Part 1 of 2: The future of ASEAN competitiveness
Part 1 of 2: The future of ASEAN competitiveness
Susilo Bambang Yudhoyono, Vientiane/Laos
It is a pleasure and honor for me to address all of you, the
leaders of business from ASEAN, at this very important ASEAN
Business and Investment Summit.
And in this spirit of togetherness, it is timely that we are
joined here today to think about the many ways and means of
enhancing our collective competitiveness.
Yet as many of you will agree, our critics have probably begun
snickering now. How can ASEAN accomplish this, they say, what
with increased global and regional competition? How can ASEAN
compete in this cut-throat environment?
Granted, the challenges are indeed great. But we can be as
determined as the critics and overcome their skepticism -- and
may I say, our own as well. How? Well, keeping our positive
attitude, for one, is a good start. And I have always believed
that a positive attitude can overcome challenges --or else I
would not be speaking here today as Indonesia's executive chief
--it wasn't easy getting here, trust me.
With this positive attitude, I confidently say that if we put
our heads together to think of collective solutions, then we will
be stronger, more dynamic, and better able to cope and overcome
these challenges.
Why? Because competition is a fact of life -- it is not going
away. I sympathize that for some countries, competition can be a
matter of life and death, because it determines job creation and
the people's welfare. We certainly have seen how this struggle
for greater competitiveness has created new economic regions.
We see this in countries where agglomeration of economic and
industrial activities often define a nation's competitiveness.
It is also happens within a wider region -- when neighboring
countries join forces to create an economic region that
strengthens not only the member countries, but the region as a
whole.
For ASEAN, competition is serious business. In fact, I dare
say that ASEAN will be increasingly defined by its economic
competitiveness -- it is through this distinction that we can
wield greater international diplomatic power. Indeed, we
articulated our determined approach towards competitiveness last
October, when we outlined our vision for an ASEAN Economic
Community (AEC) at the summit meeting in Bali.
As we all know, AEC is one of three pillars of the ASEAN
Community vision, defined at that summit as the Bali Concord II,
the other two pillars being the ASEAN Security Community and the
ASEAN Socio-Cultural Community. The AEC seeks to create (and I
quote) "a stable, prosperous, and highly competitive ASEAN
economic region in which there is a free flow of goods, services,
investment, and a free flow of capital, equitable economic
development and reduced poverty and socio-economic disparities in
the year 2020".
In order to achieve this vision, ASEAN needs to transform the
region into a single market and production base. Why a single
market? So that consumers in the region has freedom of selection,
to buy regional goods as if they were produced in their home
countries.
Our individual countries have large markets -- but as an
ASEAN single market, we have an enormous consumer market.This
larger "domestic" market will make the region's industries much
more competitive. Isn't it then just common sense to have this
free flow of goods and services, funds and people, and equally
important, a free flow of ideas?
Surely as leaders of business and captains of industry you
will agree with me that a healthy economy requires a secure and
efficient flow of all these things, within and across borders.
This is what the AEC aims to achieve.
Now, why a single production base? Well, it would make
linkages between far-flung production centers much easier. This
production base would also allow for a dynamic division of labor
between those centers, based on their individual comparative
advantages.
What we are aiming for is enhanced competitiveness, so that
firms operating in the region can withstand global competition.
The basic tenet is that increased specialization, efficient
resource allocation, and diffusion of knowledge through trade
will heighten ASEAN-wide competition, and hence the firms'
competitiveness.
Some of our critics may say, well, the differences between
these ASEAN countries are too great --how can they possibly
function as one entity? I don't agree with this thinking --but
then again, I am from Indonesia, where differences are
everywhere, an intrinsic part of our society.
Consider this: ASEAN members vary according to individual
natural resources, and levels of development. To those who say
that is a problem, I reply that is the basis for a dynamic
division of labor -- If we can ensure a smooth and efficient
exchange of inputs. That is why we must eliminate trade barriers
-- their presence merely hinders this exchange.
Now, a word about investment. This dynamic division of labor
that I am talking about depends on investment, including the
movement of industries from the more developed members to the
less developed ones.
It also depends on an ongoing expansion and upgrading of
regional production networks. As entrepreneurs will say, we must
throw money at something in order for it to return.
So we must invest more in these regional production
networks, so that they become stronger components of the global
supply chain. Here, foreign investment plays a critical role --
with their presence, we can create networks of large, medium, and
small domestic companies.
This single production base will mean that production
activities in each of the ASEAN members will become regionalized
and internationalized, so that less developed members of ASEAN
and their SMEs -- can benefit from regional production networks.
These so to say "smaller fish" can then "leapfrog" by
specializing and finding niches in this production network.
How can we accomplish this? As I've said before, with a lot
of positive attitude -- and this attitude is best exemplified by
free and open investment. If we allow for greater investment,
especially foreign direct investment, then we can maintain the
changes necessary for the networks' progress. Governments of
member nations must be active in opening up their investment
regimes and seeking these investors.
This is an abridged text of a keynote address given by
President Susilo Bambang Yudhoyono at the 2nd ASEAN Business and
Investment Summit in Vientiane, Laos, on Nov. 28 2004.
