Singapore Prime Minister Lee Hsien Loong Sunday urged the Association of Southeast Asia Nations (ASEAN) "to liberalize in order to integrate" and move forward as an economic entity.

Lee Hsien Loong said one reason why ASEAN had not been more successful in attracting investments was the relatively high costs of operating in the region.

"As some foreign investors have indicated, ASEAN currently still operates as 10 different economic entities with different rules and standards, all of which raise transactions costs," he told the ASEAN Business and Investment Summit 2005 here.

Quoting a recent study, Lee said economic integration was vital for the region as an integrated ASEAN market would boost its gross domestic product (GDP) by 10 percent and reduce operational costs by one-fifth.

An integrated market would enable ASEAN to capitalize on the complementary strengths of each country, he said.

"ASEAN must find ways to open up more economic sectors, remove non-tariff barriers and reduce costs for businesses to operate seamlessly across the individual economies," he added.

Lee also stressed the need to enhance connectivity among ASEAN countries as stronger economic integration could only take place when production centers are physically connected within ASEAN and accessible to the global market through air, land and sea links.

ASEAN also needed to "address its diversity" since not all countries were at similar stages of development, he said, adding that the pace of ASEAN integration should not be set by its slowest members.

"We should instead look for creative and flexible approaches to accelerate integration while addressing the diversity of the region," he added.

Source: Xinhua