NUSA DUA, INDONESIA—The Association of Southeast Asian Nations can avoid the headaches the European Union is struggling with today by taking its time integrating its member states, said Malaysian Prime Minister Najib Razak.
While the 10-member bloc has been around for more than 40 years and has often been criticized for moving too slowly on plans to more closely connect its diverse economies, Mr. Najib said the group’s successes have been defined by being careful and making decisions through consensus.
“The view is not to do it the European way,” he said Thursday in an interview after an annual summit of the Asean heads of state on Indonesia’s resort island of Bali. “If we move too fast we might get into problems like Europe is having.”
While there are huge differences in the economic and political systems of the members of Asean, on average the region has been doing pretty well recently. Asean economies, home to close to 600 million people, have been expanding at an average rate of more than 5% for most of the past decade. The region has a total gross domestic product of close to $2 trillion, making it larger than India.
The group has been quietly making slow progress on forming the member nations into an economic community in the next several years by lowering tariffs and other barriers to trade among members. It is also working to build infrastructure among the countries and make it easier for students, tourists and skilled laborers from the region to move from country to country.
A single Asean currency, however, isn’t being seriously considered by any of the region’s leaders, said Mr. Najib. “People realize you cannot have a single currency without having a political union” to regulate the region’s economy, he said. “Asean is a community of nations. It’s not a union, and it will continue as such.”
He said the troubles in Europe will affect Malaysia but not as much as they might have five or 10 years ago because close to half of its trade today is with other countries in Asia and only 9% of its trade is with the European Union.
“We have that cushion because of less exposure, but if Europe doesn’t handle its sovereign debt crises and its spreads…then the world falls down together with the EU,” he said.
While tensions in Southeast Asia have been rising amid concerns about China’s expanding claims to parts of the South China Sea, Mr. Najib predicted that eventually its giant northern neighbor will find a way to get along with others so that trade and investment in the region won’t be hurt.
“The Chinese have been known to be quite pragmatic people,” he said. “China has the same stakes as we have so why should China gamble away what it has worked so hard for so many years for [just] as it is on the brink of becoming the world’s largest economy?”
Source : The Wall Street Journal