Susilo Bambang Yudhoyono, Vientiane/Laos
It is a pleasure and honor for me to address all of you, the
leaders of business from ASEAN, at this very important ASEAN
Business and Investment Summit.
And in this spirit of togetherness, it is timely that we are
joined here today to think about the many ways and means of
enhancing our collective competitiveness.
Yet as many of you will agree, our critics have probably begun
snickering now. How can ASEAN accomplish this, they say, what
with increased global and regional competition? How can ASEAN
compete in this cut-throat environment?
Granted, the challenges are indeed great. But we can be as
determined as the critics and overcome their skepticism -- and
may I say, our own as well. How? Well, keeping our positive
attitude, for one, is a good start. And I have always believed
that a positive attitude can overcome challenges --or else I
would not be speaking here today as Indonesia's executive chief
--it wasn't easy getting here, trust me.
With this positive attitude, I confidently say that if we put
our heads together to think of collective solutions, then we will
be stronger, more dynamic, and better able to cope and overcome
these challenges.
Why? Because competition is a fact of life -- it is not going
away. I sympathize that for some countries, competition can be a
matter of life and death, because it determines job creation and
the people's welfare. We certainly have seen how this struggle
for greater competitiveness has created new economic regions.
We see this in countries where agglomeration of economic and
industrial activities often define a nation's competitiveness.
It is also happens within a wider region -- when neighboring
countries join forces to create an economic region that
strengthens not only the member countries, but the region as a
whole.
For ASEAN, competition is serious business. In fact, I dare
say that ASEAN will be increasingly defined by its economic
competitiveness -- it is through this distinction that we can
wield greater international diplomatic power. Indeed, we
articulated our determined approach towards competitiveness last
October, when we outlined our vision for an ASEAN Economic
Community (AEC) at the summit meeting in Bali.
As we all know, AEC is one of three pillars of the ASEAN
Community vision, defined at that summit as the Bali Concord II,
the other two pillars being the ASEAN Security Community and the
ASEAN Socio-Cultural Community. The AEC seeks to create (and I
quote) "a stable, prosperous, and highly competitive ASEAN
economic region in which there is a free flow of goods, services,
investment, and a free flow of capital, equitable economic
development and reduced poverty and socio-economic disparities in
the year 2020".
In order to achieve this vision, ASEAN needs to transform the
region into a single market and production base. Why a single
market? So that consumers in the region has freedom of selection,
to buy regional goods as if they were produced in their home
countries.
Our individual countries have large markets -- but as an
ASEAN single market, we have an enormous consumer market.This
larger "domestic" market will make the region's industries much
more competitive. Isn't it then just common sense to have this
free flow of goods and services, funds and people, and equally
important, a free flow of ideas?
Surely as leaders of business and captains of industry you
will agree with me that a healthy economy requires a secure and
efficient flow of all these things, within and across borders.
This is what the AEC aims to achieve.
Now, why a single production base? Well, it would make
linkages between far-flung production centers much easier. This
production base would also allow for a dynamic division of labor
between those centers, based on their individual comparative
advantages.
What we are aiming for is enhanced competitiveness, so that
firms operating in the region can withstand global competition.
The basic tenet is that increased specialization, efficient
resource allocation, and diffusion of knowledge through trade
will heighten ASEAN-wide competition, and hence the firms'
competitiveness.
Some of our critics may say, well, the differences between
these ASEAN countries are too great --how can they possibly
function as one entity? I don't agree with this thinking --but
then again, I am from Indonesia, where differences are
everywhere, an intrinsic part of our society.
Consider this: ASEAN members vary according to individual
natural resources, and levels of development. To those who say
that is a problem, I reply that is the basis for a dynamic
division of labor -- If we can ensure a smooth and efficient
exchange of inputs. That is why we must eliminate trade barriers
-- their presence merely hinders this exchange.
Now, a word about investment. This dynamic division of labor
that I am talking about depends on investment, including the
movement of industries from the more developed members to the
less developed ones.
It also depends on an ongoing expansion and upgrading of
regional production networks. As entrepreneurs will say, we must
throw money at something in order for it to return.
So we must invest more in these regional production
networks, so that they become stronger components of the global
supply chain. Here, foreign investment plays a critical role --
with their presence, we can create networks of large, medium, and
small domestic companies.
This single production base will mean that production
activities in each of the ASEAN members will become regionalized
and internationalized, so that less developed members of ASEAN
and their SMEs -- can benefit from regional production networks.
These so to say "smaller fish" can then "leapfrog" by
specializing and finding niches in this production network.
How can we accomplish this? As I've said before, with a lot
of positive attitude -- and this attitude is best exemplified by
free and open investment. If we allow for greater investment,
especially foreign direct investment, then we can maintain the
changes necessary for the networks' progress. Governments of
member nations must be active in opening up their investment
regimes and seeking these investors.
This is an abridged text of a keynote address given by
President Susilo Bambang Yudhoyono at the 2nd ASEAN Business and
Investment Summit in Vientiane, Laos, on Nov. 28 2004.