U S AND THE ASIA-PACIFIC REGION 63 capital in total investment in ASEAN by 1979 was: Singapore-69.47 per cent; the Philippines - 59.7 per cent; Indonesia - 56.9 per cent, Malaysia-54.8 per cent, and Thailand-29.1.11 America actively supported the formation of ASEAN seeing it the best hope for taking care of regional security, and ensuring a free market economy in the region. While deep-seated fears of Japanese expansionism exist among the ASEAN countries, the regions are much too beholden to the U S to refuse to the Washington's line on matters of regional security. Indeed the militarised political structures in this region have been actively supported since the late sixties, not only by the U S, but also by Japan. The pace of capitalist development has accelerated in the countries of -the Asia-Pacific region. By the mid-seventies there has been considerable restructuring away from dependence on the export of a few primary commodities to the expansion of export of labor intensive manufactures and semi-manufactures. The character of export industrialisation has had profound impact on the nature and form of dependence of these economies on the industrialised systems of the United States, Japan, and Western Europe. These economics are integrated into a new international division of labour as manufacturers of labor-intensive products, parts and components or of local resource-based commodities, Theinternationalisation of capital under the control of transnational corporations for fuller exploitation of cheap labour for world-wide markets has resulted in the creation of the so-called Newly Industrialsed Countries ^NIG) like Taiwan, Hong Kong, South Korea Singapore etc Though this region (including ASEAN countries) has achieved very high growth-rates in the absence of equitable distribution of income and this has only resulted in widening the gap between the rich and the poor and increasing the disparity between urban and rural areas. These countries' politico-economic orientation has received the stamp of approval from agencies like the World Bank, the International Monetary Fund (IMF), and the Asian Development Bank (ADB).12 The deliberate policy of these international financial institutions to promote private foreign investments has played a vital role in the so-called 'modernisation9 of these countries and in thus making these economies subservient to foreign private capital. The emergence of repressive militarised political structures is the natural outcome of the process of dismantling the political and economic obstacles to the implementation of the above programme. In recent years, massive borrowings by these countries from transnational banks (TNB) have added another dimension to their development. These banks, mostly American and Japanese, have developed large interests in this region, where their involvement ranks second only to Latin America in the entire Third World. Singapore and Hong Kong, the two city states in the region, have become havens for the operations of the TNCs and the TNBs. Ronald Reagan has declared that "no area of the world is beyond