ASEAN urged zo open up investments

[ausgeo@xxxxxxx]

The Indonesia Times

ASEAN urged zo open up investments


KUALA LUMPUR (AFP)- ASEAN expects to complete the implementation of a free 
trade plan by 2000, three years ahead of schedule. It should move on to create 
an open investment area in the region, an ASEAN official said Monday.

Association of Southeast Asian Nations secretary general Ajit Singh urged 
members to capitalize on the achievements of the ASEAN Free Trade Area and 
establish an ASEAN Investment Area in order to be competitive.

"For ASEAN, AFTA plus AIA is the way to go. The synergies on both of them will 
ensure that ASEAN will remain as a highly attractive and globally competitive 
investment region," he told an ASEAN forum on foreign investment.

The AFTA plan calls for lowering tariffs on most goods traded within the 
region to a maximum five percent by 2003. ASEAN groups Brunei, Indonesia, 
Malaysia, the Philippines, Singapore, Thailand and Vietnam.

Vietnam, which joined ASEAN in 1995, has been given until 2006 to match the 
tariffcuts of the more mature economies.

But Ajit said that the tariff reduction schedules of the ASEAN member 
countries indicate that over 87 percent of total tariff lines will have tariff 
rates of no more than five percent by 2000.

"The products covered by these tariff lines account for 97 percent of 
inter-ASEAN trade," he added. Inter-ASEAN trade totaled 132.5 billion dollars 
in 1995.

Moreover, the average ASEAN tariff is expected to decrease from 7.1 pct in 
1996 to 2.7 pct when AFTA is created, officials said.

Malaysian International Trade and Industry Minister Rafidah Aziz later told 
reporters that ASEAN had yet to set a time frame for the AIA as it wanted to 
first work on the strategies and scope of the investment program.

ASEAN does not want to be restrained by a time frame, she said, adding that 
the implementation should be flexible enough to consider the various levels of 
development and the sovereignty of national policies.

But she predicted the AIA would be set up "somewhere in the next decade or 
so."

Rafidah said the creation of the AIA would strengthen the economic base of 
ASEAN and tarn it into a competitive region with a more liberal and 
transparent environment to attract greater investment inflows.

It would entail "greater private sector cooperation, freer flow of capital, 
skills and technology and where possible, national or preferential treatment 
for ASEAN investment," she said.

Foreign investment in ASEAN countries rose about 65 pct to US$19.6b in 1995 
from US$11.9b in 1990, officials said.

Rafidah said Malaysia which ranks among the five largest Asian recipients of 
foreign investment, expects to maintain its position through aggressive 
marketing and upgrading of domestic infrastructure and support facilities.

"Malaysia will continue to improve the investment climate through further 
deregulation and liberalization and provide national treatment for foreign 
investors," she said.

But Rafidah stressed that "Malaysia will continue to oppose any attempts by 
any party to propose rules and disciplines that directly encroach and impinge 
upon national policy objectives."