Business leaders in Southeast Asia are seeking more clarity on the region’s march toward a common community after policy makers unveiled a new road map following missed targets for economic integration this year.
Having clear guidelines and a framework will make the 10-member Association of Southeast Asian Nations’ plan to create its ASEAN Economic Community go faster, Wouter Van Wersch, Southeast Asia president and CEO at General Electric Co., said at the Bloomberg ASEAN Business Summit conference in Bangkok.
Asean leaders adopted a blueprint for the AEC in 2007, where they aimed to create a single market that would include allowing the free flow of investments and capital across a region that is home to more than 600 million people. The group said last month it will now attempt to complete measures unfinished in an eight-year plan by the end of 2016 after missing the end-2015 goal.
“Asean is about consultation and consensus -- the governments need to take a stronger ownership of the AEC and push it through,” said Van Wersch. “What we need is stability. We need a clear framework to invest.”
The economic integration that ASEAN envisions would make it a larger trading bloc than the EU and a potential economic and political counter balance to China. An ASEAN scorecard showed that as of end-October, the grouping had implemented 79.5 percent of measures committed under the AEC. Among prioritized measures, the rate was 92.7 percent.
“The harmonization of the capital markets has already taken place --standardization has started in financial markets,” said Michael Zink, head of Southeast Asia at Citigroup Inc., citing the ability to easily issue bonds to all 10 countries. “It’s unrealistic to expect perfection. We just need to know what the rules are.”
The AEC will lift the region’s visibility over the next 10 to 15 years, said Glenn Maguire, an economist at Australia & New Zealand Banking Group Ltd. Yet the experience of the European debt crisis highlights the need for strict structures around financial integration and cross-border lending, he said.
“Having a good network and government support will be crucial” in a region with diverse cultures, said Noni Purnomo, president director of taxi company Blue Bird group in Indonesia. “One of the challenges for us to go outside Indonesia is to find the right partner to develop the industry together.”