Situs Wapres RI
Situs Wapres RI
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Opening Speech By the Vice President of the Republic of Indonesia, At the Opening Ceremony of the 43rd Meeting of the ASEAN Economic Ministers and Related Meetings

Manado, 10 August 2011

Bismillahirrahmanirrahim
Assalamu’alaikum Wr. Wb,
Peace be upon us
Good Afternoon, Selamat Siang dan Salam sejahtera bagi kita semua

Ladies and Gentlemen,

First, to those who observe Ramadhan, I wish all of you the blessings of this Holy Month.

I am delighted to welcome all of you to City of Manado, Province of North Sulawesi.  As the chair of ASEAN this year, Indonesia is truly honored to host the 43rd Meeting of ASEAN Economic Ministers and Related Meetings in this scenic city.  

As you may observe, Manado is a rapidly emerging growth centre in Eastern Indonesia, and is only 600 km from our nearest ASEAN neighbor, the Southern part of the Philippines, with some cultural and other similarities.

The two geographically proximate regions are also part of the sub-regional growth area cooperation within ASEAN – the BIMP - EAGA (Brunei Indonesia Malaysia Philippines - East ASEAN Growth Area). It is therefore a most appropriate setting for the meetings.

Ladies and gentlemen,

The 43rd ASEAN Economic Ministers Meeting is taking place at an important juncture. After turning 44 years old just two days ago on the 8th August, ASEAN Economic cooperation has come a long way.  

Since the Bali Concord of 2003 when we came up with the vision of the ASEAN Community, we now have the legal foundation of an ASEAN Charter, three pillars of the ASEAN Community, and a blueprint for the ASEAN Economic Community.  Implementation of the ASEAN Economic Community Blueprint has already commenced since 2008 and there has been progress.  

Intraregional movements of goods, capital and people have increased spectacularly. This has made ASEAN as the most important market and source of investment and tourists for its individual member, while at the same time ASEAN has maintained its openness and centrality vis-à-vis its economic partners and the global economy.

However, to realize our vision of an ASEAN community, much more needs to be done.  The strength and relevance of regional cooperation will once again be tested as we face uncertainties in the global economy and the rather shaky functioning of multilateral institutions and governance.  

In recent weeks we have seen the uncertainties being created in the US with the protracted debate on the debt ceiling, potential for a double dip recession and, most recently, the downgrade of the US sovereign rating.  In Europe we have seen the difficulties in managing the debt packages of Greece, Ireland and Portugal, and the anxieties of a debt crisis spreading to other countries, Italy and Spain.   

What does all this mean for us in ASEAN?  

Since the 2008 global financial crisis, it is evident that US and Europe could no longer be main engines of growth for the world economy.  All of the ASEAN economies were affected by the global financial crisis. But, thanks to the relatively sound fundamentals and quick responses, the rebound was achieved by 2010.  

It is my view that all of the ASEAN economies are in a better situation right now to face the global uncertainties.   

However, this is no time for complacency. We all have to be vigilant and be prepared with national policy responses, as well as regional policy responses and cooperation.
 
Immediate issues aside, concerns with respect to the benefits of regional integration will persist. Our challenge will be to ensure balanced, equitable, sustainable and inclusive growth and development between and within ASEAN.  

The challenges and the necessary responses were emphasized when Leaders met for the 18th ASEAN Summit. Ministers and officials have been working hard since then to follow up the Leaders directions. I do hope that on this occasion ASEAN Economic Ministers will reflect on recent developments and continue their work to further shape and provide concrete recommendations in line with the directives of ASEAN leaders.

At the 18th ASEAN Leaders Summit in Jakarta last May,  the Leaders noted, "Our work these days and our expectations of how things will evolve may inspire us to think of ASEAN beyond 2015 which is competitive, fairly equal, inclusive, green, sustainable, and resilient". 

Let me now address each of these stated goals in the context of this ASEAN Economic Ministers Meeting.

In thinking about a competitive ASEAN, I note that encouraging progress has been made towards achieving a single market and production base in ASEAN, particularly through implementation of the ASEAN Trade in Goods Agreement. With regard to trade in goods, 99% of total tariff lines have been eliminated for intra-ASEAN trade between the six founding ASEAN Member States. Our next step will be extending this progress to the CLMV Member States by 2015.

As we approach 2015, the remaining challenges are being seen with greater clarity.  A recent report from the Asia Competitiveness Institute highlighted the need and scope to substantially raise competitiveness across ASEAN economies and for ASEAN as a whole.

The report said that in 2010, ASEAN’s ranking on competitiveness fundamentals, as measured by a wide range of macroeconomic and microeconomic factors, is 57 out of 132 countries. This position has remained relatively unchanged over the last five years.

To address this competitiveness challenge, ASEAN needs to focus on removing Non-Tariff Barriers and addressing the so-called “behind the border” barriers to trade in services and investment.  

We need a concerted drive on micro-economic regulatory reform to ensure ASEAN remains competitive, to make it easier to start and grow businesses in ASEAN, to encourage higher levels of domestic and foreign investment, and to improve productivity and spur growth and development.

To move forward, progress in the  implementation of the ASEAN Framework Agreement on Services (AFAS) is also of critical importance.   It is worth noting, at the global level, that reducing barriers to services is estimated to generate twice the economic impact of reducing barriers to trade in goods.

The services sector has been the source of most global job growth over the last decade.  Efficient services sector will also contribute to competitiveness of other sectors.

Let us remind ourselves that the services sector is a major component of the GDP of ASEAN Member States. It accounts for between 30 percent and 70 percent of GDP of ASEAN Member States. 

