Asia-Pacific

Malaysia pushes to speed up ASEAN single market

(Reuters)
Updated: 2006-08-22 10:19

KUALA LUMPUR - Southeast Asia nations should speed up plans to create a single market by 2015 - five years ahead of target - or risk losing its appeal to foreign investors, Malaysia's prime minister said on Tuesday.

Abdullah Ahmad Badawi, speaking at the opening of an annual meeting of ASEAN economic ministers, said there were compelling reasons for the grouping to advance the deadline to form what it called the ASEAN Economic Community.

"If we do not hasten the creation of that regional single market, ASEAN may run the risk of losing its position as an important investment destination," he said in a speech.

"We must take the necessary steps to protect our position as a competitive production base and as an important economic entity in the global trading environment."

ASEAN, with external trade totalling more than $1 trillion, is home to more than 560 million people and has a collective economy bigger than India's.

Under the ASEAN plan for a single market, goods would flow freely across borders and curbs on flows of capital and labour would ease, making the region a cheaper place to do business and allowing home-grown businesses to expand and compete globally.

But its 10 member states span the development spectrum, from a modern economy such as Singapore to two of the world's poorest nations, Myanmar and Laos.

ASEAN is also under pressure to cut the cost of doing business as competition for investments from Asian rivals such as China and India intensifies.

ASEAN groups Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam.

Malaysian Trade Minister Rafidah Aziz said ASEAN needed to be viewed by investors as a single, cohesive economic entity where goods and services flowed freely, with few or no barriers.

But this would require adjustments in certain domestic policies and measures, she told the meeting.