ASEAN firms must cooperate for free tarde
JAKARTA (JP): The private sectors of the Association of Southeast Asian Nations (ASEAN) should forge cooperation to benefit from the free trade in the region, an Indonesian executive has said.
Setyanto P. Santosa, secretary general of the ASEAN Chambers of Commerce and Industry (ASEAN-CCI) said yesterday the establishment of joint ventures would, for example, help the ASEAN private companies benefit from the ASEAN Free Trade Area (AFTA) due to be implemented in the year 2003.
The former president of the state-owned company Telkom was speaking to the press after addressing a seminar titled Enhancement of Trade and Investment Cooperation in Southeast Asia: Opportunities and Challenges towards ASEAN-10 and Beyond, organized by the ASEAN secretariat and the United Nations Economic Social Commission for Asia and the Pacific.
"When AFTA started, all companies were free to enter the ASEAN market. But I think ASEAN companies should mostly benefit from the free market. And one way to benefit is for them to set up joint ventures," he said.
ASEAN, with a total population of about 430 million, is the third largest market in Asia after China and India.
He underlined the importance of the private sector's role in improving ASEAN competitiveness and generating economic growth because the ASEAN governments would in turn only act as a facilitator.
He said in facilitating greater trade and investment inflows, the ASEAN-CCI should help strengthen the domestic private sector, act as a mechanism for a dialog with policy makers at domestic and regional levels, become the interface between foreign and local investors in the domestic economy and serve as the communication channel among the world's private sectors.
Investment
Toshikazu Hamada, an economist from Japan's Sophia University, said at the seminar that AFTA was formed for two reasons.
The first was to reveal the comparative advantages more clearly among member economies through a well-functioned price mechanism by the gradual border tax.
The second was that tariff reduction forced member economies to utilize wisely their factor endowments.
"ASEAN countries have to work together to utilize all the resources for economic development in building infrastructure, developing rural areas, increasing productivity, rationalizing institutions and modernizing agriculture," he said.
He also said harmonizing the legal and tax systems and administrative procedures to ASEAN standard would induce foreign direct investments into AFTA and surely opened new horizons of economic prosperity for the region.
"As long as ASEAN can maintain foreign investors' confidence on the regional growth with the combined efforts of improving productivity and fostering supporting industries, it can invite and channel more foreign direct investment inflows," he said. (bnt)