ASEAN called on to promote collective efforts

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.