East Asia looks within for new growth model

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HUA HIN: East Asian countries are looking at a new growth model as demand for goods from traditional markets in developed countries are shrinking, Datuk Seri Najib Tun Razak said.

The Prime Minister said leaders who attended the East Asia Summit (EAS) here yesterday felt that the present economic model, in which countries in the region manufactured products for export to developed nations, no longer worked.

“East Asia is the growth area in the near future. Some people say the 21st century is the Asian century as the growth of the world’s economy will start from this area.

“We need to see new sources of growth and create more middle class in East Asia and expand the social safety net so that domestic demand will increase,” he told Malaysian journalists at the end of the summit.

The summit was attended by the 10 Asean leaders and their dialogue partners from China, Japan, South Korea, Australia, New Zealand and India.

Take five: Najib at the summit in Hua Hin yesterday.

Asean and its six dialogue partners make up 20% of the world’s Gross Domestic Product and 50% of the foreign exchange reserves.

Najib also said the leaders agreed that the Copenhagen Conference on Climate Change in December must have a legally binding commitment especially from developed nations to reduce carbon emissions.

“If there is no commitment from them, then the conference is not going to be successful. Countries like the Philippines, Indonesia and Samoa will be on the receiving ends of climate change,” Najib added.

Vietnam, which is chair of Asean next year, will host two Asean summits in Hanoi in April and October.

Meanwhile, International Trade and Industry Minister Datuk Mustapa Mohamed said Malaysia was well on track to realising the Asean Free Trade Area (Afta) on Jan 1, 2010 as only 89 products were left without tariff elimination.

He said the average import duties currently stood at 1.04% compared to about 20% in 1992 when Afta was established.

Mustapa said Malaysia was committed to eliminating import duties on 2,123 products, reducing import duties to 5% for sensitive items like tropical fruits, tobacco and tobacco products, and reducing import duties for rice and rice products to 20%.

“Afta not only brings benefits to the business sector, but also to the people on the ground. Ordinary people can now buy products from Asean countries at a much lower cost than before,” he said.