Introduction

1. The global shifts of strategic balances after the end of the Cold War had brought about changes in inter-state and inter-regional relations. In the Asia Pacific, there is general peace and stability. Positive interstate relations generally prevail among countries in the region. Recent developments in the region as well as the economic recovery in the affected countries have had a stabilizing influence on the region.

Security Situation in Asia Pacific

2. Malaysia views a stable relationship between the major powers as key to regional stability. In this regard. Malaysian welcomes the efforts undertaken to foster closer relations by those countries through high level visits and regular meetings. While in general, relations between the major powers in recent years have been smooth, their security and strategic interests sometimes collide which raises tension in the region. The continued presence of military alliances is deemed crucial by certain countries for regional stability. But some other countries oppose them, as they perceive the military alliances to be directed towards them or as a deterrent against rising powers. They also view with skepticism the strategic partnership of the alliance. The development of weapons systems among the alliance members, even though claimed to be for defensive purposes, is viewed as having offensive capability, thus having potential destabilizing impacts on strategic balances. The military alliances have therefore contributed, to a certain extent, to the perpetuation of the climate of mistrust and rivalry among countries in the region.

3. In Northeast Asia, peace and stability of the region is epitomized by power play of the major regional powers and in part mirrored by the presence of security cooperation realized through both bilateral and multilateral security dialogue and security alliances. On the Korean Peninsula, the existing tension is an issue of concern for the region as developments there could have a bearing on relations between the major powers and stability of the Asia Pacific. The state of relationship characterized by positive and constructive elements among the major powers is significant in contributing towards the achievement of durable peace and stability on the peninsula. Notwithstanding the role of the major powers, inter-Korea relations remain the key factor that determines the momentum of the peace process in the area. It is within this context that Malaysia is supportive of the historic Summit between the leaders of the two Koreas in Pyongyang on 13 -15 June 2000. The Summit could be seen as an important starting point to creating a conducive atmosphere for the ending of hostility and confrontation between the two Koreas. The "Sunshine Policy" of President Kim Dae-jung of the ROK has apparently paid its dividends. On the other hand, initiatives taken by the DPRK in international relations have also been important. The participation of the DPRK at the 7th ARF Ministers' Meeting in Bangkok in July 2000 is a positive development to the momentum created by the Korean Summit towards bringing the DPRK into the mainstream of regional affairs. Malaysia is also encouraged to see the positive state of engagement between North Korea and a number of countries in recent months as demonstrated by the normalization of diplomatic relations and exchanges of visits. Malaysia hopes that the momentum generated by the Inter-Korea Summit and the positive developments would contribute to efforts to achieving lasting peace and stability in the Korean Peninsula.

4. In Southeast Asia, the overall situation is peaceful and stable despite various challenges confronting the region. The admission of Laos, Myanmar and Vietnam into ASEAN was a major milestone in the history of ASEAN. Cambodia's entry in April 1999 marked the realization of ASEAN 10, whereby all Southeast Asian countries are now united under the banner of ASEAN. Since its inception, ASEAN has played a significant role, which had helped to accelerate regional cooperation. The inter-state relations among the ASEAN member countries in the region continue to be on a positive note and these have been manifested by the increasing regional cooperation within ASEAN. The expanding scope of bilateral cooperation especially in trade, investment, environment and other areas is a favorable indication of the state of close relationship among countries in the region. The network and linkages have also expanded under the ASEAN framework.

5. The stable political environment and the positive inter-state relations among ASEAN member countries have much to do with the strict adherence to the principles of inter-state relations stipulated in the Treaty of Amity and Cooperation in Southeast Asia (TAG). Peace and stability have made possible cooperation in other areas, paving the way for the extraordinary economic growth and prosperity enjoyed by many ASEAN countries.

6. ASEAN has been working gradually to create a Zone of Peace, Freedom and Neutrality (ZOPFAN) in Southeast Asia. Towards this end, ASEAN has put in place relevant building blocks over the years such as the Treaty of Amity and Cooperation in Southeast Asia (TAC) and the Southeast Asia Nuclear Weapons Free Zone Treaty (SEANWFZ Treaty). Attached to the SEANWFZ Treaty is a Protocol, which is open for signature by the five Nuclear Weapon States (NWS). ASEAN is currently undertaking consultations with the NWS with the view to facilitating their accession to the SEANWFZ Treaty.

7. The security outlook of the region is also significantly influenced by the level of arms build-up among the countries. Malaysia believes that adherence to non-proliferation and the goal of nuclear disarmament are of paramount importance. Malaysia supports the CTBT, CWC, BWC and the UN Register of Conventional Arms. Ratification and support for those regimes by the ARF participants would contribute significantly towards enhancing security of this region.

8. The ARF in general has made progress as a consultative forum for multilateral security dialogue in the Asia Pacific region. The process has contributed to the promotion of transparency and mutual understanding among the participants on issues relevant to regional peace and stability. As the ARF originally was not perceived nor structured as a mechanism to solve crises in the region, its process should evolve at a pace comfortable to all ARF participants and on the basis of consensus. Malaysia firmly believes that the future of the ARF depends on the adherence to these fundamental principles by all participants. It is also important for the ARF to continue to approach security in a comprehensive manner. Threat to national and regional security do not only come in the form of military threat but also in other forms such as- the financial crisis that swept the region in 1997. Malaysia believes that the ARF will continue to make important contributions to regional security through dialogue and cooperation.

