ASEAN economies<\/p>\n
Given the currency and stock market turmoil which has gripped
\nASEAN's four largest members, it was expected that the 29th
\nannual meeting of ASEAN ministers with economic portfolios in
\nKuala Lumpur last week would be much more than a routine
\ngathering to evaluate the progress in the process of developing
\nthe ASEAN Free Trade Area (Afta).<\/p>\n
Because the currency turbulence in Indonesia, Malaysia and the
\nPhilippines was partly seen as a contagion of the financial
\ncrisis in Thailand in early July, many analysts and
\nbusinesspeople expected the ministers to broaden their agenda to
\ninclude vigorous discourses on real policy coordination.<\/p>\n
But the gathering ended over the weekend largely as a routine
\none. In fact, Indonesia backtracked on its commitment to Afta by
\nwithdrawing five chemical products, the importation of which is
\nestimated at more than US$1 billion a year, from its earlier
\nliberalization commitment. The meeting was served further bad
\nnews by senior officials who disclosed various problems behind
\nthe disappointingly slow pace of the ASEAN industrial cooperation
\nscheme, a program designed to enhance regional economic
\nintegration.<\/p>\n
The ASEAN Investment Area concept, formulated three years ago
\nas another program to promote complementary economic systems in
\npreparation for regional integration, remains a broad framework
\nwhich has yet to be fine-tuned and translated into workable
\ntechnical details.<\/p>\n
The boldest measure taken by the ministers was the agreement
\nto liberalize trade in services by 2020, 17 years after the full
\noperation of free trade in commodities beginning in 2003. But
\neven this supposedly dramatic measure could be rendered
\nmeaningless if members remain free to later backtrack on earlier
\ncommitments.<\/p>\n
The ministers did touch upon the currency crisis, but with an
\noptimistic note in their joint press statement that the financial
\ncrisis had made Afta even more important. They saw the sharp
\ncurrency depreciation as a boon to further expand ASEAN exports
\nboth within and outside the region. So great was their optimism
\nthat they voiced hope that a full-fledged Afta would be launched
\nearlier than the current target of 2003.<\/p>\n
This is theoretically possible. Members not hard hit by the
\ncurrency turmoil now find it cheaper to buy goods from the four
\ncountries suffering from the sharp depreciation. This in turn
\nwould further expand intra-ASEAN trade which last year exceeded
\nUS$155 billion.<\/p>\n
But the optimism will only prove well-founded if ASEAN
\nmembers, individually and collectively, work hard to regain
\ninternational confidence in ASEAN. This is crucial as the
\ncurrency turmoil has shown up a market perception -- however
\nirrational it may be -- which looks at ASEAN as a bloc.<\/p>\n
This is, we think, the new area to which the ministers should
\npay more serious attention. They should agree on what each member
\nshould do to strengthen itself economically and what all members
\nshould perform collectively to bolster the region's economic
\nresilience. Put another way, the ministers' meeting should become
\na kind of regional surveillance to impose peer pressure on each
\nmember country to put its respective economic house in order.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/asean-economies-1447899208",
"image": ""
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"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
}