U.S. slowdown highlights case for SE Asian reform

U.S. slowdown highlights case for SE Asian reform

HANOI (AFP): Southeast Asia must push ahead with efforts to integrate its poorer members, implement reforms and tear down tariff barriers to better deal with the U.S.-led global economic slowdown, a top ASEAN official said on Friday.

Rodolfo Severino, secretary general of the Association of Southeast Asian Nations (ASEAN), said this was not the time to slacken efforts to help ASEAN's less developed members catch up with their richer neighbors.

Asked if the global slowdown would set back ASEAN's efforts, Severino told reporters: "No. In fact that is a spur to further integration because you can't deal with a lot of these problems individually any more."

ASEAN has to "push regional integration in order to become more attractive to investments", otherwise the region will lose out to China, India, Latin America and even Eastern Europe, he said on the sidelines of annual ASEAN talks in Vietnam.

Senior ASEAN officials are preparing for a meeting here next week of their foreign ministers, who will also get together with their top trading and security partners such as the United States, China, Japan and Russia.

Discussions on Friday dealt with ways to hasten the integration of newer ASEAN members Cambodia, Laos, Myanmar and Vietnam with the group's founders Brunei, Indonesia, Malaysia, the Philippines, Singapore and Thailand.

ASEAN represents a market of 500 million people but encompasses some of the world's poorest countries with one of the richest, Singapore.

"We are focussing on the integration of the newer members," Severino said, adding there were discussions on how to coordinate various programs to spur economic development in the Mekong River countries including Vietnam and Laos.

The ASEAN chief said integration would take time because the economic gap "is pretty wide". The focus was on developing human resources and building institutions that would strengthen the rule of law.

"If you are perceived to have a system of law in place, then you have a better chance of attracting investments," he said, adding that "worries about the political situation in some ASEAN countries" had deterred investors.

Although the annual foreign ministers' meeting is intended largely as a forum for security issues, with Indonesia's chronic instability likely to loom large, officials said there was no escaping the recent economic downturn.

"These are bad times and we're trying to deal with it by pushing economic integration and harnessing ICT (information and communications technology) and continuing with national and structural reforms," Severino said.

The ASEAN Free Trade Area, which aims to bring down tariffs to between zero and five percent by 2003 for ASEAN's more developed members, was on track, he added.

Singapore, ASEAN's strongest economy, has plunged into recession due to falling exports and weak industrial output, and other export-reliant ASEAN countries have slashed growth forecasts this year as well.

Severino said China would pose tougher competition for ASEAN nations after it becomes a member of the World Trade Organization, but there were also opportunities.

"This is not a zero-sum game," he said. "If the barriers are lowered for ASEAN exports to China then that's good for us."