionalism, and ultimately an East Asian trade bloc.

Rejuvenated East Asian Regionalism

It was not surprising that at the informal ASEAN summit in Kuala Lumpur in mid-December 1997, the leaders of ASEAN and those of China, Japan, and South Korea discussed the acceleration of the ASEAN Free Trade Area (AFTA). What had not been expected though was discussion of a possible expansion of AFTA programmes to cover the countries of Northeast Asia as well. It was the first time this broader free trade co-operation within East Asian countries was raised officially and discussed as part of long-term measures to weather the current economic turmoil. Before the economic crisis, the agreed agenda between the leaders of ASEAN and East Asia concentrated on political and security co-operation.

Both Malaysian Prime Minister Mahathir Mohammad and Thai Prime Minister Chuan Leekpai urged ASEAN countries to increase intra-ASEAN trade by buying more ASEAN goods. Mahathir said that by increasing trade with one another ASEAN countries would help each other's economies recover faster.

The ASEAN leaders also asked major world economies and international financial institutions to help them deal with the meltdowns of Asian currencies and stock markets. They specifically named the United States, the European Union, and Japan in addition to the International Monetary Fund, World Bank, and Asian Development Bank as parties who could help.