Allocation of regional industrial projects: some issues

Abstract

Introduction After nearly ten years since the inception of the Association in 1967, ASEAN policy makers appear ready to seriously consider and begin to implement regional schemes of industrial cooperation. The cautious approach adopted by ASEAN to economic cooperation seems to have been dictated by such considerations as those concerning internal development, dependence of the Southeast Asian economies on the advanced countries, the existence of mutually competitive economic struc- tures which tend to assign regional economic cooperation a low priority in the ASEAN agenda. In the area of industrial cooperation, the identification of industrial projects for implementation in the ASEAN region is not independent of the task of allocating them among the member countries. Issues such as preferential trade arrangements for their implementation, compensation mechanisms for the differential impacts of projects among member countries, and relations with non-member countries in project development and pricing of output would complicate the process of project identification and allocation.