CHAPTER 5

CONCLUSION AND RECOMMENDATION

The objectives of this study was to know about ASEAN and about the political, Economic, Social and technological environment of Thailand and to analyse the relation between the two, i.e. the ASEAN and Thailand and the influence of one on another. Moreover, the study wanted to look into the current position of ASEAN with regard to the global economic scenario and the very acceptance of ASEAN in the global platform.

After doing the research the researcher has come to the conclusion that ASEAN has travelled a long way, both in terms of its size as well as in terms of its recognition in the global scenario. Formed as regional sub-grouping of five member nations, now ASEAN has become a thriving and leading group of ten countries. Today, it is the third largest regional trading block of the world after EU and NAFTA. ASEAN was formed out of external fear of political and security nature. The characteristic feature of ASEAN is its policy of non-interference in the internal affairs of the member nations. From the time of its inception, ASEAN as an administrative body has been deliberately kept separately from the internal affairs, either political or economical, of the member nations. Therefore, ASEAN by nature is not a supranational organization like the EU. ASEAN was a deliberate effort of these small Southeast Asian countries at forming a regional group in order to have a more collaborative political atmosphere among themselves.

ASEAN has particularly been able to foster stability in the region from the time of its existence and the Treaty of Amity and Cooperation is one important aspect of the same. The treaty of Amity and Cooperation lays down the basic principles for the inter-state relations in the region. In fact, by means of this Treaty of Amity and cooperation, ASEAN has been able to foster positive economic benefits to the individual member countries and this has been a crucial factor in the increase of the Foreign Direct Investment in the region. However, as far as the internal political and economic issues of the member states are concerned, ASEAN has never tried to put its influence on these internal issues. In fact, from the beginning itself, the leaders insisted on the separation of political and economic matters. Therefore in the early years of its existence, a little credit is given to the association for the dramatic improvement in terms of the standard economic indicators of the member countries. But the importance of ASEAN is acknowledged in bringing about peace and stability in the region so that the individual economies would prosper. Thus, during that time, the economic importance of ASEAN as an association could be derived from the rapid growth and development of some
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of its member countries, including Thailand, rather than the collective strength and cohesion of the association itself. However, off late its attitude has changed to the economic aspect

The attitudinal change of ASEAN regarding deeper level of economic integration can be attributed to the growth of Foreign Direct Investment and industrialization in the region that has led to a significant export and economic growth in the region. In turn, this growth has integrated the economies of these Southeast Asian countries into the world economy, thereby resulting in the need for reforms in deregulation, financing and investment. Moreover, the strengthening of the European and the North American economic regions during the 1980s gave further impetus to ASEAN to tighten its economic alliance. Therefore, the ASEAN Free-Trade agreement was came into effect in 1992. ASEANs economic focus is and will remain in the trade liberalization within the region. Its policies are aimed at reducing the tariff across the region and building capacity to meet the growing global demand. The most important move towards this is the ASEAN Vision of the ASEAN Community 2015, which will bring all these ten nation states under one umbrella. Moreover, in this era of globalization, ASEAN has also not remained isolated; rather it has maintained close ties with the other economic powers through various bilateral Free-Trade Agreements and other trade agreements. In fact forums like ASEN+3, ASEAN+6, EU-ASEAN Dialogue; the East Asian Summit etc show the open nature of the association and its willingness at global economic platform. Today, sitting in the midst of giant economies like India, China and Japan and with active economic relations with the USA and EU, ASEAN is now all set to seek its due share in the global economy and politics. From the political perspective, the ASEAN Charter is expected to provide a more solid base for a stronger ASEAN which is at the centre of regional and international cooperation.

