Growth triangle project expected to fortify ASEAN

Growth triangle project expected to fortify ASEAN

KUALA LUMPUR (AFP): The development of an area of economic
cooperation between Indonesia, Malaysia and Singapore is expected
to strengthen links within Southeast Asia, officials said
yesterday.

The Indonesia-Malaysia-Singapore growth triangle (IMS-GT) will
act as a conduit to bolster economic ties in the Association of
Southeast Asian Nation (ASEAN), they said.

Singapore Trade and Industry Minister Lee Yock Suan said the
IMS-GT hub had strong potential to attract foreign investment but
needed to sharpen its competitiveness to ward off challenges from
emerging economies such as China.

"As the IMS-GT develops, we must bear in mind that it is not
an exclusive and stand-alone entity. It is part of the broader
framework of ASEAN cooperation," Lee was reported saying by
Bernama news agency.

"Being three close neighbors within ASEAN, we can set the pace
for forging economic links within ASEAN," he said in his address
at the second IMS-GT ministerial meeting in southern Johore
state.

The IMS-GT, which groups four states in Malaysia, Riau and
West Sumatera in Indonesia and Singapore, received more than US$8
billion in foreign direct investment last year.

Indonesia has proposed including five new provinces in the
triangle, which will double the market size to 34 million people.

Lee said the growth triangle would benefit from the formation
of the ASEAN Free Trade Area (AFTA), and would in turn contribute
towards enhancing ASEAN integration.

The Association of Southeast Asian Nations (ASEAN) groups
Brunei, Indonesia, Malaysia, Philippines, Singapore, Thailand and
Vietnam. Burma, Cambodia and Laos are to join the grouping in
July.

Current members have set a deadline of 2003 to create a free
trade area which will lower tariffs to a maximum five percent.
Vietnam has been given an extension to 2006 while the three
incoming members have up to 2008 to comply.

Earlier, Malaysia's International Trade and Industry Minister
Rafidah Aziz said rising investments from Indonesia and Singapore
had fortified the country's manufacturing base.

Between 1990-1996, more than 1,185 projects with investments
totaling 13 billion ringgit (US$5.2 billion) were approved from
the two countries, with the bulk coming from Singapore, Rafidah
said.

Of the total 6.6 billion ringgit Malaysian investments abroad,
400,000 ringgit had been invested in Indonesia and 1.7 billion
ringgit in Singapore, she added.