ASEAN measures are not bold enough: Analysts

ASEAN measures are not bold enough: Analysts

HANOI (AP): Southeast Asian officials are finalizing a package of "bold measures" to restore confidence in the region's devastated economies. But analysts say they aren't bold enough to spark a turnaround of the 17-month-old financial crisis.

"This is very disappointing actually; these are not bold initiatives," said Maria Socorro Bautista, an economist at the University of the Philippines. "This is not new."

The measures, to be announced later this week at a summit of the Association of Southeast Asian Nations, include faster trade and investment liberalization and relaxed rules on foreign ownership of land.

ASEAN economic ministers consider the measures so important that they took the unusual step of throwing them back twice to their senior officials for strengthening -- once in October and again last Saturday.

They say they're pleased with the results.

"It's going to be significant," Indonesian Economic Minister Ginandjar Kartasasmita said. "It signals the seriousness of the countries in this region... these will not be easy measures."

The package must still be approved by the ASEAN leaders, who were arriving in Hanoi on Monday for their two-day summit.

A draft of the measures says the countries will eliminate tariffs on most products traded within the region by 2002, a year faster than previously envisaged. However, poorer members of the nine-member group will be given more time.

The group also will establish an ASEAN Investment Area in 2003, seven years ahead of schedule. That will open more industries to foreign investment and give businessmen from other ASEAN nations the same legal rights as local investors. It also will allow 100 percent foreign ownership of land and of more industries.

However, countries with constitutional restrictions on foreign ownership, such as the Philippines and Vietnam, will be allowed exemptions.

The current package also includes duty-free imports of capital equipment and says a new round of negotiations on trade in services will begin early in 1999 and end in 2001.

Some countries also offered individual concessions to start in 1999. Several, however, were already planned or have already begun.

The Philippines, for example, pledged to open retail trade and distribution businesses to foreign equity -- a step contained in a bill already submitted to its Congress.

Indonesia said it will allow 100 percent foreign equity in manufacturing and listed banks, which Ginandjar said it had already planned.

"We were going to do it anyway. But if we do it together, the impact will be much greater," he said.

Officials say they've realized that foreign investors tend to see Southeast Asia as a single region, and therefore it's important that the whole region send a message that it is coping with its economic difficulties.

"This is a collective move by the ASEAN members to show they're still committed to trade and liberalization," said Song Sen Wun, regional economist for G.K. Goh in Singapore.

"This may look bold, but these are just brave words at these trying times."

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