Located in the fertile tropical landscape in the heart of Southeast Asia, Thailand - the Land of Smiles and The Land of Opportunities and is characterized by an open, vibrant and diverse society, endowed with rich cultural heritage and unspoiled natural beauty. Today, Thailand is a mosaic of diversity and culture and a glorious past. A nation of over 60 million people, the Thai sense of national identity is guided by two factors- the Monarchy and Buddhism. Thailand has a dynamic economy which is characterized by an open, market based, private sector led framework. It is known to be an advanced economy which has enjoyed a somewhat steady economic growth. A constitutional Monarchy by nature, Thailand has gone through its own share of political and economic upheavals. On the political front Thailand is often known for the high degree of political instability which is characterized by revolutions, electoral democracy and military dictatorship including coups. Till date Thailand has had seventeen charters and constitutions, which reflects the high degree of political instability of Thailand. However, in spite of the intermitted political challenges, the Thai society has remained stable. But in spite of its political chaos, Thailand has miraculously been able to
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maintain its economic growth owing to its outward looking foreign policies. During 1965 to 1990, the Thai economy grew at an annual rate of 4.2 per cent, which was much higher than the other contemporary economies of that time. A liberalized economy, favourable foreign policies and governmental regulations are the main factors behind this rapid growth that Thailand has experienced. However, the soaring foreign investment that led to an investment boom in the Thai economy and the ineffective financial institutions are the two reasons behind the Asian Financial Crisis of 1997-98, which originated in Thailand and has spread to the other economies of the region as well. But, miraculously again, the Thai economy rev=covered quickly from the crisis and the economy took off again with growth averaging about 5% per year in the period between 2002-2007. Today, Thailand comes under the category of the upper- middle income economy of the world. It is the second largest economy of the Southeast Asian region.

Thailand is one of the founding members of ASEAN and has been continuously and actively contributing to ASEAN and its process of integration. Though owing to its intergovernmental and non supranational character, ASEAN has never interfered into the internal affairs of Thailand, even at the time of the political instability during the last two decades. ASEAN has also been a pillar of Thai foreign policy and it was Thailand who proposed the formation of the ASEAN Free Trade Area. Thailand, under the prosper thy neighbour policy has continued to assist its neighbours as they struggle with the challenges of economic development, which is an essential element of the ASEAN Community. At the same time, the Kingdom also attaches importance to promote connectivity among the different other countries in the region- both in terms of the physical linkages through transportation infrastructure development as well as cultural and intellectual linkages which will enhance trust and understanding among the peoples in the region. All these have been pursued by means of different platforms like Greater Mekong Sub-region (GMS), Ayeyawady- Chao Phraya Mekong Economic Cooperation etc in general and ASEAN in particular.

Thailand is a key player in ASEAN and enjoying a strategic location in the greater ASEAN region. Off late ASEAN has opened the bigger door for Thailand for its integration into the global economy under the invisible hand of ASEAN. The signing of the different bilateral trade agreements by ASEAN with its neighbouring countries which are known to be the big economic powerhouses of the world holds strategic economic importance. For instance, the ASEAN- South Korea FTA of 2006, the ASEAN-Japan FTA in 2008, The ASEAN-India FTA and the ASEAN-China FTA in 2010, has opened new and lucrative doors for these member countries. This not only will increase Thailands trade statistics with these bigger economics but will also expose it to the worlds bigger markets like India and China. Moreover, due to the proximity of Thailand to these neighbouring Asian countries and owing to these FTAs, there is the possibility of replacement of US and EU as its strategic trading partners by these strong and emerging economies of the world.

Moreover, the proposed ASEAN Community by 2015 will open new avenues for Thailand by means of exposing it to a market of nearly 600 million people and by making the Thai industries more competitive owing to greater competition. Also, the integration of ASEAN with the other economic powers like India, China, South Korea, Japan, Australia and New Zealand will be the worlds biggest free trade market ever and it is expected to boost the Thai economy by 4.03 percent. Moreover, such trade groupings will have immense implications for the nature of international trade around the globe.

Recommendation

After conducting the study the researcher is amazed to see the wide array of subjects regarding ASEAN, in which some further research can be done. This includes issues like the growth and evolution of ASEAN as a small sub- groping of the Southeast Asian region into a strong and powerful trade block of the world. Moreover, further studies can also be done on the potential advantages and the disadvantages related to the proposed ASEAN Community of 2015 as a whole or the impact of the proposed ASEAN Economic Community on the individual member economies of the association. Also, the growing sentiments of regionalism in the context of East Asia, owing to the emergence of the ASEAN+3 forum could be an another area of study. If we go deeper into the more particular aspects of ASEAN, a study can be done on the importance of the Chiang Mai initiative on the financial and economic integration of these member countries and also on the ASEAN+3 countries (China, South Korea and Japan). Or, a study on the investment portfolio of ASEAN can also be a subject for further studies.