NAYPIDAW, Myanmar - Member states of the Association of Southeast Asian Nations (ASEAN) are
struggling to get ready for full economic integration by 2015, and most of
their 600 million people are unaware of the changes that will take place.
That was the conclusion by policy makers and business
people speaking at the Lippo-UPH Dialogue at the World Economic Forum in
Myanmar's capital Naypidaw.
But participants were also hopeful the issues would be
resolved, as the leaders did not renege on their commitments but recognised the
need for action.
Key areas still to be resolved include an 'open skies'
aviation agreement, elimination of subsidies for rice farmers, and the need to
develop the human capital needed to exploit the opportunities.
"In the last ASEAN meeting that we had we had
come to the recognition that we cannot be as idealistic as we were. I think
most of the boxes are going to be checked off by the end of 2015, but some
countries I think have come to the realisation that we are not going to be as ready
as we might have thought in 2003 by the end of 2015," said Gita Wirjawan,
Indonesia's Minister of Trade.
This delay was a worry for business people eager to
explore opportunities in other ASEAN markets previously closed to them.
"I would say that the business community is
somewhat disappointed and our clients within that, largely based on the
expectations. They were all expecting 2015 to be the date and somehow they
don't see enough traction. And I think the reason for that is really two or
three. I think given the crises we are going through there is a risk that the
national priorities will overtake the compulsion. There isn't really a
compulsion mechanism for ASEAN," said Jaspal Bindra, CEO of Asia and Group
Executive Director of Standard Chartered Bank PLC.
Differences between members states was another reason
for slow progress.
"One of the challenges with an integration like
this is about how you tie countries together economically but respect the
political and social differences that exist in a region that's as diverse as
the ASEAN region," said John Rice, Vice Chairman of General Electric (GE).
"I think it's a little bit of a 'thread the
needle' activity but very important and if you can get it right you can unlock
a tremendous amount of growth. I think this region with the population, with
the growth in the middle class and the interest that people have in improving
lends itself this kind of activity," Rice said.
But Minister Wirjawan said: "Now, by 2015,
December 31st, there's going to be a few boxes that Indonesia is likely not
going to be able to check off. But that's okay. Because by way of joining this
community we're only going to be encouraged and also forced to basically try to
check off those boxes as early as possible. That's only by way of competition
coming from our brothers and sisters in other ASEAN countries, but also from
the world over."
One example was fuel subsidies, which were being cut
despite the measure being unpopular.
Another panellist was also more sanguine about the
deadline.
"Please do not expect a big bang event in 2015
where everything is going to happen overnight when the ASEAN Economic Community
comes into being. We've made progress in some areas and unfortunately regressed
in some areas," said former Singapore Ambassador to the United Nations and
Dean of the Lee Kuan Yew School of Public Policy, Kishore Mahbubani.
"But over time and following the ASEAN pace,
gradually the ASEAN Economic Community will come to be and by the end of the
decade, whatever the vision was, if it's not done by 2015 it will be done by
2020," Mahbubani said.
He highlighted that politicians and bureaucrats from
the region met freely to cooperate on various matters, engaged major global
powers, and most importantly, have enjoyed peace for many years.
"The one region of the world that is the most
diverse region in the world, with 300 million Muslims, 80 million Christians,
150 million Buddhists and Taoists and Confuscianists and all that. Guess what.
This most diverse region in the world has achieved peace, so it brings
metaphysical significance to the world as a whole because ASEAN is teaching the
world that as you become a global village we can all live together and work
together. And that's why it's such a tragedy that this ASEAN story is not even
understood by the citizens of ASEAN," said Mahbubani.
Awareness among the 600 million people living in ASEAN
countries about the Economic Community and the changes it will bring is very
low.
"The reality is, ladies and gentlemen, if you
take a drive out of Jakarta for a mere 15 to 20 minutes you will meet up with
so many people who still don't have a clue as to what the ASEAN Economic
Community is, and what it means to Indonesia", said Trade Minister Gita
Wirjawan.
It was a view echoed by Serge Pun, Executive Chairman
of Singapore Exchange-listed Burmese conglomerate Yoma Strategic Holdings.
Serge Pun said businesses were not familiar with how
things will change when the ASEAN Economic Community takes effect on December
31, 2015.
"We talk about ASEAN integration and we actually
don't know what we are going to integrate. Or at least, the vast population
doesn't. The vast number of businesses doesn't. A few government officials may.
So there's a lot of concern about what is this zero tax, how does it really
affect us, does it benefit us or does it hurt us. There's no answer," he said.
Import duties for ASEAN products and services will be
cut to zero, and all economic sectors will be open for investment, with equal
treatment of ASEAN investors in all other ASEAN countries.
Some restrictions, such as visa requirements for some
member states, will remain, which was raised as a concern for some panellists
and members of the audience.
One of the biggest challenges for the region is to
train and educate its 600 million strong population to seize the opportunities
that lay ahead.
"It's an exciting time for business and the
entire region but I think one of the challenges that remain that will become a
hurdle for ASEAN to really realise its full potential is human capital. We need
to make sure that each country and each person has the adequate human capital
to be able to compete and also receive the benefits of this integration,"
said John Riady, Director of The Lippo Group and Dean of the Faculty of Law at
Universitas Pelita Harapan (UPH).
"So, in Indonesia we are making a contribution
through UPH, which is now one of the leading private universities in Indonesia.
It is our hope that every Indonesian receives that they need in order to be
competitive and to excel in this regional environment," Riady said.
GE's John Rice said skills were required at all
levels, from technicians to future business leaders.
Jaspal Bindra from Standard Chartered highlighted that
access to banking services was a critical enabler in economic development, that
brings more people into the middle class.
There are stark income disparities among member
states.
Singaporeans have an average per capita income of
US$49,754 a year, while Myanmar is at the bottom of the rankings with US$1,040.
Even within Indonesia there are vast disparities,
acknowledged by Trade Minister Wirjawan, between the main islands of Java and
Sumatra in the west, and poorer provinces in the east.
The so-called MP3EI Masterplan for Acceleration and
Expansion of Indonesia Economic Development aims to address this.
ASEAN was established on August 8, 1967 by Indonesia,
Malaysia, the Philippines, Singapore and Thailand. Brunei, Myanmar (then
Burma), Cambodia, Laos and Vietnam joined later, and Timor Leste and Papua New
Guinea are observers.
It covers a land area of 4.46 million square
kilometres, about half the land area of the United States.
Reuters
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