VOL. XXIII, NO. 4 QUARTER 1995 The Asia Pacific Crossing the Threshold Century of the 21st • Current Events The Role and Prospect of the United Nations Peace-Keeping Operations • The Asia Pacific Region The Challenge of Creating on the Threshold of the 21st Century: a Civil Society in Indonesia Trends and Goals Tax Structure and Policies • Asia Pacific Dynamism in Investment in Developing Countries Flows: An ASEAN-Indonesian The Political-Demography of National Perspective Integration and Its Policy Implications • Indonesia, Asia Pacific, and for a Sustainable Development the Global Economy at the Beginning in Indonesia of the 21st Century Book Review Centre for Strategic and International Studies The Quarterly TheIndonesian QuarterlyisajournalofpolicyorientedstudiespublishedbytheCentre for Strategic and International Studies (CSIS), Jalan Tanah Abang 111/23-27, Jakarta 10160.It isamediumforresearch findings, evaluationsandviewsofscholars, statesmen and thinkers on the Indonesian situation and its problems. It is also a medium for Indonesian views on regional and global problems. The opinions expressed in The Indonesian Quarterly are those of their authors and do not necessarily reflect the opinion ofthe CSIS. The Logo To better represent the underlying ideas that gave birth to the CSIS in 1971 the Centre uses as of 1989the logo that figures on the front coverofthisjournal. Theoriginal, inbronze, designedbyG. Sidhar- ta, itconsistsofadiscwithanengravingthatdepictstheglobewhich serves as a background to a naked man with an open book laid on a cloth over his lap, his left hand pointing into the book, his right hand raised upwards. Altogether it simbolises the Centre's nature as an institution where people think, learn and communicate their knowledgetowhoeverareinterested, to share it with them, mankind the world over being their concern and the globe their horizon. The nakedness symbolises the open-mindedness, the absence ofprejudice, in the attitude ofthe scholars who work with the Centre, just as it is with scholars every- where. The inscription reads "Nalar Ajar Terusan Budi," which in the Javanese ' language essentially means that to think and to share knowledge are only the natural consequence ofan enlightened mind. It is asuryasengkala, that is chandrasengkala, a Javanese traditional way to symbolise a commemorable year in the lunar calendar, adapted to the solar calendar system. It consists in using words that express the per- ceived meaning of the commemorated year while marking the year at the same time, each word having a numerical value. Thus, the inscription, in reverse order, represents the year the CSIS was established: 1971. Editor aniel Setyawan Advisory Board J. Soedjati Djiwandono, Kadjat Hartojo, Daoed Joesoef, Clara Joewono, ofEditors Rufinus Lahur, A.M.W. Pranarka, Pande R. Silalahi, Djisman S. Simandjuntak, Hadi Soesastro, Harry Tjan Silalahi, Jusuf Wanandi. TheIndonesian Quarterly is published in January, April, July and October. SIT 01381/SK/Dirjen PG/SIT/72 ISSN 0304-2170 Contents Current Events • The Role and Prospect of the United Nations • Defining the "Asia Pacific Region" Peace-Keeping Operations A. HasnanHabib 302 C.P.F. Luhulima 342 • FutureJapan-US Relations and Its Impact • The Challenge of Creating on the Asia Pacific Region JusufWanandi 308 a Civil Society in Indonesia MichaelLeifer 354 • Tax Structure and Policies Articles in Developing Countries • The Asia Pacific Region on SriMulyaniIndrawati 361 the Threshold of the 21st Century: Trends and Goals • The Political-Demography HadiSoesastro 313 of National Integration and Its Policy Implications • Asia Pacific Dynamism in for a Sustainable Development Investment Flows: An ASEAN- in Indonesia Indonesian Perspective RiwantoTirtosudarmo 369 SoedarpoSastrosatomo 323 • Indonesia, Asia Pacific, and the Global Economy at Book Review the Beginning of the 21st Century • Myths and Realities AliWardhana 331 FransiscoFernatidesdaSilva 384 Current Events Defining the "Asia Pacific Region"* A. Hasnan Habib THIS short essay will address theprob- final conclusion of how the term "Asia Pa- lem in the context of the expanding cific Region" may be defined which is per- and intense network of interstate tinent to the prevailing condition and situa- links, particularly in the economic, tradeand tion in the region. investment areas, within a hither-to loosely defined "Asia Pacific Region" which has been taking place over the past 10-15 years. Definitions The rapid economic expansion, expected to continue well into the 21st century, while Asia bringing prosperity to most states in the re- gion, has also security ramifications. Thus, According to The New Encyclopaedia most recently the region has seen the emer- Britannica (1991), "Asia" is more a geo- gence of a regional security forum where graphical term than a homogeneous conti- security and defence issues can be discussed nent. Itis the largest continent, occupying30 