Open
Regionalism and Deeper Integration: The Implementation of ASEAN Investment
Area (AIA) and ASEAN Free Trade Area (AFTA)
Dr.
Lawan Thanadsillapakul
Part
7
The First Two
Pillars: Co-operation and Facilitation, and Promotion and Awareness
The
ASEAN Plan of Action on Co-operation and Promotion of Foreign Direct Investment
and Intra-ASEAN Investment was initially endorsed at the fifth ASEAN Summit
in Bangkok 1995 when the decision to establish AIA was adopted. It was
further elaborated by the AHIA Meeting in July 1998. The plan of action
contains various measures for investment facilitation and promotion. They
include joint promotional seminars and activities to attract foreign direct
investment; joint promotion to attract FDI in higher technological-based
industries and high value-added activities; joint publications on investment
regulations, policies, procedures and opportunities to further enhance
the transparency of ASEAN's investment regime; simplification of ASEAN
countries' investment procedures; joint training programs for ASEAN's
investment officials on investment promotion; and closer co-operation
among ASEAN investment agencies through exchange of investment data and
information; and updates on any policy changes. ASEAN Investment co-operation
work programs(51) will help
to implement the ASEAN Plan of Action on Co-operation and Promotion of
Foreign Direct Investment and intra-ASEAN Investment. Among these work
programs are the linking of ASEAN member countries' homepages to the ASEANWEB;
joint promotion events within and outside ASEAN, and human resource development.
The Taskforce on the collection and reporting of FDI statistics was set
up by the AHIA, to provide a comparable approach to measuring, collecting
and reporting of FDI statistics for monitoring the progress and development
of the ASEAN Investment Area. The Work Programs also include a compilation
of measures taken and incentives provided by member countries in promoting
FDI that will be published to assist the private sectors in their investment
decision-making processes. In conjunction with the signing of the Framework
Agreement on AIA and to facilitate FDI flows into the region, the AHIA
agreed that three major projects be launched(52) :
1) |
ASEAN
Supporting Industrial Database (ASID) for supporting industries
for manufacturers and suppliers of ASEAN countries(53) ; |
2) |
Directory
of ASEAN-owned Technology Suppliers for facilitating intra-ASEAN
sourcing of technology, enhancement of investment match-making,
promotion of joint venture operations and to provide opportunities
to technology suppliers in the region to supply technology to third
countries; |
3) |
Compendium
on investment Policy and Measures of ASEAN countries for providing
general information on investment policies and measures of the members. |
The
work programs include, among others, joint training programs, high level
strategic planning meeting, a protocol to amend the ASEAN Agreement for
the promotion and Protection of Investment(54) , and a comprehensive survey on the promotion of FDI into and within ASEAN.
Furthermore, it established the ASEANWEB, which links the websites among
its member countries' investment networks, to provide investment information
in order to enhance the transparency of ASEAN investment regime and for
better access to investment information for investors. This helps investors
gain access to the overall investment policies in ASEAN countries to facilitate
their decision-making in investment. The AHIA convened a conference, where
the ministers of ASEAN countries met up with world corporate leaders to
encourage private sector companies to meet, interact, and to explore the
opportunities present in the region(55) . It was also agreed that individual ASEAN countries should also consult
the private sectors in their respective countries on what specific measures
could be adopted to improve the investment climate. In this connection,
they urged the private sectors to participate actively in these consultations(56) .
The
Third Pillar: the Liberalisation Program
Under the AIA, ASEAN agreed to promote itself as "a single
investment region"(57) through joint investment promotion efforts, aiming at the full realisation
of the ASEAN Investment Area. Under AIA, national treatment will be applied
to both ASEAN investors and all other investors. ASEAN member countries
hope that this will increase the confidence of investors in investing
in the ASEAN region. The financial crisis(58) provided a further impetus for the move to liberalise the investment regime
in the form of "bold measures".
Part
8
_______________________________________________________________
(51)
This results from the Meeting of the Fourth ASEAN Heads of Investment
Agencies, 24th July 1998, Singapore, Joint Press Statement. Paragraph
8.
(52)
Joint Press Statement, Meeting of the Fourth ASEAN Heads of Investment
Agencies, 24th July 1998, Singapore.
(53)
The ASEAN Supporting Industry Database will assist ASEAN investors seeking
to source parts, components or raw materials from ASEAN rather than importing
such products from outside the region, thereby enhancing ASEAN's industrial
linkage.
(54)
The revised Protocol includes of provisions on transparency and predictability,
the simplification of investment procedures and approval process, a dispute
settlement mechanism, and accession of new members. The agreement is aimed
at increasing the confidence of investors to invest in the ASEAN region.
(55)
Decision made by the ASEAN Heads of Investment Agencies Meeting, Manila,
Philippines, 3rd-4th July 1997. The conference took place in conjunction
with the 30th ASEAN Anniversary in 1998.
(56)
This resulted from the Meeting of the forth ASEAN Heads of Investment
Agencies, 24th July 1998, Singapore.
(57)
Joint Press Statement of the ASEAN Heads of Investment Agencies Meeting,
Manila, Philippines, 3rd-4th July 1997, Paragraph 7.
(58)
The Heads of Investment Agencies have noted that foreign direct investment
and intra-ASEAN investment flows have declined dramatically since the
beginning of the crisis. In this regard, they agreed that there is a need
to take collective actions and measures in addition to those taken in
the individual member countries. They called on the various private sector
organizations in ASEAN to provide suggestions on meaningful, immediate
and specific measures that will help in the economic recovery process.
See Joint Press Statement of the Meeting of the Fourth ASEAN Heads of
Investment Agencies, 24th July 1998, Singapore, Paragraph 3. |