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.