ASEAN leaders warn on Southeast Asia’s rich-poor gap
August 30 - September 5, 2010
DANANG, Vietnam – Southeast Asian leaders warned last week of a widening gap between the booming region’s richest and poorest nations that could threaten its ambitious drive for an EU-style single market.
Cambodia, Laos, Myanmar and Vietnam have recorded high growth rates but their per capita gross domestic product remains the lowest among the 10 ASEAN members.
“The danger of [a] widening development gap remains a major obstacle to ASEAN’s future development, especially given the context of expanded ASEAN economic integration,” Vietnam’s Prime Minister Nguyen Tan Dung said in opening remarks to an annual meeting of the bloc’s trade and commerce ministers.
Emulating the European Union’s example, ASEAN wants to establish by 2015 a single market and manufacturing base of about 600 million people – a goal that has been spurred by intensifying competition from China and India.
The discrepancy between ASEAN’s rich and poor members “is quite wide” and could undermine efforts to create the single market, ASEAN secretary general Surin Pitsuwan told reporters.
“A house divided by such a gap is not stable,” he said.
Surin said the gulf within ASEAN had widened because some countries were better able to attract investment as the global economy recovered from the crisis which struck in 2008.
“It has come up quite often at the highest level, of how to help bridge this gap,” he said.
The Vietnamese prime minister, who chaired the meeting, urged ministers to “work out concrete and robust measures” to create a more equitable ASEAN.
But the bloc has been more focused on initiatives such as forging individual free trade deals and does not have the budgets or structures in place to address the issue, said Leon Perera, group managing director of Spire Research and Consulting in Singapore.
“I think they haven’t really set that goal in a serious way,” he told AFP.
Perera said that “other things being equal, you tend to get more inequality” as a consequence of globalisation, and a development gap may be more significant within countries than between them.
“I think what has not been developed is ... some kind of process where you have a more systematic way of addressing the different levels of capacity,” said Indonesian Trade Minister Mari Pangestu.
She said Europe has a special fund to address differences within that bloc.
ASEAN announced earlier this year agreement in principle to establish an infrastructure fund, which could help equalise development.
In Vietnam alone, the European Chamber of Commerce has cited estimates that the country needs around $70-80 billion of investment in infrastructure, such as ports and roads, over the next five to 10 years.
The Indonesian minister said that fostering increased trade and investment within Southeast Asia and the wider region will help counter a possible “double-dip” global recession.
Fears have grown that the United States economy – a key engine of global growth – could dip back into recession after a fragile recovery from the 2008 crisis.
“We talk about that, and we need to be cognisant of the risks of the global environment that we face,” Pangestu said. – AFP
