http://www.nst.com.my/Current_News/NST/Saturday/National/20051126075721/Article/indexb_html
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Single Asean market
By Koh Lay Chin
A SINGLE market ripe with a multitude of choices and opportunities. That is what an integrated Asean will do for Malaysian businessmen who cannot wait to reap its benefits. As the end-goal of economic integration outlined in Asean’s Vision 2020, the Asean Economic Community (AEC) will see a European Union-style single market and production base where the region’s competitiveness can be better harnessed.
Malaysian businessmen are hailing Asean integration and the AEC as a wonderful concept that would allow a free flow of services, goods, investment, skilled labour and capital.
Most say the integration process was moving, but slowly, with some countries not opening up as fast as they should.
In terms of economic power, Asean’s potential is enormous, comprising a market of 500 million with an annual gross production of over RM1.9 trillion.
It is a region that is strategically positioned between the two global giants of India and China. The challenges the region faces, however, are also enormous.
Many bigger economies of the developing world are growing just as strongly, and businessmen talk about Asean losing its competitive edge if it sits back and watches.
Asean-Business Advisory Council chairman and corporate leader Datuk Syed Amin Aljeffri said integration would mean a host of obvious gains for local businessmen.
They include a wider market for products, greater choices for sourcing of raw materials and locating their production plants in areas to take the best advantage of economies of scale.
It could also see a streamlining of economic activities as many Asean companies seemed to produce the same thing and thus compete with each other, he said.
"The moment proper incentives are given and agreements reached as to which area will concentrate on what, everything will come into place. This means incentives have to be standardised, rules and regulations harmonised and logistics improved."
He said, however, that all this would come to nothing unless Asean was prepared to be like the European Union.
The realities of a common currency, which the giant grouping espouses, should be considered for the benefit of the region.
"It is not too far-fetched, and no reason why it cannot take place now. Malaysia, Singapore and Brunei, after all, shared the same currency before," he said, citing the three countries’ monetary union in 1967.
Asean’s current priority is to integrate the 11 sectors aimed at strengthening its competitiveness, and facilitate and promote intra-Asean trade and investment flows.
The sectors are wood-based products, automotive, rubber-based products, fisheries, textiles and apparels, electronic goods, agro-based products, e-Asean, healthcare, air travel and tourism.
Asean is also working to achieve a free flow of services earlier than the original target of 2020, with 2015 being considered as a possible end date.
To do this, it has agreed to set clear targets and schedules of services liberalisation for each sector and each round as well as adopting the Asean Minus X formula so that countries which are ready can liberalise first and others join in later.
Syed Amin said while concepts like the common currency was a long-term goal, there had to be some short-term goals for Asean.
Small and medium entreprises have to be more involved.
There could also be some tweaking to immigration laws to allow for labour mobility, he said, as well as the recognition of the Asean business entity which would allow Asean companies to have certain advantages or be given preferences.
The stage for these issues to be addressed is the Asean Business and Investment Summit (Asean BIS2005) to be held in Kuala Lumpur from Dec 9 to 11.
© Copyright 2004 The New Straits Times Press (M) Berhad. All rights reserved.
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