Leadership circles in Southeast Asia are increasingly seeing the region at a historical turning to determine whether it will re-establish a competitive presence in its own and the globalised market or risks becoming a virtual satellite of its larger neighbours.

This is why ASEAN leaders have recently decided to accelerate the ASEAN Free Trade Area (AFTA) and to envision progressing toward an ASEAN Economic Community, regional leaders told a gathering in Hanoi October 6 in conjunction with the ASEM Summit there.

The ASEAN Business Forum heard Ministers and private speakers from both the region and Europe urging the establishment of institutional, legal and economic stability to stimulate both domestic development and attract international investors. The gathering of some 500 in attendance was organised by the Vietnamese Trade Ministry on the sidelines of a large ASEAN Trade Fair and the Asia-Europe Summit meeting.

Vietnamese Trade Minister Truong Dinh Tuyen, who hosted the gathering, pointed to the fact that five of the six ASEAN members figuring in the World Economic Forum's list of competitiveness among states, had declined in the rankings last year. He also underlined that the coming into effect of the Asean Free Ttrade Area (AFTA) should result in a five-fold increase in a more integrated community market.

The Cambodian Senior Minister for Commerce and ASEAN Economics, Cham Prasidh, also dwelt at length on the issue of competitiveness, noting that ASEAN must be transformed into community, patterned after, but not identical to, the European Union, with a single market and integrated production. He added that this would help remedy the international opinion that the ASEAN market was too fragmented and that seperate customs and other administrations proved to be a time-consuming obstacle to trade or investment to the region. Once inside, outside traders say they encounter price differentials difficulties in shipping from state to state. All these negative factors contrast with the unity traders experience in the EU, US or China, he continued. He also noted that ASEAN had identified 11 sectors for a fast-track to integration. "Today ASEAN is at a crossroads," he observed, "Unless rapid progress is made on further regional cooperation, ASEAN is at great risk of being economically marginalised." He acknowledged that "At this point, investors believe that China has a far more attractive value proposition that ASEAN. China is perceived as a large, integrated market while ASEAN is viewed as a fragmented collection of 10 separate markets."

Underlining such difficulties, some participants noted that it was still difficult for citizens to travel between ASEAN members since some require visas.

ASEAN Deputy Secretary General for Economic Affairs, Pengiron Dato Mashor P. Ahmad, agreed and pointed to a speeding up of the process in numerous sectors. "ASEAN is at a very crucial stage in its development," he noted, "currently embarking on efforts to integrate itself culturally, economically and in security matters." He also added that "Studies undertaken on ASEAN competitiveness have concluded that despite the progress made on ASEAN economic integration initiatives, for ASEAN to achieve a desirable level of competitiveness, it has to face an uphill climb." He said that "ASEAN's effort at enhancing the competitiveness of its members and that of the region as a whole is never ending. It will remain an unfinished agenda for ASEAN as the dynamics of international trade dictates that it is a continuous process...Thus ASEAN's strategy has to be continuously adapted and improved. ASEAN has to move along the value chain in order to remain competitive."

A private view, expressed by the chairman for the Asia-Pacific region for the public relations firm Ogilvy and Mather in Hong Kong, coincided as he stressed that "time is not on our side." He and others emphasised the need for ASEAN producers to design true, recognisable and competitive product brands, to transform their output and exports of agricultural and other products from basic commodities to consumer products with high added value. But he warned that such already-existing Chinese goods were also contemplating major international marketing efforts, adding that it would be serious if ASEAN were dominated by Chinese products that replaced local resources.

Taking a real-life example that termed a success-story, Nguyen Tran Quang, the marketing director of an expand ing Vietnamese coffee firm, TrungNguyen, related how the founder, Dang Le Nguyen Vu, had in less than a decade reorganise a commodity trade in high-quality robusta coffee beans grown in the country's highlands into a recognised and expanding brand with 500 domestic franchised coffee shops and emerging outlets in Singapore, Japan and Hong Kong. The firms had also more recently launched an instant coffee under a different "G-7" brand because it was felt the original label might be to difficult to pronounce on the international market. He added that such efforts were required to tranform the country agricultural population from subsistance farmers or fish breeders into wage-earners for prosperous producers of branded international consumer goods.

David Fouquet, director of the Asia-Europe Project in Brussels also told the gathering that projection of a credible ASEAN image internationally would also require the establishment of stable and fair political, economic and social conditions that guarantee traders and investor a transparency and level playing field. Some that could be achieved by applying the standards of the World Trade Organisation and other, but that another priority should be an attack on what about popular referred to an politically targeted in Indonesia and elesewhere as "KKN" or corruption, cronyism and nepotism,