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Singapore Association of Southeast Asian Nations
The Association of Southeastern Asian Nations (ASEAN)
was
founded in 1967 primarily as a forum for discussing issues
of
mutual concern among neighboring Southeast Asian countries
rather
than as a trading union similar to the EEC. In part, this
orientation was because, other than Singapore, most of the
ASEAN
countries had similar products, tending to make them more
competitive than cooperative. Although trade relations
among the
ASEAN countries remained largely bilateral, there was some
informal
economic cooperation, including joint representations to
foreign
governments on economic issues of common concern. In 1989
the
possibility of a more formalized economic entity was at
least being
considered by the ASEAN members.
In 1988 Malaysia was Singapore's largest ASEAN trading
partner
and third largest overall trading partner, after the
United States
and Japan. The Malaysian market was the single largest
ASEAN
destination for Singapore's exports and its second largest
export
market overall. In the late 1980s, Singapore established
increasingly close economic and industrial ties with
Malaysia's
Johor state, which had served as Singapore's hinterland in
colonial
times. To alleviate its land shortage as well as its labor
shortage
and high labor costs, Singapore, began to transfer
labor-intensive
industries to sites across the causeway connecting it to
Malaysia's
southernmost state. Johor, in turn, hoped "economic
twinning" with
Singapore would boost its long-term development. By early
1987,
there were 217 Singaporean companies or Singapore-based
multinationals in Malaysia, having total investments of
slightly
more than S$200 million.
Singapore's much smaller markets with the other ASEAN
countries
also were growing. In 1989 Singapore recorded its highest
growth in
bilateral ASEAN trade with Thailand, which replaced Taiwan
as its
fifth largest trading partner. Intra-ASEAN trade generally
might
have been underestimated, partly because of the volume of
informal
trade, including smuggling, and partly because so much of
it was
controlled by the Chinese community in each country.
Keeping
business within the family, clan, or dialect group was a
central
Chinese business practice that persisted across national
boundaries.
Data as of December 1989
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