Leaders call for faster integration

Business leaders repeated their calls yesterday for deeper integration of Asean to withstand the global economic crisis and also stressed the need for the region to further strengthen its identity and networking opportunities.

Prime Minister Abhisit addresses the Asean Business Advisory Council. SOMCHAI POOMLARD

Kan Trakulhoon, president and chief executive of Siam Cement Group (SCG), said three key factors for Asean growth are unity, identity through creating an Asean brand, and tighter collaboration on intra-Asean trade and investments.

"This crisis is too huge and difficult to tackle alone. Clearly it is not a zero-sum game as all are affected," he told the Asean Business Advisory Council (ABAC) forum. "The world economy is shifting toward Asia and Asean will benefit if we can survive the crisis."

He said Asean needed to focus on both the "hard" side of co-operation such as tariff reductions and trade flows and the "soft" side such as promoting a single market of diverse sectors.

SCG, with 11% of its $8.4 billion in assets split across the region, would like to spread more investments in Asean. Intra-region investments now stand at 12% of total foreign direct investment (FDI) flows to Asean.

"I myself would prefer investing in Indonesia and Manila to China or India," said Mr Kan.

He added that the "Asean identity" must be strengthened to turn the region into a single destination for travel and to create a brand for regional recognition. He added that the private sector in Asean needs to network to develop multi-sector collaboration. This will promote more investment and remove barriers, he said.

Addressing the forum, Prime Minister Abhisit Vejjajiva admitted that regional integration needs to happen fast.

"We have not done well enough and have to do more for further integration and to penetrate large economies like China and East Asia through collaboration in trade and services," Mr Abhisit said. "The real driver for our goals is the private sector."

He said Asean was a cornerstone of Thai foreign policies. The country is committed to establishing the Asean Economic Community (AEC) by 2015.

"In my view, Asean is a people-driven organisation," Mr Abhisit said. "It has been agreed all over the world that regional co-operation is the way forward to create growth in the region."

Yu Ping, vice-chairman of the China Council for the Promotion of International Trade, said rapid growth over the past years in terms of bilateral trade and investment links with Asean would be continued.

With two-way trade of $231 billion in 2008, Mr Ping said China and Asean are the biggest trade partners for each other and that figure should almost double within five years. Asean is expected to pass Japan and the US to become China's third and second-largest trading partner by 2009-10 and 2015, respectively.

"We also encourage Chinese firms to invest and do business in Asean with investments between the two sides reaching $52 billion by end of 2008," he said.

Joseph Geagea, managing director of Chevron Asia South Ltd, said Chevron and other members of the Washington DC-based US-Asean Business Council have called on their government to work closer with Asean.

But he stressed that it is critical for Asean to become a single market and production base with seamless cross-border connections. For example, Thailand's border disagreement with Cambodia needs to be resolved for the two countries to tap petroleum resources in the overlapping area.