Asian growth spurred by regional cooperation

Asian growth spurred by regional cooperation

MANILA (AFP): Asia's powering growth will be spurred by the increasing number of geographical areas of economic cooperation, a conference was told here yesterday.

The Asian Institute of Management conference heard that the establishment of areas of cooperation demonstrated the region's economic interdependence rather than increasing competition.

Many countries had sought to duplicate the experience of the first of these growth areas -- the South China growth triangle linking southern China, Hong Kong and Taiwan, the conference heard.

Mitsuo Sato, president of the Asian Development Bank, said such growth areas were fostered by increasing Asian economic interdependence, direct investment flows within the region, greater economic liberalization and more outward-looking national economies.

But Sato added that "the benefits of cooperation may not be similar for all the participating economies. Considerable efforts must be made to design and implement cooperative arrangements in terms of cost-sharing and benefit distribution."

Ajit Singh, secretary-general of the Association of Southeast Asian Nations (ASEAN), said many growth areas benefited from successful cooperation within ASEAN, which groups Brunei, Indonesia, Malaysia, the Philippines, Singapore, Thailand and Vietnam.

"It would be wrong to assume the subregional growth areas are competing with one another," he said, adding that each area had its own unique strengths.

In many cases, one developed trading center within a growth area attracted investment and arranged for the building of infrastructure in less-developed areas that were richer in manpower or raw materials.

Among other growth areas is the Southern Growth Triangle, comprising Singapore, the Johor state of Malaysia and Riau province of Indonesia.

The Southern Growth Triangle had resulted in about US$10 billion worth of investment in Johor and Riau since 1989, Ajit Singh said.

In the Northern Growth Triangle -- comprising the North Sumatra and Aceh provinces of Indonesia, the northern states of Malaysia and the five southern provinces of Thailand -- about $3.25 billion in investment agreements had been signed since 1993, he added.

The East ASEAN Growth Area (EAGA), linking the southern Philippines with Brunei, West and East Kalimantan and North Sulawesi in Indonesia and Labuan, Sarawak and Sabah states in Malaysia, was still forging links between its business sectors following its creation in 1994.

Narongchai Akrasanee, head of the Thai investment firm General Finance and Securities Public Co. Ltd., said the development of another growth area -- the Greater Mekong Subregion, linking parts of Burma, Cambodia, Laos and Thailand -- was crucial to his country.

"Thailand definitely needs the help of these countries. We are desperate," he said noting that Thailand's demand for raw materials and energy could not be met internally.

However, he conceded it could be difficult doing business with other countries of Greater Mekong Subregion since many of them were newcomers to market economies and had bureaucracies that still did not trust capitalists.