multilaterally with the view to maintaining per cent of the world's land area (more than and enhancing peace and stability in the re- 44,000,000 square km; Europe: 10.4 million gion which are the prerequisites ofsustained square km), the most diverse and populous economic development and growth. of all continents containing more than half the human race. However, its population is First "Asia", "Pacific", and "region" unevenly distributed as a result of its geo- will be defined, followed by a brief discus- logical configuration that includes the Ara- sion of "regionalism" and "regional inte- bian massifand the plains ofIraq; themoun- gration" both are terms which derive from tain belts ofTurkey, Iran, and Afghanistan; the word "region", before arriving at the the Himalayan mountain chain stretching from Afghanistan to the Burmesepeninsula, •Short essay presented at the CSIS-ANU/ADSC workshop on "Potential Linkages Between Economic the Indo-Pakistan subcontinent; Central and Regional Security Fora", Jakarta, 1-2 November Asia; the vast Siberian lowlands extending 1$95. from the Urals to the Pacific; and the great CURRENT EVENTS 303 island chains that sweep in arcs from Japan the world's largest and most important to Indonesia. While there are densely popu- islands and archipelagoes. lated regions on theArabian plains and river There is also a definition ofAsia in a nar- valleys, on the Indo-Pakistan subcontinent, rower sense. This smaller Asia is based on in Central Asia, especially China, and to the region's more recent political, cultural, some extent in the Pacific borderlands and and economic changes. Thus, modern Asia on the islands, there are vast areas, such as would exclude two subregions, Russian and Siberia, with a low density of population Central Asia and Southwest Asia. Remain- (approximately four persons persquare km). ing in the modern version of Asia are three Asia is actuallyjust one part of the Eura- subregions: South Asia, Southeast Asia, and sian landmass, the largest body of land on East Asia. Yet, even the modern, smaller Earth. Through time, a division of Eurasia definition of Asia would make it the largest into two parts, Europe and Asia, became and most populous of the continents. generally accepted. The dividing line started with the Ural Mountains in Russia and then continued south to the Caspian Sea, turning The Pacific west to follow the boundary between today's Iran and Turkey and Georgia, Armenia, and The term "the Pacific" derives from the Azerbaijan. Turkey thus was the western- Pacific Ocean which is the largest ocean in most part ofAsia. Asia then, in the classical the world. With an area ofabout 181 million sense, extends east as far as the Pacific square kilometers, it is twice the size of the Ocean which includes the chain of islands Atlantic Ocean and occupies nearly a third formed by Japan, Taiwan, the Philippines of the surface of the Earth between the west and Indonesia, north to the Arctic Ocean, coasts of North and South America and the and south to the Indian Ocean and the con- east coasts of Australia and Asia, which is tinent of Australia. Europeans called Asia more than the area of all the Earth's land the Orient, meaning "east", and the West- surface. In the southeast it is arbitrarily ern world was referred to as the Occident, divided from the Atlantic Ocean by the meaning "west". These old terms areseldom Drake Passage along 68° West longitude; in used anymore. the southwest, its separation from the Indian Ocean is not officially designated. The Paci- The continent is divided into five major fic reaches about 15,000 kilometers from regions, or realms, distinguished primarily Antarctica almost to the Arctic Circle in the by culture, history, political development, Bering Sea. Its greatest dimension stretches and, to some extent, natural environment. from east to west, with nearly half the length The five regions are: Russian and Central ofthe equator lying 18,000 kilometers across Asia, SouthwestAsia, SouthAsia, Southeast its surface. Nations bordering the Pacific Asia, and East Asia with a total of some 46 Ocean, and the island countries situated in states. Three oceans border Asia, theArctic, it, are called the "Pacific Rim". Pacific, and Indian, but the Pacific and In- dian Oceans are by far the most important to The Pacific Ocean contains more than the people of Asia. Within the areas where 30,000 islands; their total land area, how- these oceans touch thecontinent are many of ever, amounts to only one-quarter ofone per 304 THE INDONESIAN QUARTERLY, XXIII/4 cent of the ocean's surface area. The largest b. According to Hugo, F. Reading, A Dic- islands, in the western region, form volcanic tionary of the Social Sciences (London island arcs which includeJapan, Taiwan, the and Boston: Routledge & Kegan Paul Philippines, Indonesia, New Guinea, and Ltd., 1977): (1) Areapossessing common New Zealand. characteristics differentiating it