ASEAN Moves Toward a Single Market

(source image: http://www.usfunds.com/)

KOTA BHARU: The Asean Economic Ministers (AEM) expressed confidence that the region’s economies will maintain their momentum in 2015 despite the global economic and geopolitical challenges. 

They emphasised that the deepening economic integration in the region would serve as a buffer in helping Asean progress and prosper. 

“We expect Asean’s economic performance to improve in 2015 to 5.1 per cent, above the 3.5 per cent global growth projection. We based this on the stronger demand in advanced economies, energised by the robust US recovery and several policy stimulus measures in the eurozone and Japan. 

“Also, the region’s domestic demand could get a further boost from falling oil prices with higher purchasing power for consumers, lower input costs for producers and greater fiscal space,” the ministers said in a joint statement. 

Datuk Seri Mustapa Mohamad, Minister of International Trade and Industry (Miti), chaired the 21st AEM Retreat held on February 28 to March 1, and Malaysia plays chair country of Asean for 2015. 

The ministers cautioned, however, that falling oil prices could affect export earnings and government revenue for net oil-exporting economies in Asean. The ministers also highlighted the concern posed by currency volatility, including possible capital flow reversals. 

“This is where the implementation of Asean’s regional economic integration can help Member States overcome the challenges posed by global economic volatility. In 2013, intra-Asean trade amounted to US$608.6 billion, accounting for 24.2 per cent of total trade of the region, compared with US$458.1 billion in 2008 when the Asean Economic Community (AEC) Blueprint was first implemented. 

“Similarly, total foreign direct investment (FDI) inflows to Asean amounted to US$122.4 billion in 2013, representing the highest FDI flows into a region, globally. Intra-regional FDI accounted for a significant share of 17.4 per cent of total FDI flows into the region in 2013,” the ministers further elaborated.

(Borneo Post)

The retreat is being held at a very crucial and important time as the 10-member regional grouping is working tirelessly towards the realisation of the all-important AEC -– a vital pillar towards the creation of the Asean Community. 

The ministers are also expected to consider and provide guidance on the work to draft the Post-2015 Economic Vision and Plan for Asean. 

International Trade and Industry Minister Datuk Seri Mustapa Mohamed is leading the Malaysian delegation at the retreat, held at the Renaissance Hotel here. 

The AEC is set to come into effect by Dec 31, 2015 with the aim of creating a single market and production base in the region to further bolster Asean's progress and prosperity.

(mysinchew)

On the potentials of the ASEAN market, Munir said, “unlike China and Japan, where the population is aging, 50 percent of the ASEAN population are under 30, young, growing and big, therefore, there will be a consumer boom, and a lot of potential demand for business, goods, services”.

“So every potential should be enhanced, must be made to ensure that we achieve the single market and a single production base,” he added.

However, Munir admitted that there are difficulties and challenges for ASEAN to bring about greater and closer economic integration under the AEC.

He said, “duing the last decade, tariff rates among ASEAN nations have come down, however, there are lots of non-tariff barriers, a lot of non-tariff measures are existing, these are the challenges must be removed because there are many ways could stop goods coming in, there are many ways could frustrate the free trade despite the fact that the tariff rate is zero”.

Besides, he believed that there are fears among some from the ASEAN nations about the market becoming one, especially among those from the small and medium enterprises.

“Most of the enterprises in ASEAN countries like Indonesia, Myanmar, Cambodia are very micro, so they fear they are not strong enough to face the open market,” said Munir.

“The concerns of the small and medium enterprises must be addressed,” he said, adding that small and medium enterprises are crucial to the economy of ASEAN as in some member countries, they employ over 90 percent of the workforce.

(Daily Times)

The AEC would require further enhancements to meet the demands and challenges over the next ten years, thus ASEAN needs to constantly innovate and strengthen itself to ensure that the region continues to be globally competitive. 

"We have discussed the outline for ASEAN post-2015. It is still work in progress, but it will make ASEAN more attractive for business. We're now number seven in the world. 

"In terms of economy, we are the fastest growing, exceeding five percent. We're convinced that ASEAN will become one of the most dynamic regions in the world," Mustapa said. 

On the RCEP, he said seven rounds of negotiations had been completed since its commencement in 2013. 

"The next meeting will be in Kyoto, (Japan) but before that there will be a meeting in Jakarta in April," Mustapa said. 

Among outstanding issues yet to be finalised are those on trade in goods, trade in services and investment. 

When concluded, the RCEP will link the economies of ASEAN, Australia, China, India, Japan, South Korea and New Zealand. 

The envisioned grouping will account for half the world's population and almost 30 per cent of the global economy.

(Bernama)