Section -6 (Mains Special: International Organizations)

International Organizations
World Trade Organization
peace and stability in the world through a multilateral system based on consenting member states (currently there are slightly more than 140 members) that have ratified the rules of the WTO in their individual countries as well. This means that WTO rules become a part of a country's domestic legal system. The rules, therefore, apply to local companies and nationals in the conduct of business in the international arena. If a company decides to invest in a foreign country, by, for example, setting up an office in that country, the rules of the WTO (and hence, a country's local laws) will govern how that can be done. Theoretically, if a country is a member to the WTO, its local laws cannot contradict WTO rules and regulations, which currently govern approximately 97% of all world trade.

The WTO was born out of the General Agreement on Tariffs and Trade (GATT), which was established in 1947. A series of trade negotiations, GATT rounds began at the end of World War II and were aimed at reducing tariffs for the facilitation of global trade on goods. The rationale for GATT was based on the Most Favored Nation (MFN) clause, which, when assigned to one country by another, gives the selected country privileged trading rights. As such, GATT aimed to help all countries obtain MFNlike status so that no single country would be at a trading advantage over others. The WTO replaced GATT as the world's global trading body in 1995, and the current set of governing rules stems from the Uruguay Round of GATT negotiations, which took place throughout 1986-1994. GATT trading regulations established between 1947 and 1994 (and in particular those negotiated during the Uruguay Round) remain the primary rule book for multilateral trade in goods. Specific sectors such as agriculture have been addressed, as well as issues dealing with antidumping. The Uruguay Round also laid the foundations for regulating trade in services. The General Agreement on Trade in Services (GATS) is the guideline directing multilateral trade in services. Intellectual property rights were also addressed in the establishment of regulations protecting the trade and investment of ideas, concepts, designs, patents, and so forth. The purpose of the WTO is to ensure that global trade commences smoothly, freely and predictably. The WTO creates and embodies the legal ground rules for global trade among member nations and thus offers a system for international commerce. The WTO aims to create economic

How It Functions?
Decisions are made by consensus, though a majority vote may also rule (this is very rare). Based in Geneva, Switzerland, the Ministerial Committee, which holds meetings at least every two years, makes the top decisions. There is also a General Council, a Goods Council, Services Council, and an Intellectual Property Rights Council, which all report to the General Council. Finally, there are a number of working groups and committees. If a trade dispute occurs, the WTO works to resolve it. If, for example, a country erects a trade barrier in the form of a customs duty against a particular country or a particular good, the WTO may issue trade sanctions against the violating country. The WTO will also work to resolve the conflict through negotiations.

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Free Trade at What Cost?

The anti-WTO protests we have seen around the world are a response to the consequences of establishing a multilateral trading system. Critics say that the after-effects of WTO policies are undemocratic because of the lack of transparency during negotiations. Opponents also argue that since the WTO functions as a global authority on trade and reserves the right to review a country's domestic trade policies, national sovereignty is compromised. For example, regulations that a country may wish to establish to protect its industry, workers or environment could be considered barriers to the WTO's aim to facilitate free trade. A country may have to sacrifice its own interests to avoid violating WTO agreements. Thus, a country becomes limited in its choices. Moreover, brutal regimes that are pernicious to their own countries may inadvertently be receiving concealed support from foreign governments who continue, in the name of free trade, to do business with these regimes. Unfavorable governments in favor of big business therefore remain in power at the cost of a representative government. One high profile WTO controversy has to do with intellectual property rights and a government's duty to its citizens versus a global authority. One well known example is HIV/AIDS treatments and the cost of patented medicines. Poor, very needy countries, such as those in South America and subSaharan Africa, simply cannot afford to buy these patented drugs. If they were to buy or manufacture these same drugs under an affordable generic label, which would save thousands of lives, these countries would, as members of the WTO, be in violation of intellectual property rights (TRIPS) agreements and subject to possible trade sanctions.

As most investment comes from the developed and economically powerful into the developing and less influential economies, there is, however, a tendency for the system to give the investor an advantage. Regulations that facilitate the investment process are in the investor's interest because these regulations help foreign investors maintain an edge over local competition. Controversy over what is the best course of action in the creation of a global economic system - one that fosters free trade and free choice - will persist.

International Monetary Fund

The International Monetary Fund (IMF) is an international organization that provides financial assistance and advice to member countries. This article will discuss the main functions of the organization, which has become an enduring institution integral to the creation of financial markets worldwide and to the growth of developing countries. The IMF was born at the end of World War II, out of the Bretton Woods Conference in 1945. The Fund was created out of a need to prevent economic crises like the great depression. With its sister organization, the World Bank, the IMF is the largest public lender of funds in the world. It is a specialized agency of the United Nations and is run by its 184 member states. Membership is open to any country that conducts foreign policy and accepts the statutes of the Fund.

Functions and Duties: The IMF is responsible for

Analysis
Free trade fosters investment into other countries, which can help boost the economy and eventually the standard of living of all countries involved.

the creation and maintenance of the international monetary system, the system by which international payments among countries take place. It thus strives to provide a systematic mechanism for foreign exchange transactions in order to foster investment and promote balanced global economic trade. To achieve these goals, the IMF focuses and advises on the macroeconomic policies of a country, which affect its exchange rate and its government's budget, money and credit management. The IMF

