Jun 1, 2012

Thailand - Common supply links 'vital to Asean trade'

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Asean countries should work towards standardising supply chains to help boost trade flow, speakers at the World Economic Forum on East Asia said yesterday.

Lars Amstrup, president of Chep Asia, said supply-chain costs in the Asean region are higher than in the developed world.

The European Union's harmonised rules mean that packaging materials, for instance, are standardised for the entire bloc.

"When you have an inefficient supply chain, you get products that are constantly shifted and you have a lot of manual handling, waste and damage. For instance, crops can sit for three days waiting for transfer during Chinese New Year," Mr Amstrup said.

Peter Ter Kulve, an executive vice-president of Unilever overseeing Southeast Asia and Australasia, said there have been no resources put behind standardisation. In Europe, 500 people work on this, compared with just one in Singapore, he said.

"Ports in Asean are hopeless, especially in Indonesia where it could take three to four weeks to get containers," Mr Kulve said.

Thierry Geiger, associate director of the WEF's Centre for Global Competitiveness and Performance, said infrastructure, graft and red tape are the main obstacles to trade growth in Asean.

"The most problematic matters for doing business are political stability and corruption, and in some areas, bureaucracy," he said.

In Thailand it takes 32 days to start a business, putting the country 103rd out of a league of 142 countries.

"Tackling corruption could be done by simplifying procedures, so that there is less room for corruption. Everything should be one-stop for things such as certification and import services," Mr Geiger said.

Vijay Poonoosamy, a vice-president for Ethihad Airways, said aviation is a key catalyst to economic growth and a "strategic enabler" for trade.

A region's competitiveness is linked to connectivity, and airlines provides the easiest link between countries.

"The key challenge today is for the government to do what it takes to enhance competitiveness by facilitating travel and tourism, which includes promoting cost-effective infrastructure on both the ground and in the air," Mr Poonoosamy said, adding that each cargo shipment today involves some 30 documents to complete.



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