Vientiane Times
Economic downturn sets gloomy backdrop for ASEAN meeting in Hanoi
SINGAPORE, July 19 (AFP) -
An economic downturn in Southeast Asia sets a gloomy backdrop to annual
talks in Vietnam next week of the region's foreign ministers and dialogue
with top trading partners.
Although the Association of Southeast Asian Nations (ASEAN) meeting in Hanoi
is largely a forum on security issues, officials said the ministers could
not escape discussing renewed threats to economic growth whipped up by the
slumping US economy and the global electronics downturn.
"Troubled economies are a potential source of instability and conflict, both
within and between countries," said Singapore Foreign Minister S. Jayakumar.
"These difficulties must be managed carefully if we are to avoid conflict
and maintain a global peace and stability which would aid economic
recovery."
Singapore, ASEAN's strongest economic dynamo, has fallen into recession and
economists have raised the possibility that gross domestic productgrowth
this year could swing into negative territory due to weak exports and
falling industrial production.
Other export-dependent countries in the region have also sharply lowered
growth projections.
The Asian Development Bank (ADB) projected Southeast Asian growth to
slowdown to 4.0 percent this year from 5.1 percent in 2000. The bank also
warned that the prospect of capital flight from East Asia may worsen the
downturn.
ADB said net private capital flows -- which were at the heart of the
1997-1998 Asian financial crisis -- to Indonesia, South Korea, Malaysia,
Philippines, and Thailand were likely to turn negative this year.
"As the ASEAN foreign ministers prepare to meet in Hanoi next week, the need
to restore the confidence of the international community and investors must
remain high among our priorities, along with enhancing the integration of
ASEAN members," Jayakumar said.
"One key factor is to keep existing ASEAN projects on track, such as the
ASEAN Free Trade Area or AFTA.
"If ASEAN is able to meet the trade liberalisation targets it has set for
itself, it would send a good signal to investors that our region means
business."
AFTA commits ASEAN's more developed members -- Brunei, Indonesia, Malaysia,
the Philippines, Singapore and Thailand -- to tear down trade barriers to
between zero and five percent by 2003 and at a later date for poorer members
Cambodia, Laos, Myanmar and Vietnam.
Thai Foreign Minister Surakiart Sathirathai said ASEAN "remains an integral
player in enhancing peace and prosperity" and it was in the region's
interest that ASEAN members return to a sustained growth path.
At next week's meeting, "the ministers will reaffirm their political
commitment to the AFTA process and to intensify economic integration," said
Surakiart in a speech to the Institute of Defence and Strategic Studies
here.
Helping ASEAN's poorest members to catch up with their more developed
neighbours is crucial to selling the region as an alternative investment
site amid tougher competition from an emerging China, officials said.
After meeting among themselves, the ASEAN foreign ministers will hold talks
with their counterparts from Australia, Canada, China, the European Union,
India, Japan, North Korea, Mongolia, New Zealand, Papua New Guinea, Russia,
South Korea and the United States.
The talks with their dialogue partners will be held under the umbrella of
the ASEAN Regional Forum (ARF), Asia's top forum on security issues.
Singapore's Jayakumar said these regular meetings were important because
they facilitate an exchange of views and better understanding of each others
concerns "thereby keeping ASEAN's dialogue partners engaged and involved in
Southeast Asia for the long term."
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