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Clarify rules for opening up services, Asean told

Publication Date : 25-02-2014


Liberalisation of investments in the service sector is as important as in the manufacturing sector since the services are essential input into most economic activities, the Asean secretariat said in a recent report.

The regional bloc’s secretariat collaborated with the World Bank to produce a comprehensive integration monitoring report which was published online early last week, and stated in a chapter that the region lags in openness to foreign investors in the services sector.

“Asean member states’ (AMS) commitments to liberalising foreign investments in all sectors need to become more commercially meaningful,” the secretariat recommended in the section of the report which focuses on investments and the Asean region.

Improving the clarity of the negative list used for ‘investment market access liberalisation’ in Asean will be crucial, it added.

“By consolidating various pieces related to the investment regime, the Asean Comprehensive Investment Agreement (ACIA) is a good step forward. However, the existence of both negative list (exception lists in sectors covered in ACIA) and positive list (limitation of coverage to certain services sectors) results in a lack of transparency,” the secretariat explained.

“Providing clarity on measures affecting investments seems desirable. The language of ACIA is general about the measures that should be covered by the national treatment provision. Transparency would be improved by listing these measures, and also by monitoring in detail their use.”

In addition, the secretariat said, ACIA only provides for national treatment, and this does not guarantee that investment regulations reflect best international practice or are implemented efficiently.

“Defining what is best international practice, however, is complicated and not an exact science. It would be useful to consider a mechanism, for instance through the Coordination Committee on Investment, for member states to interact to exchange views on regulatory matters,” it added.

The secretariat, in the report, said that it will be useful to continue business license simplification.

It explained that simplifying licensing is not just about cutting licences, but more on how to limit licences that best serve their objectives.

“The first thing is to compile all licences and cut unnecessary licenses. It could be started by setting technical standards to ensure that licences should fulfill legitimate regulatory purposes — such as safeguard public health and safety, protect the environment, ensure national security, or manage limited natural resources,” the secretariat suggested.

The 10-nation regional grouping, which includes Brunei, should also foster the full implementation of an integrated “One Stop Shop” where a single agency can take control of licence issuance which would then reduce overlapping licenses, it added.

“This should also be accompanied by fostering the implementation of an online system – not only electronic business licensing system but also electronic payment system. In addition, there should also be full implementation of electronic filling and payment system of business licences nationwide as well as Asean-wide,” said the secretariat.

Another suggestion is to improve the service quality of websites and help desks at investment offices to facilitate investment.

Website and help desk services should act as a front line in dealing with investment regulations and policies for investors, according to the secretariat.

“The improvement should cover both hard and soft infrastructure, including personal skills of officials. It could be started with, first, providing detailed information on business startup requirements online or making them publicly available along with the costs of obtaining licenses, and identifying government departments that are responsible to issue licenses as well as persons in charge and their contacts,” it explained.

“Second, the focus should be on empowering the help desks and/or investment relation units with enough knowledge to respond to basic questions related to investment, investment policies and regulations of each member country and Asean, and providing information on standard operating procedures on how to start up a business.”

The secretariat said that investment integration has been progressing “quite well” in Asean driven both by the growing economies of Asean and its investment integration policy.

“A free flow of investment regime should also be supported by business licensing, land, labour, and tax administration, which are all key to enhancing Asean attractiveness to foreign direct investment,” the secretariat said.


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