Asean ministers seeking to rev up sluggish region
BALI SUMMIT PREPARATIONS
Pumping in more money and integrating the member countries’ economies are among moves being considered.
Asean economic ministers yesterday began a two-day meeting to look at ways to raise trade levels in the region amid a slowdown over the last decade.
Making preparations ahead of the Asean Summit in Bali this October, the ministers looked at ways to pump in more money into South-east Asia and make the area more competitive by addressing obstacles to economic growth.
Indonesia’s Trade and Industry Minister Rini Soewandi said in her opening remarks to her Asean counterparts that ‘there is still much work to do’ to increase trade and investments in the region.
Intra-regional trade, she noted, had remained virtually stable over the last 10 years at between 21 and 25 per cent.
‘The figures suggest that our goal of becoming an integrated market has not been achieved,’ she said.
‘Higher levels of trade are a sign of vibrant national economies with few or no artificial barriers between them – trade must be able to take place seamlessly across borders.’
A host of factors contribute to ‘fragmented markets’ and affected the business climate of the trading bloc.
This included tariffs, non-tariff barriers, customs inefficiencies and poorly integrated regional logistics.
She said: ‘No matter what the size of markets, investments are unlikely to occur if markets lack competitive infrastructures or if the legal and regulatory climate is not conducive to investment.’
Ms Rini pointed out that this was a significant year for Asean. The organisation had achieved its long-time goal of reducing tariffs under the Common Effective Preferential Tariff (CEPT) scheme to between zero and 5 per cent.
However, the open economies that this has created has made it subject to the vagaries of the global economy, she said. The financial crisis in the late nineties slowed down growth and sources of investment.
Competition for markets and investments had intensified with the rise of other regional groupings. As a result, she said, ‘we have seen a shrinkage in the growth of foreign direct investments moving into Asean’.
Singapore’s Trade and Industry Minister George Yeo was at the meeting yesterday with Ms Rini and other economic ministers from Asean.
They travelled to the Bogor botanical park to be hosted to dinner by President Megawati Sukarnoputri.