Interview: Le Luong Minh
What challenges do ASEAN countries face before inaugurating the Economic Community in 2015?
LE LUONG MINH: We have already accomplished many of the tasks on the ASEAN Economic Community (AEC) Blueprint and intend to track remaining priorities via the AEC Scorecard system. While we are currently at a healthy implementation rate of 80%, as we approach the 2015 deadline, enhancing the implementation of these measures will become more critical. By 2015 all ASEAN member states should align their domestic laws with regional agreements, ensure a free flow of services and capital throughout the region, and address accompanying challenges of implementation. To ensure a free flow of goods, ASEAN is working to eliminate non-tariff barriers in all member states by installing notification and monitoring mechanisms.
We have also focused our attention on the full implementation of the ASEAN Single Window, in addition to securing mutual recognition arrangements to raise standards and conformance in various key industries.
How many sectors will benefit from foreign direct investment (FDI) inflows after the AEC starts up?
MINH: Intra-ASEAN FDI inflows have doubled following the AEC Blueprint’s adoption, from $9.7bn in 2007 to almost $20bn in 2012. As for total FDI flows to ASEAN, the share of intra-ASEAN FDI inflows increased from 11% in 2007 to nearly 19% in 2012. Over half of intra-ASEAN FDI inflows have gone into the services sector – specifically financial services, trade and commerce, and real estate - while around one-third goes to manufacturing. Recent surveys have indicated that the business community sees great regional expansion potential in the oil and gas, retail, transport and storage, manufacturing, and banking and insurance sectors. Foreign equity rules in manufacturing are fairly open in the ASEAN region but more restricted in the agriculture and mining sectors. As for services, foreign equity restrictions in telecommunications, transportation, electricity and banking are still prevalent in a majority of member states. The ASEAN Comprehensive Investment Agreement (ACIA) of March 2012 lent a useful measure of coherence to existing provisions pertaining to investment liberalisation, protection, promotion and facilitation under a single investment agreement.
However, ASEAN’s task must now be to effectively implement the ACIA to ensure that the benefits are realised by ASEAN and ASEAN-based foreign investors.
To what extent can ASEAN work to develop a common approach to the South China Sea dispute?
MINH: Tensions in the South China Sea could have far-reaching implications for the regional economy. It is worth noting that this is not solely about how to deal with issues of territorial sovereignty involving ASEAN member states and China; it is also a matter of how to ensure normal activity on one of the world’s most active sea lanes. ASEAN concluded the Declaration on the Conduct of Parties in South China Sea (DOC) with China in 2002 and has ever since been actively engaging China in dialogue with a view to ensuring its full and effective implementation. The spirit of the DOC was further strengthened with the ASEAN-China Joint Statement on the guidelines for its implementation issued on the occasion of its 10th anniversary.
In 2012, in the face of renewed tensions, ASEAN adopted its Six-Point Principles on the South China Sea, reaffirming the commitment of all member states to achieving the full implementation of the DOC in addition to the provision of guidelines for its implementation and the early conclusion of the regional Code of Conduct in the South China Sea. This was based on our respect for the principles of international law, including the 1982 UN Convention on the Law of the Sea, and a commitment to the exercise of self-restraint by all parties, as well as the peaceful resolution of disputes.
By firmly upholding these principles, ASEAN is doing all that it can to maintain peace and stability in the region, with a view to doing everything that is possible to facilitate the community’s ambitious plans for growth.
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