Uneven Asean playing field poses challenges in AEC era

Surong Bulakul, chief operating officer for infrastructure at PTT, said yesterday at the "Era of the AEC" seminar, arranged by Nikkei Asian Review, that the energy giant was looking at each Asean country with a different investment approach based on that nation’s development and strong points.

"The AEC [set for full implementation at the end of this year] has so far opened up more opportunity to look for new energy sources," he said.

PTT currently has a joint development programme with Malaysia’s Petronas in the Gulf of Thailand.

There is also a big PTT project in Myanmar for upstream exploration, while the company is looking to expand in other activities, such as the setting up of a power plant along with an energy complex in Dawei – and the first PTT retail station between Nay Pyi Taw and Yangon, he said.

In Laos, meanwhile, PTT is looking to respect the country’s green approach by investing in a major hydro-power dam, and expects to import 1,200 megawatts of power via this source by 2020, said the executive.

PTT has already set up an oil-depot terminal, retail stations and supply system for the aviation industry in Cambodia because of the level playing field in that country, while coal-mining exploration is the area of PTT interest in Indonesia because of the support from the country’s government, he added. "We see our retail sector as our main driving force, so we are planning to build major retails stations along the major highways [of the region], such as from Kunming down to Chiang Rai and from Guangxi to Vietnam," said the chief operating officer.

Tassapon Bijleveld, chief executive officer of Thai AirAsia, told the seminar that the Asean open-sky policy had already been applied in most of the region, except for the Philippines.

China, meanwhile, has opened up and India is close to doing so, so there is still room for the low-cost carrier industry to grow in the latter market, while "99.99 per cent" of the slots at most of the airports in the region are already filled, he said.

"Don Mueang [International Airport] is at 80-per-cent capacity and the only available time slot is between 2am and 5am, and this is the same story everywhere in the region, while most of the available slots are subject to first picks by domestic players," he explained.

Sarasin Viraphol, executive vice president of Charoen Pokphand Group, described China as a major economy to look up to, while India was also in the group’s sphere of expansion.

Regional partnership is crucial for any expansion overseas, he stressed.

Jayant Menon, lead economist of the Regional Cooperation and Integration Division at the Asian Development Bank, said the biggest challenge facing Asean would be implementation of the AEC goals, and that enhancing the "carrots" would the key to successfully implementing the free movement of labour, capital and products within the region.

"The problem in Asean is that there is little appetite to give up sovereignty to a supranational body, whereas in Europe there has been a lot of delegation of sovereign power to Brussels. The so-called stick is provided by the process of giving up sovereignty, but the Asean Secretariat is deliberately underpowered, because that is the Asean way," he said.

"The lesson to be learned from the European Union is that Asean member states have to learn to trust each other more … and we need a bit more stick. But at the same time [we also need] more of a stronger case for the carrots by providing governments with more analysis of the benefits of implementing the AEC in a legitimate way," he added.