Law and Development in ASEAN countries

Author(s): Nobuyuki Yasuda

Source: ASEAN Economic Bulletin , NOVEMBER 1993, Vol. 10, No. 2, LAW AND
ECONOMIC DEVELOPMENT IN THE ASIA-PACIFIC (NOVEMBER 1993), pp. 144-154
Published by: ISEAS - Yusof Ishak Institute

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 ASEAN Economic Bulletin Vol. 10, No. 2

Law and Development in

ASEAN countries
Nobuyuki Yasuda

Law plays an important role in the development process in the Association of Southeast
Asian Nations (ASEAN). This article identifies three types of law in terms of their origin:
"indigenous law", originating in the "proto states"; "imported law" introduced by colonial
rulers; and "development law" arising since the independence of these states. From these
types of laws functional principles are deduced to aid in understanding contemporary Third
World legal systems more clearly in development perspectives. The historical development of
ASEAN law is reviewed in these three time periods and the role which law has played in
political, economic and social development in the region is examined.
The conclusion suggests reasons why it may be desirable in the long term to integrate
or at least co-ordinate the law and policy within the region but on a basis which reflects
regional rather than Western tradition.

Member countries of the Association of Southeast a state or society. This means that its basic nature
Asian Nations (ASEAN) have shown a successful is a status quo, and that law is static or stable in
model for the economic development of Third its essence. On the contrary, the term of develop
World countries in the 1980s and the early 1990s. ment expresses the dynamic process of history,
There are various economic and cultural reasons and occasionally implies that it can and shall be
for this good performance but, as well, the exist controlled by human effort in future perspectives.
ence of well developed laws and legal systems are It is an important raison d'etre of law and de
important. This article examines the role of law velopment (LD) study1 to look into the relation
played in the development process of these coun between these two contrasting phenomena, dyna
tries, as well as the special nature of law in the mic and static, and to utilize the law for the better
social and cultural context of the region. and desirable development of society.2 In this
It is difficult to define law as well as develop sense, LD study is of the nature of a legal policy
ment exactly, and a full treatment of these terms science, where the aim is to design the most suit
is beyond the scope of this short article. However, able laws and legal systems in order to regulate
it is necessary and useful to mention briefly these or control the process of socio-economic and
two words which show a sharp contrast with each political development in Third World societies.
other. Law is defined generally as "social rules or Considering this, the aim of this article is, first,
norms" authorized or accepted by the authority of to examine the nature and principle of law from

ASEAN Economic Bulletin 144 November 1993

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 the point of the functional view of law because
law or social norms function in different ways
according to different times and spaces. Secondly,
we will have a glimpse of the historical develop
ment of legal systems in ASEAN countries.
Finally, we will discuss LD problems in the con
text of what we call the development state which
characterizes the nature of the present ASEAN
States.
Three Types of Law and Legal Principles
When we observe the legal systems not only in
the ASEAN countries but also in the non-Western
Third World countries, we can recognize clearly
three types of law depending on their origin. One
is indigenous law originating in the Proto states,
which we call indigenous states before their colo
nization by Western powers. Many of these laws
have been degraded into customary or unofficial
law by the introduction of "modern Western law"
in the process of modernization under the colonial
power, but, they are still effective in various as
pects of the actual life of the people, and some of
them are recognized as official or state laws in
such fields as family relations and religion. As we
see with Islamic law in many Southeast Asian
countries, these laws are reviving again and chal
lenging official Western imported legal systems.3
Second is "imported law" which was intro
duced or "imposed" by the Western powers under
their colonial rule.4 At the initial stage of coloni
zation, Western laws were applied and adapted
only to disputes between Western peoples. As
the colonial rule stabilized and normalized, these
laws were extended to native people through the
courts, and local administrations created as the
apparatus of colonial states. These laws and insti
tutions are an important part of present state legal
systems of all countries.
Third is what we call development law. This
type of law seems to be a series of products of the
development policies since the independence of
these countries after World War II. All countries
within the region except Indonesia were trans
ferred power from the former ruling countries,
ASEAN Economic Bulletin 145 November 1993
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and basically inherited the colonial legal systems.
However, in order to stabilize their political
systems and achieve rapid development, it was
unavoidable for these states to create a new type
of legislation, which gives the government wide
discretionary power. These countries can be called
development states.5
From these three types of law, we can deduce
more functional "principles", to help us under
stand contemporary Third World legal systems
more clearly in development perspectives. The
origin of indigenous laws, in either Western or
non-Western countries, is the customary laws
of village or tribal communities of ancient time.
These communities are the most primitive orga
nizations of human beings, and compared with
modern society, there is no articulated "indi
vidual" in these communities. Their members are
unified and integrated with the community such
as the cells of an organ. In the process of develop
ment of the society, this unity was loosened and
individuals emerged; however, the feeling of unity
has remained strong within the family as well
as local or religious communities, especially in
Asian societies. We may call it the "community
principle".
This principle represents the most primitive
feeling of human beings to unify and identify
themselves with a group like a family or com
munity. It may be similar to the concept of "fra
ternity", one of the three values of the French
Revolution, which is also expressed as "one for
all and all for one" as the communist ideal.
This principle is the core concept for analysing
"societal society" in the sense of "expanded
family", where the disputes between members are
settled not legally or judicially by a court or
relevant parties, but amicably by members of the
community as a whole. From the point of view
of Western law, this is of a non or para legal
nature, but this principle plays an important part
in Asian legal systems. It is also another ex
pression of such concepts as "dyadic relation of
patrons and clients" and "dependency" as Lucian
Pye,6 an eminent political scientist, uses when
he draws a common nature of Southeast Asian
political powers.
 TABLE 1
Three Types of Legal Principles

