Harmonisation and cross-border integration of ASEAN markets is needed to unleash the region’s significant growth potential, according to the Economist Corporate Network’s report entitled “Riding the ASEAN Elephant: How business is responding to an unusual animal”.

The report, based on a survey of 147 large multinationals operating in Southeast Asia, highlights the clear and growing opportunities in ASEAN that come with the region’s rapid economic growth and fast-growing middle-class, which is expected to reach more than 85 million people by 2017.

The report notes: “The reasons for investing in South-east Asia vary by sector. But underpinning everything are impressive rates of economic growth... For the period between 1999 and 2012, the ASEAN region grew in real terms by an annual average rate of 5.5 per cent, so doubling in size in just 13 years.”

With record levels of foreign direct investment, the report highlights that many companies are already increasing their footprint in this fast-growing market but believe that harmonisation and the removal of technical barriers to trade will help the region unlock its full potential for economic growth.

With the 2010 agreement to create an ASEAN Economic Community (AEC) by 2015 , there has been significant progress towards economic integration in ASEAN but, as the report states, this process is not without challenges.

A lack of harmonised economic policies and regulatory convergence have resulted in “nationalism and protectionism” in some markets such as Indonesia which has recently “pushed for measures that raise the barriers to integration.” The report notes that over the past year, the region has seen the exercise of import and export bans and quotas which limit intra- and extra-ASEAN trade.

FIA Executive Director, Bev Postma, strongly agrees that harmonised standards across ASEAN will drive further economic growth and development across the region.

“We have seen some significant developments towards economic integration in ASEAN such as the implementation of the ASEAN Single Window , and the ASEAN member states’ firm commitment to the AEC 2015 goal. However, it is clear that more needs to be done accelerate harmonisation across the region.

“The upcoming launch of the ASEAN Food and Beverage Alliance (AFBA) is a noteworthy milestone for the food industry in ASEAN, marking the next phase of the private sector’s commitment to join public sector partners in meeting their ambitious economic integration goals through the harmonisation of standards.

“AFBA is a dedicated vehicle, committed to driving harmonisation of food standards in South East Asia. This unique group of affiliated industry associations will establish a harmonised set of industry priorities and deliver tailor-made input on ASEAN policies. Thisin turn will unlock the growth potential for intra-and extra-regional trade in food products and move the dial on economic integration,” she said.

“We look forward to seeing how all parties work together through AFBA to help meet the ambitious targets for ASEAN,”