9. Efforts to further enhance the maintenance of peace and security in the region have been boosted following the agreement between ASEAN and China to adopt a code of conduct in the South China Sea. This commitment is a demonstration of the countries concerned to achieve durable peace and stability in the region. Much progress has been made in evolving the code of conduct. On the overlapping claims, all the countries directly concerned have committed themselves to resolving their territorial disputes in the area through peaceful means, namely, through consultations and negotiations. It is best that they work among themselves on how to deal with the matter. The South China Sea is more peaceful than normally suggested. This is clearly shown by past records and recent development. Any suggestion to portray the South China Sea as an area of tension is not reflective of actual situation.

10. Aside from the political and security issues, the financial and economic crisis of 1997 had adverse effects on peace, stability and more importantly the prosperity of countries in the Southeast Asia region. Three years after the financial crisis hit the region, the economic situation of the ASEAN countries has improved vastly with strong growth and modest inflation. The Asian financial crisis has demonstrated the need for countries to strengthen their economic resilience and work together as a region in order to meet these challenges. The crisis also exposed the flaws in the global financial system. It is therefore important to establish domestic and region mechanisms as well as to strengthen economic resilience in order to be better prepared for any similar crisis in the future. As open trading nations, ASEAN economies are closely linked to the world economy thus the increasing need to be prepared for the new economic landscape brought about by globalization and global integration of economic activities. These developments have profound implications to the region. The major concerns in the medium term include slower global economic growth, on-going structural issues and fast paced technological advances.

11. Individually, while all the countries have recovered from the financial crisis, the social and political impact is still being felt in certain parts of the region. Uncertainty, restiveness and criminal activities prevail in some parts of the various countries. Unless the root causes of these problems are addressed effectively, national integrity will eventually be affected. This, in turn, may undermine stability of the neighboring countries due to its spillover effects.

Future Challenge

12. While there is general- peace and stability in the Asia Pacific region, there exist various challenges including differences in security perceptions, conflicting strategic interests and bilateral irritants. There is a need for all concerned to continue to exert all efforts to maintain an environment conducive to peace and economic development.

13. Malaysia is happy to note that countries in the region are handling bilateral irritants rationally and in accordance with established international norms. Such practices should be continued in the future to ensure that bilateral irritants would not become an impediment to cordial ties.

14. Apart from developments in the region, they have to deal effectively with external forces brought about by globalisation and the advances in information and communications technology. Development of capacity to analyze and anticipate the globalization process and its implication to them are essential to minimize the downside risk of globalization.

15. Issues that transcend national boundaries are growing in scope and gaining prominence in regional and international affairs. For example, the proliferation of weapons of mass destruction threatens not only individual countries but also mankind as a whole. Malaysia remains committed to the goal of attaining general and complete disarmament in particular nuclear disarmament. Greater regional cooperation on information exchanges, cooperation between law enforcement agencies and closer cooperation at higher policy levels will be needed to combat transnational crime such as illicit drug flows, illegal migration, piracy and computer related crimes.

16. As part of confidence building measure and transparency, Malaysia welcomes countries in the region to share their legitimate security concerns and defense development plans. As for Malaysia, it does not foresee any immediate threats to its national security except for low level threat by non-state actors. As such its defense development plans and procurement are purely for self- defense purposes and are part of the modernization program of the armed forces. In this connection Malaysia has resumed its modernization program which was affected by the economic downturn.

17. Given the continuous changes taking place within ASEAN, and the rest of the world in general, one of the greatest challenges facing ASEAN is to uphold its image and credibility as a viable and effective organization. The economic and financial crisis had also, to a certain extent, contributed to the changes in the regional political and security outlook of some countries including their attitude towards the relevance of the principles of non-interference and non- intervention. Malaysia is of the view that these principles which have held ASEAN together more than three decades will still be relevant to ASEAN in the future.

18. In the light of the transformation taking place in the regional and global scene, ASEAN will have to strengthen its cohesion to remain viable. The 33rd ASEAN Ministerial Meeting recognized this when the Ministers underlined their commitment to continually shape an ASEAN that is attuned to the challenges of the times.

19. In efforts to promote peace, stability and prosperity, Malaysia will continue to nurture positive relations with other countries. Malaysia will also continue to promote regionalism. In the face of the growing tide of globalization, Southeast Asian countries would need to continue to seek strength through regional groupings such as ASEAN. The challenge ahead is to ensure that ASEAN 10 will continue to contribute towards peace, stability and prosperity of the region while taking into account the diversity in the history, religion, culture and strategic perspectives of each ASEAN countries and their different level of development. Cooperating together has also enabled ASEAN to successfully undertake various strategic initiatives of its own at the regional level to entrench regional peace, stability and prosperity. Through regional dialogue processes such as the ASEAN Regional Forum, Malaysia will work to promote greater understanding, transparency, mutual trust and thus regional stability. Stable strategic relations among the major players present in the region such as China, Japan, Russia and the United States would be a key factor to peace and stability in the Asia Pacific region.