FORGING A MORE UNITED ASEAN

FORGING A MORE UNITED ASEAN: The following Question stood in the name of Mr Steve Chia Kiah Hong -

1. To ask the Minister for Foreign Affairs if he will (a) support Malaysian Prime Minister Abdullah Badawi’s suggestion that ASEAN should explore the possibility of having a common time zone, travel document and currency to boost the cohesion of the ASEAN people; and (b) outline how his Ministry plans to support this initiative to forge a more united ASEAN.

Mr Low Thia Khiang (Hougang): Question No. 1, Sir.

The Minister for Foreign Affairs (BG George Yong-Boon Yeo): Mr Speaker, Sir, on a common ASEANtime zone, Members may recall that Senior Minister Goh Chok Tong, as Prime Minister, proposed that ASEAN leaders consider establishing an ASEAN Common Time Zone at the 5th ASEAN Summit in December 1995. SM Goh envisaged that theCommon Time Zonewould facilitate economic cooperation in ASEAN. The idea has since been under discussion by ASEAN, with Singapore supporting it strongly.

The idea of a common ASEAN currency was taken up by ASEAN leaders at the 2ndASEAN Informal Summit in December 1997. The idea has been studied by the ASEAN Common Currency Task Force and the IMF. It is a long-term issue that requiresdeep study and carefulevaluation given the diversity of ASEAN economies, the differing levels of development, and the stringent pre‑conditions required for a single currency.

ASEAN has also explored facilitating travel within the ASEAN region using a "smart card" concept. Former Prime Minister Mahathir raised this with then Prime Minister Goh in April 1998, to facilitate travel between Singapore and Malaysia . SM Goh suggested that Singapore and Malaysia could take the lead to facilitate travel within ASEAN. ASEAN officials have since formed a technical working group to look into the concept. Unfortunately, there has not been much progress. However, Singapore and Malaysia are continuing to discuss the idea.

Singapore supports all new ideas to make ASEAN more cohesive and competitive. But projects like a common currency are not easy to implement quickly as they involve a high degree of harmonisation of policies and systems. And this takes time.

Singapore supports Prime Minister Abdullah 's suggestions as part of a series of initiatives that ASEAN should consider working on. Singapore ’s hope is for the ASEAN Economic Community to be established as early as possible. Recognising that narrowing the developmental gap is essential, then Prime Minister Goh proposed the Integration of ASEAN Initiative. Singapore is committed to ASEAN integration and will continue working with Malaysia and other ASEAN members to achieve this.

Mr Low Thia Khiang: Sir, first of all, how would Singapore position itself and what is the role that Singapore would play in pushing forward further integration of this concept of ASEAN?

BG George Yong-Boon Yeo: It is completely in Singapore ’s national interest to have an integrated ASEAN, so as to better compete against other regions like China , India , Latin America and Eastern Europe . Singapore has been a very active player in all projects to integrate ASEAN and create a common economic space. Last year, when the leaders met in Bali and issued the Bali Concord envisaging the establishment of an ASEAN economic community, Singapore was a very active player behind this idea.

Mr Chiam See Tong (Potong Pasir): Sir, can the Minister comment on whether the greatest obstacle to a common currency is, in fact, the possibility of the two countries coming closer together politically, just like the European Union?Our Constitution does not allow for a political union.

BG George Yong-Boon Yeo: Sir, to create a common currency within ASEAN is a much more complex problem than that. The proportion of total intra ASEAN trade still represents a small minority of ASEAN's total trade with the world. We have a vested interest in adjusting our economic policies to developments in the advanced economies. Whether as a long-term objective we should work towards a common currency is an idea which should not be dismissed but should be worked on, explored, studied, and just kept in view. It is not something which can be done quickly without careful thought because there are a lot of implications, and they go well beyond Mr Chiam’s proposal over the years to have closer political cooperation between Malaysia and Singapore .

Mr Low Thia Khiang: Sir, given the complexity of the process and the problem of ASEAN integration, would the Minister tell us how the integration process should be prioritised in terms of an agenda for the integration process so as to progressively work towards the integration?

BG George Yong-Boon Yeo: Sir, I would say that the most important part of the ASEAN agenda is economic cooperation and creating a common economic space, so that foreign investors who come into ASEAN see ASEAN as ifit were one country for the purposes of trade, production, allocation of resources. The ASEAN Free Trade Area is intended to achieve that, but it applies only to goods. Tariffs are coming down. However, we have not yet tackled services with resoluteness and there are still many non-tariff barriers. So we have got to overcome all these impediments to free trade and the free flow of investments bit by bit. It is not easy because ASEAN countries are at differing levels of economic development. Singapore is the most ardent advocate because we already have a very free regime here, but we have got to, while servicing our own interests, be realistic and be respectful of our neighbours’ own difficulties.