Posts Tagged ‘ASEAN’

BerlinThere is possibly a great cohesion between German-Asian relationships, especially in the not-so-distant future. That is, if head of Ernst & Young’s business center in Germany, Thomas Wirtz is to be believed. He said that: “While small and medium enterprises have been lagging behind when it comes to investment in ASEAN, including Indonesia, this is likely to change as 41 percent of the respondents expect the market to be more important than BRICS [Brazil, Russia, India, China and South Africa] as well as other regions.”

In a recent EY report, Indonesia was ranked number five among top destinations for German investment after Myanmar, Vietnam, Cambodia and Laos, where business projects from the world’s fourth-largest economy are still relatively low, thereby presenting wider room for growth.

Indeed, just a few weeks ago Germany’s finance minister announced that it would be applying for membership of the Asian Infrastructure investment Bank – seen by America as being a rival to the World Bank.

It seems also that German companies are hoping that the economic environment in Asia is only going to improve for them in the future. This is due to the Asean economic Community which is anticipated to lead to a true “integrated regional economy.” And that isn’t just Indonesia. In fact, Malaysia has become an increasingly popular hub for German investment. For example, figures for last year showed the implementation of 387 manufacturing projects worth RM26.8 billion from Germany into Malaysia, particularly in electric and electronics, chemical and chemical products, petroleum products, natural gas and rubber products.

So if these trends continue, Germany could likely become a major player in the east overseas.

In an effort to reduce, if not close, the gap between the dynamic region and major wealthy economies, nations throughout South-East Asia have combined resources to launch a fund of almost $500 million to build infrastructure.

According to finance ministers of Asean, the fund will support the building of roads, railways and other public projects, reducing the need for foreign assistance, and boosting regional economic integration with hopes of its completion by 2015.

Surin Pitsuwan, Asean secretary-general, said “Our community is now being built with speed. This is a milestone. The time for donations, the time for just gifts, is over. We have to be very innovative, we have to be very collaborative in our approach.”

The region has its fair share of famous buildings and businesses, and has seen impressive growth rates, but it lacks in access to major highways, railways, clean water and electricity.

Based in Malaysia, the Asean Infrastructure Fund will initiate with $485.2 million, with hopes of financing six projects every year. The fund predicts that by 2020, it will offer $4 billion in loans, and will be worth a total of $13 billion.

Countries such as China, Japan and South Korea have shown interest in joining the fund, but the region intends to keep the project internal, at least for now.

Hoang Trung Hai, Vietnam’s Deputy Prime Minister, recently met with the Minister of Agriculture and Irrigation in Myanmar, U Myint Hlaing, as well as the Minister of National Planning and Economic Development Tin Naing Thein. Topics on the discussion table included cooperation in fields “in accordance with the guidance of the two countries’ leaders.” Economic cohesion was also discussed with an agreement on “early implementation of specific projects and acceleration of the implementation of the existing agreements.”

Big Talks

Other major areas such as politics and diplomacy were also on the discussion table and an agreement between the two countries was made vis-à-vis delegation exchange “at all levels” as well as “people-to-people exchange.” When it came to what can be done to increase regional cooperation, there is already much of this in place. For example, the support Vietnam has lent to Myanmar’s “bid to assume ASEAN 2014 Chairmanship.” As for Myanmar, it reiterated its position vis-à-vis ASEAN East Sea issues “respecting the implementation of the Declaration on the Conduct of Parties in the East Sea (DOC) signed between ASEAN and China, and towards the Code of Conduct in the East Sea (COC).”

More Support

In addition, the opening ceremony of the Vietnam and Myanmar business cooperation conference that Thiha Thura Tin Aung Myint Oo and Hai (VP and Deputy PM of Vietnam) attended in Nay Pyi Taw took place. This was definitely a big cheering contest by both countries, of both countries’ huge achievements and efforts over the years of increased cooperation.

Talks in Vietnam on Cooperation Issues

Following talks in Nay Pyi Taw (Vietnam) last week between Hoang Trung Hai (Deputy PM to Vietnam) and Thia Thura Tin Aung Myint Oo (VP to Myanmar), an agreement was reached between the two countries to “increase cooperation” in areas such as agriculture, aviation, oil, automobile, finance and more. On the table for discussion was the countries eco-political status, bilateral relations and possible ways of “boosting cooperation” in the near future, especially vis-à-vis developments in economic trade vis-à-vis what has been the case in the past. Further, if Myanmar has better conditions, Hai said, there would be more Vietnamese firms working there.

Other Cooperation

Myanmar and Vietnam also saw the possibility of cooperation from other countries within the ASEAN and sub-regional framework like “cooperation between Cambodia, Laos, Myanmar and Vietnam (CLMV), the Ayeyawady-Chao Phraya-Mekong Economic Cooperation Strategy (ACMECS), the Greater Mekong Sub-region (GMS), East-West Economic Corridor (EWEC), the South Economic Corridor (SEC) as well as at international fora.”

Animal Husbandry Cooperation

A memorandum was then signed on cooperation of animal husbandry between the Myanmar Ministry of Livestock Breeding and Fisheries, and the Vietnam Ministry of Agriculture and Rural Development as well as a MoU on development cooperation between Myanmar’s Ministry of Finance and Revenue and the Vietnam Ministry of Finance.

Good Working Background

There is space for substantial optimism since Myanmar and Vietnamese leaders both recognized efforts and achievements that have been made in business over the last few years, especially this year with the implementation of the April high-level agreement, “creating favorable conditions for business and cooperation.” There is much work to be done still, but it looks like it’s a very positive environment in which to do this.