from other areas or possessing characteristics Region giving it a unity; (2) A majorsubdivision ofastate territory officially delimitedfor Thereare severaldefinitions of"region" a specifiedfunction, and (3) A territory Some of them are as follows: consisting oftwo ormorestates delimited for a spedifiedpurpose. a. According to The New Encyclopaedia Britannica 9: 10033: lb (1991): c. According to Hutchinson, ConciseEncy- clopedic Dictionary (Helicon Publishing * In the social sciences, a cohesive area A Ltd., 1992): (1) continuous part of a that is homogeneous in selected defin- surface, space, or body, with or without ing criteria and is distinguished from definite boundaries or with certain neighbouring areas or regions by those An characteristics; (2) administrative di- criteria. It is an intellectual construct vision of a country, especially in Scot- created by the selection offeatures re- land, and (3) The sphere or realm of a levant to aparticularproblem and the subject, etc. disregard of otherfeatures considered to be irrelevant. A region is distin- d. According to TheMcGraw-HillDictiona- guishedfrom an area, which is usually ry ofModern Economics, Third Edition, a broader concept designating a por- 1983: The term applied to an area which tion of the surface of the Earth. Area may vary in size from a small section boundaries are arbitrary, established within a metropolitan area to a hugesub- for convencience. Regional boundaries region within a continent. are determined by the homogeneity and cohesiveness ofthe section; Regionalism * Regions may be defined in terms of single or multiplefeatures or in terms Since World War IL we have seen the that approach the total content ofhu- emergence ofvarious regional groupings and man occupancy of an area. The most organisations, which can be divided into common features in social science are three major types: regional defence, regional ethnic, cultural, or linguistic (Pro- economic, and a hybrid type. Exafmples of vence), climatic or topographical (the the first type are inter alia: North Atlantic Tennessee Valley), industrial or urban Treaty Organization (NATO), Warsaw (the Ruhr), economic specialization Treaty Organization, Southeast Asia Treaty (the cottonbelt ofNorth America), ad- Organization, and Western European ministrative units (standard govern- Union; the second type or economic organi- ment regions in GreatBritain), and in- sations are among others: European Com- ternational political areas (the Middle munity, European Free Trade Association, East). Benelux, Latin American Free Trade Asso- 305 CURRENT EVENTS ciation, Central American CommonMarket, gration was first used by theorists ofinterna- North American FreeTradeArea(NAFTA), tional relations in studying the experience of ASEAN Free Trade Area (AFTA), and Asia Western Europe in some detail to denote Pacific Economic Cooperation(APEC). The either a process towards or an end product third type, or hybrid regional organisations of political unification among separate na- carry out multifunctional activities, which tional entities. These are others who regard are not easy to determine whether these are integration both as a process and as end pro- primarily political, economic, military, or duct after the process has passed a certain cultural. Examples are the Organization of threshold. As an end product regional inte- American States (OAS), the Organization of gration stands for political union among pre- African Unity(OAU), the Arab League, and viously sovereign and independent terri- ASEAN. tories, mostly in the form of a federation or confederation, or security communities. As Regionalism is the expression of regional aprocess it is measured in terms of the flow consciousness that develops from a sense of of international transactions and interac- identity among states situated in geograph- tions, such as trade, investment, tourism, ical proximity which motivates them to immigrants, political, cultural, informa- mutually cooperate in one or another mode tional, etc. Such trans- and interactions, ac- common common to attain goals, satisfy cording to Karl Deutsch, will eventually lead needs, or to solve political, military, eco- to the development of security communities nomic, and other practical problems. Several or integrated sociopolitical systems. He has modes can be employed such as loose coop- identified two major subcategories of securi- eration, regional movements, regional or- ty communities: amalgamated (e.g. the ganisations, regional systems, or regional United States which has a single federal gov- subsystems of a global system. All modes, in ernment exercising central political control) particular (well-structured) regional organi- and pluralist. Pluralist security communities sations, seek to promote peace and stability have no central political authority, but the among the member states by diffusing polit- national units that make up these com- ical