Principles Market Principle Direction Principles Community Principles

Basic relation horixontal, equivalent
relation
Basic value liberty
Model social action exchange of goods at
market exchange of
equivalent value
Core sphere or dimension economic society
(economy)
State model modem capitalist state
General pattern of the supplying clear
norm interpretation rules to
courts or other
adjudication agency
Typical branch of lawprivate (civil and
commerce) law
Nature of dispute adjudication by
settlements professional third party
(court)
Basic value on the legality through the
settlement general and technical
interpretation of law
(justice)
courts and similar third
Typical settlement agent
party agent having
professional authority
Categories of law imported law
vertical, order and unifying and solidifying to
obedience relation one unit
equality fraternity
order or compulsion by one for all, all for one in
superior (state) the community
political society (state) family to local or religious
community (society)
modem socialist state no actual model
giving discretionary not clear, but giving the
power to state or its community some kind of
agency autonomy
public (administrative) family law
law
reconsideration by amicable settlement by
superior (state organ) disputing parties
(mediation or
reconciliation)
reasonableness through identification to
the discretion on specific community spirits
condition (fairness) (fraternity)
administrative tribunal para-legal mediation agent
development law indigenous law

Unger, R. (1976) legal order and legal bureaucratic law customary-interaction law
system
Nonnet & Selznick autonomy law strict law responsive law
(1977)
Kamenka&Tay (1980) Gesellschaft type of law bureaucratic- Gemeinschaft type
administrative type of law of law
Ghai (1986) market state and its law custom
Milner(1976) market hierarchy primitive
Polanyi (1977) exchange redistribution reciprocity
SOURCES: R.M. Ungar, Law in Modern Society: Toward a Criticism of Social Theory (New York: The Free Press, 1976). P. Nonnet
and P. Selznick, Law and Society in Transition: Toward Responsive Law (New York: Happer Colphan Books, 1978). Kamenka,
Augen and A.E. Tay, "Social Traditions, Legal Traditions", in Law and Social Control, edited by Augen Kamenka and A.E. Tay
(London: Edward Arnold, 1980). Ghai Yash "Land Reforms and Paradigm of Development: Reflections in Melanesian Constitu
tions", in Legal Pluralism, Proceeding of Canberra Law Workshop VII, edited by P. Sack and Elizabeth Minchin (Canberra, Law.
Dept. Research School of Social Science, Australian National University, 1986). D. Miller, Social Justice (Oxford: Clarendon
Press, 1976). K. Polanyi, The Livelihood of Man, edited by H.W. Peason (New York: Academic Press, 1977).

