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Meeting Summary

  MAIN THEME:
  “ASEAN AND JAPAN: STRENGTHENING TIES FOR A SHARED FUTURE”

1. Outline of Meeting

Business persons from ASEAN and Japan met in Brunei Darussalam from November 2 (Sunday) to November 4 (Tuesday), 2008 for the 34th ASEAN-Japan Business Meeting (AJBM) and discussed key issues about ASEAN and Japan under the theme "Strengthening Ties for a Shared Future".
The meeting consisted of an opening session on Enhancing the ASEAN-Japan Partnership: How can businesses leverage from economic treaties followed by an official opening ceremony and two panel discussions on Securing Our Energy an Environmental Future: What are the issues and challenges facing ASEAN and Japan under Newly Emerging Risks and Opportunity.

2. Pre-opening scene – setting session: Enhancing the ASEAN-Japan Partnership: How can businesses leverage from economic treaties.

Chairperson:

Panelists:

(1) Mr Anwar Pulukadang:

It seems that none of the objectives of JIEPA has shown any indication of leverage yet. With regard to investment, ASEAN countries have entered into competition among themselves to induce Japanese investors. From observation, all available treaties including JIEPA at present are more of academic or political comfort rather than as vehicles for businesses to maintain and expand operation. Japan for example should change its stance towards products produced in the regions as the region is justly compatible to produce quality goods at low cost.

(2) Dato Hj Mohamed Iqbal

The life of ASEAN begins at 40. ASEAN’s aspiration to be an integrated ASEAN Economic community and regional grouping with a global reach are faced with difficulties as ASEAN face huge gaps between the member countries due to the varied stages of development and political philosophy as well as democratic process. The essence of ASEAN together is at the necessity of prosperity. While it took ASEAN 40 years to come up with a Charter, there is a question of how long ASEAN will take to achieve the ASEAN Economic Community. The ratification of the Charter on the other hand, took a while to be fully ratified as member countries grapple with the clear implementation of the aspirations of the Charter. There are however, many opportunities to be derived from the ASEAN Charter from a business perspective as the ASEAN Charter lays a commitment to intensify community building through enhanced regional cooperation and integration that will promote a broad-based alliance in meeting the demands of a fast-changing global environment.

(3) Ms Wong Chian Voen

Significant progress has been made in terms of ASEAN-Japan relations since the establishment of ASEAN-Japan Forum in 1977. FTAs between ASEAN member states and Japan seek to further strengthen economic ties, and create a larger and more efficient marker with greater opportunities in the region. To effectively leverage on EPAs between ASEAN member states and Japan, businesses need to be aware of the provisions and preferential treatment offered under the EPAs as well as their status of implementation. Exchange of information and dialogues between the private sector and governments are therefore important to ensure that the EPAs stay relevant to today’s businesses.

(4) Mr Chiaki Yamaguchi

Individual ASEAN countries as a standalone, have small auto markets however, together collectively as ASEAN, it is bigger than South Korea, therefore economies of scale is an important element for ASEAN which is conducive for growth especially in the auto industry market. ASEAN thus has to be integrated to overcome the challenges and evolve to become a global production base through the aggressive use of AFTA and take advantage of the economies of scale that improve cost competitiveness. There is also a need to aggressively utilize EPAs with Japan that reduce tariffs on parts and components. In order to make EPAs and other partnership effective, ASEAN nations also should be making efforts such as integration and harmonization on standards on environment, safety and intellectual property rights.

3. Opening Ceremony

(1) Opening Remarks by Mr Shazali Dato Hj Sulaiman, Chaiman of the 34th ASEAN-Japan Business Meeting

The last hosted ASEAN Japan meeting in 1997 witnessed the regional currency crisis and again this year Brunei as a host stands in the midst of the global financial crisis. Therefore, the theme this year is indeed relevant in the region’s attempt to tackle the uncertainties that lie ahead. The Japanese Multinationals have been a major player and will continue to be a key player in the economic activities and diversification of Brunei Darussalam.

The importance of ASEAN attracting direct investment within ASEAN and from Japan has been as important catalyst to our regional development and with the emergence of China and India as key players in the global economy, we must continue to enhance our relationship between ASEAN and Japan to ensure that we still continue to be a preferred region for investment from Japan.

(2) Remarks from Mr Masamitsu Sakurai, Chairman of Keizai Duyokai

In 1997 during the Asian currency crisis, the AJBM also met in Brunei, so here we are once again assembled in Brunei to discuss and find solutions to issues we are facing now. It seems to me that we are trying to deal with two attempts here: one is how to enhance the relationship of ASEAN and Japan and to solve issues confronting ASEAN and Japan over many years. The other attempt is how to cope with new problems which have emerged over the last several years and what role each member of the ASEAN and Japan should take in the context of global economy.

