Support for subregional ties needed

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)