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 "Imported laws" were received from Western
capitalist countries and supplied a legal infrastruc
ture not only for the commercial and economic
area but for the state system generally. As we see
in the expression of "from status to contract", the
modern capitalist society is based on the contrac
tual relation of the citizens which is also a key
concept of imported laws. We call it the "market
principle" because it reflects common human be
haviour in transactions on a market place. It rep
resents the exchange of equivalent values between
equal parties with free will. Needless to mention,
this principle is a core factor of the commercial
and contract laws which typically regulate eco
nomic activities of human beings in the market
system. It is also extended to political and societal
areas and became a basic concept of the modern
democratic state as we see in the theory of social
contact. It seems to us that democratic polity
reflects directly this principle as far as it means
"free competition to the power". We may express
it by the word "liberty" which also presupposes
horizontal relations of human beings. The model
of settlement of disputes in this field is "adjudica
tion" by legal experts (judges) as umpires.
The nature of development laws is to authorize
a state or government to order or direct people to
do or not to do a certain action for the purpose
of development, a key objective of which is to
achieve "equality" or "redistribution" of economic
rights. From this nature of development law we
may abstract the "direction principle" which rep
resents a vertical relation like "order and obe
dience" of human beings in contrast with the
horizontal relation in the market principle. It is a
dominant principle of the public or political law,
where the superior ("state" at present situation)
has a "discretionary power" in the name of the
public interest in exercising its power. This prin
ciple is an essential part of any kind of "state"
because people are compelled by it conclusively,
but a dictatorial state is the most suitable model to
represent it.
Table 1 shows a comparative list among the
three principles in selected fields of law and soci
ety. Needless to mention, the real world is much
more complex and mixed up.
Historical Development of ASEAN Law
In order to understand the historical aspect of
ASEAN law, it is convenient to divide the staged
development of the legal system into three State
models; that is, Proto State, Colonial State and
Development State (Table 2).

TABLE 2
Various Types of Laws in ASEAN Countries

Philippines Indonesia Brunei Malaysia Singapore Thailand

Proto-statel Old (Malay) Old Malay Old Malay Old Malay Old Malay Old Thai
Custom Custom Custom Custom Custom? Custom
Proto-state II Hindu & Hindu & Hindu & Hindu & Hindu & & Hindu
Buddhism? Buddhism Buddhism Buddhism Buddhism? Buddhism
Proto-state III Islam in Islam Islam Islam Islam? Buddhism,
South Islam in
South
Colonial State Spain (Portugal) U.K. U.K. U.K.
U.S. Holland
Imported Law Spain Holland U.K. U.K. U.K.
U.K., France,
from: U.S. Germany,
Japan, etc.

ASEAN Economic Bulletin 147 November 1993

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Proto State Legal Systems Therefore, at the centre there was a rather so
phisticated state system influenced by borrowed
In the pre-historic age of Southeast Asian society,
there were scattered tribal communities based major civilizations, based on the direction prin
ciple, but in scattered villages, the daily lives
on local customs united with animistic religions.
were regulated by their own local customs related
These communities were integrated into a state
closely to the community principle. This is a
through their federation with, or conquest by, a
common feature of Asian proto states, but the
stronger community. At the initial stage of state
indigenous elements based on the community
building, Hinduism (and Confucianism in the
principle survived strongly even at the state level,
present North Vietnam area) was borrowed as a
because the state craft and ideology were im
state ideology. Various states evolved and disap
ported or borrowed from the outside world.7
peared, and some of them grew into large empires
like Khmer and Srivijaya.
In due course, new universal religions arrived Colonial State Legal Systems
in this area. Among them was Theravada Bud Western colonialism reached this region in the
dhism, introduced to mainland Southeast Asia in
early sixteenth century. The initial wave was led
the eleventh century, and it not only became the
by Spain and Portugal motivated by Christianism
national religion of the Thai and Burmese proto (Catholicism) as well as mercantilism, but these
states, but also penetrated into the spiritual or were overcome by the new powers generated
mental structure of the common people within this
mainly by the industrial capitalism of states such
region. In the fourteenth century another religion, as Britain, Holland, and a while later France and
Islam, was brought to the Southeast Asian islands the United States. Almost all of the area except
and through the conversion of kings' families, Thailand (Siam) was colonized through direct co
resulted in the formation of many sultanate states.
lonial rule or indirect Protectorates by the West
There were innumerable proto states in the history ern powers, by the beginning of the twentieth
of this region, so that it is impossible to discuss century.
their specific state or legal systems, but we can As a result, the state systems were recon
pick up two common features of these systems. structed more or less on the Western model, al
One concerns the nature of kingship and state though their autocratic nature remained or was
structure. The kings and their families were con reintroduced, because the colonial rule was neces
nected closely to the god, and sometimes they sarily of the oppressive nature. The law and legal
claimed to be its descendant (Deva-Raja or Di systems became a more important part of this
vine-Kingship in Hindu ideology). Further, the transformation. The Western laws were imported
state was constructed in hierarchical and organic not only in the area of commerce and trade, but
order, from a king on the summit to the slaves at also in parts of the political institutions such as
the bottom, although each social group or class judiciaries and central or local administrations, as
enjoyed wider autonomy within its community. far as colonialism demanded in order to regulate
Another concerns the state territory. There was the systems.
no clear state border as in modern Western states, Spanish laws, imposed in the Philippines from
partly because of scattered populations at that 1565 when Legaspi conquered, were influenced
time. At the centre or capital, the autocratic king initially by Catholicism but at a later stage were
reigned with the direct influence of a major reli influenced by the French Napoleonic Civil and
gion like Hinduism, Buddhism or Islam, but its Commercial Codes imported to Spain in the late
power was naturally weakened and lost as one nineteenth century. But more important were
went further from the centre, and the territorial American laws which were introduced after 1898
limit of its sovereignty was the place where it was when "sovereignty" was transferred from Spain to
exhausted. the United States by the Paris Treaty. As a result,

