New ASEAN chief to focus on the region's economic growth

Berni K. Moestafa, The Jakarta Post, Jakarta

The new secretary-general of the Association of Southeast Asian Nations (ASEAN) Ong Keng Yong said his priority for the region was to boost its economic growth, calling it ASEAN's biggest challenge amid tighter competition for investments.

He said many of ASEAN's economies remained shaky following the 1997 financial crisis, terrorism posed new threats to investors and countries like China were outperforming ASEAN in attracting foreign investment.

"The most challenging issue is of course economic growth," Ong told reporters following his installation at the Jakarta-based ASEAN secretariat on Monday. He replaced Rodolfo C. Severino of the Philippines who had filled the post since January 1998.

Ong's appointment comes at a time when ASEAN faces a new set of problems. ASEAN's economies that were hit by the 1997 financial crisis have yet to fully recover, but terrorism is now putting a strain on efforts to lure investment back into the region.

According to Ong, economic growth in heavily populated ASEAN countries remains sluggish more than five years after the crisis.

"The question today is how much money can an ordinary man earn and how much money can he bring back to look after his family," said Ong.

Estimates from the ASEAN secretariat show the region's average economic growth last year ranged between 3.5 percent to 3.9 percent of gross domestic product (GDP), which measures the annual value of products and services produced in a country.

ASEAN countries have seen their share of investments sapped away by fast growing markets, in particular China.

It marks a decline from the early nineties when Southeast Asian countries attracted much of the global investment spending due to its cheap labor costs and fast growing markets.

Ong said the region had not entirely lost its appeal as potential for growth remained high. But he said "if we don't put ourselves on the radar scope of investors and businessmen, by default people will just go to northeast Asia and South Asia."

ASEAN countries he said must work harder to tap some of the global investment flows and do this better together.

And instead of competing head-on with China, Ong suggested the region turn itself into a manufacturing base for Chinese-made products.

He added he would try to get ASEAN countries to make more use of the inter-ASEAN investment program to reduce reliance on foreign investment.

Another of ASEAN's economic initiatives is its ASEAN Free Trade Agreement (AFTA), a free market pact that seeks to lower tariff rates among its members to between zero and 5 percent.

The agreement is expected to boost inter-ASEAN trade thereby contributing to the region's economic growth. But implementation has been slow with several members backtracking due to pressure at home.

Ong said, however, that having AFTA was already a big step. "So now what we're doing is meeting regularly to try to bring more understanding."

Over the past five years ASEAN managed to finalize the groundwork for economic integration, said the former ASEAN secretary-general, Severino. "Thus, the coming years ought to see ASEAN moving on to the stage of implementation," he said in his speech at the ceremony.