MNCs Outside Asean Gaining More From Liberalisation
Bernama, Malaysia
MNCs Outside Asean Gaining More From Liberalisation
By Saraswathi Muniappan
26 February 2009
BANGKOK, Feb 26 (Bernama) - Multinational corporations (MNCs) from outside Asean are taking better advantage of the region’s trade and investment liberalisation than the companies from within, Secretary General of Asean, Dr Surin Pitsuwan said.
"Yet the business community of Asean is the real nuts and bolts of the integration of the region. We must have more small and medium enterprises and invest in each other’s economies."
Asean, a region of 570 million in population is a huge consumer market, especially with the growing number of middle-income group, he told the business community attending the 2008 Asean Business and Investment Summit here, today.
"The middle income population in Asean is not less than those of China or India. So, definitely the purchasing power in the region is very attractive for business, investors and for multinational corporations looking at markets around the world," he said.
Therefore, businesses must look into the opportunities in each other’s economy and take some amount of risk in order to push up the integration of the region, making it one single market under the Asean Economic Community by 2015.
He said out of the US$1.6 trillion Asean’s trade with the rest of the world, 25 percent was from within Asean. Intra-trade in Asean should be increased to 35 or 40 percent by 2015, he said.
Similarly, out of the US$63.3 billion Foreign Direct Investment (FDI) that came into Asean market in 2007, only 15 percent was from within the Asean countries.
"We must increase that. We want to see more and more of you in the entire landscape of Asean rather then just taking comfort inside the respective markets," said Surin.
Surin warned that as Asean inked more Free Trade Agreements (FTAs) with larger economies the competition will intensify and therefore it was important for Asean business community to take advantage of their own market now.
Asean will seal FTA with Australia and New Zealand during the current 14th Asean Summit. The grouping is also negotiating with European Union for similar pact.
He said there was also greater confidence in the global economic and business community about Asean as well as South East Asia, "there are hopes all across the globe and they are looking at us as another pillar in sustaining global financial and economic stability."
The confidence comes from the fact that this region’s savings are higher than any other region in the world, while its economic fundamentals are very sound compared with the rest of the world, he said.
"Our banks are not exposed to the toxic assets," he said, adding that the financial institutions in Asean are well regulated especially after the 1997/98 financial crisis.
Hence, in their calculation Asean has a good chance of success and East Asia as a whole has better change of recovery sooner than any other part of the world.
"We could help sustain the global economy and cushion the negative impact on us and on the world. They (other regions) know that if we succeed they can depend on us and the world will have one less region to worry about," said Surin.