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will also appraise a country's financial sector and its regulatory policies, as well as structural policies within the macroeconomy that relate to the labor market and employment. In addition, as a fund, it may offer financial assistance to nations in need of correcting balance of payments discrepancies. The IMF is thus entrusted with nurturing economic growth and maintaining high levels of employment within countries. The IMF gets its money from quota subscriptions paid by member states. The size of each quota is determined by how much each government can pay according to the size of its economy. The quota in turn determines the weight each country has within the IMF - and hence its voting rights - as well as how much financing it can receive from the IMF. Twenty-five percent of each country's quota is paid in the form of special drawing rights (SDRs), which are a claim on the freely usable currencies of IMF members. Before SDRs, the Bretton Woods system had been based on a fixed exchange rate, and it was feared that there would not be enough reserves to finance global economic growth. Therefore, in 1968, the IMF created the SDRs, which is a kind of international reserve asset. It was created to supplement the international reserves of the time, which were gold and the U.S. dollar. The SDR is not a currency; it is a unit of account by which member states can exchange with one another in order to settle international accounts. The SDR can also be used in exchange for other freely-traded currencies of IMF members. A country may do this when it has a deficit and needs more foreign currency to pay its international obligations. The SDR's value lies in the fact that member states commit to honor their obligations to use and accept SDRs. Each member country is assigned a certain amount of SDRs based on how much the country contributes to the Fund (which is based on the size of the country's economy). However, the need for SDRs lessened when major economies dropped the fixed exchange rate and opted

for floating rates instead. The IMF does all of its accounting in SDRs, and commercial banks accept SDR denominated accounts. The value of the SDR is adjusted daily against a basket of currencies, which currently includes the U.S. dollar, the Japanese yen, the euro, and the British pound. The larger the country, the larger its contribution; thus the U.S. contributes about 18% of total quotas while the Seychelles Islands contribute a modest 0.004%. If called upon by the IMF, a country can pay the rest of its quota in its local currency. The IMF may also borrow funds, if necessary, under two separate agreements with member countries. In total, it has SDR 212 billion (USD 290 billion) in quotas and SDR 34 billion (USD 46 billion) available to borrow.

IMF Benefits
The IMF offers its assistance in the form of surveillance, which it conducts on a yearly basis for individual countries, regions and the global economy as a whole. However, a country may ask for financial assistance if it finds itself in an economic crisis, whether caused by a sudden shock to its economy or poor macroeconomic planning. A financial crisis will result in severe devaluation of the country's currency or a major depletion of the nation's foreign reserves. In return for the IMF's help, a country is usually required to embark on an IMF-monitored economic reform program, otherwise known as Structural Adjustment Policies (SAPs). There are three more widely implemented facilities by which the IMF can lend its money. A standby agreement offers financing of a short-term balance of payments, usually between 12 to 18 months. The extended fund facility (EFF) is a medium-term arrangement by which countries can borrow a certain amount of money, typically over a three to four-year period. The EFF aims to address structural problems within the macroeconomy that are causing chronic balance of payment inequities. The structural problems are addressed through financial and tax sector reform

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and the privatization of public enterprises. The third main facility offered by the IMF is known as the poverty reduction and growth facility (PRGF). As the name implies, it aims to reduce poverty in the poorest of member countries while laying the foundations for economic development. Loans are administered with especially low interest rates. The IMF also offers technical assistance to transitional economies, such as the former Soviet Republics, in the changeover from centrally planned to market run economies. The IMF also offers emergency funds to collapsed economies, as it did for Korea during the 1997 financial crisis in Asia. The funds were injected into Korea's foreign reserves in order to boost the local currency, thereby helping the country avoid a damaging devaluation. Emergency funds can also be loaned to countries that have faced economic crisis as a result of a natural disaster. All facilities of the IMF aim to create sustainable development within a country and try to create policies that will be accepted by the local populations. However, the IMF is not an aid agency, so all loans are given on the condition that the country implement the SAPs and make it a priority to pay back what it has borrowed. Currently, all countries that are under IMF programs are developing, transitional and emerging market countries (countries that have faced financial crisis). Because the IMF lends its money with "strings attached" in the form of its SAPs, many people and organizations are vehemently opposed to the Fund's activities. Opposition groups claim that structural adjustment is an undemocratic and inhumane means of loaning funds to countries facing economic failure. Debtor countries to the IMF are often faced with having to put financial concerns ahead of social ones. Thus, by being required to open up their economies to foreign investment, to privatize public enterprises, and to cut government spending, these countries suffer an inability to properly fund their education and health programs. Moreover, foreign corporations often ex-

ploit the situation by taking advantage of local cheap labor while showing no regard for the environment. The oppositional groups say that locally cultivated programs, with a more grassroots approach towards development, would provide greater relief to these economies. Critics of the IMF say that, as it stands now, the IMF is only deepening the rift between the wealthy and the poor nations of the world. Indeed, it seems that many countries cannot end the spiral of debt and devaluation. Mexico, which sparked the infamous "debt crisis" of 1982 when it announced it was on the verge of defaulting on all its debts in the wake of low international oil prices and high interest rates in the international financial markets, has yet to show its ability to end its need for the IMF and its structural adjustment policies. Is it because these policies have not been able to address the root of the problem? Could more grassroots solutions be the answer? These questions are not easy. There are, however, some cases where the IMF goes in and exits once it has helped solve problems. Egypt is an example of a country that embarked upon an IMF structural adjustment program and was able to finish with it. Providing assistance with development is an everevolving and dynamic endeavor. While the international system aims to create a balanced global economy, it should strive to address local needs and solutions. On the other hand, we cannot ignore the benefits that can be achieved by learning from others.

