ASEAN plugs on with regional investment

ASEAN plugs on with regional investment

SINGAPORE (AFP): Southeast Asian nations agreed here Wednesday to expand the scope of a scheme to open up their industries to regional investors by covering related services as well.

Under an agreement which came into force in June, ASEAN member-states committed themselves to opening up most of their industries and granting national treatment to all investors within the region beginning 2003.

The industries cover the manufacturing, agriculture, forestry, fishery and mining sectors, with manufacturing to be fully opened up by 2003.

Trade ministers of the 10 member states of the Association of Southeast Asian Nations (ASEAN) decided Wednesday to extend the scope of the pact to cover services "incidental" to the five sectors.

"This is necessary because some of the services are inextricably linked to the sectors themselves," Singapore's Trade and Industry Minister George Yeo told a news conference after chairing the ASEAN Investment Area Council.

The council is the policy-making body spearheading ASEAN's effort to free up investments in the region.

The ASEAN ministers also agreed to set up a working group to monitor the flow of foreign direct investments into the region.

Apart from investments, the ASEAN states are engaged in efforts to open up trade within the region.

The ASEAN Free Trade Area or AFTA will begin taking shape in 2002 among the earlier members of the grouping, Brunei, Indonesia, Malaysia, the Philippines, Singapore and Thailand.

Newer members Cambodia, Laos, Myanmar and Vietnam have more flexible deadlines in their effort to remove tariffs.

An ASEAN joint statement issued after the investment talks said that member countries were targeting finalizing the negotiations to open up services linked to the five sectors by March 31, 2000.

Yeo said despite the financial crisis, which erupted in mid- 1997 and plunged the region into recession, "the will to push on with the opening up of the ASEAN Investment Area remains very strong.

A framework agreement on the ASEAN Investment Area signed on October 7, 1998 requires member states to implement coordinated investment programs and grant immediately national treatment to ASEAN investors, with exceptions specified in a so-called temporary exclusion list and sensitive list.

Kadin

Meanwhile in Jakarta, the Indonesian Chamber of Commerce and Industry (KADIN) called on the government to review its plan to join the ASEAN Free Trade Area (AFTA) in 2002.

"Indonesia needs to pull back from AFTA because the current domestic economic situation has yet to be conducive for such a move," KADIN chairman Aburizal Bakrie was quoted by Antara news agency as saying.

Speaking at a function marking KADIN's 31st anniversary late Tuesday, Bakrie said that Indonesia needed more time to restore its damaged economy before joining the AFTA scheme.

"We have to admit that impact of the current economic crisis suffered by Indonesia is the worst among other ASEAN countries," Bakrie said.

He said that the government should review the plan to join the free trade scheme of the Association of Southeast Asian Nations (ASEAN) because such an early participation would be detrimental to the nation.

He said Indonesia's weak economic position would not allow the country to benefit much from the free trade zone.

"The government needs to renegotiate the plan (of entry into AFTA)," said Bakrie.