ASEAN ECONOMIC INTEGRATION : PAST, PRESENT AND FUTURE

Abstract

The main motivation of this thesis is to investigate the contributions of ASEAN membership. It departs from the widespread qualitative discussion on ASEAN economic integration, using a quantitative approach to analyze the effects of ASEAN integration. The weighted share technique by Verdoorn and Schwartz ( 1972) is used to estimate the integration-induced effects, namely on trade and foreign direct investment. Our conclusion echoes that of numerous economists who have written on this issue: "ASEAN membership is beneficial and not detrimental to participating economies”. As such, the major contribution that this thesis hopes to make is to provide a quantitative "backup" to the existing economic literatures on ASEAN economic integration. A special point to note would be the optimistic results we obtained on Vietnam (the seventh member of ASEAN). This points to an important conclusion: there is a great potential for ASEAN membership to impact positively on the other Indochina states (namely Cambodia, Laos and Myanmar).