ASEAN firms must cooperate for free tarde

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)