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Surin: Liberalisation needed before AEC

To embrace the dynamism and potential of the Asean Economic Community (AEC) in 2015, the private sector must take on a new mindset, shun adequacy and invest abroad aided by the government.

"The rule of the game for economic growth amid globalisation is that you have to grow outside," said Surin Pitsuwan, the secretary-general of Asean.

He said South Korea and Japan adopted this modality and their economy profited greatly.

Repeating Deputy Prime Minister Kittiratt Na-Ranong's call on Thursday, Dr Surin said the Thai private sector needs to realise liberalisation is coming and they must embrace it or be passed by.

"[A change in mindset means] you do not feel comfortable and you do not feel restrained and restricted by just 70 million consumers in the country, when the AEC means you can have 10 times that many consumers," he said.

While other countries have seen a rising portion of their national product come from overseas investments, Thailand, Malaysia and Indonesia need to prepare for the same, he added.

Dr Surin also urged small and medium-sized entrepreneurs (SMEs) to invest in Asean members despite the rough competition. He called on governments to assist them.

"A robust private sector needs an enabling environment from the government, so states need to amend essential rules and regulations so businesses can be free to pursue their best interests, which cumulatively are the best interests of the nation," said Dr Surin.

Mathew Verghis, the World Bank's lead economist on Cambodia, Laos, Myanmar and Thailand, agreed governments should match SMEs with potential partners.

"A lot of SMEs don't have many connections, so governments can help link SMEs with foreign markets where there are opportunities," said Mr Verghis.

"If SMEs can group together in production to meet export orders, they can overcome the constraints of being small, so the government should assist SMEs."

Multinational corporations will have an initial advantage in the AEC because of their readiness and budget, said Dr Surin.

"They have research units that can identify any trade rules and regulations and take advantage of them faster than smaller businesses," he said.

Dr Surin said those sectors that are weak need to bring in new technology, diversify or go abroad.

"You can't expect protection forever. Even if Asean does not open up your industry, the World Trade Organisation will. If it doesn't then globalisation will. Globalisation means commerce flows, you can't stop it. And if you erect walls against all this pressure from outside, you will be weakened, and when the wall is brought down you are going to be overwhelmed because of lack of preparation," he said.

Another challenge for all Asean members is making sure that parliaments endorse the agreements and treaties that have been ratified.

"Some 75% of all [Asean-related] agreements have been ratified, but we have to make sure that our efforts do not stop at just ratification," said Dr Surin.
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