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ASEAN single market faces obstacles: analysts
SINGAPORE (AFP) — Southeast Asia's plans for a unified market by 2015 hinge on painful reforms that could be derailed by red tape, vested interests and foot-dragging, observers say. Association of Southeast Asian Nations (ASEAN) leaders holding their annual summit in Singapore from Sunday are expected to approve a blueprint for an ASEAN economic community embracing more than half a billion people. "Political will is the key. If countries don't have the political will to push through with these reforms, this will remain just a dream," said a Southeast Asian trade official, talking on condition of anonymity. "Can governments, for example, resist pressure from domestic interests against allowing foreign airlines to fly domestic routes?" Analysts have lauded ASEAN for moving forward by five years its timetable for economic integration, from 2020 to 2015. But they said the 40-year-old organisation faces a formidable task in establishing a unified market and production base that would help it compete against Asian giants China and India. Some of the reforms could come up against entrenched domestic business interests and face resistance from officials in departments such as customs, a major source of corruption in some countries, they said. Complicating the situation are disparities between the group's more developed members Brunei, Indonesia, Malaysia, the Philippines, Singapore and Thailand, and lower-income states Cambodia, Laos, Myanmar and Vietnam. As a first step to integration, ASEAN has marked 12 priority sectors for the elimination of tariffs and non-tariff barriers by 2010. These are agricultural, rubber and wood-based products along with air travel, Internet linkages, automotives, electronics, fisheries, healthcare, logistics, textiles and apparel, and tourism. ASEAN also plans to liberalise the services sector, open formerly-closed sectors to foreign investors, harmonise and streamline customs procedures, and ease the movement of professionals. ASEAN transport ministers agreed in November that national airlines can fly between capital cities by the end of 2008 under an open-skies pact that could be expanded later to include secondary cities. Mike Barclay, regional vice president of the industry trade body, the International Air Transport Association (IATA), said however that ASEAN still had a "long way to go" in freeing up aviation. "We don't see any relaxation of foreign ownership controls... we don't see the opportunity for airlines to operate domestic sectors in another ASEAN country," Barclay told an aviation conference in Singapore last month. Philippine Trade Secretary Peter Favila said in August there could be "unintended pockets of bureaucratic red tape" that could slow the blueprint's implementation, but voiced confidence this could be overcome. The Asian Development Bank (ADB) Institute identified in a recent report the huge scale of some of the reforms ASEAN states must undertake. "A shift to knowledge-based economy is crucial for Malaysia and Thailand and institutional and governance reforms and restoration of good investment climate should be priorities for Indonesia and the Philippines," it said. Cambodia, Laos, Myanmar and Vietnam need to build infrastructure like transportation and telecommunication facilities. They also need legal, judicial and governance systems and a skilled work force, the ADB's research arm said. "These countries are still not ready for the ASEAN economic community," said analyst Hiro Katsumata of the S. Rajaratnam School of International Studies in Singapore. ASEAN's six wealthier states could form the core of an economic community by 2015, with the poorer members joining later, Katsumata suggested. The ADB Institute paper highlighted the wide disparity within ASEAN in terms of market openness and urged financial and technical help for ASEAN's poorer members. For example, ASEAN's average tariff import rate is 9.53 percent, ranging from zero tariffs in Singapore to 17.92 percent in Vietnam. It takes an average 32 days to import an item in ASEAN, varying from three days in Singapore to 45 days in Cambodia and 78 days in Laos. An average 64 days are required to start a business in ASEAN, ranging from six days in Singapore to 163 days in Laos and 97 days in Indonesia. "The greatest challenge is to narrow the development gaps within ASEAN," the paper said. Labels: ASEAN
Southeast Asia faces challenges in time of prosperity
The gathering of Asian leaders around the 13th Association of Southeast Asian Nations Summit next week in Singapore comes at a moment of historic challenge in a region which, despite great progress in recent years, remains home to most of the world's poor.
