WORLD BANK SUGGESTS DEEPER INTRA-ASEAN ECONOMIC INTEGRATION

Jakarta, April 8 (ANTARA) -The World Bank has suggested a deeper integration among ASEAN members to boost the region's economy as countries with more advanced economies were undergoing slower growth, a source said.

"While the benefits of tighter integration are numerous and profound, the actual level of integration is relatively low. Efforts to create institutions and arrangements for more comprehensive economic cooperation and integration are starting to catch up only recently with the implementation of the Free Trade Agreement among ASEAN members," World Bank lead economist Ivailo Izvorsky said here on Thursday during a discussion explaining the World Bank's East Asia and Pacific Economic Update 2010.

According to the report, there was room for further trade integration in ASEAN though, according to a regional agreement, sensitive products such as unprocessed agriculture goods and services were not included.

Progress is more robust in trade in industrial products and processed foods. From the start of 2010, the ASEAN-6 , namely Brunei Darussalam, Indonesia, Malaysia, Philippines, Singapore and Thailand cut tariff rates on almost 8,000 tariff lines to zero, bringing the total tariff lines to 99.11 percent. The average tariff rate for trade in industrial products and processed food among the ASEAN-6 is now reduced to 0.05 percent from nearly 0.8 percent last year.

The World Bank suggests ASEAN to reduce its logistics costs as well as simplify the import and export procedures to further bolster trade across borders.
World Bank argues tighter integration in the region could boost regional trade in goods and services, helping create better agglomeration economies, improve international competitiveness and support sustainable urbanization.
Meanwhile, Director of Paramadina Graduate School of Diplomacy commented integrating ASEAN was not an easy task since the region shares various economic growth as well as political system.

Dinna said there were differences among ASEAN members such as in political system and economic priority which would give challenges to the vision of implementing a full regional integration.

"Regional integration especially on politic and economic sector will not be easily achieved. However, cultural contact among ASEAN members which has been conducted during the past years will likely be the sector which unite this region first," she said.