Southeast Asia's ripening reputation as a profitable place for foreign investors received an unprecedented endorsement this week from European business leaders.
The five member countries of the Association of Southeast Asian Nations (ASEAN) invited representatives of the European Economic Community (EEC) here to see what ASEAN has to offer -- and about 275 of Europe's most influential bankers, businessmen and industrialists showed up.
The three-day Conference on Industrial Cooperation wound up today with an anticlimactic round of predictions that Western Europe will increase its stake in ASEAN substantially. But the success of the meeting was assured earlier when the EEC delegates stepped off their chartered Concorde supersonic transport at Jakarta's Halim Perdana Kusuma Airport. Though the event has been planned for years, usually passive ASEAN officials appeared genuienly dumbstruck that the Europeans actually had come. They were whisked into town with police motorcycle escorts.
The leader of the delegation, ECC Vice President Wilhelm Haferkamp, is the most authoriative ever to leave the European Economic Community for this kind of discussion in any part of the world.
The list of firms represented reads like a financial magazine compilation: Daimler Benz, Bayer, British Steel, Dunlop, British Aerospace, Delta Metals and many more. In addition to the nine EEC countries, Austria and Spain sent representatives. The whole affair was cosponsored by four major European banking groups -- Abecor, Ebic, Euro-partners and Inter-Alpha -- composed of 29 banks with 25,000 branches throughout Europe and total assets of more than $600 billion.
More than 600 businessmen from the Philoppines, Malaysia, Singapore, Thailand and Indonesia have spent the past three days scrambling for some of that money. ASEAN members tried to interest the Europeans in 197 proposals for joint-venture investment industries in chemicals, electrical and electronics, industrial transformation of agricultural products, machinery and metal engineering, timber and timber-based industries, precision engineering, transport and communications-equipment manufacturing, and export crops plantations.
The conference is a follow-up to the first ASEAN-EEC meeting held in Brussels in April 1977. Earlier criticism that this sequel was merely a public relations event and an opportunity for the Europeans to escape winter for the warmth of Sourtheast Asia dissolved quickly.
"If I wanted to pick a place for a winter holiday, I certainly would never have considered Jakarta," noted one neatly coiffed banker. Most expressed astonishment at the level of development visible in Jakarta alone. "If this is the least developed of the ASEAN nations, then I am impressed," said D.J. van Dissel, the spokesman for Algemene Bank Nederland of the Abecor Group.
Van Dissel said his group plans to take a thorough look at foreign investment opportunities here and that decisions would probably be several months or more away.
EEC countries currently have direct investment amounting to about $1.3 billion in the ASEAN countries, good for third place behind Japan's $3.1 billion and about $1.6 billion from the United States.
Indonesia, rapidly becoming the hub of ASEAN activities, commands most with about $612 million, followed by Singapore's $490 million, Malaysia's $103 million, the Philippines at $72 million and Thailand with $21 million.
Indonesia's President Suharto set the tone for the conference in opening remarks aimed at impressing European delegates that there is room for much more investment. "ASEAN is the biggest producer of several kinds of commodities such as copra, natural rubber and kernel oil, plus other quite important raw materials such as petroleum, timber, tin, copper and nickel. As an archipelago, ASEAN also has a sufficiently large sea territory with considerable potentials in the field of fishery and other sea products," he said.
Suharto also pointed out that, with an area of 30 million square kilometers and a population of 250 million people, ASEAN also had great economic potential as a consumer and producer.
The comparative political stability of the ASEAN region was also touched on by Suharto. "Although international upheavals have taken place lately -- including new, disturbing developments in regions adjacent to us -- the ASEAN countries remain firm in safeguarding their political and social stability."
Indeed, one British banker pointed out that the allure of China as an investment alternative has suddenly been dampened by its involvement in Vietnam. Likewise, he said he and his colleagues are staying away from volatile spots such as Latin America, Africa and the Middle East.
"When you add it up, there are not many alternatives to ASEAN. It's down right peaceful," he said. Great Britain's respected journal, The Economist, recently predicted the ASEAN region will join North America, Western Europe and Japan as a major area of capitalism by the end of the century.
In addition to the prospects of increased EEC investment in ASEAN countries resulting from the conference, more immediate results are expected. Haverkamp said he is confident a formal cooperation agreement will be signed between EEC and ASEAN before the end of the year. EEC Deputy M. Caspari said a regular trade and investment forum also may be established.
Indonesia's Capital Investment Coordinating Board chairman, Barli Halim, also said ASEAN has begun hammering out a proposal to standardize investment procedures among the five countries to make it easier for foreign concerns from any country to enter the region.
Observers from the United States and Japan watched the proceedings with interest. U.S. Ambassador to Indonesia Edward A. Masters was present at the opening ceremonies. And while ASEAN-EEC delegates were meeting behind closed doors Tuesday, the U.S. Embassy economic and trade counselor here, Henry Bardach, predicted an upturn in American investment in this region.
Two major American trade missions toured the ASEAN region last fall. One group leader, John L. Moore of the U.S. Export-Import Bank, said his group was seriously considering involvement in up to 15 Indonesian projects along, totaling $2 billion to $3 billion. A "scouting" mission called the Overseas Private Investment Corp. (OPIC) also expressed interest in investing in the ASEAN countries.