ASEAN to accelerate economic integration
ASEAN to accelerate economic integration
The Jakarta Post, Nusa Dua, Bali
ASEAN economic ministers agreed on Monday to accelerate the
process of integrating the region's economies in a bid to lure
new investments, Indonesia's Minister of Industry and Trade Rini
Soewandi said.
She said that trade and investment activities in 11 leading
industries will be fully liberalized by 2010, quicker than
initially planned.
The agreement was reached at the ASEAN economic ministers
meeting here. Rini said it would be recommended to the 10 ASEAN
leaders during their annual summit on Tuesday in the popular
resort island of Bali.
The Association of South East Asian Nations (ASEAN) has
planned to create a single market by 2020 by gradually
implementing various economic liberalization measures.
This plan is aimed at boosting trade activities in the region
and increase the region's attractiveness as investment
destination.
Rini, however, said that the economic ministers decided to
accelerate this process on the key industries so that trade and
investment activities in the region could be quickly increased.
The 11 industries are the automotive industry, electronics,
wood-based, textile, rubber, airlines, tourism, health,
agribusiness, e-business and fisheries.
Rini said the move should attract investors into the region as
they could gain from economies of scale. Among the measures to
be implemented is streamlining local customs procedures.
The above decision should send a positive signal to the
investment community as it would be perceived by investors that
ASEAN is strongly committed toward creating a single market.
Since the late 1990s economic crisis, the region has been
losing out against China in terms of investment attractiveness as
the latter had received the bulk of foreign direct investment
into Asia during the past couple of years.
Government officials have also said that although the ASEAN
Free Trade Area (AFTA) has been implemented since the beginning
of this year as import tariffs on most products would be slashed
to between zero percent and five percent, intra-ASEAN trade
activities remained relatively small at about 21 percent of the
region's total trade value each year.
This is partly because of lingering non-tariff trade barriers.
The intra-regional trade value could potentially increase to 40
percent.
In comparison, intra-regional trade in the European Union
trade block reached 70 percent.
Despite the benefits, however, some businessmen warned that
inefficient industries could find difficulties in competing with
their regional peers. They said that the government must work
hard to help improve the domestic business climate by curbing
corruption, illegal fees, resolving labor conflict and
eliminating unfriendly regulations so that businesses can operate
efficiently.
Rini said that Indonesia was ready to deal with the rising
competition.