ASEAN nations should grow high-value exports and reassess strategies to further strengthen their economies: EIU report
DHL, the world’s leading express and logistics company, today revealed the findings of a study commissioned to Economist Intelligence Unit (EIU) at the 4th ASEAN Business and Investment Summit 2006 (ASEAN-BIS). The study, entitled “ASEAN Exports: Today, Tomorrow and the High-value Challenge”, aimed to analyze where ASEAN countries stand today in relation to China and India, and how they measure up as a trade bloc, in terms of high value exports, against the European Union (EU) and the North American Free Trade Agreement (NAFTA).
The EIU study focused on the seven largest economies within the ASEAN trade bloc: Indonesia, Thailand, Malaysia, Singapore, the Philippines, Vietnam and Myanmar, or otherwise termed as ‘ASEAN 7’ in the study. It examined the state of the exports in these countries by breaking down the exports into two export categories: high value goods and low value goods.
The study differentiates between high value (such as computer chips) and low value (such as T-shirts) exports in that better skilled, less physically demanding and more technological advanced jobs are required for the former. High-value goods also provide greater scope for companies to expand into areas of greater value production, which in turn will develop the economy as a whole.
“ASEAN 7 has been a successful exporter of high-value goods, based on the study which shows their High Value Export Indicator reflecting 51.3 per cent, trailing slightly behind NAFTA at 54 percent,” said Scott Price, CEO, DHL Express – Asia Pacific. “As a trade facilitator in this region, we are confident that the study not only provides insightful information to ASEAN governments and policies makers on the state and performance of their exports sector, particularly high-value goods, but also offers recommendations on how to overcome challenges that are being faced by the ASEAN trading bloc.”
One of the key findings states that China had not only outpaced ASEAN in high-value exports as early as 2003, but it has also overtaken ASEAN as the biggest exporter in Asia since 2004. Against this backdrop, ASEAN governments would have to review their trade policies in comparison with China and in meeting the challenges ahead.
The report recommends that ASEAN trade bloc encourages ongoing economic restructuring, principally to drive up productivity, raise technological know-how and facilitate entry into new industries in the high-value goods export category. Other considerations for the future include harmonizing trade and customs procedures to further encourage growth in high-value exports.
“A number of our clients are from the high-value industries category and DHL is further committed to work with ASEAN governments, policy makers and businesses to realise the potential of their high-value goods category and to ensure that our clients continue to grow in this region,” Mr. Price noted.
He added, “We are confident that the insights provided by the study will help this trade bloc to recognize the challenges they face in their export industries, and thereby encourage them to re-assess strategies based on recommendations so that they can meet and rise above the challenges.”
The release of the study is timed to coincide with ASEAN-BIS, a premier business and networking event that DHL has been a key sponsor of over the last years. Mr. Price is speaking on day one of the summit, currently taking place in Cebu Philippines, on ASEAN’s place in the global supply chain.
DHL is committed to reducing the complexity, risks and costs of intra- and international
trade within and across the Asia Pacific, and beyond. The firm has gone beyond offering businesses with reliable and comprehensive international shipping services, to providing them with specially commissioned studies that look at both trade and logistics trends, issues and challenges. In 2004, it commissioned McKinsey to study the implications for
Asia’s garment exporting economies, particularly India, before the World Trade Organisation’s (WTO) Multi Fibre Agreement.(MFA) quotas restriction on apparel exports ended in early 2005.
DHL has also been a strong advocate for easing customs clearance, among other trade facilitation activities. In Vietnam, DHL Express was the first Air Express operator to have dedicated customs clearance capability on Sundays. This is considered a great achievement especially in an environment such as Vietnam where weekend customs clearance operations were never performed for cargo or express operators. In Indonesia, with the positive support from customs in and outside of Jakarta, DHL took advantage of the regional autonomy legislated by the central government in 1998 to take deliberate steps to open gateways (points to carry out import and export processes) in major Indonesian cities to ease customs clearance and shorten processing time.
DHL has taken a stake in working closely with governments and the industry to reform trading and other policies so that ASEAN will successfully and progressively move up the export value chain.