ASEAN Economic Bulletin 148 November 1993

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 the mixture of two major Western legal systems, official legal system of these countries. But they
Continental Civil Law and American Common were not able to replace indigenous laws com
Law, makes a very special feature of the Philip pletely. Numerous indigenous laws were left
pine legal system. largely untouched in many areas of the daily lives
In Indonesia, the Dutch had expanded their of local people such as those relating to the
colonial rule since early seventeenth century, and family, religion and land, although many of these
their territorial sovereignty was confirmed mainly were degraded to unofficial laws. This dual struc
by the treaty with Britain in 1824. From that time,ture between official imported laws and unofficial
Dutch laws which were also influenced by French indigenous laws is a distinguishing feature, not
Codes were introduced on a large scale. However, only of ASEAN laws but also non-Western Third
Dutch legal policy in Indonesia was characterized World legal systems, very often called Legal Plu
by the "Dual Law Policy", whereby Dutch ralism. Needless to mention, this dualism is a re
originated Western laws were applied only to flection of serious problems of the Colonial State
Western people (and "foreign orientals" to a System which is characterized by dual structures
limited extent), but not to "natives" who were at economic, political, and socio-cultural levels.
governed by various Adat Rechts. Due to this
policy, Legal Pluralism became a distinguishing
Development State Legal Systems
feature of the present Indonesian legal system, al
though the government is keen to integrate them After World War II, almost all countries in South
to the Hukum Nasional. east Asia became independent but they faced seri
There were even differences among the com ous political instabilities both in the domestic and
mon laws introduced to the Straits Colonies, Brit international sphere, because of the political
ish Malaya and North Borneo, all of which were vacuum and confusion left by the surrender of the
British Colonies. Generally speaking, British law Japanese Military that had occupied the whole
was introduced more directly and strongly into the area, and of the consequent post-war world order
Straits Colonies, because of its nature as a com known as the Cold War. By the middle of the
mercial centre for the region. On the contrary, the 1960s, however, these countries, except in the
influence of British law was only superficial in Indochina region, were successful in controlling
North Borneo (present Brunei, and Sabah and these instabilities to some extent, and started
Sarawak in Malaysia) which was a distant outpost building a state in the true sense of the word. This
of British Colonialism. process is nothing but development, and this is
Even in Thailand, the only country which was why we call them development states. Although
not colonized by a Western power, the state and development has many aspects, its aim is un
legal systems were forced to be Westernized in doubtedly concerned with the solution of the dual
order to revise unequal treaties confirming extra political, economic and social structures created
territorial jurisdiction to Western countries since during colonial rule. In order to achieve this aim,
1855 when the first treaty was signed with Brit various types of development laws have emerged,
ain. Thanks to her independence, however, the which generally delegate to the government dis
Western laws were introduced on a selective basis cretionary power under the direction principle.
from various countries through the foreign legal We will discuss the present situation of law and
consultants employed by the Royal Siam Govern development in the perspectives of ASEAN devel
ment in the process of "Codification" since the opment states in more detail in the next section.
early twentieth century. There were many coun
tries whose laws were referred and examined as
a model. Law and Development in ASEAN states

As a result, Western imported laws became It is convenient to examine LD problems in

dominant and formed a substantial part of the three different phases of society: political society

