RI's recovery boosts ASEAN's attractiveness<\/p>\n
Riyadi Suparno, The Jakarta Post\/Kuala Lumpur<\/p>\n
Being the largest ASEAN member country, Indonesia's economic
\nrecovery would boost the attractiveness of the region as a trade
\npartner and an investment destination, experts said here on
\nFriday.<\/p>\n
Manu Bhaskaran, a partner at the Centennial Group Inc. of
\nSingapore, noted that Indonesia's on-track recovery was one
\nfactor bringing back investment into Southeast Asia. Others, he
\nsaid, were the beginning of a new investment cycle and improving
\ncompetitiveness across the region.<\/p>\n
Speaking at the 2005 Euro Conference here, Bhaskaran noted
\nthat despite its lingering problems, Indonesia under President
\nSusilo Bambang Yudhoyono had already had more successes than
\nfailures.<\/p>\n
He said Susilo had given the market a clear direction on where
\nhis administration was heading. Combined with a strong
\nanticorruption drive, this had increased business confidence in
\nIndonesia, he said.<\/p>\n
The President had also been successful in settling several
\nimportant overdue problems, including the Cepu oil block dispute
\nwith U.S. energy giant ExxonMobil, and had moved to cut oil
\nsubsidies, although they remained high, Bhaskaran said.<\/p>\n
Corporations were also responding positively to the
\ngovernment's moves to enforce good governance in the public and
\nprivate sectors, he said. Banks had stepped up lending to small
\nand medium enterprises, and international firms had increased
\ntheir investments in the region as confidence among foreign
\ninvestors and donors improved.<\/p>\n
Bhaskaran said the country was now on track toward high
\neconomic growth of more than 6 percent, a figure that could be
\nreached next year. This would help resolve Indonesia's long-
\nstanding problem of high unemployment, he said.<\/p>\n
Indonesia's recovery was in line with the robustness of other
\neconomies in the region, and this had increased demands for
\ninfrastructure projects and the development of other sectors, he
\nsaid.<\/p>\n
Mirando Goeltom, the senior deputy governor of Bank Indonesia,
\nsaid things were looking good for Indonesia amid sluggish global
\neconomic growth, which was mired in uncertainties about the
\nfuture. However, he cautioned inflationary pressures from the
\ninstability of the exchange rate could undermine the country's
\nperformance.<\/p>\n
Narongchai Akrasanee, Thailand's former minister of commerce,
\nsaid ASEAN, with its large market of more than 500 million
\npeople, represented a huge potential for growth.<\/p>\n
However, he also warned that investors were increasingly
\nseeing non-traditional risks emerging from the region, including
\nthe SARS epidemic of 2003, the more recent bird flu outbreak,
\nearthquake and tsunami risks, and the remaining high risk of
\nterrorist attacks in some parts of the Philippines, Indonesia and
\nThailand.<\/p>\n
Otherwise, the region was a strong contender to be a major
\ntrading partner and investment destination for countries in the
\nEuropean Union, he said.<\/p>\n
The EU has in recent years become the largest investor in the
\nregion, overtaking Japan and the United States.<\/p>\n
Narongchai noted that the establishment of Trans-Regional EU-
\nASEAN Trade Initiative (TREATI) in 2003 could pave the way for a
\nfreer trade between the two regions.<\/p>\n
Under the TREATI framework, the two parties have agreed to
\nfocus on six areas -- agriculture, fisheries, electrical and
\nelectronic goods, forestry, trade and investment facilitation.<\/p>\n
Narongchai suggested that the EU and ASEAN consider
\nformalizing their relations through formal institutions, such as
\nan ASEAN-EU joint secretariat, business council and a free trade
\nagreement.<\/p>\n
FDI flows into ASEAN<\/p>\n
(billions of U.S. dollars)
\n----------------------------------------------
\n1995 2000 2003
\n----------------------------------------------
\n28.1 23.4 19.3
\n----------------------------------------------
\nSource: ASEAN Statistical Yearbook, 2004<\/p>",
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