Asean integration needs ‘change in mindset’

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Wednesday, February 19, 2014

CEBU CITY (Updated) -- The Philippines will come out ahead of the competition, but the Filipino business sector needs to change its mindset to be an active driver for the rest of the Asean, said Dr. Cielito Habito, former Economic Planning secretary.

Habito was one of the speakers in Wednesday’s Sun.Star Asean Economic Community (AEC) 2015 forum held at Marco Polo Hotel in this city.

Habito, who is also chief of the United States Agency for International Development’s (USAID) Trade-Related Assistance for Development, said the Asean integration is not new to the Philippines, with 99.65 percent of its goods traded at zero tariffs since January 2010.

Dr. Cielito Habito on Asean integration implications
CEBU. Dr. Cielito Habito, chief of the United States Agency for International Development’s Trade-Related Assistance for Development, talks about the implications of the Asean Economic Community or the Asean integration during a forum hosted by Sun.Star and SGV at Marco Polo Hotel, Cebu City. (Kim Yuhico)

He said the country no longer needs to prepare but adjust to the challenges posed by the integration since the AEC is already here. The Asean integration is set to start on December 31, 2015.

Habito said the AEC poses a lot of challenges for the Philippines, but also gives more opportunities for the less developed countries, especially Cambodia, Laos, Myanmar and Vietnam.

Among the advantages of the integration outlined by Habito were: greater efficiency, that is from more technology sharing to lower costs and prices for all; higher productivity that means higher income; and stronger interdependence that the AEC fosters.

“It is pushing us to finally do the right things,” he said, stressing that with the forthcoming integration, the Philippines is forced to reduce trade tariffs, build inherent competitiveness, and widen its scope as it can now tap opportunities from capital markets integration, which also means that financing options are much wider now.

He advised the business sector to find strategic positioning in cross-border value chains and look beyond the AEC toward global value chains.

Habito also challenged the country’s large enterprises to opt for more inclusive value chains vs vertical integration as contribution to inclusive growth, while small-medium enterprises (SMEs) should shun the “kanya-kanya” or the system of individualism but rather embrace clustering.

“We should work together….Because if you partner with others, that is already a bridge that leads to greater regional cohesion, harmony and peace,” he said.

“Asean is not they, but we,” Habito stressed. (LMY/Sunnex)

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