ASEAN Economic Bulletin 149 November 1993

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 (state), economic society (economy) and societal
society (society), each of which are respectively
based mainly on the above principles of direction,
market, and community.
Law and Political Development
A Constitution is the most important document in
the political regime of a nation.8 All the ASEAN
member states have adopted more or less Western
styled Constitutions, and deal with two major sub
jects: Government Structure and Human Rights
(Bill of Rights). justice for common people in the development
For the government structure, all of them process, which includes environmental rights and
except Brunei,9 have adopted the system of a the preservation of the cultural identities of vari
democratically elected government, either by a
Parliamentary system (Singapore, Malaysia, Thai
land) or by a Presidency system (the Philippines
and Indonesia).10 The governments in action, how
ever, are characterized more or less by the term
Authoritarianism, justifying the oppression of the
political rights of the people in order to control
the communist movement under the Cold War,
and to promote rapid development.
Thanks to the successful economic develop
ment of these countries in the 1980s as well as
the collapse or dilution of the communist regime
including Asian socialist countries in the late
1980s and the early 1990s, the democratization of
the political system has progressed gradually but
steadily in each country. We see good examples in
the process and result of the election of Presidents
and MPs in the Philippines, Indonesia and Thai
land in 1992. However, it does not necessarily
mean that these countries have a copy of the
Western secular state model, as we can observe a
strong tendency of the revival of traditional or
cultural values such as a stress on National Reli
gion (Buddhism in Thailand and Islam in Muslim
majority states), National Ideology (Pancasila in
Indonesia) and Kingship (Malaysia and Thailand)
as a symbol of the integration of state.
Almost all of the ASEAN countries' Constitu
tions provide for the protection of human rights,11
but it is difficult to say these rights have actually
been well protected in all ASEAN countries, es
pecially in the political aspect (freedom of speech
ASEAN Economic Bulletin 150 November 1993
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and expression, assembly and formation of asso
ciations as well as personal liberty). However,
thanks to the recent democratization after the end
of the Cold War and the endeavours of human
rights activists at the domestic and international
level, the importance of human rights has been
gradually recognized.
It should be noted that a new concept of
human rights called the right to development,12
had evolved, and were advocated, in these coun
tries. Although it is difficult to conceptualize in
strict legal terms, it seems to be a set of rights or
ous ethnic groups. These rights are meaningful
only when they are constructed on the basis of
a group or collective organ, which is a kind of
"society" to be distinguished either from a state or
individuals. Needless to mention, the society is a
sphere where the "community principle" is work
able most effectively, and we can learn many
ideas from the existing rural communities. Where
the political system is concerned, the most impor
tant implication of this is to secure the autonomy
of the local community and peoples' participation
through decentralization of the state power.
Law and Economic Development
Economic development has been the most impor
tant subject, and often persuasive justification for
the authoritarian nature of the Third World devel
opment states. In order to achieve this objective,
there have been innumerable laws aimed at solv
ing the dual economic structure which is a major
cause of underdevelopment, and promoting indus
trialization. These legal measures are influenced
by the theories and practices of development eco
nomics, and vary in accordance with their theo
retical frameworks. It is impossible to examine all
aspects of law and economic development in an
article of this nature; however, a short discussion
of foreign investment laws, company laws and
transfer of technology regulations will give some
indication of the importance of this area.
 Foreign investment laws are the most important
instruments to motivate the investment of foreign
capital in domestic economic development. Due
to the inadequacy of domestic capital, almost all
ASEAN countries started enacting laws to pro
mote foreign investment by the 1960s.13 The com
mon structure of the laws is to set up regulatory
boards which have wide discretionary power to
approve and regulate foreign investments, and to
provide for various incentives to investment in
areas desirable for national development. The
foreign investment policies have been variable
by time and space, but it can be pointed out that
the stress has shifted from import substitution
industries to export oriented ones in the 1970s.
There was no significant reform in company
laws in the region before 1965 when Malaysia en
acted a new Companies Act, in part because few
large scale business corporations had yet evolved.
However, as a result of industrialization with
the help of foreign capital during the 1960s, the
big businesses, either domestic (mainly Chinese
dominant) or in joint venture with transnational
corporations (TNCs), increased rapidly. With the
influence of economic nationalism in the early
1970s, some countries started revising the com
pany law in order to control such big corpora
tions. This philosophy was implemented in three
ways: nationalization or fading out which means
transfer of foreign shares to local people; disper
sal of shareholdings or going public of private
(family) companies; and securing professional
management. The first is also a subject of foreign
investment law and the second is connected
closely with capital market regulations.14 In addi
tion, the equal distribution of national wealth
between ethnic groups was an important area of
corporate policies in a multi-racial society such as
Malaysia.15
The transfer of technology (TOT) is also an
important measure to promote industrialization,
and some ASEAN countries started TOT regula
tions as a part of foreign investment regulations.
