Introduction

ASEAN has become well known today in the world. The ASEAN region as a whole is now experiencing one of the most exciting periods of our time. The strong growth in the region has lead the ASEAN countries individually towards newly industrializing economy (NIE) status. This momentum of a catching-up process of economic growth is accompanied by rapid social changes, together with profound political transformation in each country. The pace of economic and political development in each ASEAN country can no longer be looked at individually, but needs to taken into perspective from the increasing interdependence of ASEAN within its own region and with the world driven by the dynamics of trade and investment linkages.

The success of the ASEAN economies can be attributed to the primarily outward-oriented and market-driven economic development policies over the past decades (see Table 2.1). The appropriate mix of economic policies with sound macroeconomic stability and the relatively effective reform and restructuring of the individual ASEAN economies over time have led to ASEAN becoming an attractive region for the promotion and expansion of trade and investment. As the process of ASEAN market integration continues more and more rapidly, ASEAN needs to sustain the region's international competitiveness on a world scale. This competitive pressure stimulated ASEAN policy makers to think more seriously on how to embark upon an institutionalized integration in order to facilitate ASEAN economic integration with the world.

Looking from outside as well as from within the region, there is no need to recount the numerous changes within the global economy which had occurred right after the end of the Cold War. Economic regionalism has become increasingly important in different parts of the world while multilateral trade liberalization is still actively sought after the conclusion of the Uruguay Round and now pursued under the new World Trade Organization (WTO). The developments within and outside the region have caused ASEAN to focus again on intra-ASEAN economic co-operation.