ASEAN integration through growth triangle

ASEAN integration through growth triangle

Romeo A. Reyes, Jakarta

Fidel V. Ramos is seen by many in his country and elsewhere as
the best President the Philippines has ever had. He is considered
as best performer not so much in comparison to the underwhelming
performance of his immediate predecessor and to the non-
performance of his immediate successor as in his own right.

Apart from nation building, Ramos took a shot at sub-regional
community building when he proposed expansion of cooperation
between the southern border areas of the Philippines and their
counterparts in Indonesia and Malaysia, along with Brunei
Darussalam. He saw closer cross-border cooperation as one of the
tools by which persistent secessionist sentiment in Muslim
populated border areas fueled by striking socio-economic
disparities could be overcome.

He probably drew inspiration from his diplomat father, Narciso
Ramos, who was one of the five signatories of the 1967 Bangkok
Declaration that established the Association of Southeast Asian
Nations (ASEAN). The three other ASEAN leaders positively
responded to Ramos' diplomatic initiative when the Brunei-
Indonesia-Malaysia-Philippines East ASEAN Growth Area (BIMP-EAGA)
was launched on March 24, 1994 in Davao City, Philippines.

The main objective of BIMP-EAGA was to stimulate and
accelerate economic growth and development of the provinces
comprising the growth area (Kalimantan, Maluku, Sulawesi and
Papua in Indonesia; Sabah, Sarawak and Labuan in Malaysia; and
Mindanao and Palawan in the Philippines) through sub-regional
cooperation among each other and with Brunei, one of the more
advanced ASEAN member countries (AMCs) but with a very limited
domestic market.

Essentially, the strategy was to exploit the area's natural
resource endowments, with due regard to environmental
sustainability, and to promote trade, investment and tourism,
using sub-regional cooperation as the principal tool.

Ten years after its launch, BIMP-EAGA has produced some
concrete results. New and direct air and sea links between major
urban centers have been opened thereby contributing to reduction
of physical barriers to cross-border movement of goods and
people.

In addition, uniform user fees have been adopted in selected
ports, travel and exit taxes have either been harmonized or
removed altogether for travel within EAGA, and long distance
calls within EAGA have been reduced by 20 percent, thereby
encouraging and facilitating business and personal transactions
within the sub-region.

Indeed, these measures may have contributed to the observed
increase in domestic and cross-border investments in hotel and
other tourism-related facilities in the area. But there is no
hard evidence yet to suggest that they have contributed to sub-
regional integration.

Interestingly, Ramos' initiative to establish BIMP-EAGA was
taken in 1992 when ASEAN economic ministers agreed on the Common
Effective Preferential Tariff (CEPT) Scheme for the ASEAN Free
Trade Area (AFTA). Ten years later, AFTA became a reality.

In October 2003, ASEAN Leaders decided to deepen and broaden
economic integration beyond AFTA when they declared the formation
of the ASEAN Economic Community (AEC). A year later in November
2004, they adopted an action program containing regional
cooperation measures to realize the AEC by 2020.

By 2010, ASEAN is envisioned to function as a single market
and production base in those sectors, including wood-based
products, agro-based products, fisheries, air travel, and
tourism, all of which are similarly targeted for priority
development in BIMP-EAGA.

As a sub-regional cooperation scheme, BIMP-EAGA can be viewed
as a sub-set of ASEAN. Consistent with that view, BIMP-EAGA
initiatives to deepen sub-regional economic integration could be
pursued within a broader ASEAN integration effort. Although the
former is narrower than the latter in terms of geographic
coverage and scope of cooperation, their long-term and
fundamental goal, strategic objectives and tools are essentially
the same.

Indeed, there is a strong case for closer cooperation between
the two inter-country initiatives to allow fast-tracking of ASEAN
economic integration in BIMP-EAGA. One measure that could be
fast-tracked in the four BIMP countries and show-cased for the
benefit of the rest of ASEAN is the removal of tariff on all
products in five priority sectors cited above. BIMP countries
could consider advancing the removal of tariff on cross-border
trade earlier than 2007.

Implementation of other ASEAN regional cooperation measures to
facilitate trade could also be accelerated in EAGA. These include
simplification and harmonization of documents, formalities,
procedures and practices related to customs clearance. For
example, a common customs form, which is basic in any economic
integration initiative, could be considered for immediate
adoption in EAGA cross-border trade.

In addition to customs, special attention could also be given
to immigration, quarantine and security with respect to cross-
border trade. In the area of immigration, streamlining of rules
and procedures in the issuance of working visa for BIMP nationals
and closer cooperation between immigration authorities in their
enforcement could be given special attention.

All of the above sub-regional cooperation measures could be
duly reflected in the roadmap currently being prepared by the
Facilitation Centre based in Kota Kinabalu, Malaysia "to chart
the way forward" towards realizing the objectives of BIMP-EAGA.

The tension with respect to relations with Indonesia escalated
recently because of territorial dispute over an island within
EAGA in connection with the award of an oil reserve exploitation
contract. These three BIMP countries cannot afford to let this
tension erupt into an open conflict if the gains from decades of
ASEAN cooperation are to be preserved.

Recent experience in handling the flow of migrant workers in
the sub-region dictates closer and more effective cooperation
between the originating and receiving country. Clearly, there is
a signal emerging from the sub-regional market that provides
incentives for workers (or alternatively jobs) to continue to
move across borders. They do so in response to that signal and in
line with the ASEAN vision of "one community, 10 nations". They,
just like their employers, are willing actors and beneficiaries
of BIMP-EAGA and ASEAN integration. They should therefore be seen
and treated as such and not as "illegal" victims.

The writer is Senior Adviser, ASEAN-UNDP Partnership Facility.
The views expressed herein are personal and do not necessarily
reflect those of ASEAN, UNDP, and their respective member
countries.