ASEAN investment area to be launched in 1998

ASEAN investment area to be launched in 1998

KUALA LUMPUR (AFP): The Association of Southeast Asian Nations
(ASEAN) aims to launch an open investment area by the end of next
year as part of the region's free trade plan, a Malaysian
official said yesterday.

International Trade and Industry deputy minister Kerk Choo
Ting said the ASEAN investment area (AIA) was aimed at enabling
the free flow of capital among its seven members while easing
access to technology and skilled labors.

"The AIA will cover aspects relating to investment promotion,
facilitation and liberalization," Kerk was quoted as saying by
Bernama news agency after opening a seminar on challenges in the
ASEAN Free Trade Area (AFTA).

ASEAN member countries Brunei, Indonesia, Malaysia,
Philippines, Singapore, Thailand and Vietnam, had agreed to
jointly promote the grouping as a regional investment location,
Kerk said.

They would also consider opening up all industries to
investors in the pursuit of a free and open investment regime, he
added.

Officials had said the creation of the AIA would strengthen
the economic base of ASEAN and turn it into a competitive region
with a more liberal and transparent environment to attract
greater investment inflows.

Foreign investment in ASEAN countries rose about 65 percent to
US$19.6 billion in 1995 from $11.9 billion in 1990, according top
official statistics.

Kerk said the grouping had created the ASEAN Industrial
Cooperation scheme last April to promote joint-manufacturing
activities between ASEAN-based companies.

The scheme, which came into effect in November, eliminates or
reduces intra-ASEAN tariffs to a maximum of five percent for
imports of approved products, he said.

Kerk said the scheme provided opportunities for local small
and medium-sized industries (SMI) to access the ASEAN market
while enabling them to enhance their production capacity from
economies of scale.

"The SMIs should capitalize on the support of multinationals
companies and their larger Malaysian partners to develop their
technology, product quality, skills and other capabilities in
preparation for AFTA," he added.

ASEAN expects to complete the implementation of its free trade
plan by 2000, three years ahead of schedule. The plan calls for
lowering tariffs on most goods traded within the region to a
maximum five percent by 2003.

Vietnam, which joined ASEAN in 1995, has been given until 2006
to match the tariff cuts of the more mature economies.