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Singapore will be the host of an informal ASEAN summit for Heads of Government later this year. And the main item on the agenda, at least according to the Singaporeans, concerns economic issues. In an environment where there is much disquiet over the continuing economic and political performance of the ASEAN countries, much can be gleaned about Singapore's views towards the issues confronting the region from a 24 July speech by Foreign Minister, Professor S Jayakumar, to the 33rd ASEAN Ministerial meeting in Bangkok.
The challenge for ASEAN, according to Professor Jayakumar, was to how it could reinvent itself maintaining its relevance to its dialogue partners and others. And by this he seemed particularly concerned about the perceptions of international investors who he felt were being driven away by negative perceptions of the region. In his speech he emphasised projects such as AFTA -the ASEAN Free Trade Area, and e-Asean, designed to bridge the information technology gap between member countries, as key ways forward.
The continuing emphasis on AFTA and similar programs is no surprise. Singapore has both much to give and much to gain from such initiatives.
AFTA continues, at least theoretically, to promise much. But it has been bogged down again, with some free trade deals already negotiated being wound back as members tried to climb out of the economic pit of 1997. As an example, Malaysia and Indonesia have both reinforced the protective barriers in place for sectors like the automotive industry. The deleterious effects of such decisions are obviously of concern to the innovative and competitive Singaporeans.
In terms of e-Asean, Singapore remains a front-runner in the digital economy. It is therefore well-positioned to lead its neighbours through assistance in training, human resources and infrastructure development. Their motivation to do so is also obvious, as Singapore does not wish to be the single shining light of a region marginalised and all but forgotten in the dot.com age.
It is increasingly common to hear from regional commentators that the North and East Asian economies are set to leave ASEAN further behind. Singapore is wise to be concerned about its situation reliant on economies that have done far less to prepare themselves for any recurrence of the 1997 melt-down, faced with the contagious possibility of unrest in parts of Indonesia, and with a currency tied to the downward pull of the rupiah. But what can Singaporean leaders actually do when the critical decisions for the nation's future are not necessarily within their sphere of control?
WATCHPOINT: The potential to shape, at least in part, the agenda of the upcoming ASEAN leader's summit on their home turf may ensure some significant attention is given to the Singaporean agenda. What will be the end result?
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AFG Venture Group is an Asia and Australia based corporate advisory and consulting firm with over 20 years experience in creating alliances, relationships and transactions in Australia, South East Asia and India; including a 15 year history of corporate and equities advisory in Australia, undertaking merger, acquisition, divestment, fund raising and consulting for private and public companies.
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