Manila, Philippines - The Association of Southeast Asian Nations (Asean) remains in good shape and offers “great opportunities” for growth over the next few years, Asian Development Bank (ADB) chief economist Changyong Rhee said.
He said the Asean nations can compete with the continent’s powerhouses like mainland China and India for economic growth.
“There are great opportunities in the areas of trade, financing and people movement,” Rhee said in a press briefing yesterday.
The Asean groups Brunei Darussalam, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Singapore, Thailand, Vietnam and the Philippines.
Rhee said these opportunities arose from the weakening of the developed nations, particularly in the euro zone and the United States, and the “softening” of the Asian majors such as mainland China, India and Hong Kong.
He said the sustained strong growth of China in the past few years has made it unattractive to foreign investments due to higher production and labor costs, putting Asean into the radar screen of foreign investors and locators.
The opportunities include capturing the coastal production sites and foreign investments that are looking for options outside of China, the ADB economist said.
The ADB consistently had been urging nations like the Philippines to make itself attractive to foreign investors and locators looking for alternatives outside China.
ADB country director for the Philippines Neeraj Jain said the country can experience greater economic growth if it can attract more foreign investors and locators with emphasis on labor-intensive activities.
Jain said that sustainable growth for the country must go beyond the billions of dollars from remittances of overseas Filipinos and the business process outsourcing (BPO) sector.
The full implementation of the Asean Free Trade Agreement (AFTA) by 2015 will also increase intra-regional and inter-regional trade, he added.
Tariff liberalization started in 2010 leading to full tariff reduction and liberalization by 2015.
Last year, the average intra-tariff rate for the Asean-6 countries was reduced to 0.05 percent from 3.64 percent in 2000. The six nations are founding members Brunei, Indonesia, Malaysia, Singapore, Thailand and the Philippines.
Intra-Asean trade grew over 33 percent in 2010, or from $1.5 trillion in 2009 to $2 trillion. The Philippines alone reported a 30-percent growth in intra-Asean trade in the same period.
Also working in favor of strong growth in Asia is the crisis resolutions and prevention mechanisms being put in place by regional leaders as well as multilateral agencies such as the ADB and the International Monetary Fund (IMF).
Meanwhile, Rhee said that they have not changed its outlook for Asia and the Philippines.
The ADB forecast that the region would grow by 6.9 percent this year, and 4.8 percent for the Philippines. “There is no pressing reason for us to change our original forecasts despite the uncertainties caused by the debt crisis in the euroe zone,” he said.