World Bank
The World Bank Group (WBG) was established in 1944 to rebuild post-World War II Europe under the International Bank for Reconstruction and Development (IBRD). Today, the World Bank functions as an international organization that fights poverty by offering developmental assistance to middle-income and low-income countries. By giving loans and offering advice and training in both the private and public sectors, the

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World Bank aims to eliminate poverty by helping people help themselves. Under the World Bank Group, there are complimentary institutions which aid in its goals to provide assistance.

funding from rich countries as well as from the issuance of bonds on the world's capital markets. The IBRD offers assistance to middle income and poor but credit worthy countries, and it also works as an umbrella for more specialized bodies under the Bank. The IBRD was the original arm of the Bank which was responsible for the reconstruction of post-war Europe. Before gaining membership in the WBG's affiliates (the International Finance Corporation, the Multilateral Investment Guarantee Agency and the International Center For Settlement of Investment Disputes), a country must be a member of the IBRD. The International Development Association offers loans to the world's poorest countries. These loans come in the form of "credits", and are essentially interest-free. They offer a 10-year grace period and hold a maturity of 35 years to 40 years. The International Finance Corporation (IFC) works to promote private sector investments by both foreign and local investors. It provides advice to investors and businesses, and it offers normalized financial market information through its publications, which can be used to compare across markets. The IFC also acts as an investor in capital markets and will help governments privatize inefficient public enterprises. The Multilateral Investment Guarantee Agency (MIGA) supports direct foreign investment into a country by offering security against the investment in the event of political turmoil. These guarantees come in the form of political risk insurance, meaning that MIGA offers insurance against the political risk that an investment in a developing country may bear. Finally, the International Center for Settlement of Investment Dispute facilitates and works towards a settlement in the event of a dispute between a foreign investor and a local country. As mentioned earlier, the main function of the WBG is to eliminate poverty and to provide assistance to the poor by offering loans, policy advice

Membership
There are 184 member countries that are shareholders in the IBRD, which is the primary arm of the WBG. To become a member, however, a country must first join the IMF. The size of the Bank's shareholders, like that of the IMF's shareholders, depends on the size of a country's economy. Thus, the cost of a subscription to the Bank is a factor of the quota paid to the IMF. There is an obligatory subscription fee, which is equivalent to 88.29% of the quota that a country has to pay to the Fund. In addition, a country is obligated to buy 195 Bank shares (USD 120,635 per share, reflecting a capital increase made in 1988). Of these 195 shares, 0.60% must be paid in cash in U.S. dollars while 5.40% can be paid in a country's local currency, in U.S. dollars, or in non-negotiable non-interest bearing notes. The balance of the 195 shares is left as "callable capital", meaning the Bank reserves the right to ask for the monetary value of these shares when and if necessary. A country can subscribe a further 250 shares, which do not require payment at the time of membership but are left as "callable capital". The president of the Bank comes from the largest shareholder, which is the United States, and members are represented by a Board of Governors. Throughout the year, however, powers are delegated to a board of 24 Executive Directors (ED). The five largest shareholders - the U.S., U.K., France, Germany and Japan - each have an individual ED, and the additional 19 EDs represent the rest of the member states as groups of constituencies. Of these 19, however, China, Russia and Saudi Arabia have opted to be single country constituencies, which means that they each have one representative within the 19 EDs. This decision is based on the fact that these countries have large, influential economies, which requires that their interests be voiced individually rather than diluted within a group. The World Bank gets its

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and technical assistance. As such, the countries receiving aid are learning new ways to function. Over time, however, it has been realized that sometimes as a nation develops, it requires more aid to work its way through the development process. This has resulted in some countries accumulating so much debt and debt service that payments become impossible to meet. Many of the poorest countries can receive accelerated debt relief through the Heavily Indebted Poor Countries scheme, which reduces debt and debt service payments while encouraging social expenditure. Another issue on which the Bank has recently been focusing has presented itself as an endangerment to a country's livelihood: support programs for HIV/AIDS. The WBG has also been focusing on reducing the risk of projects by means of better appraisal and supervision mechanisms as well as a multidimensional approach to overall development. (This includes not only lending but also support for legal reform, educational programs, environmental safety, anti-corruption measures and other types of social development.) The Bank encourages all of its clients, which number over 100, to implement policies that promote sustainable growth, health, education, social development programs focusing on governance and poverty reduction mechanisms, the environment, private business and macroeconomic reform.

Moreover, even though the Bank provides training, assistance, information and other means that may lead to sustainable development, opponents have observed that developing countries often have to put health, education and other social programs on hold in order to pay back their loans. Opposition groups have protested by boycotting World Bank bonds. These are the bonds that the WBG sells on global capital markets to raise money for some of its activities. These opposition groups also call for an end to all practices that require a country to implement structural adjustment programs - including privatization and government austerity measures - an end to debt owed by the poorest of the poor, and an end to environmentally damaging projects such as mining or the building of dams.

Analysis
It is not surprising that there is a clash of opinion over how aid is given. Indeed, those that offer assistance are going to want to have a say in how the loans are used and what kind of economic policies are fostered in a country's developmental process. Many developing and poor nations, however, are stuck in a quagmire of debt and impoverishment, no matter how much assistance they receive. Given this, it may need to remember that the process of aid is also a developing state, in which both the giver and the receiver should be helping each other reach a poverty-free world.

Opposition to the Bank

While the WBG strives to create a poverty-free world, there are groups that are passionately opposed to the international patron. The opponents believe that, due to the fundamental structure of the Bank, the already existing imbalance between the world's rich and poor is only exacerbated. The system allows the largest shareholders to dominate the vote, resulting in WBG policies being decided by the rich but implemented by the poor. This can result in policies that are not in the best interests of the developing country in question, whose political, social and economic policies will often have to be molded around WBG resolutions.