Published on November 15, 2007
The year ahead promises another strong economic performance - though in an environment more fraught with risks and uncertainties. According to the World Bank's latest East Asia and Pacific Update, developing East Asia is set to notch 9.7 per cent growth in 2008 (down from 10.1 per cent in 2007) as the world economy hovers around 3.4 per cent this year and the next. But behind the encouraging projection for East Asia are several critical concerns that will occupy policymakers' attention, even as they press ahead with signing the new Asean Charter and implement the blueprint for an Asean Economic Community by 2015.
While Asean and the other Asian leaders meet, attention will also focus on the complex task facing the leadership of China and India. China, having sustained better than 10 per cent growth for 25 years now faces an uncomfortable disparity between income levels on the prosperous coastal zone and the more remote western provinces and generally between urban and rural areas. At the same time, China's environment policy has not been able to cope with its rapid growth. Maintaining high growth while closing the income gap and restoring the environment is a delicate balancing act, and one with implications far beyond China's borders.
India, which has growing engagement with the economies of East Asia, is also confronting a large agenda of reforms as it seeks to maintain high growth rates and lift hundreds of millions more people from poverty.
These could include strengthening policies that improve infrastructure performance, better-designed labour regulations to attract more labour-intensive investment and the creation of jobs for India's under-employed millions.
For the 10 members of Asean, the big questions at the summit will centre first on the cohesion of the grouping itself, both in response to internal issues and growing external competitive challenges.
High on the agenda will be the recent events in Burma, where millions remain in poverty while the rest of the region has been opening and growing. For years, Asean has been concerned about the so-called CLBV group - Cambodia, the Lao PDR, Burma and Vietnam.
Today, the focus is narrower: Vietnam is closer to the wealthier six members and growing strongly; Cambodia is registering double-digit growth and about to receive large revenues from oil and gas discoveries, and the Lao PDR is receiving new investments and reducing poverty after a period of steady reform. Burma remains the most serious cause for concern and the world is looking to the collective counsel of Asean and the broader East Asia Summit members (China, Korea, Japan, India, Australia, New Zealand) to help the United Nations and Burma chart a peaceful way forward - an outcome that could open the way for new economic opportunity and international assistance for the people of Burma.
Each country faces its own set of reform questions, made more pressing by the competitive pressure of China and India in an increasingly fast-paced, open and global marketplace.
The forces which Southeast Asia rode to prosperity in the 1970s, 80s and 90s now have the ability to work against the region unless it accelerates reforms which make it a more attractive and open investment destination. The challenges range from raising the skills and innovativeness of the labour force, to creating sophisticated financial systems, to maintaining social cohesion, to greatly reducing corruption. Without tough policy and institutional changes, countries now at the middle-income level stay where they are.
Malaysia, which has successfully achieved middle-income status, now faces the challenge of accelerating growth to reach developed country status by 2020 while maintaining national cohesion in a multi-racial society. Thailand, after recovering strongly from the financial crisis, has seen international confidence in its economic management shaken by the 2006 coup.
The country is now contending not just with the complexities of an election based on a new constitution, but with the challenge of restoring investor confidence necessary for strong economic growth. Indonesia, having brought the debt burden down spectacularly and generated increasing rates of growth faces the continuing challenge of creating sufficient new jobs for labour market entrants and spreading benefits to the poor. The most populous nation of Asean finds itself with 105.3 million people clustered around the $2-a-day income level, still highly vulnerable to shocks.
Challenges exist also for the smaller economies, with none looming larger than Cambodia's ability to benefit from oil and gas revenues. In many countries, the so-called resources curse has seen such revenues undermine good governance and generate instability.
There are, however, a number of positive examples of managing such resources, and Cambodia's medium-term efforts to reduce rural poverty and improve governance standards will depend heavily on decisions made about productive and transparent management of these additional revenues from oil and gas.
The year ahead is also likely to be memorable as the turning point in the global cycle. After five years of sustained and accelerating expansion, the US economy is slowing and global monetary policies are being tightened. The outlook remains for a "soft landing" and continued expansion, but
one that is weighted with more uncertainties and with greater volatility.