These tools were influenced by the UN and
UNCTAD discussions on TNCs, Restrictive Trade
Practices and TOT during the 1970s.16
ASEAN Economic Bulletin 151 November 1993
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However, the policies behind many of the
above laws changed in the 1980s because of the
influence of the world economies. The world
recession in the early 1980s revealed the critical
problems of economic management of the Third
World governments. The strict regulatory systems
caused not only inefficiency through delays in
policy-making and its implementation, but also
serious corruption based on nepotism, which still
remains strong in many of the Third World
societies. Foreign debt accumulation became a
crucial problem in many countries, encouraging
the IMF/World Bank to compel these countries to
take steps towards economic restructuring which
means generally deregulation or liberalization of
economic systems.
Although ASEAN economies except the Philip
pines have shown a rather good performance
during the recession, the governments in the
region have taken various steps towards deregula
tion and liberalization. Foreign investment laws
were amended in order to simplify the regulatory
process and types of incentives.17
In addition, socio-economic legislation such as
environmental laws and consumer laws recently
had been developing rapidly in the ASEAN
region, although the legislation had started in the
1970s.
Law and Social Development
The aim of social development is to maximize
peoples' mental or spiritual satisfaction through
the sense of identity or feeling of unity in a soci
ety. Society is based on what we call the com
munity principle, and is distinguished clearly
from the state (political society) which concerns
the direction principle, as well as from the
economy (market society) ruled mainly by the
market principle.
A basic unit of a society is a "family" where
members enjoy maximum autonomy under the
different personal laws.18 The family laws will
be modernized slowly because the family system
is based deeply in the traditional feeling of a soci
ety, although the modern core family has become
 common in urban areas which have expanded effective and efficient in the solution of disputes
rapidly in the process of economic development. in the communities, not only because of the
A local community is the most important field saving of the over-burdens and high costs in the
of social development, where the members feel formal courts, but also because of satisfying both
happy to identify themselves with the community parties and community members through their
through participation in the decision making and participation in the settlement process and thus
implementation of its management. It is true that securing harmony within the society.
the government structure is still basically central
ized in nature due to developmentalism and au Conclusion
thoritarianism, and that the local government is
not recognized adequately at the official level, but The technical revolution since the late 1970s has
there was a rich tradition of the autonomy of created a new strong wave of market force, which
the villages at the informal level since the Proto has been affecting the existing state and economic
state stage.19 These communities play an impor systems all over the world, as exemplified by the
tant role as a social security system in providing collapse of the socialist states of Eastern Europe
mutual assistance to their members, by which and the Soviet Union. The wave of globalization
poor people are protected against the economic led by this market force reached the ASEAN
violence produced necessarily in the course of countries in the 1980s, and brought with it in
economic development. many cases the need for the co-ordination or
There are clear signs that such community integration of laws and policies beyond the scope
systems have been expanded to the urban area, of individual states. One typical instance of this
especially in the slums of the metropolitan cities, is the revision of intellectual laws in all ASEAN
because so many migrants have come from rural countries, brought about by U.S. pressure in
areas and introduced their systems in order to the late 1980s. Further, it seems that global or
sustain their lives during rapid urbanization in the transnational common laws have evolved in the
1970s and 1980s. These informal systems can be area of finance and trade which apply to both
characterized by achieving a solution of social international and domestic matters equally, such
problems through the mutual or collective method as various schemes of GATT.
based on the community principle. When we see Within ASEAN, the area which has achieved
that Western societies have been caught in a trap the most rapid economic growth, there have been
of hyper individualism which has caused atomi slow but steady moves toward co-ordination of
zation of the people and anomitization of the the policies of member states at the political and
societies, it does not seem wise to disregard these economic levels. One example is the ASEAN Free
systems although there may be difficulty in con Trade Agreement 1992. It is rather difficult to
structing them as formal legal terms. It should be expect the integration or unification of specific
noted that there have been many activities of laws within the region in a short time, because
NGOs to unite or promote co-operation among there are wide variations in the formal imported
urban and rural poor for the achievement of legal systems among member states. In the long
their self-help under the paradigm of alternative term perspective, however, there are two reasons
Development.20 why it would not be only desirable, but also pos
There have been strong indications of the re sible to integrate or at least co-ordinate the law
vival of traditional informal justice systems which and policy within the region.
try to solve disputes through conciliation or com One is derived from the nature of laws con
promise between parties. This would modify the cerning development. As we mentioned, these
imported Western legal system model which laws generally give the state discretionary power
is characterized more or less by the adversary to plan, design and implement development poli
system. The informal justice systems are more cies. Therefore, there is no clear border between