Full implementation of AFAS, including greater attention to the mobility of skilled labor facilitated through Mutual Recognition Arrangements is therefore essential if ASEAN is to capture these potential. 

Enhanced progress on ASEAN services trade liberalization should be complemented by fuller implementation of the Master Plan on ASEAN Connectivity, as well as the ongoing development of sub-regional interconnectivity among ASEAN Members States, namely: Indonesia-Malaysia-Thailand Growth Triangle (IMT-GT), Brunei-Indonesia-Malaysia-Philippines East ASEAN Growth Area (BIMP-EAGA), and Greater Mekong Sub-region (GMS).

Full implementation of these initiatives will lead to a deeper ASEAN economic integration via infrastructure connectivity that will translate into enhanced competitiveness. 

Another important stepping stone for enhanced competitiveness will be the implementation of the ASEAN Comprehensive Investment Agreement at the soonest possible time. In this regard I particularly urge delegates to focus on issues that will improve the investment climate of ASEAN Member States through increased regulatory transparency and predictability. 

Trade facilitation and competitiveness through the full implementation of National Single Windows across all ASEAN countries is also a key concern and is a prerequisite to establishing an effective ASEAN Single Window.  This is one of the key elements to achieving the ASEAN Economic Community by 2015.
 
In this respect, I will be eager to learn the outcomes of deliberations between ASEAN Economic Ministers and the private sector at the ASEAN Trade Facilitation Forum to take place on Saturday. The overall purpose of such discussions should be to identify priority areas and measures for increasing cross-border transactions to improve the competitiveness of firms in ASEAN.

Such measures should also ultimately increase private sector utilization of ASEAN economic agreements. 

Ladies and Gentlemen,

The second issue that I would like to address  is the issue of inclusiveness.  As noted by the ASEAN Leaders in May, there needs to be much more attention on the third pillar of the ASEAN Economic Community – that is Equitable Economic Development. In our community of nations, growth needs to be inclusive. We need to make sure that the benefits of growth are shared, both across the region and within countries. 

Let us recall that ASEAN Leaders have tasked Ministers to develop a framework and guiding principles that include new elements of high-impact targets and quick wins that go beyond 2015.

Inclusiveness and Equitable Economic Development needs to be tackled through effective fiscal policies, specific policies targeting Small and Medium Enterprises (SME) integration into regional and global supply chains, and policies to assist the poor and marginalized.

ASEAN SMEs must have better access to information, technology, markets and finance.

We also need to intensify efforts at implementing programs under the Initiative for ASEAN Integration (IAI), including through engagement with Dialogue Partners and Development Partners in our efforts to bridge the development gap.
 
Moving to my third point, a green and sustainable ASEAN will be an ASEAN that pays attention to "regional public goods". ASEAN needs to work together on these things because many environmental problems are cross-border.

These issues need to be tackled at the national as well as at the regional level. In some instances direct regulations, including of standards, are necessary. In other cases region-wide and even global agreements on pricing mechanisms will be needed.
 
It will certainly not be easy to get regional and international agreement on some of these issues. But we must first recognize, as the first step, that agreements of this kind are needed in principle.

Ladies and Gentlemen,

This brings me to the fourth point in the Leaders statement above – that of resilience.  Today, it is increasingly recognized that issues of security go well beyond traditional concerns of military security and now cover a much wider range of human concerns.

We need to develop ASEAN mechanisms that enable greater resilience to economic and financial crises, shortages in food and energy, and other unforeseen domestic and international shocks. 

Implementation of the ASEAN Integrated Food Security Framework is critical, as is the signing of the ASEAN Plus Three Emergency Rice Reserve later this year. I do hope that economic ministers will also do their part in terms of the related trade and other policies.

ASEAN Economic Ministers Meeting can refine and improve existing programs that increase the productivity and production and coordinate food policy in the region with regards to trade-related information such as stocks, demand, prices and logistics.

Excellencies, Ladies and Gentlemen,

Clearly, as we move towards the ASEAN Economic Community in 2015 and beyond, we will also need to place ASEAN Community in a Global Community of Nations.
 
Here, ASEAN needs some clear thinking on what ASEAN centrality means in practice. Let me cite again the  Asia Competitiveness Institute report. It says, “ASEAN is faced with a large and increasingly powerful Chinese economy in the North. And a huge Indian economy in the West also making rapid progress.... the region will ultimately need to define its role and competitive strengths at the crossroads of these two emerging economic giants”.

These are some of the important issues and priorities, and I do hope that ASEAN economic ministers can come up with concrete recommendations to Leaders.

Excellencies, Ladies and Gentlemen,

Let me finish by making my most important remark. I would like to re-iterate the point made by Indonesia’s President, Dr Susilo Bambang Yudhoyono, last month when opening the 44th ASEAN Foreign Ministers Meeting in Bali.  That is, "We must make ASEAN matter to our people. I urge delegates here to today to ensure that businesses, especially SMEs, and ASEAN entrepreneurs truly benefit from the ASEAN Economic Community".  

As President Yudhoyono put it, “We must ensure that ASEAN improves the quality of our lives. And equally important, we must strive to include our people in everything that ASEAN stands for and achieve.”

Excellencies, Ladies and Gentlemen,

With that in mind, let us progress, let us find innovative ways to accelerate the realization of ASEAN Economic Community and to achieve a common platform for ASEAN beyond 2015.
 
I wish all participants in these important meetings success. 

Finally,  by  saying Bismillahirrahmanirrahim I declare the 43rd Meeting of ASEAN Economic Ministers  and  Related  Meetings,  open.

Vice President Of The Republic Of Indonesia
Boediono
 



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