ASEAN: What next for business?<\/p>\n
By Sofjan Wanandi<\/p>\n
This article is based on a paper presented at the Private
\nSector Salute to ASEAN's session in Kuala Lumpur yesterday.<\/p>\n
KUALA LUMPUR: ASEAN at 30 is an exciting prospect. As an
\nassociation, a grouping of Southeast Asian nations, it has grown
\nand matured. At 30, the most important development is its
\nmembership expansion. Soon, perhaps by the middle of next year,
\nall 10 Southeast Asian nations will be in ASEAN. This would be
\nthe realization of the dream of ASEAN's founding fathers.<\/p>\n
An expanded ASEAN would certainly bring new challenges to the
\nregion. To maintain the group's cohesion is one of such
\nchallenges. However, ASEAN's expansion may not necessarily create
\nmajor strains to the organization as has been often predicted.<\/p>\n
The growing economic integration in the region is one reason
\nto be confident about the region's future. The economic
\nintegration in Southeast Asia that has accelerated since the
\n1980s is not likely to experience a halt because of Asia's
\ncurrent economic crisis. In fact, continued efforts at
\nintegrating the region will make it a stronger economic entity
\nthat can overcome and prevent similar crises in the future.<\/p>\n
It is unfortunate that the region is experiencing this crisis
\nat a time when we have just embarked on stepping up our economic
\nintegration through the implementation of AFTA, the ASEAN free
\ntrade area. The crisis should not divert our attention away from
\nthis effort. It is important, therefore, that we should renew our
\nunderstanding of why we had embarked on this venture in the first
\nplace.<\/p>\n
AFTA is not just about reducing tariffs and other trade
\nbarriers among the members of ASEAN. Elimination of these
\nbarriers would transform the region into a significant single
\nmarket. This market would make the region attractive to investors
\nfrom within as well as from outside the region. We have agreed
\nthat we do not want to create a closed regional market. Instead,
\nthe market should be as open to outsiders as it is open to its
\nown members. This is the essence of the concept of \"open
\nregionalism\" which ASEAN has adopted and supported not only in
\nSoutheast Asia but in the wider Asia-Pacific region.<\/p>\n
ASEAN countries are not only reducing the barriers to trade
\namong themselves. At the same time that they are implementing
\nAFTA, which grants preferential tariffs to ASEAN members, they
\nare also reducing their favored nations tariffs unilaterally.<\/p>\n
In some ASEAN countries these two reductions have been
\nundertaken in tandem, while in other ASEAN countries they are
\npursued at different paces.<\/p>\n
Whatever the case, the basic intention is commonly shared by
\nall ASEAN members, namely to strengthen regional cooperation in
\norder to improve the group's position in the world economy. We
\nare doing this not simply by sharing our markets but more
\nimportantly by pooling together our resources. This is ASEAN's
\noverall strategy.<\/p>\n
This same strategy also has to guide the activities of ASEAN's
\nbusiness community. The business community in ASEAN has also
\ngrown and matured. It should not be trapped by the idea of
\nsecuring the regional market for its own. Rather, it should
\nbenefit from a pooling of regional resources to continuously up-
\ngrade the competitiveness of its undertakings globally.<\/p>\n
By eliminating the barriers to trade and investment regionally
\nand globally, business in the region can exploit the different
\ncomparative advantages of the various ASEAN members.<\/p>\n
In doing so, businesses can continuously enhance their
\ninternational competitiveness. The expansion of ASEAN to include
\nVietnam in 1995, and Laos and Myanmar in 1997 (and Cambodia
\nprospectively in 1998) will increase the region's diversity and
\nfurther enhance its potential to maintain its international
\ncompetitiveness.<\/p>\n
It is to be noted that multinational corporations (MNCs) from
\noutside the region have adopted this wisdom for many years now.
\nThis strategy has received a boost from the development of AFTA.
\nMNCs in the region have positioned themselves to take advantage
\nof the different comparative advantages of ASEAN's diverse member
\ncountries.<\/p>\n
ASEAN's expansion provides another important boost to further
\ndevelop their production activities. Southeast Asia, in their
\nview, promises to become a production powerhouse in a range of
\nmanufacturing activities.<\/p>\n
It is a shame that the businesses from the region itself have
\nbeen late in recognizing this opportunity. However, it is better
\nlate than never. ASEAN at 30 should provide us, the business
\ncommunity in ASEAN, with a golden opportunity to redress this
\nshortcoming.<\/p>\n
There is a lot that the business communities in ASEAN can do
\ntogether. Our sharing of the regional market should be only to
\nprepare us to enter the global market. Our pooling of resources
\nwill help strengthen us in our endeavor to participate in the
\nglobal market. Up to now, our approach has been to go our own
\nways without realizing the opportunities derived from
\ncooperation.<\/p>\n
The region's great diversity should not overshadow the fact
\nthat we also have a great deal in common. Southeast Asia is a
\nregion endowed with rich natural resources. We should cooperate
\nin order to exploit these resources in a much more economic and
\nresponsible fashion.<\/p>\n
We can share our experiences and our technologies. We also
\nmust undertake joint research and development activities to
\nenhance our value-added products. We are major producers of
\nnatural rubber, oil palm, wood and many other resource-based
\nproducts.<\/p>\n
Southeast Asia also continues to have great potential in many
\nlabor-intensive manufacturing activities, especially if efforts
\ncan be made to upgrade the skills of our labor force. It is in
\nthe vast area of human resources development that we can and
\nshould cooperate. Thus, an important agenda for the ASEAN
\nbusiness community is to cooperate in efforts to improve the
\nquality of products and the quality of human resources.<\/p>\n
In the area of more capital and technology-intensive
\nmanufacturing activities, there is a wide scope for cooperation.
\nOur governments have introduced the concept of brand-to-brand
\ncomplementation, the BBC scheme, as a way to promote cooperation
\nin the region in such sectors as the automotive industry.<\/p>\n
This has been further supported by the ASEAN Industrial Joint
\nVenture (AIJV) scheme. It should be noted that these schemes
\nallow for participation by companies and investors from outside
\nthe region. They are consistent with the concept of open
\nregionalism that has been mentioned before. These schemes could
\nprovide a basis for the joint development of our technological
\ncapabilities.<\/p>\n
Again, outsiders have been quicker in realizing this
\nopportunity than the business community within ASEAN itself. Here
\ntoo, it is better late than never.<\/p>\n
The ASEAN business community should explore the many
\npossibilities for the development of joint activities, joint
\nventures and the establishment of regional strategic alliances.<\/p>\n
Ultimately it is the ASEAN business community that should be
\nat the forefront in taking advantage of the opportunities that
\ncontinue to expand with the maturing of ASEAN and the Southeast
\nAsian region as a whole.<\/p>\n
The writer is chairman and CEO of the Gemala Group, Indonesia.<\/p>", "url": "https:\/\/jawawa.id\/newsitem\/asean-what-next-for-business-1447893297", "image": "" }, "sponsor": "Okusi Associates", "sponsor_url": "https:\/\/okusiassociates.com" }