Malaysian minister urges ASEAN to form consortia

JAKARTA (JP): Malaysia's Minister of International Trade and Industry, Rafidah Aziz, has called on ASEAN's business communities to form ASEAN consortia to enter developed markets and attract large international players as partners.

Speaking at the first ASEAN Business Summit yesterday, Rafidah said that after the ASEAN Free Trade Area (AFTA) came into effect in 2003, businesses should develop new ASEAN schemes to boost and complement AFTA.

"The business community in ASEAN should start thinking of forming ASEAN conglomerates and consortia to meet ASEAN services and to make in-roads into Europe, Japan and the United States," she said.

Rafidah said ASEAN consortia could be given designated projects with special flexibilities.

These activities could extend to the services sector to allow ASEAN service-providers to pool resources and experience to undertake big projects that foreign interests usually monopolized.

"The benefit is that ... if there are certain things that can only be done on a big scale, those companies that form a consortium can undertake those projects," she said.

Rafidah said to reach these goals several issues should be resolved so all ASEAN countries benefited.

These included the question of common investment principles, national or preferential treatment for ASEAN investors, industrial sectors to be opened to ASEAN investors and the free- flow of capital, skilled staff and technology.

But she said in the long run the realization of these goals depended on how ASEAN's business communities "think and act ASEAN", how they subscribed to market liberalization or whether they were not prepared to make short term sacrifices for long- term gains, and how strong domestic monopolies lobbied to postpone market liberalization or even to withhold it.

"We don't want strong companies in any ASEAN country to lobby governments so that, at the end of the day, products that can have tariff cuts don't get tariff cuts," she said.

The Chairman of the ASEAN Chambers of Commerce and Industry, Aburizal Bakrie, said ASEAN still needed to concentrate on developing human resources, capital and technology.

He said he was confident ASEAN would continue to offer many business opportunities.

"Many people are afraid that China will overshadow ASEAN. I don't think we should worry about this, although I must admit we must keep this in mind. ASEAN's fundamentals and stability is much better," he said.

Aburizal said the 700 people attending the summit showed enthusiasm was high among ASEAN businesses.

"This enthusiasm must be maintained and should not be dampened by bureaucratic procedures, which will only drive away prospective investors from within and outside ASEAN," he said.

Enthusiasm

The Coordinating Minister for Production and Distribution, Hartarto, said despite the business community's enthusiasm, each ASEAN country still faced challenges.

"There are many challenges, but I am sure we can handle them with the help of the private sector," said Hartarto, who is also the chairman of ASEAN economic ministers.

He said that while there was no economic development model applicable for all ASEAN nations, they had many common features like the application of prudent macroeconomic management, deregulatory measures and privatization drives.

He said the participation of more than 100 U.S. and European businesspeople built ASEAN's confidence as an attractive investment destination.

"It also reflects the capability of ASEAN businesspeople to develop synergy with non-ASEAN business people," he said.

Hartarto said he expected business opportunities in ASEAN to increase once Cambodia, Laos and Myanmar became members, probably this year.

ASEAN groups Brunei, Indonesia, Malaysia, the Philippines, Singapore, Thailand and Vietnam. (rid/pwn/09)