Peter Stephens
Peter Stephens is regional communications manager of the World Bank's East Asia and Pacific Region.Labels: ASEAN
Poor rights record hampers ASEAN effort
Poor rights record hampers ASEAN effort MANILA (AFP) - Southeast Asian nations have struggled to find common ground on creating a new human rights body, and analysts say one reason is that many have poor rights records themselves.
The Association of Southeast Asian Nations (ASEAN) announced Monday it would form a rights body as part of its landmark charter, but the details were left vague and there was fierce disagreement from Myanmar and other member states.
"ASEAN is under a lot of pressure to improve its human rights record. And it knows that human rights has to be mentioned somewhere in its charter," said Basil Fernando of the Hong Kong-based Asian Human Rights Commission.
"A charter without it will just be another piece of meaningless paper," he told AFP.
Diplomats had hoped to outline a full-fledged rights commission in the draft of the new ASEAN charter which was presented to the bloc's foreign ministers on Monday.
But opposition from Myanmar as well as from Laos and Vietnam resulted in a watering-down of the language, and ensured that the details were left unresolved -- and up for debate at future rounds of negotiations.
The ruling generals of Myanmar, who are most opposed to an ASEAN rights body according to diplomats, have repeatedly embarrassed the bloc and snubbed calls to restore democracy and free Nobel peace laureate Aung San Suu Kyi.
"The prospect for genuine democracy in Burma (Myanmar) remains gloomy," the Free Burma Coalition said in a statement. "The junta simply flushed all these ASEAN efforts down the drain."
Malaysian Foreign Minister Syed Hamid Albar acknowledged the difficulties that lie ahead to create a viable rights commission with real enforcement power to stop abuses across the bloc.
"From the start we thought it was going to be a thorny issue," he told a news conference in Manila on the sidelines of the talks.
"The next difficult step is getting it really formed. Let us cross the bridge when we come to it," he said.
Myanmar is far from the only trouble spot, however, and across ASEAN -- from the democracy of the Philippines to autocratic states such as Vietnam and Laos -- almost all have some black marks in their books.
And while a handful of members can boast of having their own human rights commissions, those bodies tend to be toothless tigers with no real powers to bring rights abusers to justice.
In the Philippines, hundreds of activists, human rights workers, lawyers, trade unionists and journalists have been murdered since President Gloria Arroyo came to power in 2001.
Few prosecutions have taken place, and a UN investigation this year delivered a damning indictment of Arroyo's government and the military over the killings.
In Cambodia, perceived as having one of the region's worst records on human rights, opposition politicians and international watchdogs say abuses have worsened as Prime Minister Hun Sen has slowly tightened his grip on power.
"The problem is getting bigger and bigger but there is no effective solution," said Thun Saray, director of the Cambodian rights group Adhoc. "Also, corruption makes it more difficult for people to find justice."
Human rights groups say that in Thailand, where a military coup last year ousted elected prime minister Thaksin Shinawatra, at least 2,500 people were killed in 2003 and 2004 during Thaksin's get-tough campaign against drugs.
"One of the most prominent human rights abuses in Thailand is the culture of impunity," said Sunai Phasuk, a Thai consultant for Human Rights Watch.
"It's a legacy from the Thaksin government, in which government officials, particularly security forces and police, violated human rights and walked away from legal and criminal accountability," Sunai said.
Rights experts say one bright spot is Indonesia, where they say abuses have greatly decreased since the downfall of strongman president Suharto in 1998.
"The main remaining human rights abuses are those left over from the past," said Asmara Nababan, executive director of the private Institute for Democracy and Human Rights Studies in that country.
"At present, human rights violations continue to occur, but not on the scale and intensity of the past," he said.
Even if fears that the eventual ASEAN rights body will turn out to be less effective than hoped, some analysts say, just the mention of a plan for one is a significant step.
"ASEAN's human rights record is not good but there are signs that countries within the bloc are pushing hard to clean up their image," Timothy Parritt of rights watchdog Amnesty International told AFP.
"It is a small step and an important step for ASEAN," he said. Labels: ASEAN
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• General Hok Lundy, dies in helicopter crash
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