Your Excellency Mrs. Madeleine Albright,
Secretary of State of the United States of America,
Ladies and Gentlemen,
On behalf of my ASEAN colleagues, I wish to extend to you, Secretary Albright and your delegation a warm welcome to this annual session of the Post Ministerial Conference between ASEAN and the United States of America. Indeed, we are pleased to have you again personally leading the US delegation. On my part, I am honoured and privileged to be here today to co-chair this session for the first time now that Malaysia is the Country Coordinator for the ASEAN-US dialogue.
2. Your presence with us here today, yet again demonstrates the importance the United States attaches to its cooperation with ASEAN. The dialogue relationship has spanned more than two decades and during this period, the United States has made significant contributions towards the region, both economically and politically. Our relationship is multi-faceted and has provided opportunities for both sides to discuss and focus on practically all issues including economic, political and security matters.
3. Since our last PMC session, the ASEAN region had undergone dramatic changes. As you are aware, the ASEAN economies suffered serious setbacks with the swift and sudden onset of the financial crisis which has yet to bottom out. ASEAN countries have since embarked on various measures to overcome the crisis but such efforts have yet to bring about the desired results. This can be attributed partly to the fact that some of the factors contributing to the crisis are external in nature and beyond the control of the ASEAN countries. The problems currently faced by Japan, particularly the depreciation of the yen against the US dollar, have added concerns to ASEAN countries due to the adverse impact on regional currencies. We fear that this could further hinder our recovery process and that a protracted crisis could trigger a recession with global repercussions. We believe that with strong leadership and a decisive role by the US at this juncture could help boost confidence in the region while at the same time, other major developed economies could be spurred into undertaking concerted measures in addressing the crisis. The restoration of economic confidence in the region and a display of strong support from the international community are among the crucial factors that could contribute towards a speedy recovery of the ASEAN economies.
4. There is no doubt that the US has made significant contributions in the field of trade and investment in the region. The US is ASEAN’s fourth largest trading partner, while ASEAN is the US third largest export market. In 1997, United States direct investment in ASEAN countries exceeded US$35 billion. This amount, however, accounted for a mare 3.03% of the US total overseas investment for the year. In the light of the financial crisis, intensified efforts by the US to promote a greater flow of US investment into the region would be most welcomed.
5. The private sectors of ASEAN and the United States have played a crucial role in promoting economic cooperation between both sides. In this respect, ASEAN would like to support the efforts being undertaken by the ASEAN-US Business Council (AUSBC) in strengthening private sector and business linkages. Both ASEAN and the United States should further facilitate and encourage greater private sector involvement through trade and investment promotion activities.
6. While the US is familiar with the ASEAN Free Trade Area (AFTA), I wish to also highlight the ASEAN Industrial Cooperation (AICO) Scheme which is being implemented. Companies entering into AICO arrangement will enjoy immediate tariff benefits of 0-5%. The US companies operating in the region should take advantage of this Scheme. Currently, over 80% of the applications for AICO benefits are from Japanese companies. In addition, ASEAN countries are now working on the Agreement on ASEAN Investment Area (AIA) to make the region more attractive to investors from within as well as outside the region.
7. The financial crisis has also brought about severe social disruptions on the ASEAN people. For instance, it had become more expensive for many ASEAN students in the US to continue their studies there due to the depreciation of the ASEAN currencies. A substantial number of them have no option but to return home without completing their studies. This is indeed a heart-breaking decision for them as well as their families. As for the ASEAN countries, the unexpected return of the students has imposed additional economic and social burdens on the governments. The ASEAN governments have appealed to the US government for assistance. I am pleased to note that the US government as well as its private sector including universities have responded positively by taking specific actions aimed at lessening the financial burden faced by our students. For this, ASEAN would like to express its appreciation to the US!government.
8. 1 would also like to take this opportunity to express ASEAN’s appreciation for US support and financial contribution of US$4 million towards the implementation of the recent Regional Haze Action Plan. Part of the contribution has been allocated to four projects, namely smoke/haze modelling, smoke/haze monitoring, assessment of haze impact on health and climate impact forecasting. In addition, I understand that another US$2 million has been recently approved for fire-fighting activities in Indonesia.
9. Today’s session once again provides us with a good opportunity to review our dialogue relations. Although our political dialogue has made progress, the same cannot be said for our development cooperation. There is a discernible declining trend in development cooperation under the dialogue. We view this with concern and wish to recall that this issue was raised at last year’s session as well as at the recent 14th ASEAN-US Dialogue in Manila. The delay in implementing the agreed proposals and the lack of initiatives in terms of new project proposals could be partly responsible for the decline. You may be aware that there are several proposals in the pipeline which have yet to be considered, let alone implemented, In view of this, there may be a need for our officials to seriously look at the problem and in the process, strengthen development cooperation between us.
10. While we agree that economic cooperation between ASEAN and the US could be private sector-driven, the role of government as the prime mover in encouraging development cooperation should not be relegated. It should in fact complement the role of the private sector, not only in strengthening the economic development cooperation, but also in broadening cooperation areas not ventured by the private sector. As a start, Malaysia as Country-Coordinator and the ASEAN Secretariat are ready to work closely with the US in identifying suitable projects. In this regard, the ASEAN Secretariat is in the midst of drawing up a comprehensive Plan of Action to mitigate the social fall-out of the regional crisir. As the Plan of Action will cover the areas of youth, women, children, health and nutrition, rural development and poverty eradication, the US and the Secretariat could perhaps identify some collaborative projects of this nature which could qualify for US development assistance under the dialogue. In addition, there are also projects initiated by some of the ASEAN committees that the US could consider providing funding assistance. These projects could not be implemented for a lack of funds. The US may also wish to focus on projects which are mutually beneficial to both sides and these include projects related to Information Technology (IT), human resource development, environment, just to mention a few.
11. In concluding, I believe that a renewed sense of commitment by the US and ASEAN towards strengthening the ASEAN-US dialogue at today’s meeting will provide the impetus for both sides to move forward to promote our common interests and aspirations. My ASEAN colleagues and I look forward to have a fruitful exchange of views with Your Excellency.