Part Two
TODAY, the Association of Southeast Asian Nations is an oasis of growth in a changing and difficult world economic environment. Businesses and investors alike are seeking to ride on wide growth prospects and definitely give the Asean some serious thought.
To prosper in the Asean, we need to understand and appreciate its diversity, and capitalize on this strength. But it is also important to understand that Asean integration raises the bar of challenges of competition between the member-countries.
The regional integration through the free movement of goods, services, investment, skilled labor and the freer flow of capital will necessitate business inside and outside the Asean to study the challenges and opportunities of a single market and look at a production base in the Asean and the option of greater integration into the global economy. The Asean 2025 agenda brings opportunities for new and existing businesses to enjoy greater economies of scale and flows of trade, investment and people. There will be tremendous opportunities in several large infrastructure projects as the Asean Connectivity Masterplan moves off the drawing board and into reality, with roads, rail, power and shipping becoming more integrated across the region.
Local and foreign investors are appreciating that in Asean, they will quickly find people who understand you and your business needs. The Asean region’s track record in profiting from its diversity means that cross-cultural trade and investment are second nature. The Asean region’s 600 million people are playing a growing role in our interconnected-global economy.
The Asean is starting to shine on the global stage because its unparalleled diversity means, its people are open to new ideas and should manage differences without resorting to conflict. Rapid economic growth and an abundance of natural resources across the region have attracted significant investments.
The Asean offers a wide range of opportunities for investment and collaborations. What stands out is the region’s ability to manage and leverage its diversity, and to integrate outside investment and ideas.
The Asean promotes regional integration through the free movement of goods, services, investment, skilled labor and the freer flow of capital. This will necessitate business inside and outside the Asean to study the challenges and opportunities of a single market, the need to look at a production- base in the Asean, and the option of greater integration into the global economy. This is clearly recognized by both the European Union and the United States of America.
For the Asean, regional economic integration cannot stop at policy measures. Integration cannot end at cutting tariffs, removing nontariff barriers, reducing obstacles to investment and easing restrictions on trade in services. Economic integration must also mean binding Asean members through infrastructure in energy, transport and communications. Integrating a regional infrastructure is one of Asean’s toughest goals, because the region is geographically diverse and its economies are at different levels of development. For example, several of its members, such as Thailand, Myanmar, Vietnam, Lao PDR and Cambodia form a landmass. This geographic characteristic means that infrastructure links among them – connecting roads, rail, communication and power lines across national boundaries—could be relatively easy to set up. However, it is not the case when some of these boundaries are mountain ranges and rivers. Other Asean members, including the Philippines, are separated by deep sea, making linkages between them
expensive. Despite these difficulties, the Asean has made the development of infrastructure linkages one of its primary goals.
To expand the much-needed infrastructure development, Asean countries must assess the magnitude of national infrastructure financing needs and financing gaps within key sectors, such as transport, energy, telecommunication, water and sanitation.
To demonstrate how slow infrastructure development and integration is, let’s look at energy. Asean initiatives on energy interconnection date back to the Asean Cooperation Project on Interconnection, which started in 1982. This was aimed at linking the power systems of neighboring Asean countries. In 1986 Asean member countries signed the Agreement on Asean Energy Cooperation, calling for cooperation in the efficient development and use of all forms of energy, whether commercial and noncommercial, renewable or nonrenewable.
As Asean promotes regional infrastructure development, it is important for it to ensure that the region follows a green path. Asean countries have a critical responsibility in this area because the region is contributing ever more carbon- dioxide emissions.
To be concluded
Image credits: Nonie Reyes