Form of coming Asean integration still unclear, StanChart chief says
The private sector will be the main driving force of Asean economic integration in 2015, but the pattern of this integration is still vague, Standard Chartered Bank’s head for Southeast Asia says.
“From the bottom-up approach, businesses, not from only their own
countries, are getting more interested in Asean,” said Neeraj Swaroop, regional chief executive officer for Standard Chartered, who is based in Singapore. “That pressure will drive much of the integration itself. But we also need top-down political and policy-making support. The two are linked.”
Economic integration is mainly being driven by growth of consumerism and a dramatic rise in intra-regional trade by small and medium-sized enterprises, local corporations and regional multinational corporations.
Financial institutions should be physically present in the key markets where Asean-based enterprises are conducting their business to facilitate trade flow including cash management, financing and risk mitigation, Swaroop said. The 10 Asean member countries are Brunei, Burma, Cambodia, Indonesia, Laos, Malaysia, Singapore, Thailand, the Philippines and Vietnam.
The Asean Economic Community (AEC) will materialise in 2015, but the form of integration remains unclear, said Swaroop, noting that progress would require collaboration between businesses and regulators.
“This is going to be incremental, step-by-step progress. The good part is that there is the intention to forge closer links. But exactly what [these] closer links would be is still not clear,” he said. Risks to integration could arise from protection of local markets.
Despite some lack of clarity on how the integration will come about, there have been more cross-border business interests in the Asean countries, which continue to see average growth in gross domestic product of 4-5 per cent. Once the AEC comes into effect in 2015, its combined population of about 600 million – and rising – will present opportunities for businesses to invest and offer their products …
Full story from The Nation at http://goo.gl/xlQnt
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