Asean to declare single market but delays deeper integration–Malaysia

DAVOS, Switzerland—The Association of Southeast Asian Nations (Asean) will officially call itself a single market by year’s end, but “big things” like seamless travel within the 10-nation bloc would only come in 2020, Malaysia’s trade minister said.

“We’re going to declare ourselves as an Asean Economic Community,” said Mustapa Mohamed, whose country holds the rotating presidency of the Southeast Asian bloc this year.

“We don’t have complete integration or harmonization yet, but 2015 is laying the stage for bigger things to come,” he said on the sidelines of the World Economic Forum in Davos.

“We’re going to get almost there by 2015 but the big things like seamless travel … would come in 2020.

“What’s important is that we’re committed. I’m not saying that we’re backtracking,” said the minister.

The Southeast Asian bloc, a market of about 600 million people, had set 2015 as a deadline for integrating the region’s vast economies into a single European Union-style market, with tariffs abolished and free movement of skilled workers.

But there is much skepticism that the targets could be met, as the bloc is made up of countries in vastly different stages of economic development.

Myanmar (Burma), for instance, is just opening up its economy after decades of isolation over its outright military rule which came to an end in 2011.

At the opposite end of the spectrum is Singapore, which ranks among the world’s richest nations.

Mustapa acknowledged that it would only be “in 2020 that you’ll see more progress in Asean economic integration” in terms of the abolishing of nontariff barriers and flow of skilled labor.

By year’s end, there will be “freer movement of goods and services but not free movement of goods and services.”

The business community has been pushing political leaders to move faster on integration, but Mustapa said the Asean model is gradual.

“The business community wants Asean to be integrated as one entity. The fact is that there are border issues, customs, immigration, and different regulations,” he said.

In addition, there is little understanding among the general public on how a single market can change their lives, said the minister.

“Some fear that they would be robbed of their jobs, that come December 2015, I’ll be out of job because my Malaysian friend is coming over,” he said.

“We need to do a lot more in terms of communication.”

Asked if Europe’s recent economic woes over heavily indebted member states like Greece had put off integration plans, Mustapa said “from day one, we know that we’re not going to adopt the EU model.”

A single currency or a parliament were never part of the bloc’s plans, he said.

Asean groups together Brunei, Cambodia, Indonesia, Laos, Malaysia, Burma, the Philippines, Singapore, Thailand and Vietnam.