Money: Asean’s Future Doesn’t Look Rosy
The EU-ASEAN Business Council (EU-ABC) is calling for more progress on ASEAN’s regional economic agenda and urging state leaders to put in specific measures to accelerate the work on the ASEAN Economic Community (AEC).
The EU-ABC, which represents the interests of the European business community across Southeast Asia, cited concerns about the lack of progress on key elements of the ASEAN economic integration under the AEC, particularly in the area of the elimination of non-tariff barriers to trade.
“ASEAN has a huge opportunity in the next few years to become an even more significant participant in and contributor to the global economy, if it can make tangible progress on its economic integration agenda,” Donald Kanak, Chairman of the EU-ABC said in a statement.
“That requires a reset in how the region deals with non-tariff barriers to trade.
“That reset is key to easing the flow of goods, improving ASEAN’s competitiveness and creating a better investment environment.” he added.
The EU-ABC also noted that even during pre-COVID-19, ASEAN was seeing a a dip in foreign direct investment (FDI) to the region, and a fall in trade.
COVID-19 has worsened that position and therefore there is a more pressing need to accelerate regional economic integration to assist with the economic recovery from the pandemic.
The EU-ABC therefore calls for more coherent, faster and transparent action to aid with the economic recovery of the region and to bolster its attractiveness for investments.
Among the things that the EU-ABC believes that is hampering the progress on the economic integration is the lack of commitment or inability to deliver on the promises enshrined in both the 2015 and 2025 ASEAN Economic Community (AEC) blueprints as the targets set by ASEAN countries are regularly missed, in particular commitments to tackle non-tariff barriers to trade are hampered by ineffective processes and tools.
Existing trade facilitative agreements, such as the ASEAN Trade in Goods Agreement (ATIGA), hasn’t been fully implemented or adhered to.
Despite the region adding new ideas and programmes, such as in digital transformation, sadly it continues to fail to deliver on existing ones.
As a consequence of ASEAN’s lack of progress in these areas is that most European multinationals as well as regional SMEs treat the region as ten individual markets, and consequently focus on one or a few markets that are of most importance or interest to them and do not address the region as a whole.
“The pandemic offers ASEAN a challenge and an opportunity for a “reset” in its approach to economic integration. More urgency, more commitment, more resources are needed to deliver the AEC Blueprint and realise the region’s huge potential,” EU-ABC executive director Chris Humphrey said.
“Business needs to play its part by identifying barriers and then executing with more jobs, more trade and more investment whenever barriers are eliminated.