Asean states ‘too disparate to come together for common market

By business.asiaone.com
15 May, 2016
As appeared in business.asiaone.com

ASEAN was on Thursday described as not being ready for the single market it hopes to set up among its 10 members by year’s end.

Timothy Ong Teck Mong, chairman of the Asia Inc Forum, a regional network of political and business leaders, said the countries in ASEAN are too economically disparate to come together as the ASEAN Economic Community (AEC).

And there is another gulf – the one that is the “cultural difference” between government officials and business people, he said.

Speaking at a panel discussion attended by about 250 people at the third ASEAN Business Club (ABC) forum, he added that this government-business gulf was just “the tip of the iceberg”.

“For the rest of the iceberg, all I need to do is look at the World Bank’s survey of the regulatory environments of 189 economies.”

He explained that in terms of ease of doing business, the 10 ASEAN states held rankings in the 2015 survey ranging from first to 179th.

He did not identify the economies placed first or 179th, but it can be noted that in the World Bank’s 2014 survey, Singapore was ranked first in the field of 189, and Myanmar, 177th.

“If you look at the iceberg as a whole, you certainly don’t see a region converging in terms of the rules and regulations that impact business,” he said.

To get ready for a single market, he suggested that ASEAN follow either of two interesting proposals:

One was to look into how to integrate private-sector participation in the implementation of the AEC; the other was the “Pathfinder approach”.

The Pathfinder Project was recommended in February by Malaysian Minister Idris Jala. It proposes, among other things, that 10 companies from each ASEAN country take part in dialogues to address problems of intra-ASEAN trade.

Mr Idris had presented the project just before the panel discussion to overwhelming support from the audience; in a vote taken anonymously through a live polling system, only two respondents at the forum disagreed with his proposition.

At the panel discussion, other panellists voiced their scepticism with the ASEAN council, again highlighting the differences between the corporate and legislative sectors.

Nazir Razak, chairman of CIMB Group, referring to ASEAN’s 2008 charter, which provides for ASEAN to be an international organisation with institutional and legal capacity, said the private sector was “collectively frustrated with where we are today”.

He added: “My point is: ‘Don’t disappoint us again … and make sure you deliver on those promises. Let’s do it right this next round.”

Suthad Setboonsarng, board member of Banpu PCL and a member of the ASEAN Secretariat from 1993 to 1997, responded by saying that it was the business sector that was “totally disorganised”.

Guillermo M. Luz, private-sector co-chairman of the National Competitiveness Council of Philippines, said decision-making channels outside the political arena such as the Pathfinder Project were significant and valid. However, businesses were not equipped to address issues, security being one.

Mr Nazir also voiced his concerns about Indonesia’s commitment to the ASEAN, given that the archipelago’s recently appointed President Joko Widodo had yet to give a “strong statement” on the country’s participation in the regional grouping.

“ASEAN is nothing without Indonesia,” he said.

As for the actual implementation of the AEC, Serge Pun, chairman of the Serge Pun & Associates Group, said: “Talking pragmatically, the convergence of the AEC is really not easy. It goes against the entire ASEAN culture of non-interference, of maintaining sovereignty and independence.

“But then again, we all realise we have to do it. So even though the future is very unclear, we just have to leap with it, take a leap of faith – and hope we land somewhere.”