Asian Development Bank: The Asian Develop-

ment Bank (ADB) is a regional development bank established in 1966 to promote economic and social development in Asian and Pacific countries through loans and technical assistance. It is a multilateral development financial institution owned by 67 members, 48 from the region and 19 from other parts of the globe. ADB's vision is a region free of poverty. Its mission is to help its developing member countries reduce poverty and improve the quality of life of their citizens. The work of the Asian Development Bank (ADB) is aimed at improving the welfare of the people in

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Asia and the Pacific, particularly the 1.9 billion who live on less than $2 a day. Despite many success stories, Asia and the Pacific remains home to two thirds of the world's poor. The bank was conceived with the vision of creating a financial institution that would be "Asian in character" to foster growth and cooperation in a region that back then was one of the world's poorest. ADB raises funds through bond issues on the world's capital markets, while also utilizing its members' contributions and earnings from lending. These sources account for almost three quarters of its lending operations. Although recent economic growth in many member countries have led to a change in emphasis to some degree, throughout most of its history the bank has operated on a project basis, specifically in the areas of infrastructure investment, agricultural development and loans to basic industries in member countries. Although by definition the bank is a lender to governments and government entities, it also provides direct assistance to private enterprises and has also participated as a liquidity enhancer and best practice enabler in the private sectors of regional member countries. The primary human capital asset of the bank is its staff of professionals, encompassing academic and/ or practical experts in the areas of agriculture, civil engineering, economics, environment, health, public policy and finance. Professional staff are drawn from its member countries and given various incentives to relocate to Manila. It is conceivable that once all of Asia-Pacific reaches a certain level of living standard the bank will be wound down or reconfigured to operate as a commercial enterprise.

members while the others come from non-regional members. The Board of Governors also elect the bank's President who is the chairperson of the Board of Directors and manages ADB. The president has a term of office lasting five years, and may be reelected. Traditionally, and because Japan is one of the largest shareholders of the bank, the President has always been Japanese. The current President is Haruhiko Kuroda. The headquarters of the bank is at 6 ADB Avenue, Mandaluyong city, Metro Manila, Philippines, and it has representative offices around the world. The bank employs approximately 2,400 people, coming from 55 of its 67 member countries, and with more than half of the staff being Filipino. ADB has 67 members (as of 2 February 2007). The year after a member's name indicates the year of membership. The largest share holders of the ADB are Japan and USA, each holding 15.57% of the shares. At the time a country ceases to be a member, the Bank shall arrange for the repurchase of such country's shares by the Bank as a part of the settlement of accounts with such country in accordance with the provisions of paragraphs 3 and 4 of this Article. Republic of China(Taiwan) initially joined as "China" as a founding member representing the whole of China. However, its share of Bank capital was based on the size of Taiwan's capital, unlike the World Bank and IMF where the government in Taiwan had had a share representing the whole of China prior to the People's Republic of China joining and taking the Republic of China's seat. In 1986, a compromise was effected when the People's Republic of China joined the institution. The ROC was allowed to retain its membership, but under the name of Taipei,China a name it protests. Uniquely, this allows both sides of the Taiwan Straits to be represented at the institution.

Policy-making Body & Members: The highest

policy-making body of the bank is the Board of Governors composed of one representative from each member state. The Board of Governors, in turn, elect among themselves the 12 members of the Board of Directors and their deputy. Eight of the 12 members come from regional (Asia-Pacific)

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ADB projects and Technical Assistance:-

ADB's annual project lending amounts to about US$7 billion per year with typical lending per project being in the $100 million range.
Afghan Diaspora Project Funding Utah state university led projects to
bring labor skills in Thailand Earthquake and Tsunami Emergency Support Project in Indonesia

Greater Mekong Subregional Program ROC Ping Hu Offshore Oil and Gas Development

economic organisation of 10 countries located in southeast Asia, which was formed on 8 August 1967 by Indonesia, Malaysia, the Philippines, Singapore and Thailand. Since then, membership has expanded to include Brunei, Burma (Myanmar), Cambodia, Laos, and Vietnam. Its aims include the acceleration of economic growth, social progress, cultural development among its members, the protection of the peace and stability of the region, and to provide opportunities for member countries to discuss differences peacefully. In 2005, the bloc spanned over an area of 4.46 million km2 with a combined GDP of about USD $896.5 billion/$2,728 billion growing at an average rate of around 5.6% per annum. Nominal GDP had grown to USD $1.4 trillion in 2008.

Strategic Private Sector Partnerships for Urban

Poverty Reduction in the Philippines Trans-Afghanistan gas pipeline feasibility assessment Loan of $1.2 billion to bail it out of an impending economic crisis in Pakistan and on going funding for the countries growing energy needs, specifically Hydro-power projects Micro finance support for private enterprises, in conjunction with governments, including Pakistan and India. In 2009, the bank endorsed a 2.9-billion-dollar funding strategy for proposed projects in India. The projects in this strategy were only indicative and still needed to be further approved by the bank's Board of Directors; however, PRC Foreign Ministry spokesman Qin Gang claimed, "The Asian Development Bank, regardless of the major concerns of China, approved the India Country Partnership strategy which involves the territorial dispute between China and India. China expresses its strong dissatisfaction over this... The bank's move not only seriously tarnishes its own name, but also undermines the interests of its members.

Establishment
ASEAN was preceded by an organisation called the Association of Southeast Asia, commonly called ASA, an alliance consisting of the Philippines, Malaysia, and Thailand that was formed in 1961. The bloc itself, however, was established on 8 August 1967, when foreign ministers of five countries Indonesia, Malaysia, the Philippines, Singapore, and Thailand met at the Thai Department of Foreign Affairs building in Bangkok and signed the ASEAN Declaration, more commonly known as the Bangkok declaration. The motivations for the birth of ASEAN were the desire for a stable external environment (so that its members governing elite could concentrate on nation building), the common fear of communism, reduced faith in or mistrust of external powers in the 1960s, as well as the aspiration for national economic development; not to mention Indonesias ambition to become a regional hegemon through regional cooperation and the hope on the part of Malaysia and Singapore to constrain Indonesia and bring it into a more cooperative framework. Unlike the European Union, ASEAN was designed to serve nationalism.

