ASEAN needs to liberalize ‘realistically’

Linda Yulisman, The Jakarta Post, Phnom Penh | Tue, 04/03/2012 10:12 AM A | A | A | -Klipping The Jakarta Post

A senior minister says Indonesia is set to propose a more “realistic” agenda for liberalizing trade and investment in Southeast Asia when the 20th ASEAN Summit begins in Phnom Penh, Cambodia, on Tuesday.

ASEAN needed to acknowledge the limits of individual member nations, despite its intention of establishing an integrated economic community in 2015, Trade Minister Gita Wirjawan said on Monday.

“Due to the limitations, we must be realistic in liberalizing trade and investment. This will also apply in the realization of the national single window,” he said after the 7th ASEAN Economic Community (AEC) Council meeting.

Awareness of the political dynamics of individual member nations was also needed to eliminate the hurdles that might block realization of the AEC, Gita added.

ASEAN, home to around 600 million people and with a combined gross domestic product (GDP) of US$1.8 trillion in 2010, has been gearing up to launch a single market in 2015 through stepped-up cooperation, including, among other things, enhancing connectivity between member nations.

Intra-ASEAN trade has rebounded from a dip resulting from the 2008 global financial crisis, reaching $519.7 billion in 2010, up from $376.2 billion in 2009 and $470 billion in 2008.

In 2010, the figure represented 25 percent of ASEAN’s total trade of $2.04 trillion.

Gita said that the two-day summit would also highlight technical steps to ease use of the ASEAN Infrastructure Fund (FIF), a financing project to help boost connectivity in the region.

Last week, ASEAN finance ministers agreed to launch a project in May to distribute $4 billion to member countries through 2020.

A shareholder agreement was recently signed by member nations and ASEAN intends to launch the fund at a meeting to be held in Manila, the Philippines, in May.

The fund will have an initial equity contribution of $485.2 million, with $335.2 million originating from nine ASEAN member nations and the remaining $150 million provided by the Asian Development Bank.

Gita said that Indonesia would raise concerns over the requirements of a member nations to access the fund.

“We don’t want the mechanism to only highlight ‘bankability’, as some nations may be more bankable than the others,” Gita said.

“We must prioritize those who really need it most,” he added.

Economic imbalances between ASEAN’s member nations have been a recurring theme, as there has been a wide gap between the association’s most developed nations.

Singapore, for example, recently reported annual per capita GDP of more than $37,000, while lesser-developed nations, such as Laos, reported per capita GDP of $980, and host country Cambodia reported a per capita GDP of $700.

Apart from the plenary session, the Indonesian delegation, to be led by Vice President Boediono and which includes Foreign Minister Marty Natalegawa, will join other leaders in a series of meetings.

On the agenda is a meeting with representatives of ASEAN’s Inter-parliamentary Assembly (AIPA) and representatives of civil society organizations on Tuesday.