Getting ready for one Asean – and moving forward

BIZLINKS - Rey Gamboa - The Philippine Star

Like most journeys in life, as long as we keep moving, there will be a path or a road, maybe new, maybe old, that will open. How one journeys to get to where one aspires to go, however, will spell the difference between success and failure.

In the case of the journey towards Asean economic integration, the Philippines – as one of the 10 member countries of the Association of Southeast Asian Nations – is definitely committed to travel abide by the agreement that was signed and sealed by members in 2007.

A quick survey, though, as to how near or far the Philippines is in this journey compared to other Asean members will reveal that the Philippines is not moving as fast as some of its neighbors.

Singapore, it is believed, is the most ready. Brunei follows. Then, its Thailand and Malaysia. And somewhere following is the Philippines and Indonesia. The rest, including Vietnam, Laos, Cambodia and Myanmar, could be regarded as among the laggards.

But as many economists have pointed out, the Asean economic integration targeted by end 2015 is a “moving” goal, and the fact that 99.6 percent of all tariff lines have already been reduced since 2010 to the target of 0-5 percent is already something that can be deemed as a huge accomplishment.

Definitely, in the forthcoming next two Asian Summits this year, the progress (as well as issues and challenges) of members vis-à-vis the goal of free trade among the 10 countries will be a big topic in discussions.

United Asean’s significance

As Philippine Long Distance Telephone Co. chairman Manuel V. Pangilinan, who also chairs the local Asean Business Advisory Council, has pointed out in a recent speech, a united Asean will be able to exert significant influence in the global market with its individual member strengths.

Singled out were the world dominance of Indonesia and Malaysia in palm oil production, Thailand and Vietnam in rice production, and the Philippines and Indonesia in coconut oil and minerals. Let me also add the Philippines’ dominance as a global source of migrant workers and in business processing services.

As a whole, Asean has a significant position to play in these markets as it starts to think with one mind. The possibilities of truly having a one economic Asean is bewitching given its combined inherent strengths: 620 million people, or a third of the world’s economic manpower force; a GDP of $2.3 trillion, the seventh largest in the world; and a total external trade bill of $2.4 trillion.

Setting new goals

Thus, on the table in the next Asean Summits, there will be a lot of discussion on how the AEC will leverage its oneness to bring better bargaining power for its members in the global trade.

Presently, as Pangilinan had said, intra-industry trade (or trade amongst member nations within industries, like electronics, motor vehicles and petroleum) is still far below the combined Asean trade with the rest of the world.

In simpler terms, we should expect slogans in the near future that encourage a sort of protectionist mindset about patronizing Asean products first. Think “Buy Asean” or “Proudly made by Asean.”

Intra-Asean trade, now standing at $609 billion, could stand a lot of improvement with refinements and redirections in each of the member-countries’ economic plans.

Again, to borrow an example that Pangilinan gave, securing a future commitment by Indonesia to import sugar – at least 4 million tons a year – for its own consumption would be a vital key to revitalizing our decaying sugar industry.

This “order,” which of course can only be fulfilled if we introduce farming interventions and milling technologies that will allow our farmers to sell sugar at world competitive levels, will not only revitalize and expand our sugar market in the world, but will also reduce local prices of this commodity by at least half for Filipinos to enjoy.

Fraternal synergies

Indeed, numerous opportunities are right under our noses that are simply waiting to be recognized and acted upon. Asean should start operating much like a fraternity, a true brotherhood of nations that support and nurture each other with the end view of becoming a strong force to reckon.

One enticing area is tourism in its many variations, which could become of substantial source of revenues especially for the poor and middle-income member countries. Think here of a template by the more advanced countries that can be used by those who are just jumpstarting their tourism industries.

Other areas include agriculture, mining, human resource services, manufacturing, and even heavy industries like petrochemicals, steel, and aluminum. 

Yes, just as former Malaysian prime minister Mahathir Mohamad said, we could pick up a few pointers from the European community – to avoid their mistakes and to refine our strengths so that we can reach the concept of an integrated economy in quicker time.

Asean citizen

There are, of course, many other aspects that Asean members must mind to speed up towards an integrated economy. If Asean aims to accelerate economic growth, social progress, and sociocultural evolution among its members, it must seriously give attention to the protection of regional peace and stability, as well as opportunities for member countries to discuss differences peacefully.

This, of course, poses a big challenge given the diverse cultures – even of countries separated only by geographic delineations – of the peoples that had been bound in a one-Asean concept by their leaders almost 50 years ago.

On the other hand, there is no point of return because the world is a fiercely competitive market where protectionism is being frowned upon, but surreptitiously practiced, and those that fail to act may never find a place in future.

For sure, with almost half a century of trying, the 10 member countries of Asian will see the end of their journey, one that promises a platform of progress for each member in a regime of mutual cooperation and understanding.

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We are actively using two social networking websites to reach out more often and even interact with and engage our readers, friends and colleagues in the various areas of interest that I tackle in my column. Please like us at www.facebook.com and follow us at www.twitter.com/ReyGamboa.

Should you wish to share any insights, write me at Link Edge, 25th Floor, 139 Corporate Center, Valero Street, Salcedo Village, 1227 Makati City. Or e-mail me at [email protected]. For a compilation of previous articles, visit www.BizlinksPhilippines.net.

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