Asean must bridge income gap_expert

Today's Business News - Wednesday December 12, 2007

TRADE / REGIONAL ECONOMIC INTEGRATION

Asean must bridge income gap_expert

ACHARA ASHAYAGACHAT

Asean needs more flexibility in its traditional non-intervention policy if it wants to bridge the gaps in development among members to meet the dream of an Asean Economic Community by 2015, according to Dennis Hew, a senior fellow at the Institute of Southeast Asian Studies in Singapore. The 75-page Asean Economic Community (AEC) blueprint adopted by Asean leaders in Singapore last month has already identified many challenges in the years to come, he said.

But what really mattered was that member countries met targets and deadlines.

Mr Hew was in Bangkok yesterday to launch his book, titled Brick by Brick : The Building of an Asean Economic Community.

The greatest challenge for Asean, he said, was to narrow the development divide and ensure that Burma, Cambodia, Laos and Vietnam can catch up to the six more developed Asean states.

Sundram Pushpanathan, principal director of the Bureau for Economic Integration and Finance at the Asean secretariat, said the blueprint offered a strategic short and medium-term plan toward 2015 through a four-phased approach with benchmarks in 2008-09, 2010-11, 2012-13 and 2014-15.

If successful, Asean in the next seven years would become a single market and production base and a competitive economic region, said Mr Pushpanathan.

Asean hopes to implement one-stop customs procedures by the end of next year. It would also have a new comprehensive investment agreement; eliminate impediments and facilitate the private sector; enhance transport facilitation and logistics services; promote multi-modal transport infrastructure linkages and connectivity; eliminate tariff and non-tariff barriers; and secure a reliable supply of energy including bio-fuel, he said in a teleconference from Canberra.

Mr Hew, however, told the audience that the world should not expect to see Asean become an EU-style common market. He added that establishing uniform customs procedures was an important first step in that direction.

What would actually take place is a fully functioning Afta that provides for easier movement of goods, services, investment, capital and people, he said, referring to the intra-regional free trade area that was conceived in 1992.

Asean's target of integrating production would largely depend on the development of production networks and the region's connectivity to the global supply chain, he said.

One good thing, he said, was that by 2015 Asean would become an FTA hub as most of the Asean+1 FTAs would be fully operational by then. But this is on the assumption that the current proliferation of FTAs does not cause a ''spaghetti bowl'' mess of overlapping trade arrangements, Mr Hew noted.

Asean members also needed to resolve a number of issues to avoid the ''Asean Way'' being a stumbling block, he said. For instance, he suggested, the grouping needs to be more flexible on the concept of national sovereignty.

Bangkok Post