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We ride the wave on the ASEAN growth!

By Edgardo C. Amistad

The target set by the Association of Southeast Asian Nations (ASEAN) to forge a single market by 2015 is fast approaching. The latest information we got is that the so-called ASEAN integration is now more than seventy percent complete. However, the remaining twenty plus percent is made up of the more contentious issues  so reaching a definitive agreement to be able to meet the self-imposed deadline of December 31, 2015, remains up in the air.

Still, in view of the confidence expressed by the ASEAN leaders as well as the enormous benefits that integration will bring to the member-countries, more likely than not, the deadline will be met – one way or the other. The stakes are so high for the leaders of ASEAN to stumble at this stage.

How will an integrated ASEAN look like? Let’s examine some significant facts and figures.

1.  It will have the third biggest population (and therefore market size) in the world with 600 million people.  This is next only to China with 1.35 billion and India with 1.2 billion, and bigger than the European Union’s 500 million and the United States’ 315 million.

2.  It will have a total gross domestic product (GDP) of $2.356 trillion, making it the 8th largest economy in world. This is larger than India’s, Russia’s or Brazil’s. More importantly, the combined GDP’s growth rate will be one of the highest in the world. ASEAN is expected to grow by 5.3% this year versus 3.3% for the rest of the world. In addition, foreign direct investment (FDI) in the region has been growing significantly in the past years. For 2011, it cornered 7.6% of global FDI.

3.  It will cover a land area of 4.46 million square kilometers, the seventh largest in the world. The territory possesses one of the most bio-diverse systems in the planet and is blessed with abundant natural resources.

Based on the above, the future possibilities for a united ASEAN will be mind-blowing and the probability that it could replicate China’s phenomenal growth is not far-fetched. Depending only on the vision, determination and cooperation of the leaders involved, the region’s rise to economic prominence will be just a matter of time.

The most compelling impact of the ASEAN integration would be in the area of trade and investment. This is bound to shoot up to unheard-of heights and thereby bring about sustainable prosperity to the entire region.

But for all these expectations to materialize, both the public and the private sectors must be ready and willing to seize the opportunities as they emerge. Governments must think long-term and set up the framework and policies necessary to encourage the growth of commerce beyond their own borders.  For their part, private companies must have the gumption to expand their operation and broaden their reach. Governments will lay down the tracks and private companies will drive the engine.

This then is the challenge to the companies operating in the ASEAN region. They must now start thinking regional, if not global.  It is of utmost importance. Exposing themselves to new markets, honing their global competitiveness, as well as partnering with other regional players will be the only way to go.

What then will be the imperative for companies to succeed in this new environment besides excelling in their core business? The answer lies in these three words: Corporate Social Responsibility or CSR.

Companies that will venture into new territories (meaning new countries) must guard themselves against becoming perceived as exploiters or in the game for profit alone and nothing else. On the contrary, they must work to be seen as institutions that imbibe the highest level of professionalism and integrity, and are considerate of the welfare of society.

After all, in defining CSR, companies must answer two sets of critical questions: The first set is: “How do we make our money? Is it through the practice of good governance? Are we mindful of our impact on the environment? Do we respect human rights? And the second is: “What do we do with our money? Do we benefit only our owners? What about the other stakeholders? Do we give back to society?

In the case of Philippine corporations, the ones that are already testing or have already tested the so-called waters of the regional enterprise like the Manny Pangilinan Group, the Ayala Group and the San Miguel Group, to name a few, are all practitioners of CSR. They probably have the most advanced CSR programs not only in the country but also in the entire region. They are all pillars of the League of Corporate Foundations (LCF), an association of the biggest companies practicing and advocating CSR in the Philippines. It is safe to assume therefore that their reputation as upright corporate citizens have preceded their entry into the expanded business arena.

Other companies intending to follow the lead of these three conglomerates should also be mindful of the importance of CSR and should include this as an integral part of their strategy for going regional. To do otherwise is to leave themselves vulnerable to charges of crass commercialism and insensitive opportunism.

The world of business today is far removed from the era of the robber barons of the early twentieth century. Corporations are no longer just judged by their efficiency to create value for their stockholders but rather by the ability and willingness to benefit the stakeholders where they operate.  Hence, the term corporate citizenship was coined and gained currency to reflect the high ethical and moral standards that companies must uphold as part of their way of doing business. These are the very considerations that prompt companies to practice CSR: to drive home the point that the business of business today is not only business but also protecting the environment, creating jobs and social equity, and bringing prosperity to people and their community.

As society becomes even more observant and critical of the corporate behavior, the more significant becomes the role of CSR in navigating the emerging environment. To paraphrase a famous slogan in the mid-20th century, CSR is the wave now and of the future!

(This article reflects the personal opinion of the author and does not reflect the official stand of the Management Association of the Philippines. The author is Member of MAP CSR Committee, member of the Advisory Council of LCF, Chair of the ASEAN CSR Network and President of both UCPB-CIIF Finance and Development Corporation and UCPB-CIIF Foundation, Inc.. Feedback at map@globelines.com.ph and ecamistad@cocofinance.com. For previous articles, please visit map.org.ph)