Association of Southeast Asian Nations

The Association of Southeast Asian Nations, commonly abbreviated ASEAN is a geo-political and

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In 1976, the Melanesian state of Papua New Guinea was accorded observer status. Throughout the 1970s, the organization embarked on a program of economic cooperation, following the Bali Summit of 1976. This floundered in the mid1980s and was only revived around 1991 due to a Thai proposal for a regional free trade area. The bloc then grew when Brunei Darussalam became the sixth member after it joined on 8 January 1984, barely a week after the country became independent on 1 January. On 21 July 1994, Vietnam became the seventh member. Laos and Burma (Myanmar) joined two years later in 23 July 1997. Cambodia was to have joined together with Laos and Myanmar, but was deferred due to the country's internal political struggle. The country later joined on 24 April 1997, following the stabilisation of its government. During the 1990s, the bloc experienced an increase in both membership as well as in the drive for further integration. In 1990, Malaysia proposed the creation of an East Asia Economic Caucus composing the then-members of ASEAN as well as the People's Republic of China, Japan, and South Korea, with the intention of counterbalancing the growing influence of the United States in the AsiaPacific Economic Cooperation (APEC) as well as in the Asian region as a whole. This proposal, however, failed since it faced heavy opposition from Japan and the United States. Despite this failure, member states continued to work for further integration. In 1992, the Common Effective Preferential Tariff (CEPT) scheme was signed as a schedule for phasing tariffs and as a goal to increase the regions competitive advantage as a production base geared for the world market. This law would act as the framework for the ASEAN Free Trade Area. After the East Asian Financial Crisis of 1997, a revival of the Malaysian proposal was established in Chiang Mai, known as the Chiang Mai Initiative, which calls for better integration between the economies of ASEAN as well as the ASEAN Plus Three countries (China, Japan, and South Korea). Aside from improving each member state's economies, the bloc also focused on peace and stability

in the region. On 15 December 1995, the Southeast Asian Nuclear-Weapon-Free Zone Treaty was signed with the intention of turning Southeast Asia into a Nuclear-Weapon-Free Zone. The treaty took effect on 28 March 1997 after all but one of the member states have ratified it. It became fully effective on 21 June 2001, after the Philippines ratified it, effectively banning all nuclear weapons in the region. At the turn of the 21st century, issues shifted to involve a more environmental prospective. The organization started to discuss environmental agreements. These included the signing of the ASEAN Agreement on Transboundary Haze Pollution in 2002 as an attempt to control haze pollution in Southeast Asia. Unfortunately, this was unsuccessful due to the outbreaks of the 2005 Malaysian haze and the 2006 Southeast Asian haze. Other environmental treaties introduced by the organization include the Cebu Declaration on East Asian Energy Security, the ASEAN-Wildlife Enforcement Network in 2005, and the Asia-Pacific Partnership on Clean Development and Climate, both of which are responses to Global Warming and the negative effects of climate change. Through the Bali Concord II in 2003, ASEAN has subscribed to the notion of democratic peace, which means all member countries believe democratic processes will promote regional peace and stability. Also, the non-democratic members all agreed that it was something all member states should aspire to. The leaders of each country, particularly Mahathir Mohamad of Malaysia, also felt the need to further integrate the region. Beginning in 1997, the bloc began creating organisations within its framework with the intention of achieving this goal. ASEAN Plus Three was the first of these and was created to improve existing ties with the People's Republic of China, Japan, and South Korea. This was followed by the even larger East Asia Summit, which included these countries as well as India, Australia, and New Zealand. This new grouping acted as a prerequisite for the planned

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East Asia Community, which was supposedly patterned after the now-defunct European Community. The ASEAN Eminent Persons Group was created to study the possible successes and failures of this policy as well as the possibility of drafting an ASEAN Charter. In 2006, ASEAN was given observer status at the United Nations General Assembly. As a response, the organisation awarded the status of "dialogue partner" to the United Nations. Furthermore, on 23 July that year, Jos Ramos-Horta, then Prime Minister of East Timor, signed a formal request for membership and expected the accession process to last at least five years before the then-observer state became a full member. In 2007, ASEAN celebrated its 40th anniversary since its inception, and 30 years of diplomatic relations with the United States. On 26 August 2007, ASEAN stated that it aims to complete all its free trade agreements with China, Japan, South Korea, India, Australia and New Zealand by 2013, in line with the establishment of the ASEAN Economic Community by 2015. In November 2007 the ASEAN members signed the ASEAN Charter, a constitution governing relations among the ASEAN members and establishing ASEAN itself as an international legal entity. During the same year, the Cebu Declaration on East Asian Energy Security in Cebu on 15 January 2007, by ASEAN and the other members of the EAS (Australia, People's Republic of China, India, Japan, New Zealand, South Korea), which promotes energy security by finding energy alternatives to conventional fuels. On February 27, 2009 a Free Trade Agreement with the ASEAN regional block of 10 countries and New Zealand and its close partner Australia was signed, it is estimated that this FTA would boost aggregate GDP across the 12 countries by more than US$48 billion over the period 20002020.