rivalries, ideological conflicts, and eco- munities do not expect to fight one another nomic competition. Regionalism constitutes and thus do not fortify their borders. Ex- a middle-range approach of responding to amples are the North American continent, international problems, with unilateralism Western Europe (Perhaps also ASEAN?). on one side and universalism (or globalism) on the other. In most cases, unilateralism Integration is political unification, but and universalism are incapable of resolving one that is purely voluntary and peaceful. interstate problems or conflicts. Thus, the States engaged in this process decide, on regionalists argue, the pragmatic solutions their own free will, to cease to be fully and are most likely to be found at the regional wholly sovereign; they wish to mingle, level. merge, and mix with their neighbours so as to lose some ofthe attributes of sovereignty. History shows that the more prevalent way Regional Integration to political unification has been through the There is no universally accepted defini- force of arms. But coercive political unifica- tion of regional integration. The term inte- tion definitely is not integration. 306 THE INDONESIAN QUARTERLY, XXIII/4 Criteria for Defining the "Asia Paci- ASEANparlance. Instead, a combination of fic Region" a few criteria should be used, the most im- portant being, common interest/aspiration/ Motivation and Common Interest: The Two goal, as the experience of ASEAN has Most Important Criteria shown. It is quite obvious, that in this re- Thesimplest wayofdefining regions is on ggaargde,d imnosntaticoonuanltrdieevselinoptmheentretgoiaotntaairnepreon-- the basis of distinct land masses and ele- sperity and well-being for their peoples by ments, such as Africa, Europe, Asia, North emphasising sustained economic develop- and South America, and Oceania (Australa- ment through closer economic, trade, invest- sia which comprises Australia and New Zea- ment and technological cooperation among land, Melanesia, Micronesia, and Polyne- countries in the region. The region's extra- sia). Unfortunately, the definition ofregions ordinary economic dynamism and growth always creates conceptual controversy. For over the past 10-15 years testify to this. To example, should Turkey be grouped with a continue this trend well into the21st century, cluster of Southwestern Asian, European, peace, stability, and security(comprehensive Balkan, Mediterranean, NATO, developing, security) are imperative. or Islamic states? Is Papua-New Guinea a Southeast Asian, a Melanesian or an Ocea- The remarkable economic dynamism and nian state? Should the Arab-speaking coun- growth have been the result of a "natural" tries of northern Africa be grouped in a re- process of "horizontal" integration, that gion called the Middle East, the Mediterra- has created an intra-Asian trade and invest- nean, orAfrica? One can go on and on with- ment network. As each East Asian economy out ever reaching full agreement. Such will has moved up the ladder of development, it also be the case with the definition of "Asia has tended to accelerate the growth of those Pacific Region", especially because the term at the next tier of development. This pattern links the largest continent with the largest can be verified by the trade and investment ocean which, combined, occupies approx- figures over the period stated above. These imately two-thirds of the surface of the intra-regional flows of trade and investment Earth. have led to the emergence of "growth clusters", subregional economic networks There are many criteria for identifying forming within as well as across national regions, such as language, religion, culture, borders. Moreover, they have brought about civilisation, perceived common interest, a gradual shift in economic strength from stage of development, ethnicity, population the Atlantic to Asia Pacific. size, climate, geographical, military/polit- ical, economical, each of which will re- sult in altogether different regional con- Geographical Criterion figurations. However, there is not much use in seeking to determine what the "best" de- There are four possible definitions of the finition ofthe Asia Pacific region is, a region Asia Pacific region, using the geographical that is engaged in the process of regional in- criterion. They are as follows: tegration towards one or another form of a. The broad, or classical definition ofAsia end product, i.e., security and prosperity comprising five subregions, i.e., Russian community, or "regional resilience" in the and Central Asia, Southwest Asia, South CURRENT EVENTS 307 Asia, Southeast Asia, and East Asia, plus a household word, the term should the Pacific Ocean. This huge region is be retained; home to some 46 Asian states and over - the process of expanding and deep- 30,000 islands: ening the already achieved level of * This is, ofcourse, an impossible defini- regional integration should be based tion for