Singapore's Goh calls for ASEAN investment road show

Singapore's Goh calls for ASEAN investment road show

By Meidyatama Suryodiningrat

SINGAPORE (JP): Singapore Prime Minister Goh Chok Tong pushed
forward his idea for a Joint ASEAN Investment Roadshow on Friday
to help bolster economic recovery in the crisis-hit region.

Speaking before a gathering of foreign ministers of the
Association of Southeast Asian Nations (ASEAN), Goh said pooling
such an effort would make the region more attractive for
investment.

"My basic idea is for ASEAN to organize joint investment
promotion initiatives to market ourselves to the major economies
in North America, Europe and East Asia," he said while suggesting
each road show be led by an ASEAN economics minister.

Formed in 1967, ASEAN comprises Brunei, Cambodia, Indonesia,
Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and
Vietnam. The grouping has forged close economic cooperation,
inching its way toward a free trade area.

Goh pointed out that ASEAN's high reputation stemmed in a
large part to its economic success. And thus the financial
crisis-struck region would not regain its standing unless
members' economies fully recovered.

"We have begun the journey of recovery and we must seize the
initiative to market our countries collectively and actively," he
asserted.

Furthermore, it would be of great symbolic value against
criticism of waning solidarity. "Joint Investment Roadshows will
demonstrate our unity and common purpose," he remarked.

Singaporean officials fleshed out the concept of a joint
road show and Goh himself expressed hope the proposal could be
adopted in the ASEAN Economic Ministers meeting in September.

Debt

Turning to the crisis which first hit the region in mid-1997,
Goh cautiously proclaimed "the worst is over".

However, he warned against complacency amid the nascent
recovery.

Large corporate bad debt overhang has yet to be resolved,
while corporate reforms advance at a sluggish rate.

"Compared with financial reforms, restructuring the corporate
sector has proven much more difficult," Goh said.

Other looming impediments could emerge from an economic down
turn of countries like China, Japan and the United States.

Despite robust growth in the United States, many have
expressed concern over the exuberance of Wall Street.

"If it dissipates it could trigger a chain of negative wealth
effects on U.S. consumers. This could derail U.S. growth and have
tidal effects on Europe's and Asia's recovery," Goh argued.

Another concern is Japan's slow economic recovery.

"The Japanese government's fiscal stimulation and banking
reform are having an effect, but recovery will be slow. Japan has
to revamp its banking and corporate sector and this will take
time," the prime minister said.

Closer to home, the China factor will also come into play.
Beijing has been praised by analysts for not devaluing its
currency when Southeast Asian economies were in the darkest hours
of the crisis.

As the largest market in Asia, China will continue to have an
overt impact on the region.

Goh pointed out that China would likely face greater
deflationary pressures and slower growth this year.

No less threatening is the disillusionment of the free market
system as domestic economic hardship remains unabated. Dire
economic conditions could prompt closures of domestic markets.

"We may see many developing countries resorting to
protectionist measures to counter the unhappy effects of
globalization," Goh warned.

"Even some developed countries may become selectively
protectionist to stem the influx of more competitive products
from the developing world," he added.

Goh acknowledged that even ASEAN states are not immune to such
temptations.

"This is understandable because not all arguments for
protectionism are entirely illogical. But whatever the abstract
logic for or against ... the march towards greater economic
integration and interdependence is inexorable," he asserted.