Are we ready?

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By Neil Honeyman

An Independent View

Monday, November 18, 2013


THE Association of South East Asian Nations (Asean) is a regional alliance founded in 1967. The original members were Indonesia, Malaysia, the Philippines, Singapore, Thailand, Brunei, Laos, Cambodia, Myanmar, Vietnam, and Timor Leste joined subsequently. Asean’s headquarters are in Jakarta, Indonesia. In 1992, the then member states signed an agreement to establish an Asean free trade area (AFTA) by the beginning of 2008. Although this did not happen, tariffs have steadily been reduced.

In 2015, we shall see the creation of the Asean Economic Community (AEC). There are those who view this development with trepidation and others who see the formation of AEC as an opportunity for economic growth.

We hope the optimists will prevail.

In 1973, I was a civil servant based in Dublin, Ireland. Ireland had just joined the European Economic Community (EEC). Consequently I was able to see at first-hand what happened in the early stages of a Nation becoming part of a multi-national community. There was, of course, a slight reduction in the autonomy associated with being an independent sovereign state, but this was minor in comparison with the advantages of membership of a mutually supportive multi-national organization, the EEC.

An economic community means no import duties (tariffs) between member states. We hope this concept will be embraced by the Philippines. It would see a healthy dent in the role of the corrupt and inefficient Bureau of Customs.

No tariffs means no smuggling.

No tariffs does not mean no support for our industries.

Industries which, currently, are afforded a measure of protection by tariffs will instead be able to lobby for grants and subsidies.

Food security, a pre-eminently important governmental responsibility (no matter how wealthy the country), will be uppermost in the AEC mindset as it was with the EEC. The EEC developed a Common Agriculture Policy (CAP) which had the effect of creating excellent opportunities for Agribusiness. The Irish farmer saw a very substantial increase in his income from 1973.

We believe the AEC will have a similar attitude towards food security and will develop an agriculture policy designed to encourage more and more efficient food production. This is vital since AEC countries, collectively, will, for the foreseeable future, experience population growth, currently approximately 2 percent compound per annum.

Thus, we hope to see AEC member nations combining to implement the AEC equivalent of Europe's CAP. Grants and other financial incentives, perhaps tied to demonstrable increases in productivity, will be implemented.

This means that accompanying the formation of AEC will be an explosive growth in the (presumably) Jakarta-based bureaucracy.

We sometimes see bureaucracy as being a bad thing in which excessively complicated administrative procedures are invoked by supercilious mandarins to cause perplexity amongst the rest of us.

We hope, however, that the AEC will install a bureaucracy which is efficient and in which decision-making is fair and transparent.

Recruitment of high quality people to the AEC in vital. Clearly, the bureaucracy will be drawn from civil servants (aka government officials in those countries where democracy is either fragile or non-existent) of member-nations, but we hope that it will also include some who have relevant experience and who are currently working the private sector.

***

Are we ready?

No!

The necessary AEC organizational infrastructure does not yet exist. If there is to be a successful implementation in 2015, the apparatus must be assembled soon. Budgets need to be prepared and an equitable mechanism to determine each member-nation's contribution needs to be agreed.

For the sugar industry, we would expect representations on behalf of the Philippines to be made to Asean during 2014.

This would take the form of explaining the challenges faced by industry and what we are seeking in terms of grants and incentives.

I would like to see farmers' income growth in 2015 to be at least as much as that received by the Irish farmers in 1973.

But to achieve this, we must build strong foundations for the AEC.

When should this building process start?

Now!

Published in the Sun.Star Bacolod newspaper on November 18, 2013.

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