ASEAN is not yet ready for integration, Mahathir says

ASEAN is not yet ready for integration, Mahathir says

Singapore is the only ASEAN member that will be completely ready for economic integration under the ASEAN Economic Community (AEC) by 2015, and some of the group's poorer members should be allowed to retain their economic protections, former Malaysian prime minister Mahathir Mohamad said yesterday.

"The poorer members of ASEAN are not yet ready for the AEC. Even the richer members are not really ready for the AEC. This is because their domestic policies are not similar," Mahathir told a conference on "Assessing ASEAN's Readiness by Country" held by Krungthep Turakij newspaper at a Bangkok hotel.

Singapore is best prepared for the AEC because the city-state is a free port that has never relied for long periods on tariffs, he said. Other economies depend heavily on tariff duties, Mahathir said, noting that even his own country is second to Singapore in terms of readiness.

ASEAN members have the ambition to liberate and integrate their economies by promoting free movement of goods, investment, services and manpower by the end of 2015. Tariffs and non-tariff barriers are being pushed down and will be eliminated eventually.

If ASEAN sticks to its original schedule for economic integration, some countries might face difficulties, Mahathir said. "We should come together, but we should allow countries like Cambodia, Laos and Myanmar to protect their economies."

Different strategies can achieve different results from trade liberalisation, such as with automobiles in Malaysia and Thailand, he said. He noted that Malaysia had invested a lot to develop its own automobile manufacturer - Proton Holdings - but had derived less benefit from the effort than Thailand had from its strategy of assembling foreign automobiles.

Mahathir suggested ASEAN look to the crisis in the European Union as a lesson for ASEAN integration.

"We cannot reject unity outright. On the other hand, we cannot just unite simply because the Europeans united. We need to know first why the EU has seemingly failed," he said.

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