'ASEAN needs strong political will to lift economy'

'ASEAN needs strong political will to lift economy'

Agence France-Presse, Bandar Seri Begawan

The Association of Southeast Asian Nations (ASEAN) was told Monday it would need strong political will to regain its economic competitiveness and retain valuable investments.

Brunei Sultan Hassanal Bolkiah, in a blunt opening address at an ASEAN foreign ministers meeting here, said ASEAN must recover its shine as an investment haven for the benefit of the region's 500 million inhabitants.

"There are few who doubt our potential but there are many who doubt our ability to transform it into reality," he told delegates to the conference where lifting the regional economy is a key focus.

"For the hundreds of millions of people we represent, the most pressing item of business on our regional agenda is economic progress. It is the biggest challenge for our ministers," he said.

Southeast Asia once led world economic growth and was a magnet for foreign investment but lost its luster after a financial crisis swept through the region in 1997. The crisis also exposed a web of corruption, weak financial regulations and business practices not up to world standards.

With China's emergence as a regional economic power, ASEAN officials have voiced concerns the region could be crowded out in terms of trade and investments.

Economists estimate China currently gets around 50 percent of all foreign direct investments into East Asia, compared to 20 percent for ASEAN, reversing a trend in the early 1990s.

ASEAN's gross domestic product should grow an average 3.0 to 4.0 percent this year.

"There needs to be unity and solidarity for economic cooperation in ASEAN and the Sultan's speech provided the momentum for this, to look further into ASEAN's integration and economic progress," Malaysian Foreign minister Syed Hamid Albar said.

The Sultan said although the region was making real progress in recovering from the turmoil, "we still face enormous difficulties".

Citing U.S.-led stock market volatility this month and the sheer speed of changing global events, he said: "This is perhaps the most difficult aspect of government nowadays."

Sultan Hassanal, among the richest men in the world, said Southeast Asia "must win back the confidence and trust of investors."

He said although ASEAN was pursuing efforts to set up a free trade zone by 2020 covering all 10 countries in the region, it may not guarantee Southeast Asia would be able to cope with intense global competition.

The sultan noted ASEAN critics were saying that member states, rather than cooperating, were more likely to end up competing against each other and that the region was not in a position to establish itself as a base for doing business.

"Those voices should not be ignored," he said.

Sultan Hassanal said an ASEAN study to gauge its competitiveness would be ready next year and that the grouping was prepared to act on its recommendations.

"We are going to need strong political will, however. Nevertheless, I am sure that this will be given," he said.

A draft of the joint communique to be issued by the ministers at the end of their two-day meeting on Tuesday said "much needs to be done in ensuring sustainable economic recovery in the region."

The ministers are also expected to endorse for further study the feasibility of setting up an ASEAN credit facility to fund small business ventures by poor families as part of an effort to reduce poverty.

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