Asean integration excites StanChartBy Michelle V. Remo
Philippine Daily Inquirer
Standard Chartered is excited about the integration of Southeast Asian economies by 2015, believing this will not only help accelerate growth of member-countries but also boost profits of banks doing business in the region.
According to Neeraj Swaroop, chief executive officer of Standard Chartered for Southeast Asia, the increased economic activity within the region that can result from integration of member-countries will spur greater demand for banking products and services.
“The business of banking is driven by how economies perform. If economies are growing, banking grows as well,” Swaroop told the Inquirer in an interview.
“Any policy that actively promotes economic growth is also helpful to banking,” he added.
Under the proposed integration of the Association of Southeast Asia Nations economies, tariffs on most goods will be brought down to zero and near-zero levels, and rules and hurdles to intercountry investments will be eased and lifted so that enterprises will find it easier to do business in the region.
The financial systems of member-countries will also be connected so that payments and settlements, as well as buying and selling of securities among member-countries will be easier.
Integration is seen boosting growth of member-countries and lessening their dependence on advanced economies in Europe and the United States for trade and investments.
Swaroop, who was in the country for the Manila 2012 meeting of the Asian Development Bank, said Asean integration will help businesses in the region easily access the regional market with 600 million consumers.
“The initiative to create a common market will promote growth in Asean because, for one, it will make the cost of doing business easier. For another, it will provide investors with access to the 600-million market,” he said.
Swaroop, however, said that integration of Southeast Asian countries is not a prerequisite for growth.
The Standard Chartered executive said that even before 2015, the prospects for growth in the region are already favorable. The integration will only help further accelerate growth of the region, he said.
Swaroop said that banks are expected to post decent incomes growth in Southeast Asia over the short to medium term because member-countries are doing quite well vis-à-vis their Western counterparts.
He said Standard Chartered is fortunate that it has long focused on Asia and does not rely as much on Western markets. About 60 percent of Standard Chartered’s revenues come from Asia, he said, and that only 10 percent comes from the West. The balance comes from East Africa.
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