(3) Message from His Excellency Taro Aso, Prime Minister of Japan read by the Ambassador of Japan to Brunei Darussalam, His Excellency Hashimoto Itsuo.

Japan and ASEAN share a close relationship based on a long history of friendship. Over the last 30 years, Japan and ASEAN have worked together on economic relations in areas such as private trade, investment, on Official Development Assistance and on regional political and security dialogues as well as in other areas. The various recent EPAs that came into force are hoped to contribute towards deepening and broadening of Japan-ASEAN relationship. The rapidly evolving developments in the world economy including the surge in food and energy prices and ongoing financial crisis have demonstrated the need for each country to correspond and cooperate with each other to tackle the scale of global challenges.

(4) Keynote Address by HRH Prince Mohamed Bolkiah, Minister of Foreign Affairs and Trade, Brunei Darussalam

"The Asian Financial Crisis", being referred to the local people as a mess is very serious and is directly affecting businesses and individuals. Japan has given ASEAN a lot to be grateful for by playing a great part in the region’s economic integration and has done much to make sure that ASEAN has the stability it needs. ASEAN is indeed an important destination for Japanese investment, and Japanese companies have added much to Brunei’s own economic development. The reality of village life is certainly the reality of life in any global village as when something goes wrong in one corner, everyone else is deeply affected. There is no reason for panic and certainly no need to try to move out of the global village. Everything that has been done over the last eleven years has made ASEAN strong and fully committed.

4. Session 2: Securing Our Energy and Environmental Future: What are the issues and challenges?

Chairperson:

Panelists:

(1) Mr Gabriel Yong

ASEAN has, over the last fifteen years made the commitment for sustainable development however, until today ASEAN is still uncertain whether it will have a sustainable future. Together, ASEAN and Japan can look into projects or infrastructure developments that emphasize on sustainable future. ASEAN should reflect upon the mess and stop to look back for lessons to enable it to prepare for the future. Moreover, one opportunity for ASEAN and Japan lies in forming an instrumental force or alliance to enforce the global industry to comply for a sustainable future.

(2) Mr Edgar Chua

Among the three hard truths relating to energy sector today are 1) the global demand for energy is growing, both in the developed and developing world, 2) supplies of "easy oil" cannot keep up with the growth in energy demand and 3) more energy means more CO2 emitted at a time when climate change looms as a critical global issue. Therefore, governments need to develop internationally aligned policies to meet the energy challenge and address climate change and should not allow for complacency in any way. ASEAN and Japan could together use this opportunity to put in place measures to secure energy efficiency and aggressively develop non-CO2 emitting energy sources such as solar, wind and geothermal energy.

(3) Ms Prum Sophallika

Cambodia calls for help from other member countries as well as Japan to not only develop its infrastructure but also in the area of waste management such as in the area of recycling.

(4) Mr Tatsuo Sato

Within environmental issues, global warming and the reduction of Carbon Dioxide (CO2) seem to have become the most relevant global agenda from both political and economic perspectives. In Japan, public and private sectors have together sought to tackle this challenge since the Kyoto Protocol in 1997 through G8 Hokkaido Toyako Summit this year. I propose four points as our future challenges. They are the setup of fair target for each country, agreement on common but differentiated responsibility, development of innovative technology, and technology transfer to the ASEAN countries from Japan which includes economic and human resource support. We need to act together and bring out new ideas in order to encourage our governments to adapt policies which lead to the reduction of CO2.
3R initiatives- reduce, reuse, recycle- implemented by the company and Japan were shared at the meeting.

5. Session 3: ASEAN and Japan under Newly Emerging Risks and Opportunities

Chairperson:

Panelists:

(1) Sopon Racharaksa

The backdrop of the US financial turbulence which is fast spreading across Europe has prompted much anxiety about a global economic downturn that may be deeper and longer than expected. The crisis will channel into Asian countries with varied level of impacts which may lead to serious liquidity problems to some countries in ASEAN. In this light, massive foreign reserves need to be continually accumulated and to overcome this crisis, there needs to be strengthened financial cooperation under the ASEAN+3 framework.

(2) Mr Cesar Purisima

The global financial climate can be expected to receive another second and third wave of economic crisis with Singapore at the moment being the first ASEAN member to have been hit by the recession over the last several weeks. This crisis has given rise to the challenge of reigniting confidence in the region. ASEAN needs to rise and reinvent itself to address the issue and sense the urgency to push for faster integration which will create an engine for growth in the region. There is a need for ASEAN to be practical and turn the pledges into reality. On the other hand, the challenge for Japan lies in ensuring this happens. The world indeed is one and the only way is through integration.

