The ASEAN Institute's Symposium on "Liberalization and Rationalization of Fiscal Policies", Kuala Lumpur, 19 July 1993
We congratulate the ASEAN Institute for organizing this symposium and initiating a series of discussions on trade liberalization among ASEAN countries. The ASEAN Institute has been in the forefront of efforts to forge greater collaboration among the private sector. It is indeed well- placed to assume this role by virtue of its strong membership of prominent and best performing companies in the region.
The success of ASEAN economies has been the result of the pragmatic policies of individual governments, principally in recognizing the crucial role of the private sector as the engine of growth. ASEAN companies have been some of the most successful and profitable enterprises in the developing world, and in fact a few are fast gaining prominence on the world corporate scene. At the same time, we believe the leadership of the private sector in ASEAN has reached a level of maturity, to be able to transcend the immediate interests of their respective companies, and even individual nations, and contribute towards the overall progress and prosperity of the region as a whole. Thus we heartily welcome the efforts of the private sector to support liberalization and regional integration.
More than 200 years ago, Adam Smith wrote: "People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices." We hope this gathering of ASEAN business leaders to promote trade liberalization, which also means increased competition among themselves, will prove Adam Smith wrong.
On the contrary, in the advanced industrialized countries, powerful business lobbies have succeeded in pressuring various governments to institute protectionist policies to insulate their industries from competition, especially from dynamic newly industrialized countries. It is no exaggeration that the economic malaise in some advanced industrialized countries is because their governments have succumbed to the powerful interests and lobbies, against obvious rational economic propositions and societal considerations.
We are indeed gratified that the private sector leadership in ASEAN, unlike their counterparts in industrialized economies, has taken unto itself to promote competition and thereby constitutes a powerful force towards liberalization. Thus, we can hope to see, with liberalization and integration of our economies, greater access to goods and services and an improvement in the general standard and quality of living of our people. What is even more crucial, liberalization will stimulate economic growth throughout the region, drawing the peripheral areas into the mainstreams of development. In this way, market forces coupled with governmental affirmative action can operate effectively to break the vicious cycle of poverty and bring hope of a better future for the millions in our midst.
The combined economic strength of ASEAN has grown tremendously over the years. In fact, no other regional grouping can rival ASEAN in terms of growth performance. This has happened even while ASEAN did not have an economic agenda. We believe ASEAN has yet to exploit its potential to the fullest. Thus it is imperative that we give substance to the many ideas and pronouncements on economic cooperation and integration. This would mean, among other things, realizing our commitment towards realizing AFTA (ASEAN Free Trade Area) within the shortest possible time. It is equally urgent that we accelerate the process of establishing economic linkages within the areas identified as having growth potentials. We believe the implementation of the various growth triangles -- will expedite integration and boost economic activity.
The world has so changed in recent years that it requires no less than a new vision to enable us to traverse the new century. The progress of time in a very short spell has shown the hollowness of the victory of the first would over its totalitarian enemies which it fought tooth and nail for four decades. There was no ideological victory to be celebrated. If it was true the collapse of the Berlin wall and the subsequent events ushered the triumph of democracy, why are expressions such as the "the end of democracy" and "the disenchantment of liberty" gaining vogue among the more thoughtful members of industrialized societies. It was as if the West had lost the very ideals that once made their societies and nations truly great. That they also need the presence of an enemy to sustain their fighting spirit is also obvious, so much so that they have to create one if they do not have any.
It is now evident that we can no longer look up to the big powers for leadership. Each of them are so deep in their own problems to cater to other people's interests. The slow progress of the Uruguay Round negotiations on GATT is a clear indication that we in the region have to construct our own mechanisms and avenues for the development of trade. While the speedy conclusion of the GATT is critical to us, we cannot merely sit and wait for things to happen beyond our control. We are now, in fact, in a position to decide on many matters within our proper competence. And decide them we must.
It takes more than mere vision to unleash the fullest potential of East Asia. And no one is more acutely aware of this potential than the private sector businesses who have themselves benefited from greater regional integration as well as having to grapple with some of the problems attendant upon our dependence on other regions. Thus it is to the advantage of the private sector to take up the idea of the East Asia Economic Caucus as their own cause.
The structure of the global economy has undergone a major transformation, so that we must progressively reduce our dependence on our traditional industrial trading partners in the West. Not only are we less welcome now in their markets, but their prospects are so uncertain that our tenacious reliance on them would be detrimental to our long-term interests. By any standard, they still constitute an enormous economic bloc, but their current difficulties cannot be blamed entirely on the swings of the economic cycle. There are growing signs of sclerosis. Even when solutions are available, their will to act is clearly lacking.
We ourselves do not suffer from lack of vision. Further progress in East Asia can only be delayed by our own tardiness in establishing the necessary framework and infrastructure for regional integration. One cannot over- emphasize the need for effective government and private sector collaboration on an ASEAN scale. If only the two can act in concert, we are confident that we could surmount the resistance towards regional integration. The same applies in the case of the EAEC. It is the role of the respective governments to clear away politically related hindrances, if any, and for the private sector to convince their fellow members to transcend their narrow sectoral interests in favour of liberal and transparent policies that would surely promote overall growth and prosperity in their own country as well as throughout the region. In this regard, since the ASEAN private sector is already a cohesive grouping, it should form the nucleus to advance the EAEC concept among their counterparts throughout the entire East Asia region.