(Chairman and CEO, Ayala Corporation)
What is ASEAN to you?
ASEAN is an important grouping of nations in this part of the region that can collectively be a considerable market and force in the global community given the richness of its natural, human, and capital resources. As a group of nations working as one we can be a counterbalancing force for opportunities and risks in this part of Asia to both China and India.
Is it easy enough to do business across ASEAN? Do ASEAN governments or institutions limit business opportunities across the region?
One of the obstacles to greater business across ASEAN seems to be the lack of awareness among private sector companies of the opportunities to do business across the region. Based on a recent survey conducted by UBS on the ASEAN Economic Community (AEC) wherein 60 companies in the ASEAN region participated, familiarity with the AEC among businesses in the region remains generally low with only a third of the respondents indicating familiarity with the AEC. Couple this with the prevailing perception that there is little possibility it will be fully implemented by 2015, then there’s obviously a lot of work to be done in invigorating trade and investment within the ASEAN region. The governments can perhaps do a lot better in terms of educating business about the opportunities that may open up, as well as challenges that can be brought about, under an AEC. A mere 13% of the respondents in the survey cited the government as their primary source of information. For trade and investments to firm up, the governments have a crucial role as drivers of the AEC. There is already a positive reception to the idea of an AEC based on the survey where 55% of the respondents feel that the AEC is an “important” if not, a “very important” factor in their future investment plans. We can do well to build on that positive outlook for ASEAN in terms of procurement and materials sourcing, as well as workforce and employment set up.
What difference will the AEC make to your business?
A fully implemented and operating AEC will open greater opportunities for our business in terms broadening the market for our products and services, enhancing our materials sourcing and procurement, expanding pool of capital and human resources and expanding manufacturing platforms. It will also expand partnerships across the region. A fully implemented AEC also improves overall competitiveness of nations and business and therefore further raises standards altogether to ensure we remain relevant in a One ASEAN market.
What is the single biggest thing that will make it easier to do business across borders in ASEAN?
One of the main factors that can help accelerate cross-border trade in ASEAN is by focusing on Logistics and Infrastructure. These are key enablers to greater trade and investment across the region. A focused effort on implementing harmonized customs processes with consistent “single window” and easing customs barriers such as improving road border-crossing, easing trucking regulations, etc. would also help encourage more intra- ASEAN business. Reducing red tape and lowering the cost of doing business would also be critical factors to greater cross-border trade in ASEAN.
If all trade in asean had to be denominated in one currency, what should it be? would a single currency be viable in ASEAN?
Before we can reach this level of integration I think we still need to overcome some of the challenges to implementing a single ASEAN currency such as the substantial development divide (income gap) among ASEAN Member States, regional infrastructure development, and consistency in structural policies among others.
What is the most promising sector in ASEAN in the context of ASEAN as a bridge between east and west?
I would consider the technology and business process outsourcing sectors as a promising sector that bridges the East and the West. It is pervasive and there is a huge global demand for it. ASEAN has the capability to offer services in these sectors.
Do you think that the “ASEAN brand” has been sufficiently defined? How should it be defined?
I think the ASEAN has sufficiently defined itself as an entity in terms of what it wants to achieve—that is to create a stable, competitive, and prosperous economic region. The challenge is in the implementation of the big ideas that already exist. A commitment to the region also has a way of raising standards which by itself can define ASEAN. This ultimately creates strong nations individually and therefore a strong ASEAN.
Is ASEAN and its institutions sufficiently democratic? How well do they represent their citizens?
One of the observations raised about the efforts towards creating a One ASEAN is that the process has become a largely government driven process, which may have left the private sector less engaged than we want them to be. SMEs which are a significant component of the economy also may not have sufficient awareness of the opportunities and networks that can be tapped at the regional level. Harnessing the energy of the private sector and strengthening sectoral/sub-sectoral forum by proactively identifying and involving a “material” set of companies in the process may help accelerate the process of integration. It would be ideal to involve a mix of SMEs and MNCs in this group. This group should be involved in each step of the decision-making process and in the integration design. It may help to interact with private sector representatives on each step of the policy process (i.e. interactive working groups, workshops on preparation, feedback through scorecards/surveys as to effectiveness of systems set in place).
What is your image of ASEAN in 2030? A reasonable aspiration for ASEAN in 2030 is to see fully implemented free movement and mobility of trade, services, and labor flow with more harmonized customs, clearing and border systems. By then hopefully we would have overcome the challenges of macroeconomic policy coordination and narrowing the development divide across nations. It would be ideal to see a strong and more cohesive ASEAN with a greater sense of unity and regional identity and community.