our purpose. on the expressed will of the countries b. The narrower, or modern definition of concerned, which is voluntary and Asia which consists of three subregions, peaceful, without coercion in what- i.e., South Asia, Southeast Asia, and ever form, with the APEC and the East Asia; and the Pacific Ocean. ARF as the two "core" organisa- * This definition is still an impossible tions for respectively, economic and one, and does not reflect the realities security cooperation; APEC in the field, and is still too large for our - each new application to join and/or ARF must be scrutinised and purpose. agreed upon by all members of the c. The Pacific part ofAsia, which only com- organisation concerned. prises Southeast Asia and East Asia. * This corresponds with Mahathir's ori- ginal "East Asia Economic Region" which, though it reflects the real situa- Conclusion tion on the ground, nonetheless can be regarded as retrogressive in light of the The Asia Pacific Region cannot be de- stage of regional cooperation achieved fined in an exact manner, as is the case with todate (APEC and PECC, ARF and all other regions. Inevitably, conceptual con- CSCAP). troversy creeps in. * The definition denotes a region too Of all criteria for defining the Asia Paci- small for our purpose. fic Region, most important are: (a) motiva- d. The Pacific Rim, comprising nations bor- tion/common interest, i.e. to create a pros- dering the Pacific Ocean, and the island perous, stable, secure and peaceful com- countries situated in it. munity of nations in the Asia Pacific Re- * This definition leaves only Southeast gion, or Asia Pacific Regional Resilience; Asia and East Asia as components of and(b) geographical criterion which suggests the wider Asia Pacific region which in- that in terms of substance, the Pacific Rim cludes all countries on the North and most appropriately defines the region. South American continent, as well as the Oceanian subregion. The definition APEC and ARF, resp. for economic and suits our purpose. security cooperation, should be made as the * However, due attention should be paid "core framework" for expanding and to the following: deepening the already achieved level of re- - although in this case "Pacific Rim" gional integration which must be based on is substantively the same as "Asia the voluntary and expressed free will of all Pacific", terminologically the two countries concerned and should proceed terms are different Since the term gradually. This also means that each new ap- "Asia Pacific" has virtually become plication tojoin APEC and/orARF must be 308 THE INDONESIAN QUARTERLY, XXIII/4 scrutinised and agreed upon by all members peanCommunity, Second Edition. OxfordUniversi- of the organisations concerned. ty Press. Greenwald, Douglas and Associates. 1983. The Mc- REFERENCES Graw-Hill Dictionary of Modern Economics: A Handbook of Terms and Organizations, Third Couloumbis, Theodore A. and Wolfe, James H. 1986. Edition. Introduction to InternationalRelations: Powerand Lindberg, Leon N. and Scheingold, Stuart A. (eds.). Justice, Third Edition. Englewood Cliffs, New 1971. Regional Integration: Theory and Research. Jersey 07632: Prentice-Hall Inc. Cambridge, Massachusetts: Harvard University Corbey, Dorette. 1995. Dialectical Functionalism. In Press. International Organization 49/2 (Spring). Reading, Hugo F. 1977. A Dictionary of the Social Elliot, Jeffrey M. and Reginald, Robert. 1989. The Sciences. London: Routledge& Kegan Paul. Arms Control, Disarmament, andMilitary Security Piano, Jack C. andOlton, Roy. 1988. TheInternational Dictionary. 130 Cremona, Santa Barbara, Califor- Relations Dictionary, Fourth Edition. Santa Bar- nia: ABC-CLIO, Inc. and 55 St. Thomas' Street, bara, California: Oxford, England: ABC-CLIO. Oxford, OXI 1JG, England: Clio Press Ltd. 1995. Regionalism and Trade: The Right Direction? 1995. Compton's Interactive Encyclopaedia. For Win- In Economist (16 September). dows (Compton's New Media). 1991. Various Volumes of The New Encyclopaedia George, Stephen. 1991. PoliticsandPolicy in theEuro- Britannica, 15th Edition. Future Japan-US Relations and Its Impact on the Asia Pacific Region* Jusuf Wanandi Introduction economically dynamic for the last 50 years. It was to a very large extent "Pax Amer- IT has been very much theAmerican mil- icana" that makes this possible. While other itaryforward deployment in theWestern countries have been contributing to the US Pacific and its corresponding political, presence, it could be said that for the most economic and to a certain extent cultural part the Japan-US alliance has made this role that have made and kept the East Asian possible, especially in the last 10 years ofthe or Asia Pacific region peaceful, stable and Cold War. Naturally there has been ups and *Paper presented at the Kerzai Doyukai Study down in the relationship. At this moment the Group Meeting, Tokyo, 20 November 1995. main presence of US troops and military