14 December 2002 An Interview with Outgoing SG Rodolfo C. Severino Done by Warief Djajanto* at the ASEAN Secretariat before the handover ceremony with the current SG Mr. Ong Keng Yong Jakarta (ASEAN Features) – Rodolfo C. Severino, Jr pipes out a reality call to Southeast Asia’s business people. “It is up to you to use it (AFTA),” exclaims the outgoing secretary general of the 10-member Association of Southeast Asian Nations, ASEAN.  Severino, 66, a former Philippines foreign affairs undersecretary, ends his five-year term as ASEAN’s top administrator Dec 31. Although he leaves behind a record of achievements, he also passes on a catalog of concerns to his successor, Singapore ambassador Ong Keng Yong. One such concern is the region’s private sector has not put to full use the benefits of the ASEAN Free Trade Area, AFTA, a basic reality since Jan 1 2002. It allows for trade between ASEAN member countries with average tariffs down to 3 pct or less on practically all goods and services. Private companies that do take advantage of AFTA facilities are U.S. and Japanese firms that do business in the region. “AFTA as a marketing tool for a region with practically no tariffs, we say it is up to you to use it,” Severino urges ASEAN companies in an end of term interview. ASEAN has a special program to boost the region’s trade and industry, he says. It is called ASEAN industrial cooperation and has involved  car makers, appliances, electronics and food production. However actual use has varied, he says with a half-frown. In an October 30 speech in Jakarta, Severino half-lamented that he has not heard from ASEAN companies that have gained from AFTA and stand to benefit further from the process of integration. “The pressure for deeper integration comes from U.S. and Japanese companies that operate in ASEAN,” he told ASEAN marketing groups. Why can U.S. and Japanese businesses take advantage of AFTA and not so much ASEAN businesses?  They (ASEAN firms) are not big enough. They are not as high profile as the big names, Severino replies. “But the point here is that if Sony, Ford, Microsoft, Motorola, IBM, if they don’t have a regional market in ASEAN, they would go to China.” The problem is many ASEAN companies are not big enough to take advantage of the regional market. They need restructuring so they can go beyond the national market, Severino explains. On the ASEAN’s agreement with China in November to create a free trade area in 10 years, Severino says such a free trade area will invite investors to invest in ASEAN as an alternative to China to eventually go into the China market. He admits some ASEAN industries may get hurt by Chinese goods that flow into ASEAN. “We have to live with that. But the point is that while some industries get hurt, others are benefiting. And already ASEAN’s exports to China are rising very rapidly,” Severino argues.

Looking back the past five years, he cites several key events during his watch and ASEAN’s response to them.  One is the 1997-98 monetary crisis that fist hit Thailand and spread across the region. ASEAN’s specific reaction was to coordinate a position to the international financial architecture. Second was to set up a peer review among its finance ministers. This periodic surveillance protected ASEAN from being caught by surprise and enhanced cooperation, Severino views.  On the annual haze situation brought about by uncontrolled forest fires in Indonesia’s major islands of Sumatra and Kalimantan (Indonesian Borneo) and affecting Malaysia and Singapore particularly, fire-fighting teams have been formed to come in and put out fires. The most important and most difficult measure is fire prevention. It has to do with education, public awareness and mobilization, and law enforcement, he says. On the expansion of membership from six to 10, leaving out Cambodia, Laos, Myanmar and Viet Nam would not help the stability of the region, Severino says. The consequence of expansion is a development gap between the earlier members and the newer members. Severino says ASEAN has a four point programme called the Initiative for ASEAN Integration to help bridge the development gap. This embraces infrastructure, human resource development, information and communication technology, and regional economic integration. “It should be done primarily by the newer members themselves. But it is good to undertake these things within an ASEAN framework,” Severino reasons. Looking ahead, Severino sees regional economic integration beyond AFTA and peace and security issues as priority areas for ASEAN to tackle. “Regional economic integration is of critical importance. This is because creating an integrated regional economy is the only way for ASEAN to achieve economies of scale, greater efficiency of production and marketing, and a greater degree of attraction to investment,” says Severino. He says ASEAN is now, upon the mandate of the leaders, defining the next stage and further stages of regional economic integration and the measures for getting there. On peace and security, the multinational dispute over the islands in the South China Sea and terrorism are high on the agenda.  “Clearly, the code of conduct between ASEAN and China on the South China Sea is a significant step forward. Terrorism is another important problem to deal with cooperatively.” Another priority is to cooperate more closely in dealing with transnational problems like piracy, drug trafficking, trafficking in women and children, cybercrime, environmental degradation, and HIV/AIDS, Severino concludes. Ends * Warief Djajanto is an independent writer commissioned by the ASEAN Secretariat