Trade within Asean lags behind other regional blocs: Surin
Asean is urging SMEs to venture beyond their national borders as intra-regional trade accounts for only 25 per cent of gross domestic product, compared to up to 70 per cent for other blocs.
“Trade among ourselves is still lower than it should be. It’s 25 per cent of US$2 trillion, or only $500 billion. Asean needs to increase that,” secretary-general Surin Pitsuwan said in a recent lecture to the British Chamber of Commerce (Thailand).
The North America Free Trade Agreement’s intra-regional trade is about 48 per cent while in the European Union with 27 countries it is 68-70 per cent.
SMEs should cross borders and change their mindset.
“Don’t feel just comfortable staying here. Go out, explore and examine the landscape. It’s been built, it’s been open,” Surin said.
Multinational corporations are taking more advantage of all the rules and regulations, or de-regulations, than Asean companies are.
“We feel that investors from around the world are coming to Asean. Swarovski just opened up its office in Bangkok, looking forward to the Asean Economic Community market. AIA changed its name from an Asian branch to an Asean office,” he said.
Asean countries may have to push their SMEs outside their territories to gain advantages from the combined market of 600 million.
SMEs constitute the bulk of local companies in this regional bloc. In Thailand, they account for 99.6 per cent.
Foreign direct investment into Asean increased to $80 billion in 2010, according to the Asean Secretariat. About 70 per cent poured into the service sector, giving impetus to a rising middle class with higher purchasing power to seek a better quality of life from services, besides daily necessities.
“And this means growth,” he said.
“We [Asean] are determined and we are making steady progress in that direction,” he said.
However, challenges, problems and hesitation remain. Some countries are reluctant to liberalise their economies due to their need to protect local interests.
Each Asean member state should seek its own niche and do what it excels in.
“Laos has tremendous potential and resources, which need to be managed efficiently. Myanmar is moving very fast on the prospects of opening up and investment. Those in Thailand and Singapore are ready to go in. Once the sanctions are lifted, it will be interesting,” he said.
The competitiveness of any country depends on the quality of its people and education.
In Thailand, challenges exist with manpower and flexibility.
“Thai people and enterprises may have to go out, engage |and compete as [regional] opportunities are opening up,” he added.