(3) Mr Moe Kyaw

Myanmar is unique in the sense that it does not have a financial crisis because the country does not have a stock exchange and mortgages are unheard of, while its exporters face immense difficulties in making international monetary transactions in US dollars because of US sanctions.
On the other hand, only 6% of FDI into ASEAN goes to CLMV countries who account for 28% of ASEAN population. There is a need to educate Asian businesses to look at Asia first and lobby governments to promote trade in the Middle East and South Asia while there is a dire need to develop key linkages that connects the whole region which will be beneficial for economic activities and integration. ASEAN as a region together with Japan could work together to come up with investment protection and incentives on developing CLMV economies and need linkages.

(4) Mr Takashi Narusawa

The most serious risk facing ASEAN is the impact of deepening global recession. It has been considered that it may slow down the regional economic growth, but what is more concerned is that it may affect the process of economic integration which ASEAN has sought to promote. However, this recession may work in the way that raises the relative position of Asia, including ASEAN, in the global economy, and therefore we should seize this opportunity by speeding up the conclusion of the free trade agreements and strengthening economic infrastructures. Firstly, we need to focus on the development of promising GMS region especially in the areas of infrastructure and industry development, and establish a mega economic zone which ranges from China to India. Secondly, we should strengthen international competitiveness of priority sectors in each ASEAN country. The key point is to foster a global company whether it is public or private. In order to achieve this, Japanese companies should promote investment in the region and reinforce cooperation with their counterparts. Thirdly, to adapt to the specialization of economic activities, we need to further pursue the improvements of bond markets and education environment.

6. Closing Session:

  1. Remark by Mr Toshitaka Hagiwara
  2. Remark by Mr Luong Trung Hieu, Deputy Chairman of the 35th AJBM in Vietnam
  3. Remark by Mr Shazali Dato Sulaiman, Chairman, 34th AJBM

The meeting achieved its objective in discussing the issues and it is hoped that the issues and messages can be communicated the members respective Government. It is important that both the private sector and government can work together to ensure policies are implementable and beneficial to the private sector. Environmental and energy issues were discussed in Tokyo last year and were thus included as a topic this year due to the significance of climate change being a topical issue. It is expected that the financial crisis will be a topic that will be followed up from this AJBM in Vietnam.

The AJBM would like to put on record its greatest appreciation to HRH Prince Mohamed Bolkiah for gracing the opening ceremony as the guest of honor and delivering a keynote address.

AJBM also would like to express its appreciation to Brunei Darussalam steering committee for the organization of the 34th AJBM.

Also appreciation to the Vietnam steering committee to host the 35th AJBM.

ANNEX

There were a few comments brought up by the members of the floor as in the following:

1.

A 3 point recommendation on the possible area for cooperation between ASEAN and Japan was brought up in the area of intellectual property rights by a Keizai Duyokai member

(A) There is a need for ASEAN to take measures for intervention since intellectual property rights are not properly practiced and enforced.

(B) There is a need to conduct knowledge creation in the IPR to protect parties such as companies and individuals on their rights.

(C) A binding legal system should be established in ASEAN to enhance further integration between ASEAN and Japan in the areas of business cooperation.

2.

There was a point brought up by the member of the floor that ASEAN always aspire to noble ideals but lacks the capacity to monitor and enforce those standards, therefore ASEAN as a region should take such matter seriously and truly cooperate together to achieve set goals in order to be able to be a competitive region and be looked at as a truly viable investment destination.

3.

Another point brought up by the member of the floor was the Asia first concept as earlier stressed by the Speaker Moe Kyaw. The commentator expressed that now is indeed a good time to do so since the global economic turmoil as witnessed by all is barely affecting Asia although it is not denied that China and Singapore are affected by the turmoil, nonetheless; there are still great prospect for growth for the rest of the ASEAN countries.

4.

ASEAN’s monetary fund and Chiang Mai’s initiative is so far working well to shield the ASEAN economies from the repeat of financial crisis which at the same time has strengthened regional cooperation and integration. Therefore, this has pushed the prospect for ASEAN to progress further. Opportunities for ASEAN are therefore great provided that ASEAN steers in the right direction.

5.

The fundamental cause of the current economic turmoil is that deficits far exceed the performance of real economy. Therefore, there are two approaches to overcome the current situation. First is to reduce excessive deficits. Japan experienced a hard process of ‘forgive’ after the collapse of the bubble economy in the late 1990s. This time also, this process is considered to be necessary. Second is to raise the performance of economy itself by growth.

6.

The growth of global economy in the last several years has owed much part to the asset-inflated bubble of the United States. Now that U.S. and European economies are suffering, it is crucial that we seek to raise Asia as a growth center of the world economy with its initiative taken by ASEAN, and I believe it is possible.