ASEAN Charter
On 15 December 2008 the members of ASEAN met in the Indonesian capital of Jakarta to launch a charter, signed in November 2007, with the aim of moving closer to "an EU-style community".The charter turns ASEAN into a legal entity and aims to create a single free-trade area for the region encompassing 500 million people. President of Indonesia Susilo Bambang Yudhoyono stated that "This is a momentous development when ASEAN is consolidating, integrating and transforming itself into a community. It is achieved while ASEAN seeks a more vigorous role in Asian and global affairs at a time when the international system is experiencing a seismic shift," he added, referring to climate change and economic upheaval. Southeast Asia is no longer the bitterly divided, wartorn region it was in the 1960s and 1970s."

The charter's aims included:

"Respect for the independence, sovereignty and

territorial integrity of member states". "Peaceful settlement of disputes". "Non-interference in member states internal affairs". "Right to live without external interference". However, the ongoing global financial crisis was stated as being a threat to the goals envisioned by the charter, and also set forth the idea of a proposed human rights body to be discussed at a future summit in February 2009. This proposition caused controversy, as the body would not have the power to impose sanctions or punish countries who violate citizens' rights and would therefore be limited in effectiveness.

Policies
Apart from consultations and consensus, ASEANs agenda-setting and decision-making processes can be usefully understood in terms of the so-called Track I and Track II. Track I refers to the practice of diplomacy among government channels. The participants stand as representatives of their re-

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spective states and reflect the official positions of their governments during negotiations and discussions. All official decisions are made in Track I. Track II on the other hand refers to diplomatic activities that are unofficial and includes participants from both government and non-government institutions such as the academic, economic communities and NGOs. This track enables governments to discuss controversial issues and test new ideas without making official statements or binding commitments, and, if necessary, backtrack on positions. Although Track II dialogues are sometimes cited as examples of the involvement of civil society in regional decision-making process by governments and other second track actors, NGOs have rarely got access to this track, meanwhile participants from the academic community are a dozen thinktanks. However, these think-tanks are, in most cases, very much linked to their respective governments, and dependent on government funding for their academic and policy-relevant activities. Their recommendations, especially in economic integration, are often closer to ASEANs decisions than the rest of civil societys positions. The track that acts as a forum for civil society in Southeast Asia is called Track III, which is essentially people-to-people diplomacy undertaken mainly by CSOs. Track III networks claim to represent communities and people who are largely marginalised from political power centers and unable to achieve positive change without outside assistance. This track tries to influence government policies indirectly by lobbying, generating pressure through the media. Third-track actors also organise and/or attend meetings as well as conferences to get access to Track I officials. While Track II meetings and interactions with Track I actors have increased and intensified, rarely has the rest of civil society had the opportunity to interface with Track II. Those with Track I have been even rarer. In other words, the participation of the big majority of CSOs has been excluded from ASEANs agenda-setting and decision-making.

Looking at the three tracks, it is clear that until now, ASEAN has been run by government officials who, as far as ASEAN matters are concerned, are accountable only to their governments and not the people.

ASEAN Summit
The organization holds meetings, known as the ASEAN Summit, where heads of government of each member meet to discuss and resolve regional issues, as well as to conduct other meetings with other countries outside of the bloc with the intention of promoting external relations. The ASEAN Leaders' Formal Summit was first held in Bali, Indonesia in 1976. Its third meeting was held in Manila in 1987 and during this meeting, it was decided that the leaders would meet every five years. Consequently, the fourth meeting was held in Singapore in 1992 where the leaders again agreed to meet more frequently, deciding to hold the summit every three years. In 2001, it was decided to meet annually to address urgent issues affecting the region. Member nations were assigned to be the summit host in alphabetical order except in the case of Myanmar which dropped its 2006 hosting rights in 2004 due to pressure from the United States and the European Union. By December 2008, the ASEAN Charter came into force and with it, the ASEAN Summit will be held twice in a year.

East Asia Summit

The East Asia Summit (EAS) is a forum held annually by leaders of 16 countries in the East Asian region. EAS meetings are held after annual ASEAN leaders meetings. The first summit was held in Kuala Lumpur on December 14, 2005.The concept of an East Asia Grouping has significant history going back to an idea first promoted in 1991 by then Malaysian Prime Minister Mahathir bin Mohamad for an East Asia Economic Caucus. The final report in 2002 of the East Asian Study Group, established by the ASEAN Plus Three countries, was based on an EAS involving ASEAN

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Plus Three, therefore not involving Australia, New Zealand or India The EAS as proposed was to be an ASEAN led development, with the summit to be linked to ASEAN summit meetings however the issue was to which countries beyond those in ASEAN the EAS was to be extended to. The decision to hold the EAS was reached during the 2004 ASEAN Plus Three summit and the initial 16 members determined at the ASEAN Plus Three Ministerial Meeting held in Laos at the end of July 2005. Credit for advancing the forum during the 2004 ASEAN Plus Three summit has been attributed to Malaysia.

The reality appears however that movement towards such a relationship is a long way-off. Lee Kuan Yew has compared the relationship between South-East Asia and India with that of the European Community and Turkey, and has suggested that a free-trade area involving South-East Asia and India is 30 to 50 years away. The members of EAS agreed to study the Japanese proposed Comprehensive Economic Partnership in East Asia (CEPEA). The Track Two report on CEPEA is due to be completed in mid-2008 and at the Third EAS it was agreed this would be considered at the Fourth EAS.

Third EAS: The issues of Myanmar (Burma), following the 2007 Burmese anti-government protests,and climate change were expected to be discussed at the Third EAS.

First EAS: Prior to the first meeting there was

significant discussion as to which countries should be represented .At the time there were difficulties in the relationship between the "Plus Three" members (ie Japan, China and South Korea) of ASEAN Plus Three ,and the perception that India and to a lesser extent Australia and New Zealand were present to balance the growing China power all meant the first meeting's achievements were limited. Russia expressed early interest in EAS membership and attended the first EAS as an observer at the invitation of 2005 EAS host Malaysia.

