ASEAN executives told to restructure businesses

ASEAN executives told to restructure businesses

JAKARTA (JP): Southeast Asian businesspeople must develop
strategies to restructure and rationalize their businesses with
regional trade barriers falling by 2003, the ASEAN Secretary-
General, Ajit Singh, said yesterday.

The Association of Southeast Asian Nations (ASEAN) is pursuing
many initiates to make businesses in the region more competitive,
he told a Mercantile Club luncheon.

"This is the inevitable reality that you will face in ASEAN by
the year 2003. You can no longer be satisfied with being merely
national players, you must go regional," Singh said.

He said that as barriers fell in the region, national markets
would no longer be segmented.

"You will no longer need to be located or physically present
in all markets but may choose just to produce in the lowest-cost
country and then export to other ASEAN markets."

According to Singh, businesspeople can also set up mergers or
joint ventures with other ASEAN firms, adopt better technology,
innovate product development and marketing and secure access to a
far greater pool of financing.

"You will have to think ASEAN if you want to take advantage of
the new climate of cooperation and confidence that will exist as
ASEAN enters the next century," he said.

ASEAN, grouping Brunei, Indonesia, Malaysia, the Philippines,
Singapore, Thailand and Vietnam, is set to implement the ASEAN
Free Trade Area by the year 2003 when trade in the region will be
liberalized with most tariffs being reduced to a maximum of 5
percent.

Singh said member countries had submitted 45,609 tariff lines,
about 94 percent of all total tariff lines in ASEAN, to the
Inclusion List of the Common Effective Preferential Tariffs
(CEPT) scheme.

He said ASEAN would comprise ten countries by the next
century, with Laos, Cambodia and Myanmar coming into the fold.

"It will be a region composed of more than half a billion
people with member countries that are some of the fastest growing
and most open in the world," he said.

ASEAN now represents 420 million people and regional Gross
Domestic Products (GDP) of about US$650 billion, he said.

At its present growth rate, this regional GDP will double
every eight years, creating huge opportunities for ASEAN
businesses and companies, he said.

"But these ASEAN companies will also have to contend with
foreign firms who will be attracted by the same opportunities and
who will have access to their own vast financial resources and
marketing and technical expertise."

He said it was likely that intra-ASEAN trade would grow
dramatically by 2003.

"Currently, the implementation of the CEPT scheme has
increased intra-ASEAN trade noticeably. For instance, intra-ASEAN
exports of all products grew by about 20 percent from $57.4
billion in 1994 to $68.8 billion in 1995."

Singh said measures would be taken to strengthen the position
of small and medium enterprises (SME) in the region by 2003.

"A policy study to look into ASEAN 'best practice' on SME
development based on manufacturing activities is being conducted.
The scope of the study covers, among others, SME financing,
technology sharing, human resource development, export marketing
and industrial linkages."

He said strong supporting industries would be stimulated by
encouraging greater foreign direct investment in SMEs and foreign
and ASEAN joint-venture SMEs by 2003. (icn)