The last topic brought into discussions at the summit was whether ASEAN is the harbour of investment. Desi Anwar of Metro TV moderated the session. Statistics suggesting that only 4.2% of total GDP is from intra-ASEAN region trade and the investment level in the region is still below the pre-crisis level requires a careful analysis of how far ASEAN is from being an integrated region and what can be done.
Sitting as the panellists included Chris Kanter (Chairman and Founder of GEPI), Vice Chairman of APINDO, Mahendra Siregar (Vice-Minister of Finance of Republic of Indonesia), Tan Sri Anthony Francis Fernandes (Group Executive Officer of AirAsia Berhad), G V Sanjay Reddy (Vice Chairman of GVK), and Dato’ Sri Nazir Razak (Group Managing Director/CEO of CIMB Group).
Chris Kanter of GEPI highlighted the importance of creating a good investment environment. Despite the importance of Foreign Direct Investments (FDI), ASEAN countries should also maintain domestic interests. In addition, clear FDI rules by taking account ASEAN as a single market should be on our agenda.
Mahendra Siregar Indonesian Vice-Minister of Finance viewed that ASEAN is a harbour of investment. But the question is, where else? He concerned about the development model that ASEAN is currently adopting: whether ASEAN will continue to use the current model of ‘business as usual’ or change and develop a new model. Mr Siregar was optimistic about the growth trajectory of ASEAN. Significant increases in FDI and intra-region trade are some of the evidence. However, the current model might not be sustainable. ASEAN countries cannot continue to build up foreign exchange reserves whilst other parts of the world keep importing. ASEAN should also involve more people. In addition to having a clear framework of regional integration and blue-print regarding liberalisation and competition, equitable economic development should also be focused by ASEAN.
Anthony Fernandes of AirAsia shared his company experience of contributing to ASEAN connectivity by ‘making Asia a smaller place’. Mr Fernandes was confident that ASEAN has phenomenal internal markets. The business environment in ASEAN is unique as we’ve got almost everything: tsunami, flood, red shirts, and the Singaporean government! This creates some challenges and opportunities. Mr Fernandes viewed that there is not enough ‘branding’ in ASEAN. There should be one common air traffic control. Mr Fernandes praised the progress that the Indonesian air transportation authority has made by allowing more competition in the market and also Emirsyah Satar of Garuda Indonesia’s success in reviving the airline. At the regional level, however, ASEAN should be known as business commitments in addition to political commitments. Mr Fernandes summarised his talk by stating that “business communities should take the lead, the government should facilitate”. The world is changing. Thus, innovation is the key. The government should therefore create an environment which enables innovation. Freedom of speech and allowing younger generation to develop their creative thinking by changing the education formula from memorising to critical analysis is crucial. On the financial aspect, the creation of an ASEAN stock market may be needed.
Sanjay Redy of GVK viewed that ‘problems’ create opportunities. If there is no problem, then there will not be opportunity as the opportunity would have been taken by others. He was unsure about the extent of the ASEAN Economic Community which is expected to be achieved by 2015. He expressed that hopefully the AEC does not aim at creating a common currency market.
Sri Razak of CIMB pointed out that ‘more businesses in ASEAN should be ASEAN businesses’. ASEAN has been able to invite some world leaders to visit Bali. But this achievement needs a follow-up. He was unsure about what the consequence of being an ASEAN company. Defining his company as an ASEAN multi-local company, which has headquarters in some ASEAN countries but each of them adopts its own work culture and led by local people, being an ASEAN company may give either positive, negative or neutral effects for example when bidding for a project. Taking an example from the financial market, there is limited information sharing in the region. Thus, an ASEAN banking framework is important.
The question and answer session was dominated by a similar issue that the ASEAN connectivity session discussed, that is regarding the governance. It is true that each ASEAN government has its own homework to ensure that a healthy business environment exists but the non-binding nature of ASEAN might become an issue regarding ‘who will be teachers’ and ‘will the countries get punishment if they do not do their homework well’. Minister Mahendra Siregar viewed that such a punishment will be in the form of demand for a government (i.e. presidential) change. An attendee from the European region who has spent 20 years in Indonesia viewed that normally when we wait for the government to act, there is nothing happens. Another attendee suggests that what is needed by business communities is ‘simply’ an ASEAN business club, a ‘real people’ club. So, who should take leadership roles?
This article is prepared by Risti Permani.