ASEAN makes progress to integrate economy
The Jakarta Post, Nusa Dua, Bali
The Association of the Southeast Asian Nations (ASEAN) is making significant progress in laying the groundwork to liberalize and integrate their economies, director general of Asia Pacific and Africa, at the Ministry of Foreign Affairs Makarim Wibisono said.
"We've made very substantive progress," he told reporters on Friday at the close of a two-day Senior Officials Meeting of ASEAN, held ahead of the grouping's leaders summit starting next week.
He explained that the 10 members of the grouping, for instance, had agreed to select 11 key industries as "fast track sectors" to accelerate the liberalization and economic integration drive.
He did not name the specific sectors, but he said the Indonesian government had been mandated as a coordinator to cooperate with the private sector in an effort to boost competitiveness of the wood-based and automotive sectors. The Philippines is in charge of the electronics industry.
ASEAN aims to create a single market -- dubbed the ASEAN Economic Community" -- of over 500 million people. The results of meeting among the ASEAN leaders will result in the Bali Concord II, which includes a commitment toward economic integration.
Makarim said that the vision of ASEAN economic integration was a prosperous and highly competitive region in which there was a free flow of goods, services and investment.
Experts have said that improving the region's global competitiveness through a liberalization drive is crucial particularly to compete with China in luring foreign investment.
"The deepening and acceleration of regional economic integration, through the ASEAN Economic Community project, will significantly elevate ASEAN's attractiveness as a global production base, drawing quality investment into the region and thus, will help sharpen the region's competitive edge," experts stated in a document.
Although the founding nations of ASEAN have already cut tariffs on most manufacturing products to between zero and five percent since the beginning of this year under the ASEAN Free Trade Area (AFTA) program, analysts have said that this has yet to be fully implemented and that the region must still find ways to seriously eliminate non-tariff trade barriers as well as improve the investment environment.
Harmonization of external tariffs must also be immediately introduced into the ASEAN agenda, especially among members with higher tariffs.