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Amid trade tensions, Asean seeks integration
AMID simmering trade tensions, Asean members must keep their borders open, so that the region can reach its full potential as a trade bloc, Singapore's Minister for Finance Heng Swee Keat has said.
Wrapping up the Asean meetings this week in Singapore, he noted that globalisation has lifted millions out of poverty, but has also "negatively affected" certain segments.
Asean members would therefore need to find ways to integrate their economies, while simultaneously making structural changes to improve financial connectivity across the region, and to develop the skills of its people.
"We need to send a strong signal that trade tensions, if they escalate into something worse, will not benefit anyone. We must continue to have very strong commitment to trade and to openness to the globalisation process."
He told reporters that it is too early to revise growth projections for Asean, and that the members had "spent quite a bit of time discussing trade matters".
"To realise Asean's full potential, we appreciate the need to further integrate our economies," he said at a joint press conference with his counterparts from the Philippines and Thailand.
Asean's growth as a region is expected to chug along faster than that in most other regions this year, after having grown at just over 5 per cent last year.
Members of Asean are due to hold meetings with China, Japan, and South Korea at the forum known as the Asean+3 in May.
Mr Heng also identified financial technology (fintech) as an important plank of cooperation in Asean.
Fintech lowers costs significantly and can thus foster financial inclusion.
Ravi Menon, managing director of the Monetary Authority of Singapore, told reporters that mobile devices can play an important role in the spread of basic banking, insurance and payment services to under-served markets in Asean.
Governor of the Philippine central bank Nestor Espenilla Jr noted that fintech innovation in areas such as credit scoring and simple payments are new solutions that traditional banking methods have not been able to provide.
Veerathai Santiprabhob, governor of the Bank of Thailand, pointed out that Thai banks have not charged transfer fees for the inter-bank transfer service known as PromptPay, given that fees for such digital retail payments are significantly lower.
There are now about 30 million PromptPay users. Thailand plans to link PromptPay with Singapore's version of real-time fund transfer, known as PayNow.
Mr Menon added that business leaders have also made a strong pitch for regulators to facilitate the use of fintech.
The Asean Financial Innovation Network (AFIN) is set to pilot its platform by the fourth quarter of this year, said the Asean Bankers Association in a separate statement.
AFIN is a regional network that aims to match Asean financial institutions with fintech firms to develop solutions to spur financial inclusion in the region.
One area of focus for Asean this year, when it is under Singapore's chairmanship, will be on sustaining growth, which is to be centred on infrastructure financing.
The Asian Development Bank has estimates that in the 15 years until 2030, Asean's infrastructure investment needs will total US$2.8 trillion, or US$184 billion a year.
Asean's energy sector has 77 renewable-energy projects in hydro, solar, wind, geothermal and biomass spread across the region.