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Malaysia’s New Economic Model:
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AseanAffairs Magazine May - June 2010

Prime Minister Najib Razak vows to take Malaysia forward and transform it into a high income nation through economic and social reforms. Initial responses to this ambitious drive are mixed, details are scarce and investors play wait-and-see.Yet, Najib insists he’s got support to push ahead.

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Asean Affairs interview with Ambassador CHO Young-jai, the Secretary General of ASEAN-Korea Centre. He has served as a career diplomat for more than 30 years. He served as Deputy Minister for Planning and Management at the Ministry of Foreign Affairs and Trade, and recently as the Korean Ambassador to Italy and the Permanent Representative to UN organizations based in Rome.


Q: How would you describe the Asean Korea Centre’s role in promoting trade and investment ties between the Republic of Korea and Asean?

One of the purposes of the Centre is to increase trade volume and accelerate investment flow between the Asean Member States and Korea. To achieve this goal, the Centre promotes trade and investment ties, facilitates business opportunities between Asean and Korea, and assists investors and companies seeking business partners in Asean and Korea.

The Centre carries out such activities as trade exhibitions and missions as well as investment seminars and missions, and other trade and investment promotion programs to strengthen Asean-Korea business ties. For example, trade exhibitions such as the Asean Food and Beverage Exhibition and the Seoul Gift Show showcased products from Asean and provided an opportunity for business meetings between potential Korean buyers and Asean companies.

And investment missions organised by the Centre (to all ten Asean countries) allowed for potential Korean investors to explore the investment opportunities through industrial visits and meetings with government officials and leading Asean companies.

In addition, the Centre provides useful trade and investment-related information to help the business communities in Asean and Korea strengthen trade and investment interactions.

Q: What has been the progress, or growth, in the areas achieved since the two sides concluded the free trade agreement?

Statistics showed that the trade volume increased by 23.1 percent during the one year period after the entry into force of the Asean-Korea Free Trade Agreement (AKFTA) on Trade in Goods in June 2007.

Although the Asean-Korea trade experienced a contraction in 2009 due to the global financial crisis, it is picking up and regaining its momentum as the economies of Asean and Korea begin to turn around.

It is noteworthy that the trade volume between Asean and Korea during the period of Jan. - Feb. 2010 has recorded a 36.3 percent increase from the same period last year.

With the acceleration of the liberalisation process now under way in Asean, the impact of the AKFTA is expected to be fully realised, leading to a significant increase in trade between Asean and Korea. In addition, the entry into force of the Agreements on Trade in Services and Investments will add further impetus to the growing trade and investment ties between Asean and Korea.

As you might be aware, the leaders of Asean and Korea expressed expectations at the Asean-Korea Commemorative Summit held in Jeju last year that the trade volume between Asean and Korea will increase up to $150 billion by 2015 through the Asean- Korea FTA along with other complementary trade arrangements.

If I may add, the Centre, for its part, plans to develop the Asean-Korea FTA Integrated Information Services this year to help Asean and Korean businesses fully utilise the AKFTA, and maximise its benefits, and thus to contribute to further boosting trade and investment between Asean and Korea.

Q: Compared with other trade partners and investment destinations, how important is Asean for Korea?

Since 2008, Asean has emerged as Korea’s third largest trading partner after China and the EU, and Korea’s third largest investment destination. The two-way trade volume amounted to $90 billion in 2008.

Mutual investment between Asean and Korea showed a five-fold increase from 2004 to 2008, reaching around $6.8 billion.

Asean is of growing importance to Korea with its fast growing economies, rich natural resources, and its drive towards economic integration. Asean is moving to achieve a single market and production base of 580 million people by 2015.

The economic integration will make the region more competitive and better integrated with the global economy, which will certainly provide more and more business opportunities for Korea and further strengthen economic ties between Asean and Korea.

Furthermore, beyond economics, a stable and growing Asean provides stability for Korea and other countries in the region and ensures a future of greater prosperity and progress.

Q: One of the priorities of Asean is to narrow the development gap among its member countries. What are some of the activities of the Centre that might support Asean in this area?

The Centre is also tasked to support initiatives and programs related to narrowing the development gap in Asean, as set out in the MOU establishing the Centre. As Asean moves towards becoming a single economic community, narrowing the development gap among the Member States becomes an important issue.

For the Centre’s part, the Centre has been engaged in capacity-building programs to support Asean integration. The Centre organizes the Trade Promotion Workshop for Asean trade promotion officials, Industrial Familiarization Program for Asean officials and business representatives such as Industrial Design and Packaging Workshop, and the Asean Tourism Human Resource Development Program for Asean tourism professionals to help build the capacities of concerned industries in Asean Member States.

The Centre recognises the need for programs that target CLMV (Cambodia, Laos, Myanmar, and Vietnam) countries to help narrow the development gaps, and will work to develop programs tailored to the needs of these countries and thus support the Asean integration efforts.



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