Myanmar successfully blocked formal discussion of its internal affairs. The summit did issue the Singapore Declaration on Climate Change, Energy and the Environment. The Summit also agreed to the establishment of the Economic Research Institute for ASEAN and East Asia and to receive the final report on the Comprehensive Economic Partnership in East Asia at the Fourth EAS. The outcomes are summarised in the Chairman's Statement of the 3rd East Asia Summit Singapore, 21 November 2007.

Second EAS: The next EAS was to be held on De-

cember 13, 2006 in Metro Cebu, Philippines. After the confidence building of the inaugural EAS the 2006 EAS will help to define the future role of the EAS, its relationship with ASEAN Plus Three and the involvement of Russia in EAS. However in the face of Tropical Typhoon Utor the summit was post-poned until January 2007. It was rescheduled for January 15, 2007, approximately a month after the original scheduled date.The outcomes are summarised in the Chairman's Statement of the Second East Asia Summit. The EAS members signed the Cebu Declaration on East Asian Energy Security, a declaration on energy security and biofuels containing statement for members to prepare, non-binding, targets.

Fourth EAS: The Summit was significantly delayed and its location changed a number of times due to internal tensions in Thailand, the host nation. In the lead up to the Summit there were also several fatal border clashes between Thailand and Cambodia. The Summit however is said to be used as an opportunity for discussions on the sidelines between the respective nation's leaders.
It was also announced that India would be represented at the Summit by its Commerce and Industry Minister Kamal Nath not its Prime Minister.

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The Summit was then cancelled following protesters takin over the summit's venue on the day of the Summit.

The relationship with ASEAN Plus Three

The relationship between the EAS on the one hand and ASEAN Plus Three on the other is still not clear. As discussed above, some countries are more supportive of the narrower ASEAN Plus Three grouping whereas others support the broader, more inclusive EAS. ASEAN Plus Three, which has been meeting since December 1997 has a history, including the Chiang Mai initiative which appears to have led to the development of the Asian Currency Unit. This may be significant for those advocating a broader role for EAS in the future. The tension between the groupings extends to the respective members' intentions towards future Free Trade Agreements with China and South Korea focused on ASEAN Plus Three and Japan on the broader EAS members. The 1997 Asian financial crisis had demonstrated the need for regional groupings and initiatives. It was during this time ASEAN Plus Three had commenced and it was also during this time that the East Asian caucus was being discussed. The EAS is just one regional grouping and some members down play its significance, the former Australian Prime Minister John Howard has stated that the EAS was secondary as a regional summit to Asia-Pacific Economic Cooperation (APEC) which has on his view a premier role. Not all members of the EAS, notably India, are members of APEC. However as the EAS meetings are scheduled with the ASEAN Plus Three meetings (they both follow the annual ASEAN meetings) and all members of ASEAN Plus Three are members of EAS the ability of the two forums to remain relevant given the existence of the other remains in question. China has stated its preference for both EAS and ASEAN Plus Three to exist side-by-side.

The relationship between APEC, ASEAN Plus Three and the EAS remained unresolved heading into the 2007 APEC meeting. Following the meeting the then Malaysian Prime Minister Abdullah Badawi described ASEAN Plus Three as the primary vehicle and implied APEC was the lesser of the three. At the same time a Malaysian commentator writing in a Singaporean newspaper described concentric circles for the three with ASEAN Plus Three at the centre and APEC at the outer, also suggested the Nikai Initiative, with its regional OECD like plans, might overtaking the remaining role for APEC.

Regional Forum
The ASEAN Regional Forum (ARF) is a formal, official, multilateral dialogue in Asia Pacific region. As of July 2007, it is consisted of 27 participants. ARF objectives are to foster dialogue and consultation, and promote confidence-building and preventive diplomacy in the region. The ARF met for the first time in 1994. The current participants in the ARF are as follows: all the ASEAN members, Australia, Bangladesh, Canada, the People's Republic of China, the European Union, India, Japan, North Korea, South Korea, Mongolia, New Zealand, Pakistan, Papua New Guinea, Russia, Timor-Leste, United States and Sri Lanka. The Republic of China (also known as Taiwan) has been excluded since the establishment of the ARF, and issues regarding the Taiwan Strait is neither discussed at the ARF meetings nor stated in the ARF Chairman's Statements.

Economic Community
ASEAN has emphasised regional cooperation in the three pillars of security, sociocultural and economic integration. The regional grouping has made the most progress in economic integration, aiming to create an ASEAN Economic Community (AEC) by 2015. The AEC would have a combined population of over 560 million and total trade exceeding US$ 1,400 billion.

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Free Trade Area: The foundation of the AEC is

the ASEAN Free Trade Area (AFTA), a common external preferential tariff scheme to promote the free flow of goods within ASEAN. The ASEAN Free Trade Area (AFTA) is an agreement by the member nations of ASEAN concerning local manufacturing in all ASEAN countries. The AFTA agreement was signed on 28 January 1992 in Singapore. When the AFTA agreement was originally signed, ASEAN had six members, namely, Brunei, Indonesia, Malaysia, the Philippines, Singapore and Thailand. Vietnam joined in 1995, Laos and Myanmar in 1997, and Cambodia in 1999. The latecomers have not fully met the AFTA's obligations, but they are officially considered part of the AFTA as they were required to sign the agreement upon entry into ASEAN, and were given longer time frames in which to meet AFTA's tariff reduction obligations.

