82 - ASEAN's Economic Cooperation: Original Vision, Current Practice and Future Challenges

Summary

INDONESIA IN ASEAN: PAST

After Indonesia's independence in 1945, Sukarno, the country's first President, faced the challenge of building a nation that had been occupied for 350 years by the Dutch and for 3.5 years by the Japanese. From the early to mid-1960s, Indonesia had experienced great domestic and foreign political dynamics. Sukarno secured his domestic authority with the support of the military, the communist party and the parliament, to which he had appointed half the members. At that time, he did not want to be associated with the West since he saw many of them as former colonials. His basic obsession was to build the world anew, in which the West needed to be balanced by new emerging nations.

However, with the downfall of Sukarno due to the alleged coup d’état by the Communist Party in Indonesia, things changed dramatically under Suharto who succeeded as president in 1967. Suharto had to face not only domestic political and economic turmoil inherited from the previous government, but also growing concerns about communist influence in the Southeast Asian region. Domestically, Indonesia inherited a massive foreign debt from the last government and needed money to pay it off. In handling the domestic economic burden, Suharto followed a more pragmatic approach and was willing to accept help from countries in the West to settle Indonesia's debt. Externally, Indonesia faced the growing threat of communism after Vietnam won the war against the United States. Communism had become a common threat to the countries in Southeast Asia.

As with Sukarno in his earlier years, along with the spirit of the Constitution of Indonesia, Suharto developed a “non-alignment” or “free and active” foreign policy which emphasized neutrality (“free”) and the need to proactively engage in a continuous effort to keep peace in the region (“active”). Based on the need to establish a zone of peace and cooperation, Indonesia signed the ASEAN declaration with Malaysia, the Philippines, Singapore and Thailand in 1967, showing the group's commitment to regional cooperation against a common enemy: the communists.

In 1967, ASEAN was merely a “declaration”, which was non-binding. ASEAN's objectives were to accelerate economic growth, social progress and cultural development…