ASEAN seen facing lower growth

ASEAN seen facing lower growth

HONOLULU, Hawaii (AFP): Southeast Asian nations face the prospect of lower growth because of heightened competition for investment from China and India, a senior Indonesian official warned here Tuesday.

"China and India are presenting themselves as very serious competitors for ASEAN (the Association of Southeast Asian Nations)," Lakasmana Sukardi, Indonesian State minister of investment and state enterprises development, told a meeting of Pacific basin business executives.

"Both countries have huge and cheap labor pools and large potential markets. In short, the easy days for Southeast Asia are gone and won't be coming back soon."

As a result, he told members of the Pacific Basin Economic Council (PBEC), "we are going to have to adjust to slightly lower growth rates than those enjoyed in the last three decades."

"We have no choice but to get leaner and meaner than we were in the past. The pressure is greater than ever for us to create an excellent climate for investment, production and trade."

The minister said ASEAN nonetheless had time to establish the critical legal structures needed to lure foreign investors because of uncertainties clouding the future economic direction of China and India.

He said there were no assurances that China's transition to a market economy would go smoothly while in India there remained an underlying resistance to economic liberalization.

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