ASEAN expansion appears promising with infra rising

CEBU, Philippines - The economies of the Association of Southeast Asian Nations (ASEAN) have so much potential for further expansion, with massive infrastructure buildup playing a major role to this projected expansion, Finance Secretary Carlos Dominguez III said yesterday.

"Our economies have much headroom for rapid expansion beginning from a massive infrastructure buildup that will bring our region increased efficiency," Dominguez told finance officials from the 10 ASEAN nations in his keynote speech at the 12th ASEAN Finance Ministers' Investor Seminar at the Shangri-La's Mactan Resort and Spa yesterday.

"Towards realizing an ASEAN Economic Community (AEC), we are promoting e-commerce in the region, pooling resources to develop the infrastructure we need, facilitating trade and supporting each other’s rising expanding consumer markets," he said.

He said the ASEAN has developed a masterplan, the ASEAN Connectivity 2025, and detailed AEC Blueprint 2025 as the regional bloc aims to become one the important drivers to global growth.

"In less than a decade, we aspire to build a truly dynamic regional economy. The regional economy we envision is a truly ambitious undertaking that will require massive investments. But we have momentum and opportunity on our side. The support of the investor community will be indispensable for this undertaking to succeed," the Philippine finance chief said.

He added they were to discuss with the investor community the investment opportunities the detailed plans being considered by ASEAN.

"We will be receptive to your insights," he told delegates.

"More extensive cooperation and more intensive integration have been beneficial to the economies of this dynamic region," Dominguez said.

He also said all ASEAN economies are driven to a large extent by trade, noting the ASEAN Free Trade Area (AFTA) provided the bloc a framework for dramatically increasing intra-regional trade and investments.

"This allowed us to negotiate as a bloc with the larger trading economies around us through the Regional Comprehensive Economic Partnership (RCEP). Over the longer term, we envision an ASEAN Economic Community (AEC) that will provide a strong driver for growth among ourselves and global growth," the finance official said.

The AEC provides a strong market of 600 million people and a 300 million-strong labor force is young, talented and dynamic.

"Our governments are convinced that globalization is the way to progress," he said.

Preferred investment site

Lim Hong Hin, deputy secretary general of ASEAN, said the economic transformation of ASEAN has made it one of the most preferred investment destination today. 

He cited ASEAN is currently the world's fourth largest foreign direct investment (FDI) recipient after the US, Hong Kong and China; and also the fourth largest trader after China, US and Germany.

Lim said ASEAN is seen to grow 4.8 percent this year amid global uncertainties, well above the 3.4 percent projected growth of advanced economies.

"ASEAN remains focused to broaden regional integration to cushion this uncertainty," he said, adding the regions long-term outlook remains robust and positive.

Lim cited the 2016 European Union-ASEAN Business Sentiment Survey, which found that 74 percent of respondents project an increase in ASEAN profits in 2016 and that almost two-thirds plan to expand their operations and headcount in ASEAN.

The survey, an annual barometer of European business confidence and outlook in the ASEAN region, also said that 85 percent plan to increase their level of trade and investment in the region; 74 percent expect ASEAN's importance to their global revenues to increase over the next five years; 66 percent of believe that the EU should pursue a region-to-region free trade agreement (FTA) with ASEAN; and 58 percent feel that they are at a competitive disadvantage without an EU-ASEAN FTA. (FREEMAN)