Revisiting the BIMP-EAGA
Enhancing the growth potential of east ASEAN countries’ “weak links”
By Roxanne V. Lu
Created in March 1994 under the initiative of then-Philippine president Fidel Ramos, the primary goal of the Brunei Darussalam-Indonesia-Malaysia-Philippines East ASEAN Growth Area is to strengthen economic cooperation to accelerate growth in Brunei and in the less-developed territories of BIMP-EAGA’s three other member countries. The grouping’s areas of focus include the entire sultanate of Brunei Darussalam; 10 provinces in the Indonesian islands of Kalimantan, Sulawesi, Maluku, and Irian Jaya; Sabah, Sarawak, and Labuan in Malaysia; and Mindanao and Palawan in the Philippines.
BIMP-EAGA aims to help these areas follow the growth path of the economic centers in the subregion: Jakarta, Kuala Lumpur, and Metro Manila. The main thrust of the unified efforts is to spur trade, investments, and tourism in these places. Now, more than a decade since its inception, BIMP-EAGA continues to grow and impact the lives and businesses of people in the growth area, although much work still needs to be done before its organizers’ vision is fully realized.
East Asean Neighborhood
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| (From left) Brunei’s Sultan Hassanal Bolkiah, Indonesian President Susilo Bambang Yudhoyono, Malaysian Prime Minister Abdullah Ahmad Badawi, and Philippine President Gloria Macapagal-Arroyo at the 3rd BIMP-EAGA Summit held in Cebu last January |
The growth area covers roughly 1.6 million square kilometers and is home to some 53.5 million people. The success of the BIMP-EAGA is hinged on the fact that the four member countries are geographically proximate, which makes it possible to share resources, infrastructure, and markets, as well as facilitates cross-border investments. Furthermore, there is freer movement of people, goods, and services due to the countries’ proximity.
Brunei Darussalam is situated in the northwest of the island of Borneo, bounded on the north by the South China Sea and on the other sides by the Malaysian state of Sarawak. Brunei posted a 3.7% GDP growth in 2006, with petroleum products still accounting for more than half of the economy. Brunei’s major exports are oil and gas. Indonesia, the fourth-largest country in the world, lies at the edge of the Asian continent nearest Australia. The Indonesian islands included in the BIMP-EAGA—Kalimantan, Sulawesi, Maluku, and Irian Jaya—are known for their rich natural resources, tropical forests, exotic flora and fauna, and many havens of powder-white shores. Irian Jaya, in particular, is one of the world’s last wilderness frontiers.
Indonesia’s GDP grew 5.4% in 2006 and is expected to record a 6.0% growth in 2007 due to an influx of investments and a rise in private consumption. Exports in 2006 reached US$100.7 billion from the previous year’s US$85.6 billion. Indonesia’s export boosters are gas, fats and vegetable oil, palm oil, manufactured goods, garments, textiles, and footwear.
Malaysia is located on the southernmost tip of the Asian continent. Its BIMP-EAGA states, Sarawak and Sabah, are in the northern part of the island of Borneo. The Federal Territory of Labuan, on the other hand, is an island off the northwest coast of Borneo.
Malaysian exports rose more than 10% in 2006 to US$168.8 billion, boosted by strong demand from the country’s major markets, particularly the other ASEAN countries, the U.S., and China. Its main exports are electronics, crude petroleum, palm oil, crude rubber, timber, and paper.
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| The Zamboanga International Airport is one of the airports covered by a BIMP-EAGA memorandum of understanding granting fifth freedom traffic rights for passengers and cargo services |
Mindanao and Palawan in the Philippines are being billed as “Asia’s playground in the 21st century” due to their outstanding tourism attractions and rich water resources. The southern part of the country, where Mindanao and Palawan are located, is strategically placed at the center of the east ASEAN region, making it a potential hub for transport, business, and telecommunications.
Considered the “food basket of the Philippines,” Mindanao is pushing for market competitiveness through such “commodity champions” as vegetables, tropical and exotic fruits, beef, dairy, and seaweed. Palawan, on the other hand, is the ecotourism pride of the country, with its unspoiled beaches, picturesque islands, and marine and wildlife sanctuaries.
The Philippine economy grew 5.4% in 2006 and is expected to grow up to 8.0% in the next three years with the implementation of the government’s plan to inject money into infrastructure projects.
Facilitating Flows
| BIMP-EAGA AT AGLANCE |
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| Member Countries |
• Brunei Darussalam
• Indonesia: Kalimatan, Sulawesi, Maluku, and Irian Jaya
• Malaysia: Sarawak, Sabah, and Federal Territory of Labuan
• Philippines: Palawan and Mindanao
Land Area: 1,563,877 square kilometers
Population: 53.5 million (2003)
Major Exports
• Brunei: Crude oil, natural gas, refined products
• Indonesia: Oil and gas, electrical appliances, plywood, textile, rubber
• Malaysia: Electronic equipment, petroleum and liquefied natural gas, wood and wood products, palm oil, rubber, textiles, chemicals
• Philippines: Coconut, pineapple, tuna, electronics, semiconductors |
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Over the years, Brunei, Indonesia, Malaysia, and the Philippines have not only expanded their social and economic relationships with each other but have also established regional ties with other countries, like Japan and Australia. The reinvigoration of ancient economic links between the four ASEAN countries, and the strengthening of ties with neighboring economic powerhouses, have improved the competitiveness and enhanced the attractiveness of BIMP-EAGA, resulting in an influx of investments, trade, and tourism.
The main strategy of BIMP-EAGA is based on economic comple-mentarities. So far, its major accomplishments include the exemption from travel tax payments of travelers within the BIMP-EAGA, the establishment of additional air and sea linkages, the creation of a uniformed port tariff between the Philippines and Indonesia, the reduction of port dues and dockage fees, the accreditation of hospitals for medical examination, and providing discount rates for telephone calls within BIMP-EAGA. Recently, BIMP-EAGA foreign affairs and transport ministers signed a memorandum of understanding granting fifth freedom traffic rights for passengers and cargo services in the airports of Bandar Seri Begawan in Brunei Darussalam, Balikpapan and Pontianak in Indonesia, Kota Kinabalu and Kuching in Malaysia, and Davao City and Zamboanga City in the Philippines.
The leaders also agreed to harmonize aviation rules and procedures; facilitate the transportation of passengers, mail, and cargo; exchange information on the BIMP-EAGA aviation database; as well as adopt measures to ensure aviation safety and security. These advances will bring about greater accessibility, facilitate the mobility of people, enhance the flow of goods and commodities, and attract investors to locate in the subregion.
Apart from the crafted policies that promise to make BIMP-EAGA an ideal place to invest in and explore, it offers something that comes more naturally. The warm generosity and hospitality, high quality of skills, and drive to learn and work of the people in the region make BIMP-EAGA a perfect environment for business and pleasure.
Although Brunei, Indonesia, Malaysia, and Philippines still have a long way to go in bringing all their territories up to speed in the development race, by working together, the sustained growth of BIMP-EAGA could come sooner than expected.
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