ASEAN Economies in Perspective: A Comparative Study of by John Wong

By John Wong

Publication by means of Wong, John

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The proper evaluation should rest on the dynamic consideration of growth and development potential for the region due to 38 ASEAN Economies in Perspective integration, as well as on the political reality under which international commercial policies are actually formulated. It is well known that the ebbs and flows of the international economic system do not depend on such static assumptions as postulated by the classical or neoclassical trade theories. 32 At present the ASEAN governments are clearing the way for member-countries to enter into some form of preferential trading arrangements with each other, in order to generate more intra-A SEAN trade.

However, individual primary exporting countries often compare the movements in the price of their specific commodities with the unit price of their manufacturing imports. Empirically, whether or not there is any deterioration of terms of trade depends very much on the earning trends of individual commodities in question or the time reference periods covered. Thus a cogent empirical generalisation can still be made on the basis of experience of the period 1953-71; this does indicate a slow and steady rise in the price of manufactured goods and a corresponding deterioration in the Trade: an Engine for Growth and Dependency 29 terms of trade of primary producers.

The most effective domestic measure to deal with the problem of instability is, as is commonly recognised, diversification, which ultimately involves attempts to restructure the existing exports towards increasing the share of the manufactured and semi-processed products. By inducing a gradual shift of the trade structure towards more manufacturing exports, such a policy could lead to greater stabilisation of export earnings, and possibly an overall improvement in the export performance of these countries.

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