the Association of South East Asian Nations
the Association of South East Asian Nations
From 25-28 April 2012, the Economic Ministers from ASEAN countries and the Secretary-General of ASEAN will attend a road show in Sendai and Tokyo, Japan, to discuss opportunities for Japanese businesses looking for new opportunities in Southeast Asia.
During the road show, the Ministers will hold dialogues with politicians, bureaucrats and business leaders, participate in symposia, tour Japanese companies and factories, and visit the sites affected by the Great East Japan Earthquake.
Issues to be discussed include the overview and status of trade and investment in the region, and there will be a presentation on the prospects of ASEAN regional integration by the ASEAN Secretariat, ADBI and Denso International Asia, a Japanese company operating in Thailand.
The ASEAN Road Show aims at building strategic economic partnerships between Japan and ASEAN countries in public and private sectors and enhancing and promoting trade and investment in East Asia region. It is organized by the Economic Research Institute for ASEAN and East Asia (ERIA), with support from the Japan External Trade Organization (JETRO) and Tokyo’s ASEAN-Japan Centre.
For further details, please see: ERIA
The Secretary General of Malaysia’s Ministry of International Trade and Industry, Dr. Rebecca Fatima Sta Maria, gives a brief progress summary of the Asean Economic Community (AEC) project to integrate Southeast Asia’s economies into a more cohesive bloc. Started four years ago, the project has another four years to meet its 2015 deadline. How does everything look at the halfway point?
It is important, she says, to look at the goal itself and dispel any notion that Asean is trying to become a customs union or common market in the form of the European Union. Each of the world’s regions has its own regional framework to suit the economies and unique conditions of that part of the world, whether it be NAFTA, the Gulf Cooperation Council or UNASUR. With its diversity of economic development and somewhat similar and competing industries, Southeast Asia realizes it is not in a position to form a union anything like the EU… at this stage. So what is the AEC’s 2015 aim?
The AEC is, in a nutshell, the realisation of a competitive and dynamic region which allows for free flow of goods, services and investment, and freer flow of capital and skilled workers by 2015. Tariff and non-tariff barriers are to be gradually eliminated.
On the surface these might seem like fairly loose goals, but they’re just first steps. ASEAN is aiming at something called ‘open regionalism’, where the organization as a whole can sign trade treaties but within which individual countries may form their own agreements. Intra-region trade has been made much freer with 95% of traffic now tariff free. The Self-Certification System and the Asean Single Window have sped up trade by reducing bureaucracy and introducing measures to make transportation more efficient. These moves in turn make the region more attractive to outside investors.
The AEC has met 83.8% of its first-phase (2007-09) objectives, and will try to achieve 100% of them plus more in the second phase (2010-11). New measures to ease movement of skilled labor across borders, an aviation ‘open skies’ policy, healthcare, environmental and tourist cooperation strategies and transparent investment rules are all on the agenda over the coming years.
Planners are confident the AEC can reach its goals and become an attractive and somewhat integrated economy of 600 million people in the next four years. And while ASEAN may not aspire to be like the European Union in the immediate future, there are clearly those who harbor dreams of something closer to it in the longer term.
source & article: Business Times
Japan has a lot to offer ASEAN in infrastructure investment, but more freedom of movement in both regions is needed to make it happen. The Japan Business Federation (Keidanren) Chairman Hiromasa Yonekura says his organization will ‘step up support’ for infrastructure investment and talent exchange, saying investments must be profitable and speculating on how Japanese investors might be persuaded to supply the massive sums of money required.
Yonekura suggested Japan join the Trans-Pacific Partnership to enable its workers to move more freely in other parts of Asia, and that Japan itself open its borders to more immigrant workers, to fill a shortfall in supply created by the country’s aging population.
The Japan Business Federation, known locally as Nippon Keidanren, is a powerful and influential federation of Japan’s business and economic organizations. Its mission is to build sustainable economies both in Japan and overseas through private enterprise.
source & article: Kyodo via Japantoday
It’s unfortunate that Japan is often overlooked by the world’s media these days, as reporters chase frothier stories of economic bonanza on the Asian mainland. But while Japan’s star in Southeast Asian business activity may have faded in the past couple of decades, it would be a mistake to assume the trend is permanent, or that there is a declining interest among Japan’s tourists, consumers and investors.
Quite the opposite is true. Trade between Japan and the 10 ASEAN members has grown steadily since 1990, from US$60.38 million that year to its 2008 height of $211.05 million. That number dipped to $158.34 million in 2009, a year in which few did well, but its rebound to $200.46 million in 2010 shows a healthy level of activity with a natural urge on both sides to build further ties. Amid increased competition from neighbors China and South Korea, Japan remains a significant player in ASEAN’s economy and development.
The ASEAN-Japan Centre (AJC) in Tokyo has played a large role in the relationship. Established in 1981 by the governments of Japan and ASEAN member states, the Centre has remits to invigorate three core activities: exports from ASEAN to the Japanese market, investment from Japan to ASEAN including technology and skills transfer, and Japanese tourism to ASEAN destinations. The AJC also supports and works closely with others such as the Japan External Trade Organization (JETRO) in finding new markets for Japanese exports, the Japan International Cooperation Agency (JICA) on aid and development projects, with government trade and tourism boards from ASEAN countries, and member countries’ embassies in Tokyo and around the region. >>
Citigroup expects investment banking revenues in Southeast Asia to soar this year, and showed its confidence by moving one of its two Asia-Pacific chief executives from Hong Kong to Singapore.
