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.