Subregional ties help boost ASEAN economy: Hartarto

JAKARTA (JP): The development of subregional growth centers among members of the Association of Southeast Asian Nations (ASEAN) help boost the region's economic growth, a senior minister said.

Coordinating Minister for Production and Distribution Hartarto said yesterday that the establishment of subregional growth centers among ASEAN countries has led to the promotion of greater economic activity in the respective subregions.

"The ASEAN governments are, therefore, determined to continue cooperating in the development of more subregional growth centers in the future," he told members of the Mercantile Club during a business luncheon.

ASEAN members have developed three subregional growth centers in the last five years to facilitate business activities in their neighboring areas.

The first is called the Indonesia-Malaysia-Singapore Growth Triangle, linking Riau province -- including Batam, Singapore and Johor state in Malaysia -- into an integrated economic center. The second is the Indonesia-Malaysia-Thailand Growth Triangle connecting North and West Sumatra in Indonesia, southern provinces in Thailand and western states in Malaysia.

The Brunei Darussalam-Indonesia-Malaysia-Philippines East ASEAN Growth Area, the latest subregional cooperation developed by ASEAN members, encircles provinces of Central and South Kalimantan; Central, South and Southeast Sulawesi; Sarawak of Malaysia; and the southern provinces of the Philippines and Brunei.

Hartarto said that the development of other subregional growth centers is now under preparation. As a result, more nearby areas in ASEAN could benefit from the advantages of other members, either in the form of capital, land or labor.

He said that under such subregional cooperation, Malaysia, for example, could benefit from the availability of agricultural lands in North and West Sumatra to develop plantations. Singapore would take advantage of Riau's lands for its tourism companies. Indonesia, on the other side, could benefit from Singapore's financial strength and know-how.

Largest market

Hartarto said that ASEAN -- which at present groups Brunei, Indonesia, Malaysia, the Philippines, Singapore, Thailand and new member Vietnam -- is one of the regions experiencing rapid economic development.

The planned entry of Cambodia, Laos and Myanmar into the association over the next few years will turn the region into one of the largest markets in the world.

"The region, with a population around 500 million, will become a promising market not only for ASEAN-based products, but also those from other countries," he said.

He said that at the fifth ASEAN Summit in Bangkok last year, the association's member countries agreed to accelerate the schedules of trade liberalization in the region, from 15 years to 10 years.

"With this new schedule, the ASEAN Free Trade Area (AFTA) will be achieved by the year 2003, instead of 2008," he said. "In addition, the ASEAN leaders also agreed to broaden the coverage of the AFTA products."

Hartarto said that the Indonesian government is committed to further improving economic efficiency in the country to improve the competitiveness of domestic products.

"The Indonesian government is opening up to reforms and corrections because in reality, a strong nation is one willing to constantly reform itself," he said.

Hartarto noted that a series of deregulatory packages, including those on the lowering of tax rates, reduction of tariffs and non-tariff barriers and investment liberalization had been introduced to improve efficiency in the country's business activities.

With such efforts, Indonesia is confident that it will be able to compete with other countries during the era of trade liberalization in the next five years. At the same time, it will also be able to sustain its rapid economic growth. (hen)