ASEAN investment chiefs vow to tear down barriers

ASEAN investment chiefs vow to tear down barriers

PHUKET, Thailand (AFP): Southeast Asian countries agreed in
principle Friday to ditch a 2020 deadline for complete
liberalization of foreign investment and decided to move quicker,
officials said here.

Ministers and senior officials of the ASEAN Investment Area
(AIA) Council said they would bring the deadline for 100-percent
non-ASEAN ownership forward to send a clear message to the world
that regional economies were ready for business and welcomed
investment from all sources.

The Association of Southeast Asian Nations (ASEAN) had
previously said it would allow 100 percent ownership of projects
for most ASEAN members by 2003, with non-ASEAN investors to be
given full access by 2020.

"In principle we have agreed to bring the date forward,"
Abhisit Vejjajiva, minister attached to the Thai prime minister's
office, told reporters.

Delegates at the first ever formal AIA Council meeting said
the distinction between ASEAN and non-ASEAN investment was being
"blurred" and they did not want to seem like they were holding
back investment from any quarter.

"We are moving toward blurring the distinction between ASEAN
and non-ASEAN investors," ASEAN secretary general Rodolfo
Severino told AFP.

"When we start dismantling limits on investment most countries
agree it is just not practical to distinguish between ASEAN and
non-ASEAN members."

No date was set for the liberalization of non-ASEAN
investment. Delegates said the AIA Council agreed that non-exempt
industries should be opened to intra-ASEAN investors as soon as
possible ahead of 2003.

Lists of exempt industries -- those protected for reasons such
as cultural sensitivity or security -- would be finished by April
7 and reviewed ahead of the next AIA meeting in September.

Severino said on the sidelines of the meeting that the quicker
reduction of barriers to non-ASEAN investment should appease
countries such as the United States which had lobbied for
"national treatment" for its investors in Asia.

Delegates were told the "world is watching" the progress of
their plans to overcome the regional economic crisis and were
urged to show ASEAN was ready to get investment flows going
again.

"The world is now watching us closely," Abhisit said in his
opening speech.

"Amidst the potential uncertainty and chaos, ASEAN must
accelerate the process of regional cooperation to strengthen the
economic structure in both the short and long term."

"Let us push forward the wheel of ASEAN investment cooperation
and at the same time consistently keep its positive momentum for
the shared prosperity and benefit of ASEAN."

Earlier investment liberalization targets have been
overshadowed by the Asian economic crash which sent major ASEAN
corporations scrambling to cut costs and cover their debts,
officials said.

"There aren't many ASEAN investors at the moment so we may
have to talk more about the non-ASEAN countries," one Thai
official said before the meeting.

Abhisit said governments had to work harder to rebuild
investor confidence through a range of initiatives including the
AIA and the ASEAN Free Trade Area (AFTA) plan and by offering
"appropriate incentives" to business.

"During the good times, attracting foreign direct investment
to ASEAN was a relatively simple process. In many ways during
those times ASEAN was an investment promoter's dream," he said.

"Now with the crisis, investors are facing uncertainties they
have not faced before."

A Lao official said his country was ready to talk about 100
percent foreign ownership by the year 2008 instead of 2010 as
previously agreed. Laos and Vietnam have asked for more time to
dismantle investment barriers.

ASEAN groups Brunei, Indonesia, Laos, Malaysia, Myanmar, the
Philippines, Singapore, Thailand and Vietnam.

The ASEAN summit in Hanoi last December approved a raft of
measures to speed up trade liberalization and free up investment
to counter fears the region was becoming an economic backwater
following the 1997 crash.

Friday's AIA council meeting will be followed by an ASEAN
economic ministers' retreat here Saturday, which is expected to
mull ways to quicken trade liberalization.