New leaders to boost investments in ASEAN

New leaders to boost investments in ASEAN

SINGAPORE (AFP): The emergence of new and younger leaders in
the Association of Southeast Asian Nations (ASEAN) has laid the
foundation for a return of investor confidence, but policy
reforms remain the key, ASEAN chief Rodolfo Severino said on
Wednesday.

"It requires more than young leaders to convince investors.
What matters is policy," Severino said in an interview with AFP.

He said the rise to power of Megawati Soekarnoputri in
Indonesia, Gloria Arroyo in the Philippines and Thaksin
Shinawatra in Thailand should stabilize the region and help put
it back on the radar screens of investors.

With these new leaders in place, "we see the beginnings of
coherent policies in some of the major economies of ASEAN," he
said.

He described the flurry of diplomacy that saw Megawati tour
all 10 ASEAN members and Arroyo and Thaksin visiting Singapore
last week as a "good coincidence".

These visits "brought attention to ASEAN and it focused the
minds of these leaders on ASEAN at the same time" ahead of a
summit of Southeast Asian leaders in Brunei in November, he said.

Megawati's choice of cabinet officials, which has won praise
and led to the signing of a letter of intent with the
International Monetary Fund (IMF), would be helpful for
investments into ASEAN's biggest country, said Severino, who was
in Singapore to speak at a university symposium.

The agreement with the IMF, which would allow the resumption
of loans of up to US$5 billion, "should bolster investor
confidence and subject Indonesia to certain standards that they
have to abide by," he said.

But he said Indonesia was not yet over the hump, as it faced
challenges to restore the rule of law, deal with separatist
threats as well as human resource development and integrating
with the rest of the region.

"You can't resolve these overnight. The important thing is to
make clear the basis for growth... is laid so that investments
will come in anticipation of the growth," he said.

"Until we see a self-sustaining inflow of investments, then we
cannot say that Indonesia is over the hump. It takes more than a
change of president," he added.

Speaking to students at the National University of Singapore
earlier Wednesday, Severino said ASEAN must integrate its
economies faster and find new niches if it wants to compete with
giant neighbor China.

"ASEAN countries recognize that they must integrate their
economies faster because investors are looking for large,
integrated markets rather than small, fragmented ones," he said.