ASEAN faces export challenge<\/p>\n
JAKARTA (AFP): ASEAN economies face the challenge of
\nmaintaining their edge in exports, the engine of their rapid
\ngrowth, as domestic constraints increase and competition from
\nAsian rivals heats up.<\/p>\n
Economists say the first signs of a slowdown from years of
\nfast export growth are now visible and warn that the Association
\nof Southeast Asian Nations (ASEAN) cannot dismiss it as a mere
\nblip.<\/p>\n
The Jakarta-based ASEAN secretariat has projected collective
\nexport growth for six of the seven ASEAN members to slow a shade
\nfrom 20 percent in 1995 to a still healthy 16 percent in 1996 at
\n350 billion US dollars.<\/p>\n
But the forecast -- which excludes ASEAN's newest member,
\nVietnam -- did not factor in a steep fall in external electronics
\ndemand hurting the group's exports.<\/p>\n
Electronics is a key item in the export basket of Singapore,
\nthe region's biggest trading nation, as well as neighboring
\nMalaysia and Thailand.<\/p>\n
ASEAN, ended an annual ministerial meeting here yesterday,
\ngroups the three countries with oil-rich Brunei, Indonesia, the
\nPhilippines, and Vietnam which joined the organization only last
\nyear.<\/p>\n
As a bloc, ASEAN is the fourth largest trader after the United
\nStates, Japan and the European Union, with two-way trade this
\nyear estimated at 700 billion dollars.<\/p>\n
Indonesian economist Raja Silalahi said that, besides the
\nslowdown in the volatile electronics market, infrastructure
\nconstraints and other bottlenecks were beginning to affect
\nASEAN's competitiveness in trade.<\/p>\n
He also cited increasing competition from lower-cost locations
\nelsewhere in Asia, including Myanmar, which is aspiring to join
\nASEAN. Vietnam, too, is posing competition to the more mature
\nASEAN economies, he said.<\/p>\n
\"The cost of labor there is lower, the cost of capital also,
\nand other things like land are cheaper,\" he said.<\/p>\n
\"They take a share of the market and reduce our (ASEAN)
\nexports,\" said Silalahi. \"We will face problems competing in the
\nmarket.\"<\/p>\n
Investment house J.P. Morgan warned in a recent report: \"It is
\nthe rise of nearby rivals and its own infrastructure and labor-
\nforce bottlenecks that threaten ASEAN's high export growth in the
\nfuture.\"<\/p>\n
Economists said ASEAN members should move to deal with the
\nbottlenecks and arrest the export slowdown before they blunt the
\ngroup's competitive edge.<\/p>\n
\"ASEAN should be concerned. It may reflect some factors like
\nunder-investment in infrastructure,\" said Robert Tay, an
\neconomist with the ASEAN secretariat.<\/p>\n
\"For a number of years, ASEAN exports have grown in a
\nconsistently higher plane compared to OECD (Organization of
\nEconomic Cooperation and Development) economies,\" he said.<\/p>\n
\"This downtrend or (eventual) convergence to the world average
\nmay be expected over a period of time.\"<\/p>\n
Projected exports for the year, without taking into account
\nthe electronics slowdown, are impressive.<\/p>\n
Brunei's exports are projected by the secretariat to rise to
\n2.7 billion dollars from 2.5 billion dollars last year,
\nIndonesia's from 45.3 billion dollars to 51.9 billion dollars and
\nMalaysia's from 71.5 billion dollars to 86.2 billion dollars.<\/p>\n
The Philippines' exports are expected to rise from 16.6
\nbillion dollars to 19.8 billion dollars, Singapore's from 111.9
\nbillion dollars to 130.9 billion dollars and Thailand's from 56.2
\nbillion dollars to 57.9 billion dollars.<\/p>\n
Current account deficits were projected by the ASEAN
\nsecretariat to decelerate -- from 11.4 billion dollars in 1995 to
\n4.2 billion dollars in 1996.<\/p>\n
Indonesia, the Philippines and Thailand would record lower
\ndeficits while Brunei and Singapore were expected to increase
\ntheir surpluses.<\/p>\n
A senior Indonesian official said the export growth slowdown
\nwas worrying.<\/p>\n
\"We are hoping it is temporary,\" he said. \"But we need to do
\nsomething -- increase trade within ASEAN and form strategic
\nalliances -- to compete,\" he said.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/asean-faces-export-challenge-1447893297",
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