Alan Boyd, Sydney – Worried about the strategic vulnerability of its eastern flanks, Indonesia is discreetly lobbying for East Timor to be granted early observer status in the Association of Southeast Asian Nations (ASEAN).

Diplomats said that Jakarta would seek the help of a third party, probably Malaysia or the Philippines, in achieving a consensus for Dili to be given the same access as Papua New Guinea to ministerial summits. The Philippines has invited the newly-independent state to send representatives to ASEAN's next high-level gathering in July. But it will only be permitted to attend official public functions.

Myanmar blocked a bid in February by Manila to sponsor Timor as an observer on the grounds that former Timorese resistance factions had links with the pro-democracy movement within Myanmar. Aung San Suu Kyi's National League for Democracy (NLD) is thought to have first had contact with the Timorese at regional human rights meetings in Thailand and the Philippines as long ago as 1991.

However, Yangon is reportedly upset that the ties have continued since East Timor voted for autonomy from Indonesia in 1999, after sustained pressure was exerted on Jakarta by Western countries. The ruling junta, renowned for a xenophobic reaction to liberation movements elsewhere, apparently fears that a similar international campaign could end its four-decade grip on power in Myanmar.

Indonesia, uncomfortable with its position as former colonial master, did not publicly support Manila's bid to secure observer status for Timor, but raised no objections in closed sessions. Having Dili as a consultation partner would help allay concerns among Indonesian military planners that the western half of divided Timor might eventually seek to follow the same independence path.

West Timor, annexed by Indonesia in 1949, has become critical to Indonesian forward defense strategies since the loss of the eastern province because of a perception in Jakarta that Dili could be used as a foothold by ambitious regional powers.

Government leaders are especially concerned at the influence Australia has gained over East Timor by virtue of a large military contingent and geographical proximity. Australia has left no doubt that it wants a friendly or neutral East Timor following independence to safeguard its northern borders and protect lucrative oil interests along their sea border.

According to diplomats, Indonesia is pushing for another discussion on East Timor's status at the July meeting of ASEAN foreign ministers, but wants the initiative to be seen as coming from the Philippines. Apart from having the most liberal foreign policy in ASEAN, Manila is viewed as having more sway with Dili because both countries have majority Christian populations.

Malaysia, also uneasy over Canberra's intents in Timor, is viewed as another potential ally, while Singapore and Thailand have expressed guarded support.

It is unlikely that a vote will be taken in July, as the issue would have to be considered first at a leadership level, after an evaluation of the republic's ability to fulfill observer requirements. This study will undoubtedly conclude that East Timor is not ready for the costly demands of committee sessions that come with full membership of ASEAN, but that it could handle a lower-level commitment. East Timor has already attended several ASEAN meetings as an official guest, but badly needs a higher profile to secure economic aid and establish trade links.

As an observer it would be permitted to host unofficial consultations and sit in on the annual ministerial meetings, which also include top ministers from ASEAN's liaison partners in Europe and North America.

The Asian Development Bank (ADB) expects economic growth in East Timor to slow to zero this year, as the initial rush of international aid tapers off and budgets are diverted to cover grass-roots development projects. Foreign assistance of US$150 million-$170 million will be needed to keep revenues in the black during the next three years, though royalties from gasfields in the Timor Sea will start to filter through in fiscal 2005.

Economic standing is a sensitive point with the more advanced ASEAN states as a result of the premature decision to admit Vietnam, Myanmar, Cambodia and Laos when membership was last expanded in the mid-1990s. Only Vietnam has since achieved a level where it can contribute economically to the grouping by participating in free-trade accords.

The other three nations are struggling even to meet manpower obligations for membership. Dili, which fully expects to be preoccupied with domestic issues such as housing and health services for at least the first three years of independence, has given mixed signals on its desire to join ASEAN.

Ramos Horta, now the foreign minister, angrily condemned ASEAN's diplomatic paralysis in late 1999 and said East Timor would seek membership of the Pacific Forum instead. But this year he has been talking up the importance of ASEAN, though not as a priority issue. It was unlikely, he said, that an application would be lodged for at least three years.

Malaysia initiated the last expansion as a security mechanism against Chinese ambitions within Southeast Asia, at a time when American military influence was waning. But there is little urgency this time, at least outside Indonesia.

Although ASEAN's charter leaves the door open for additional states, the message in diplomatic circles is that membership is effectively closed despite a burgeoning queue of applicants. Apart from Papua New Guinea, which would theoretically be next in line, overtures have also been made by India, Australia and New Zealand; the latter two have already brokered a trade accord with ASEAN.

Complicating the issue is a parallel bid to draw China, Japan and Korea into a broader East Asian caucus, though ASEAN may opt out for fear of surrendering to northern Asian economic influence.

Nevertheless, there is a feeling within ASEAN that the bloc has a moral obligation to treat East Timor as a special case, both for compassionate reasons and as recompense for its shabby treatment of the province before and during the autonomy crisis in 1999.

Not a single ASEAN voice was raised when Jakarta incorporated East Timor as part of its territory in 1975, probably because of US pressure exerted through the anti-communist alliance in Indochina. ASEAN continued to back Indonesia against Portugal when the territorial issue was referred to the International Court, even when Western European nations retaliated by downgrading their relations with the bloc.

As recently as five years ago, activists from East Timor were being harassed during visits within the region and in some cases were denied visas for human rights meetings within ASEAN. Even so, in 1999 the US and Australia pushed hard for ASEAN to take the lead in putting together an international peacekeeping force to end the bloody reign of terror by Indonesian troops that were resisting independence. But initially at least, ASEAN again succumbed to pressure by Jakarta and sheltered behind its much-tarnished policy of non-intervention, paying a steep diplomatic price in the process.

Similarly, regional leaders made no effort to pass the burden to the ASEAN Regional Forum (ARF), the only permanent consultative security body in Southeast Asia, which also includes the US and north Asian states. ARF, widely viewed as an ineffectual talking shop, suffers from having no official agenda on human rights. It has taken vague positions in the past – most notably on Myanmar – but these have had the undesirable effect of raising the tolerance level for perceived abuses. There was a reprieve in 1999 when Indonesia's B J Habibie unexpectedly dropped his opposition to the entry of an international force to restore law and order in East Timor, allowing some ASEAN countries to send troops as part of the United Nations transitional authority.

Yet the initiative of putting together the force was instead taken up by Australia, which gained wide accolades for carrying off a particularly difficult logistical operation and continues to benefit both strategically and economically. Ironically, Jakarta had wanted a force that would be entirely composed of troops from ASEAN or other parts of Asia. The solution was a typical ASEAN compromise: members would be permitted to participate, but only on an individual basis. Even then, ASEAN continued to muddle its position. The Philippines, despite being one of the biggest participants in the peacekeeping force, subsequently opposed moves for the UN Human Rights Commission to hold an international probe into the East Timor situation. On the other hand, ASEAN did eventually act against one of its own members, and Timor may well turn out to have been a watershed in ASEAN's external relations.

Redefined, the ground rules imply that interference is acceptable as long as collective stability is at stake, whether on a security or economic level.

The next test could well be a partial breakup of the Indonesian archipelago.

Admitting East Timor would reinforce the awakening of ASEAN, as Dili, with its revolutionary background and strident demands for justice over alleged Indonesian human rights violations, could hardly be expected to take the traditional compromising route.

Taking in the former guerrillas carries its own risk of deepening divisions between the more autocratic regimes, with their insistence on restoring the status quo, and the liberal wing that wants a more proactive external policy. But at least it might help keep ASEAN honest.