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10/07/2017

Ernest Mahlaule – Asean, A Hub Of Economic Cooperation And Investment In Southeast Asia

At first glance, the ASEAN intergovernmental bloc might seem like unfamiliar terrain to most South African business people, but a closer look reveals a swathe of economic opportunity in what is arguably one of the world’s fastest growing regions.

The Association of Southeast Asian Nations (ASEAN) groups together 10 countries, stretching from the emerging market nations of Laos and Myanmar to the regional powerhouses of Indonesia and Singapore.

For much of its 50-year history, the bloc has provided a strong backdrop for regional stability and cooperation, thus ensuring in recent years a sustainable and a much more robust growth
trajectory, especially in the aftermath of the 2008 global financial crisis.

The potential of this vast untapped market will be unpacked at a conference that the Johannesburg Chamber of Commerce and Industry (JCCI) is planning to host in November in Johannesburg to run concurrently with the Africa-ASEAN Business Expo.

An understanding of ASEAN will also help foster cooperation between local businesses and their ASEAN counterparts to offset weakness in the domestic economy.

ASEAN is the world’s third most populous market, behind only China and India. The region boasts an active consumer market, a growing middle class and a highly literate workforce. For an intrepid investor from South Africa the ASEAN bloc offers a myriad of prime opportunities in
such strategic sectors as automotives, textiles, mining, healthcare, financial services, e-commerce, agriculture, energy, transportation, logistics, tourism, science and technology.

Last year, ASEAN established an economic blueprint to guide and strengthen its economic integration through 2025 by prioritising trade facilitation, food safety regulation, access to finance for micro, small and medium enterprises (MSMEs), business startup development, and the development of special economic zones.

The focus on these priorities is underpinned by continued investment by the ASEAN states in critical infrastructure, including roads, airports and supply chain management under what is known as the Master Plan on ASEAN Connectivity.

Key infrastructure projects include the completion of the ASEAN Highway Network involving the integration of some 38,400 kilometres of roads, the Singapore Kunming Rail Link project linking Singapore to China via a series of lines, including those that will traverse Thailand, Cambodia, Vietnam, Laos and Myanmar.

The Trans-ASEAN Gas Pipeline (TAGP) Project is another key pillar of ASEAN’s infrastructure investment push. This will result in a regional cross-border gas transportation grid by 2020.

In practice, this should make it relatively easy for South African businesses and investors to establish a footprint in the region. ASEAN counts among its biggest trading partners China, the United States, India and Japan. ASEAN also has free trade agreements with the likes of New Zealand, Korea and Australia.

In 2002, China and ASEAN Countries signed the Framework Agreement on Comprehensive Economic Cooperation which formed the legal basis for the creation of the ASEAN-China Free Trade Area (ACFTA) to foster the free flow of goods, services and investments. ACFTA is the largest free trade area in the world, boasting a combined market of nearly two billion people and GDP of almost $US10 trillion. It was then followed by the creation of the ASEAN-Japan Comprehensive Economic Partnership (AJCEP) in 2008, with a combined market of 700 million people and GDP in excess of US$8 trillion.

The extent of cooperation between ASEAN nations and their regional counterparts, therefore presents a template for the rest of sub-Saharan Africa to follow since the continent’s potential continues to be hampered by disparate trade and investment regimes that need to be harmonised in order to propel our economies farther.

All told, the opportunity to learn from ASEAN is immense, and so is the opportunity to create strategic bonds between our business constituencies.

As a pre-eminent business association representing interests of businesses in all the key sectors
of the South African economy, JCCI looks forward to harnessing the ingenuity that has made ASEAN a global powerhouse for trade and investment.

Visit http://www.jcci.co.zafor more information

 Ernest Mahlaule Asean A Hub Of Economic Cooperation.JPG
 Ernest Mahlaule Asean A Hub Of Economic Development.pdf


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