ASEAN called on to promote collective efforts
By Riyadi
KUALA LUMPUR (JP): Malaysian Prime Minister Mahathir Mohamad called for collective efforts in the region yesterday to move toward economic integration and improve competitiveness.
Recent experience with currency manipulation should lead the nine member countries of the Association of Southeast Asian Nations (ASEAN) to liberalize more trade and investment without ignoring the dangers of liberalization, Mahathir said.
Speaking at the opening of the 29th ASEAN economic ministers meeting here, Mahathir warned about the possibility of developed nations using a liberalization theme to coerce developing countries, as the history of human civilization was "full of exploitation of the weak by the strong and the powerful".
"We must not just think of a level playing field but also the relative strength of contestants," Mahathir said at the opening ceremony.
"Liberalization is not about doing away with rules and laws altogether, but about every economy submitting to the same set of rules and regulations and laws on a world scale," he said.
He said ASEAN countries should act together to combat unfair practices in international trade and efforts to exploit "our weaknesses in order to weaken us further".
"We have struggled hard to gain independence and we cannot afford to lose our sovereignty in the name of a free, unrestricted breaching of our economy and other borders," he said.
To face the growing unfair and uncertain world, Mahathir said, ASEAN economies should stand together as a group by forging greater economic integration through the ASEAN Free Trade Area (AFTA), expected to materialize by 2003.
"We need AFTA to increase competition and upgrade the efficiency of our industries in order that they become more competitive in the world market," he said.
While implementing initiatives toward greater economic integration, Mahathir said, ASEAN countries should not overlook the critical element of reducing transactional costs or the costs of doing business in the region.
He said each member country needed to review regulatory and administrative procedures at a national level to make them simpler and more transparent.
"We have to squarely combat corrupt practices," Mahathir said.
In an effort to reduce the cost of doing business in the region, each ASEAN country should review the efficiency of their utilities industry, he said.
The costs of electricity, gas, water and telecommunications, for instance, must be pressed to the minimum level so that they became less of a burden to businesses, he said.
"In the same way, we need to make our ports and airports more efficient, our haulage and freight forwarding services more responsive," said the prime minister.
ASEAN countries, he continued, also needed to upgrade, strengthen and expand their services sector to complement their strength in the manufacturing and industrial sector.
Mahathir warned that ASEAN countries could not rely anymore on the manufacturing sector as the only engine of growth, because its contribution to the gross domestic product had almost reached an optimum level.
The lack of strength in the services sector was responsible for the widening account deficit in most ASEAN economies, he said.
ASEAN member countries also needed to cooperate in macroeconomic policy formulation to ensure a stable, sustainable economic growth for the region.
Nevertheless, Mahathir said, ASEAN economies should pursue all those economic integration processes in a sustainable, clean and environmental-friendly way to avoid costs associated with environmental degradation.
These economic integration initiatives would in turn make ASEAN an attractive area for long-term, "nonspeculative" foreign investment and attract more world-class producers.
"We must continue to welcome real long-term investment, but must be wary of operations which do not create any real wealth for us," Mahathir said.