PACIFIC BASIN ECONOMIC COUNCIL
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Foreward The story of the Pacific Basin Economic Council (PBEC) begins in 1964. At this time the economies of many Pacific countries were beginning to recover from the devastation caused by World War II, by wars which followed in Korea and Vietnam and by internal conflicts in the Philippines, Indonesia and Malaysia which occurred within the two decades immediately thereafter Enormous geo-political changes had taken place during this period. For a short time, the Sino-Soviet alignment seemed set to dominate the Eurasian region. By 1964 this seemed less likely to happen, but tensions still remained high as Communist China, on its own, remained an enigma and an ideological war had broken out in Vietnam which was to last for some twelve years and involve many countries in the region. At the same time a number of other countries of South East Asia, having emerged from the yoke of colonialism to become independent nations during the 1950s and early sixties, were beginning the painful process of modernizing their economies and transforming the basis of their societies. On the other side of the Pacific, the United States of America, by then a global economic and military superpower but still uncertain of its place in Pacific affairs, was developing stable partnerships with a number of Pacific countries. It was already a crucial market for Japan, and later, for the Republics of Korea and Taiwan, although economic ties were not then as strong as the political ties already developed by the US with these countries. Japan, of course, having taken the first steps along the road towards becoming an economic powerhouse, was also expanding its links in the region while the Pacific countries of the British Commonwealth -- Australia, Canada and New Zealand -- were building new partnerships in order to diversify their traditional interests away from Europe when Britain joined the European Economic Community (EEC). For Australia in particular, its huge natural resource base was to lead to the development of strong interdependent commercial ties with Japan when it became the major supplier of raw materials for Japan's rapidly expanding industrial sector. On the Eastern Pacific seaboard, the countries of Latin America were beleaguered with debt problems and high inflation as well as severe socio-economic and political pressures. The problem of indebtedness was not confined to developing countries in Latin America but to Asia as well, and for many years, was regarded as the single most important issue facing the region In the whole of the region many free world countries were extremely protectionist with economies that were often weak, dependent on aid and vulnerable to ideological pressures. There was a massive need to develop industry and infrastructure which, in the face of shortages of domestic savings, required capital drawn from overseas investors who, nonetheless, were looked upon with some wariness and distrust It was a time, too, when there was no real framework for comprehensive regional cooperation, and nowhere was this more evident than at the government level. However in 1967, five nations of South East Asia -- Indonesia, Malaysia, the Philippines, Singapore and Thailand -- took the initiative to form the Association of South East Asia Nations (ASEAN), thus creating a framework for regional cooperation among the non-communist states of their region. This was essentially a united political and economic buffer against the growing Communist expansionary threat -- an attempt to stop the "dominoes" falling over. It was against the backdrop of this environment that the inspiration for PBEC's creation came from business leaders who recognized that, notwithstanding the economic, social and political uncertainties of the time, a discernible shift in economic power away from Europe was occurring: a new era was beginning to emerge in which the Pacific would become a dominant force in the global economy. The combined gross national product of PBEC's five founding member countries --Australia, Canada, Japan, New Zealand and the United States of America -- already equaled that of the EEC. PBEC recognized very early in its formative years that it was primarily concerned with the concept of interdependence. The Pacific, PBEC believed, demanded a new and more liberalized economic system which could make its rich natural resources more widely and more equitably distributed throughout the region and the world. PBEC also believed, from its very first days, that free trade and investment through open markets would be an essential element of any moves towards regional economic cooperation. Thirty years on, it is hard to believe that the 1960s, when PBEC was founded, had been in essence the cradle of a new Pacific Age heralding the predicted "Century of the Pacific." Against all the odds, the unprecedented technological advances of those years, especially in transport and communications, are now shared by the people of many cultures who make up the diverse regions of the Pacific from Asia to the Americas, Australia and the Pacific islands. By translating their vision into reality, the founders of PBEC established a unique organization which had become a pathfinder and leader in the revolutionary process of bridging the Pacific. This history records the steps taken by PBEC during a period which straddles some of the most turbulent and momentous years of the 20th century and of an organization now poised to meet the challenges and responsibilities of leadership into the next millennium. Esme Marris Wellington, New Zealand Malcolm Overland Canberra, Australia