ASEAN Economic Bulletin 152 November 1993

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law and policy in this field, and so laws in this
area are distinguished from other basic laws such
as civil and commercial laws which supply the
explicit rules for the solution of disputes in the
courts. The policy has become common among all
nations, because the aims of development are
more or less the same, and because the recent
globalization mentioned above requires states to
take a common step in various aspects inside or
outside of the region. For instance, it does not
seem so difficult to co-ordinate monopolies and
competition laws, consumer protection laws and
environmental laws as well as financial laws and
intellectual laws, because their aim is clear and
they belong to a new generation of laws which are
of a technical nature and free from the traditional
concepts of law.
The other reason concerns a common legal cul
ture of the ASEAN region. Harmony is mentioned
generally as a common value in all Asian cultures
which shows a clear contrast with Western legal
culture which is based on articulated concepts
of "law" and "right". But its implication seems
different in the Southeast Asian region from other
areas, especially India and China which have
inherited major civilizations. Both in India and
China, there are mature social systems which are
characterized by the order of paternalistic vertical
kinship relations based on the direction principle.
On the contrary, as noted very often, the social
structure of ASEAN countries is characterized as
loosely structured and depends on patron and
client relations, where the community principle
has remained in a rather pure and original form.
This means that harmony is more amicable than
in the other two regions, and that Western legal
concepts have not penetrated deeply into ASEAN
society yet. So ASEAN countries have much
room to establish their own legal system.
This loose or fuzzy structure seems to contrib
ute substantially to the recent rapid development
not only in the social sphere as mentioned above,
but also in the economic field, because of its na
ture of flexibility to apply laws and rules between
the parties to disputes which save the social cost
of the settlement of the disputes and give a chance
to the relevant parties to unify themselves for a
common goal.
Considering the problems inherent in the
present Western legal model such as high social
costs both mentally and materially caused by
over-litigation, ASEAN laws should develop in
a rather different direction from just a straight
extension of the Western legal model. It should
be a major concern of the ASEAN LD jurispru
dence to look for the most suitable national and
transnational legal systems within the region, and,
we believe, it can be done well by incorporating
such different values as we call the "direction"
and "community" principles harmoniously into
the legal systems based largely on the market
principle.

NOTES

1. See John Henry Merryman, "Comparative Law and Social Change: On Origins, Style, Decline & Revival of
the Law and Development Movement", and Elliot M. Burg, "Law and Development: A Review of the Litera
ture & a Critique of 'Scholars in Self-Estrangement'", both in AJ.C.L. 25 (1977), pp. 457^91 and pp. 492
530 respectively, on the Critical Survey on the LD paradigm in the U.S. until the early 1970s. See also,
Anthony Carty, ed., Law and Development (Dartmouth: Aldershort, 1992).
2. There were many efforts to define the relation between law and development such as in, Law and Develop
ment: The Future of Law and Development Research, Study-Report of the Research Advisory Committee on
Law and Development of the International Legal Center, 1974.
3. There are strong movements to revive the Islamic systems in Muslim majority populated Southeast Asian
countries like Malaysia and Indonesia. For example, see "In God's Name: Kelantan continues to push to
implement Islamic law", Far Eastern Economic Review, 2 September 1992, p. 13.
4. In Southeast Asia, there was another type of "imported" laws, such as Islamic, Hindu and traditional Chinese
laws. But these laws were amalgamated with native laws, in contrast with imported Western laws, which caused
the present legal pluralism of these countries. This is why Hooker divides his book into two parts; "status" and
"contract". M.B. Hooker, A Concise Legal History of South-East Asia (Oxford: Clarendon Press, 1978).