Trade in Services: An ASEAN Framework Agreement on Trade in Services was adopted at the ASEAN Summit in Bangkok in December 1995. Under AFAS, ASEAN Member States enter into successive rounds of negotiations to liberalise trade in services with the aim of submitting increasingly higher levels of commitments. The negotiations result in commitments that are set forth in schedules of specific commitments annexed to the Framework Agreement. These schedules are often referred to as packages of services commitments. At present, ASEAN has concluded seven packages of commitments under AFAS.

Single Aviation Market: The ASEAN Single Avia-

Comprehensive Investment Area:-

The ASEAN Comprehensive Investment Area (ACIA) will encourage the free flow of investment within ASEAN. The main principles of the ACIA are as follows:

All industries are to be opened up for investment, ith exclusions to be phased out according to schedules National treatment is granted immediately to ASEAN investors with few exclusions Elimination of investment impediments Streamlining of investment process and procedures

tion Market (SAM), proposed by the ASEAN Air Transport Working Group, supported by the ASEAN Senior Transport Officials Meeting, and endorsed by the ASEAN Transport Ministers, will introduce an open-sky arrangement to the region by 2015. The ASEAN SAM will be expected to fully liberalise air travel between its member states, allowing ASEAN to directly benefit from the growth in air travel around the world, and also freeing up tourism, trade, investment and services flows between member states. Beginning 1 December 2008, restrictions on the third and fourth freedoms of the air between capital cities of member states for air passengers services will be removed, while from 1 January 2009, there will be full liberalisation of air freight services in the region, while By 1 January 2011, there will be liberalisation of fifth freedom traffic rights between all capital cities.

Free Trade Agreements With Other Countries:

Enhancing transparency Undertaking investment facilitation measures

Full realisation of the ACIA with the removal of temporary exclusion lists in manufacturing agriculture, fisheries, forestry and mining is scheduled by 2010 for most ASEAN members and by 2015 for the CLMV (Cambodia, Lao PDR, Myanmar, and Vietnam) countries.

ASEAN has concluded free trade agreements with China, Korea, Japan, Australia and New Zealand. In addition, it is currently negotiating free trade agreement with India (conclusion expected in April 2009) and with the European Union. Taiwan has also expressed interest in an agreement with ASEAN but needs to overcome diplomatic objections from China.

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Cultural activities: The organisation hosts cul-

tural activities in an attempt to further integrate the region. These include sports and educational activities as well as writing awards. Examples of these include the ASEAN University Network, the ASEAN Center for Biodiversity, the ASEAN Outstanding Scientist and Technologist Award, and the Singapore-sponsored ASEAN Scholarship.

Bay of Bengal Initiative for MultiSectoral Technical and Economic Cooperation

Bay of Bengal Initiative for MultiSectoral Technical and Economic Cooperation (BIMSTEC) is an international organisation involving a group of countries in South Asia and South East Asia. The member countries of this group are: Bangladesh, India, Myanmar, Sri Lanka, Thailand, Bhutan and Nepal. On 6 June 1997, a new sub-regional grouping was formed in Bangkok and given the name BIST-EC (Bangladesh, India, Sri Lanka, and Thailand Economic Cooperation). Myanmar attended the inaugural June Meeting as an observer and joined the organization as a full member at a Special Ministerial Meeting held in Bangkok on 22 December 1997, upon which the name of the grouping was changed to BIMST-EC. Nepal was granted observer status by the second Ministerial Meeting in Dhaka in December 1998. Subsequently, full membership has been granted to Nepal and Bhutan in 2004. In the first Summit on 31 July 2004, leaders of the group agreed that the name of the grouping should be known as BIMSTEC or the Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation. According to the Bangkok Declaration on the Establishment of BIST-EC, the aims and purposes of BIST-EC/BIMST-EC are to create an enabling environment for rapid economic development, accelerate social progress in the sub-region, promote active collaboration and mutual assistance on matters of common interest, provide assistance to each

other in the form of training and research facilities, cooperate more effectively in joint efforts that are supportive of, and complementary to national development plans of member states, maintain close and beneficial cooperation with existing international and regional organizations, and cooperate in projects that can be dealt with most productively on a sub-regional basis and which make best use of available synergies. BIMSTEC was initiated with the goal to combine the 'Look West' policy of Thailand and ASEAN with the 'Look East' policy of India and South Asia. So it could be explained that BIMSTEC is a link between ASEAN and SARRC. Seven members of BIMSTEC covers 13 Priority Sectors led by member countries in a voluntary manner namely, Trade & Investment, Technology, Energy, Transport & Communication, Tourism, Fisheries, Agriculture, Cultural Cooperation, Environment and Disaster Management, Public Health, People-to-People Contact, Poverty Alleviation and Counter-Terrorism and Transnational Crimes. What make BIMSTEC different from other organization would be that BIMSTEC represent one of the most diverse regions of the world, be it, way of life, religion, language, culture, etc. BIMSTEC clearly separates issues of development into 13 Priority Sectors besides focusing only on economic cooperation which make BIMSTEC covers all aspects regarding the word 'developing'. BIMSTEC provides a unique link between South Asia and Southeast Asia bringing together 1.3 billion people - 21 percent of the world population, a combined GDP of US$750 billion, and a considerable amount of complementarities. A study shows the potential of US$ 43 to 59 billion trade creation under BIMSTEC FTA. Regarding economic aspect, BIMSTEC has Trade Negotiating Committee (BIMTEC TNC). The 16th TNC meeting was held during 17-21 March 2008 in India. The 17th TNC meeting was held during 15-17 October 2008 in Colombo, Sri Lanka. TNC Meeting is now working on the List of Goods regarding the Framework Agreement that has been signed in 2004. So far, BIMSTEC has been work-

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