Business | Investment
Asean states woo Gulf investors amid global turmoil
Asian bloc stresses robust regulatory mechanisms of its banking system and capital markets as the West grapples with economic storm.
- By Shakir HusainStaff Reporter
- Published: 23:29 October 11, 2008
Dubai: Southeast Asian countries are drawing the attention of investors from the Gulf to the regulatory mechanisms of their banking system and capital markets while Western banks are struggling to keep solvent amid the worsening global financial crisis.
Ministers from the 10-member Association of Southeast Asian Nations (Asean), who were meeting in Dubai last week to attract Arab capital, said their economies have shown resilience, and will be able to weather the current global economic storm.
They said this was due to reforms introduced following a regional financial crisis a decade ago.
"Asean today is lean and fit, in part reflective of the significant reforms undertaken over the decade since the 1997 financial crisis. Asean member states have strengthened fiscal sustainability, deepened capital markets, enhanced financial regulation and supervisory frameworks, reduced debt exposure and improved their reserve positions," the ministers said in a joint statement.
This should make Asean a good destination for Arab investment, the ministers argued as they launched their first joint campaign in the Gulf.
Enhanced
Asean secretary-general Surin Pitsuwan said holding the meeting in Dubai recognised the significance the Asian bloc attaches to building close links with the Arab region. "We are entering a new era of enhanced partnership between these two regions," he said.
Asean and the GCC last month agreed to cooperate in areas such as finance, tourism, food and energy security, healthcare and cultural exchanges.
Surin said the ministers wanted to offer investors from the Gulf region "real alternative investment destinations" to the US and Europe that have traditionally been recipients of Arab capital.
Private sector investors from the Gulf, he added, are keen to explore opportunities in Asean and promised that "through us you will have a wider reach" to East Asia and the Pacific.
However, the Asean officials recognise that the ongoing global financial crisis has made their job of attracting investors more difficult.
The combined gross domestic product (GDP) growth in the region is expected to fall from the 6.7 per cent achieved last year.
Indonesian Finance Minister Mulyani Indrawati said Asean is "very vigilant about the current financial turbulence" but the regional economies are sound.
"The fundamentals of both the Gulf and Asean are still strong, so there is strong mutual benefit to interact more," she told reporters. Malaysia, which had rejected the International Monetary Fund remedies in favour of its own solutions to overcome the currency crisis in 1998, appeared to fault the Western "model of deregulation" for the troubles in the global financial and stock markets.
While the Asean officials talked at length about learning lessons from the 1997-98 crisis, their central message was about the economic transformation of the region, which has a population of 570 million representing a strong consumer market.
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