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Address doubts of less developed Asean nations

The lukewarm economic cooperation arising from the Asean Economic Community needs our urgent attention, or it may stall and prevent us from unlocking the full potential of Asean (Duterte's Asean vision: Stability, peace, prosperity; April 23).

In 1993, I was asked by the Asean Bankers Association to do a study on forging regional cooperation in the banking sector.

After studying the notes of past meetings and talking to over 50 top bankers in the region, I found that many ideas had already been proposed, such as streamlining banking practices and regulations, and allowing the setting up of bank branches or offices on a reciprocal basis.

But protectionism and the development gap among member nations stood in the way. We had not yet acquired the mutual trust required for deeper cooperation.

Only in December 2014 was the Asean Banking Integration Framework finally endorsed by the Asean Central Bank Governors.

It was only this month that the Philippines, Malaysia and Thailand firmed up agreements to open up their banking sectors reciprocally.

Some less-developed member nations still harbour the notion that integration would put them on the losing end. This notion should be addressed.

Some less-developed member nations still harbour the notion that integration would put them on the losing end. This notion should be addressed. We could devise ways to spread the benefits more evenly, or create other secondary benefits to the host nations to redress any shortcoming.

One good sign is that more regulators or policymakers are now receptive to integration, as they see the issue at the macro level and in the longer term.

Take the Philippines, for example. Mr Amando Tetangco, governor of the central bank of the Philippines, said in a recent interview with Oxford Business Group: "Foreign banks entering the Philippines are expected to take with them multinational corporate clients who are in search of investment opportunities.

"Moreover, heightened competition resulting from liberalisation complements efforts towards financial inclusion, where people from all segments are able to easily access financial products and services."

Foreign banks would also bring better management and the latest Internet and mobile banking technology.

A progressive, well-integrated Asean would enhance the competitiveness of all member nations eventually.

Albert Ng Ya Ken

A version of this article appeared in the print edition of The Sunday Times on April 30, 2017, with the headline 'Address doubts of less developed Asean nations'. Print Edition | Subscribe