ASEAN chief vows political, economic reforms
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ASEAN Secretary General Le Luoung Minh / Courtesy of ASEAN Secretariat
By Kim Jae-kyoung
JAKARTA — ASEAN Secretary General Le Luong Minh said that he will have all member states improve their rules and tax schemes to turn the region into a more attractive place for investment under the ASEAN Economic Community (AEC).
“ASEAN member states must continue to improve their investment regime through amending or enacting investment and company laws, improvement of their negative investment lists, streamlining of business licensing procedures and taxation reform,” he said in a recent interview at the headquarters of ASEAN in Jakarta, Indonesia.
“With an emphasis to build a rules-based, people-oriented, people-centered ASEAN community that embraces good regulation practices, transparency and good governance, AEC will provide a thriving and enabling environment for businesses and consumers alike,” he added.
Minh is leading the 10-member bloc through the formation of the AEC with the focus on political and economic reforms.
He pointed out that the establishment of the AEC and its 2025 blueprint are testament not only to this collective commitment, but also to the importance accorded by the 10 member states to further the regional economic integration.
“For example, after tariff liberalization has been achieved, ASEAN member states have continued to work on addressing non-tariff barriers by way of simplifying customs procedures, rules of origin and other trade facilitation initiatives,” he said.
For this purpose, ASEAN had a soft launch of the ASEAN Solutions for Investment, Services and Trade (ASSIST) in late 2015. The full launch is imminent this year, according to the secretary general.
ASSIST is a non-binding consultative mechanism for expedited solutions of operational problems faced by ASEAN-based enterprises on cross-border issues on implementation of ASEAN agreements.
“To maintain and continue to develop ASEAN’s attractiveness as investment destination in the world, I will continue to work with the member states to maintain and implement their commitments to the region’s economic integration agenda,” he said.
He emphasized that ASEAN is looking to create an economic development model most suitable for the member states by taking a cue from Korea, Taiwan and other successful countries.
“We have to learn a successful model but not particularly from one model in terms of political systems and geographical conditions. We are discussing which model is best for ASEAN — the Taiwan or the Korean model,” he said.
“Not from any single model. We will look into various models and come up with the best one for ASEAN,” he added.
The following is an excerpt from the interview.
Q The ASEAN Economic Community (AEC) made its debut at the end of 2015. What would be the implication of the AEC launch for the world?
A The establishment of the AEC has brought immense opportunities to people in ASEAN and to the rest of the world. With the introduction of the AEC, ASEAN is expected to remain as one of the most economically dynamic regions in the world.
Global investors can now seize the advantage of a business-friendly and innovation-supporting regional environment in ASEAN, achieved through the adoption of common frameworks, standards and mutual cooperation across various areas, such as agriculture and financial services, and in competition policy, intellectual property rights, and consumer protection.
With intra-ASEAN import tariffs virtually eliminated, AEC provides impetus for the free flow of goods in the region. Trade costs are being reduced through streamlining cross-border trading processes, including customs procedures, rules of origin and close engagement with the private sector, harmonization of regulations and mutual recognition arrangements.
The AEC has also led to improvements in transport and other infrastructure policies and networks such as ASEAN Open Skies, the ASEAN Highway Network and the Singapore Kunming Rail-Link, all of which have facilitated cross-border transportation and contributed to the reduction of business costs.
One other major impact is a well-integrated ASEAN in the wider East Asian region and global economy through ASEAN FTA engagement with our dialogue partners, such as Australia, New Zealand, Korea, Japan, China and India.
These agreements pave the way for ASEAN businesses with more opportunities to expand their markets and to strengthen their role in regional and global value chains.
Q: ASEAN is one of the fastest-growing areas with the greatest potential in the coming decades. What do you think are key drivers that are leading ASEAN’s impressive growth?
A:
Several factors would explain the favorable growth outlook for the region which compares favorably with those of major developed and emerging economies.
ASEAN has a sizeable population with about 625 million people, the majority of whom are under the age of 30. Currently, ASEAN has the third largest labor force in the world, and the consuming middle-class households’ purchasing power is steadily rising.
ASEAN has also benefited from unremitting flows of FDI due to its relative economic and political stability, supported by improvement in business and the investment climate.
The region is also blessed with abundant natural resources and a strategic geographical location with close proximity to major economies such as China, India and Japan, making it an ideal production and distribution hub to external and regional markets.
Q: There are gaps among ASEAN member countries in many aspects — population and national income. How can you address that issue?
The issue of equitable development and narrowing development gaps has always been a priority in the agenda of ASEAN Community building. In 2000, the ASEAN leaders launched the Initiative for ASEAN Integration (IAI) to narrow the development divide and enhance ASEAN’s competitiveness as a region.
The IAI has provided ASEAN with a framework for regional cooperation for the more developed ASEAN member countries and external partners to help member countries that most need it.
To date, under the IAI Work Plan I (2002-2008) and the IAI Work Plan II (2009-2015), a total of 573 building projects and activities were implemented to spur the development of four relatively underdeveloped countries — Cambodia, Laos, Myanmar and Vietnam, and help them to fulfill their ASEAN commitments.
The ASEAN Equitable Development Monitor 2014, developed to assess the progress of ASEAN in achieving equitable development, demonstrates that substantial progress has been made in reducing regional development gaps.
Q: How can we promote cultural exchanges between Korea and ASEAN?
We have a number of initiatives to promote that kind of cooperation — promoting ASEAN culture in Korea and Korean culture in ASEAN. We look forward to beefing up cultural exchanges conducive to building stronger cooperation between Korea and ASEAN.
ASEAN Cultural centers will be put into action sometime this year. These are efforts to promote ASEAN cultures in Korea. This will strengthen the relation between ASEAN and Korea.
Several initiatives have been identified to further expand ASEAN-Korea cooperation, especially in culture, arts, the media and creative industries. Promoting people-to-people exchanges through long-term projects should be enhanced.