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 5. This "developmentalism" is a main cause of the Authoritarian regimes of these nations, though it relates
closely with the cultural structure of "proto states" in these countries.
6. Lucian W. Pye, Asian Power and Politics: The Cultural Dimensions of Authority (Cambridge, Massachusetts:
The Bellknap Press of Harvard University, 1985), pp. 90-132.
7. See Hooker, op. cit., pp. 17-94, on law texts of Proto states in the region, which were imported or "borrowed"
from major oriental legal systems.
8. See Lawrence W. Beer, Constitutional Systems in Late Twentieth Century Asia (Seattle and London: Univer
sity of Washington Press, 1992) on a general view of the present Constitutional problems of each country. See
also Sison Carmelo V., Constitutional and Legal Systems of ASEAN Countries (Quezon City: The Academy of
ASEAN Law and Jurisprudence, Univ. of the Philippines Law Complex, 1990), which includes complete texts
of the Constitution of each countries.
9. The Brunei Constitution provides for the partly elected "Legislative Council", but it has not operated since
1984 when Brunei become independent.
10. In 1987, the Philippines returned to the American Presidency model originally introduced in the Common
wealth Constitution of 1935, after trying a Parliamentary system by the 1973 Constitution (not operative due
to Martial Law) and a Presidency Cabinet system by its 1981 Amendment under the Marcos Regime (Gaullist
styled Presidency). The present Indonesian Constitution enacted in 1945 (returned in 1959 from the 1950
Constitution) provides that the President shall be elected by the Peoples' Consultative Council (MPJR) com
posed of elected Parliamentary members and others appointed by the President himself.
11. One exemption is the Brunei Constitution. Further, all except Indonesia have comprehensive lists of the
human rights under an independent chapter.
12. See Roland Rich, "The Rights to Development: A Right of Peoples", in The Rights of People edited by Jamen
Crawford (Oxford: Clarendon Press, 1988) and Upendra Baxi, "The Development of the Right to Develop
ment" in Human Rights in the Changing World, edited by E.S. Venkataramiah (New Delhi: International Law
Association, Regional Branch [India], 1988).
13. The earliest legislation of each country are: the Industries Promotion Act in Thailand (1957), the Pioneer
Investment Ordinance in Malaysia (1958), the Investment Promotion Act in the Philippines (1967) and the
Foreign Investment Law in Indonesia (1967), all of which have been often amended partially or totally.
14. The Public Companies Act in Thailand (1979) and the Philippines Corporation Code (1980). See Yasuda
Nobuyuki, "Corporation and Law in ASEAN Countries", in Teuk Mohammad Radhi, et. al., Corporation and
Law in ASEAN Countries (IDE, JRP Series No. 58, 1986), pp. 155-242, on the development of company laws
with brief reference to securities regulation within the region. It should be noted that Singapore has kept a
"liberal" approach to both domestic and foreign capital, although its company law was amended repeatedly
with the intention to build a financial centre for the region since its enactment in 1968.
15. See Yasuda Nobuyuki, "Malaysia's New Economic Policy and the Industrial Co-ordination Act", The Devel
oping Economies XXIX , no. 4 (December 1991): 331-49.
16. For instance, "Rules & Regulations to implement the Intent & Provisions of S.5 creating the Technology
Transfer Board within the Ministry of Industry (PD. 52, Oct., 10, 1978)" of the Philippines provides for com
prehensive guidelines on TOT by foreign investors in the Philippines. In other countries, foreign investment
bodies exercise a regulatory power under similar guidelines.
17. Typical examples are the Promotion of Investment Act (1986) in Malaysia and the new Omnibus Investment
Code of the Philippines (1987), both of which are substituted for former investment laws.
18. There is a general family law applicable to all citizens only in Thailand and the Philippines, although they also
have special laws applicable to Muslims in the southern parts of the states.
19 It seems that only the Philippines has a comprehensive Local Government Code (1991) which provides for all
classes of local governments elected by the local people.
20. The role of NGOs in social development cannot be over-emphasized. Art. 13 of the Philippine Constitution
recognizes their role in the achievement of social justice.
21. It is true that there can be serious problems when it is manipulated and abused by rural bosses, as seen in some
cases of the Barangai Justice System in the Philippines.

Nobuyuki Yasuda is a professor at the Department of International Cooperation Studies, Graduate School of Inter
national Development at Nagoya University, Japan.

ASEAN Economic Bulletin 154 November 1993

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