Shirish Apte will relocate to focus on ASEAN nations as well as India and Australia, while Stephen Bird will remain in Hong Kong to deal with greater China, Korea and Japan.
Thanks to record volumes of initial public offerings and debt deals, investment banking revenue reached a record US$1.59 billion in 2010 (up from $1.19 billion in 2009). This is despite higher than expected inflation rates and political volatility in some Southeast Asian countries, and Mr. Apte said conversations with clients had revealed there was still a high level of interest in ASEAN investment.
Companies would increasingly turn to capital-raising from investors as banks became more risk averse and the new Basel III regulations required banks to maintain higher levels of capital and keep more liquid assets. Meanwhile, ASEAN stockmarkets were among the world’s best performers in 2010. Mr. Apte identified key areas of activity as real estate and financial services in Singapore, palm oil and energy in Malaysia, and resources and commodities in Indonesia.
Citigroup has operations in all ASEAN countries except Cambodia, Laos and Burma, with $57 million in investment banking revenues. It is also the first US bank to offer credit cards in Vietnam, and assisted the Vietnamese government raise $1 billion through debt sales.
source & article: Dow Jones via The Australian
ASEAN Finance Ministers have agreed the region is underperforming economically and hope that new links between the region’s stock markets will see a capital inflows and an increase in market liquidity.
The Singapore Exchange and Bursa Malaysia are in the process of setting up a cross trading system allowing much easier access to investors from both countries. In an attempt to speed up integration, this system will now extend to include Thailand and the Philippines. The plan is to go live with three exchanges on board in the second half of 2011, with the Philippines joining in the first half of 2012. Integration will also see the formation of a new ASEAN asset class with common accounting standards.
Foreign investors are generally welcoming of the news, saying it will address ASEAN’s main disadvantage: a lack of liquidity. Others caution that increased inflows could create bubbles, and mention that it will be years before less developed countries like Cambodia and Laos are able to join in.
Finance ministers from across the region are currently meeting at the 7th Annual ASEAN Finance Minister’s Investor Seminar in Kuala Lumpur.
source & article: Channel NewsAsia
A new self-certification pilot scheme will save exporters millions of dollars and time on paperwork when it is fully implemented in 2012. The scheme, a cooperation between Customs in Singapore, Malaysia and Brunei, means exporters who satisfy the criteria for locally-produced goods can self-declare their origin and receive a preferential tariff rate when exporting within the Asean region. At present, Singaporean companies must apply for certification every time they make a shipment, costing S$15 (US$11.60) each.
Singapore’s trade with other Asean countries was worth around US$89.65 billion in 2009. Customs says 850 exporters will each save up to S$1.08 million a year under the program, and benefit from increased speed and efficiency.
source & article: Straits Times
Southeast Asia has recovered well from the latest financial crisis. Predictions from an OECD report have ASEAN’s six major economies growing 7.3% on average this year, and 6% over the coming five years.
The crisis gave the region new opportunities “to rethink past growth strategies and define new development objectives,” according to economist Kiichiro Fukasaku at the Organization for Economic Cooperation & Development Centre in Tokyo. He also noted efforts towards regional integration as vital to a more balanced growth. The report recommended ASEAN countries diversify their exports and move up the value chain, while stressing the well-known importance of infrastructure improvements.
Estimated growth figures in ASEAN’s Big Six for 2011-15 are: Vietnam 7.1%, Indonesia 6.6%, Malaysia 5.5%, Thailand 5.2%, Singapore 4.7% and Philippines 4.6%.
source & article: Channel NewsAsia
An article in today’s Sydney Morning Herald examines the impact of an integrated ASEAN economy, mostly from an Australian and trade perspective. Were the dreams of ASEAN’s planners to come true by 2015 or sometime soon after, it would have a dramatic effect on other regional economies as Southeast Asia build massive transportation infrastructures, harmonized customs and immigration regulations, and opened up the energy and telecommunications markets:
It is the kind of seismic change in regional economic development that, if implemented, will force all sorts of changes in local laws, regulations and procedures.
Moves towards an EU-like integration are driven and influenced by the rapid growth of China and India, increasing competition as well as new investment opportunities in both directions. Smaller countries are finding it harder to get headlines and export industries in Australia may also need a cultural adjustment to transact more effectively with the region.
source & article: Sydney Morning Herald
US companies are mainly concerned about rising office rents and corruption in Southeast Asia but remain bullish about the region in general, according to a survey by the American Chamber of Commerce (AmCham).
AmCham’s ASEAN Regional Business Outlook Survey listed office rental and rising housing costs as US businesses’ chief worries, but chairman Steven Okun said these conditions were normal in any region with high growth, increased investment and increased hiring. It was something US companies would have to figure out for themselves if they want to move into Southeast Asia, he said.
80% of survey respondents intend to do exactly that. 70% said they expect the region to become more important to global business over the next couple of years, up from 65% in the previous survey. Two thirds said they expect to see a profit increase from this year (down from 70% last year). 82%, however, said they expect bigger profits in 2011. 55% were worried about the impact of corruption in the region.
Vietnam, Indonesia and Philippines were seen as the countries with greatest potential for growth. AmCham’s survey of 328 US companies operating in Southeast Asia should be good news for ASEAN’s Economic Ministers in Vietnam this week, as they downplayed the significance of US Government non-attendance at their meeting but maintained foreign interest in the region is still strong.