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.