Wednesday, 8th August, 2001

AFTA Is The Only First Challenge

The Sabah Business Council and Sabah Economic Action Council chaired by Chief Minister Datuk Chong Kah Kiat and seminars like the ones held by IDS are the best platforms to discuss development issues towards consolidating Sabah's position in facing trade liberalisation and globalisation.

However, those in the sectors must also participate actively and take initiative to boost capacity and productivity.

Among the identified strategies was amalgamation of lands of small holders to form a bigger area to enable the use of machinery which would increase productivity and at the same time reduce labour and production costs.

Manufacturers are also urged to bolster their products' competitiveness through efficient production while ensuring the uniqueness of the items produced by taking into consideration its local content and availability of raw materials.

Earlier, Lajim said on the broader side, AFTA is the only the first step towards facing globalisation due to impending World Trade Organisation (WTO) that would create bigger challenges for the country and Sabah.

AFTA was incepted in Singapore in January 1992 through the Singapore Declaration and Asean economic co-operation consolidation treaty with the Common Effective Preferential Tariff (CEPT) as the main instrument.

At the Asean Conference in Hanoi in 1998, the six original signatories (countries) Malaysia, Thailand, Singapore, Philippines, Brunei Darussalam and Indonesia agreed to accelerate the AFTA implementation from 2003 to 2002.

"The implementation of the AFTA would force us to compete with other manufacturing countries because their exports would not be taxed or at a minimum rate upon entering our country's market," he said.

He also commented that Sabah's strategic location in the BIMP-EAGA could be an advantage since it has the potential to attract multi-national companies to set up their business here as the base to channel investment to Asean.

Apart from expanding Sabah's main agriculture commodities, those in the sector should also consider venturing into the food sub-sector development such as poultry, aquaculture, fishery and speciality original products that has a huge market in the region, he said.