Support for subregional ties needed

JAKARTA (JP): President Soeharto said yesterday that Indonesia and the other countries of the Association of Southeast Asian Nations (ASEAN) will see large amounts of new investment coming into the region when the group's trade liberalization goes into effect by 2003.

Indonesia, as a part of the region, should anticipate the investment inflows by strengthening its cooperation with the other ASEAN members through the existing subregional economic cooperation schemes, he said.

ASEAN, under its ASEAN Free Trade Area (AFTA) agreement, will liberalize trade among its members by lowering import tariffs to a maximum of five percent.

"As a free-trade area, ASEAN will become a new economic giant. Therefore, we hope that ASEAN members will become more attractive for new investment," Soeharto stated in his keynote address at the opening of a coordination meeting on subregional growth areas here yesterday.

"In addition to the commitment on trade liberalization, the member countries will strengthen cooperation with each other and with countries from outside the region," he added.

He particularly noted that, in line with the commitment for economic cooperation, ASEAN also expected to encourage other countries in the region, including Laos, Cambodia and Myanmar, to join the association soon.

ASEAN currently groups Brunei, Indonesia, Malaysia, the Philippines, Singapore, Thailand and Vietnam.

Soeharto acknowledged that to create a strong economic region, ASEAN should focus on developing an open economic system. However, he acknowledged ASEAN countries still have to deal with a lot of problems before entering the liberalization era.

Support

Soeharto also urged all ministries to support economic development in ASEAN's three subregional growth areas.

If necessary, each ministry can revise its sectoral development plans or projects to make them conform to the objectives of sub-regional cooperation, he said.

"In the initial stages of sub-regional economic cooperation, we need each ministry to be willing to revise its projects and to adjust them as new opportunities arise," Soeharto said.

Coordinating Minister for Production and Distribution Hartarto said that Indonesia would focus on certain sectors, including agriculture, tourism, forestry, fishery, mining and energy, in the subregional cooperation.

Meanwhile, a deputy chairman of the Indonesian Chamber of Commerce and Industry, Iman Taufik, said that cooperation between local investors and Jakarta-based companies will be important to support the development of businesses in the subregional growth areas.

He noted that local investors should also be prepared to secure strategic assets which could be acquired by foreign investors.

He said that opportunities are now available to establish business cooperation and to boost trade relations among the countries involved.

"This cooperation will boost ASEAN's trade volume which currently accounts for 25 percent of the global volume," he said.

ASEAN's international trade reached US$700 billion last year, the fourth largest after the United States, Japan and the European Union.

Indonesia is now part of ASEAN's three subregional economic cooperation areas with the other association members except Vietnam. The cooperation areas are the Indonesia-Malaysia- Thailand Growth Triangle, the Indonesia-Malaysia-Singapore Growth Triangle and the Brunei-Indonesia-Malaysia-Philippine East ASEAN Growth Area. (alo)