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SINCE MARCH 1994, Asia's newest growth region has continuously impacted economically and socially on the lives of its people. Several are aware of its potentials, but many others have yet to grasp the concept of the BIMP-EAGA. The BIMP-EAGA (or simply EAGA) stands for the Brunei Darussalam Indonesia Malaysia the Philippines - East ASEAN Growth Area. It is Asia's largest regional grouping, spanning territories of four ASEAN countries. Some point out that it may also be the fastest growing, in light of its achievements in only four years.
In today's era of economic cooperation and globalisation, EAGA is consistent with economic policies and specific agreements between members of ASEAN in the implementation of its Free Trade Area (AFTA), and economists advise that EAGA could even be the testing ground for AFTA's CEPT. The functionality of this growth area likewise falls squarely within the frameworks of APEC and the much larger WTO. While the foregoing scenario is perceivably of political nature, it must be emphasised that EAGA is not a government program, but rather a joint public-private sector mechanism for bringing investment and trade opportunities to the business community, through initiatives of the four member governments. EAGA's history began with a discussion among ASEAN Heads of State in Brunei Darussalam in October 1992. The endorsements and confirmations of then Indonesian President Suharto (September 1993), Sultan Haji Hassanal Bolkiah of Brunei Darussalam (November 1993), and Malaysian Prime Minister Mahathir Mohammad (February 1994) paved the way for the BIMP-EAGA Inaugural Senior Officials' and Ministers' Meeting (SOMM) in Davao City, Philippines in March 1994. Implementing Mechanisms It was during that meeting that EAGA's goal was agreed upon: to increase trade, tourism, and investments in the region through the following objectives: First, to facilitate free movement of people, goods, and services. Second, share common infrastructure and natural resources; and third, pursue economic complementation. In implementing the EAGA, the private sector, through its participation in the Working Groups and affiliation with the East ASEAN Business Council (EABC), provide valuable insights to pave the way for strategic policy recommendations. These recommendations are then taken up by the Working Groups, or elevated to the Senior Officials' and Ministers' Meeting (SOMM) for action. Alternatively, the business community also has the option to air its concerns to the EABC, who subsequently relays these collectively to SOMM by way of the Council's participation as a distinct delegation during these occasions. EAGA Working Groups are composed of both public and private sector participants who take up relevant issues and launch projects benefiting their sectors and EAGA as a whole. Five such sectors have been identified as fast-track areas, where bold initiatives are continually advocated for in order to spur development in other supportive sectors. These fast track areas are Air Linkages, Sea Linkages, Tourism, Fisheries, and Construction. Progress of the Working Groups is monitored by a designated "lead country," selected on the basis of their recognised expertise over others in this particular sector. Perhaps what contribute to EAGA's uniqueness are two basic characteristics: first, the Ministers responsible for EAGA agreed that it is to be market-driven, where the private sector plays a crucial role in its development. Second, EAGA is to adhere to a decentralised organisational structure, where quadrilateral consensus is not required. This means that a specific project between two member countries may be called an EAGA project, and may push through as agreed, even though the other two member countries are not involved in the endeavour. Re-establishing Ancient Trade Links
The EAGA has vast resources available for trade, investments, and tourism. Brunei has a supply of oil and gas estimated to last at least another 20 years. In 1995, Brunei exported B$ 3.388 B (US$ 2.118 B) in crude oil and gas, a large percentage of which to the markets of Japan and South Korea. Indonesia is rich oil and gas, agricultural and forestry products and construction materials. In the year 1994, Indonesia exported US$ 5.072 B in crude petroleum, $ 4.124 B in plywood, and $ 3.689 B in gas. In addition, mining is also among Indonesia's strengths, marked by the presence of this industry in all Indonesia-EAGA component areas. In the period January to October 1998, Malaysia's Sabah state sold RM 4.067 B (US$ 1.070 B) in palm oil products. In the same period, it also exported RM 1.6 B ($421 m) in crude petroleum and RM 1.069 B ($281 m) in plywood. On the other hand, Sarawak shipped RM 5.615 B ($1.478 B) in liquefied natural gas, RM 3.052 B ($803 m) in crude petroleum, RM 2.135 B ($562 m) in wood products, and RM 1.383 B ($364 m) in sawn logs. In the Philippines, Western Mindanao registered 1997 export values of US$ 39m in marine and agricultural products, and Northern Mindanao posted a $ 16.618m in canned pineapple products. Textile manufacturing is also among the island's top exports of late. EAGA's Achievements Until the crisis hit in mid-1997, air links in EAGA expanded to 11, from only five before the EAGA initiative. Leading to the first quarter of 1997, Royal Brunei Airlines, the national carrier of the sultanate, has likewise registered an average of 23.5 percent growth in outgoing cargo bound for EAGA destinations. EAGA's sea transport industry also has marked developments. The latest addition to EAGA vessels plying the fast-growing Zamboanga - Sandakan sea link is a Malaysian-registered fast ferry. A small economic boom between these two cities has grown notable, where with increased shipping had generated more opportunities. The volume of Mindanao-bound cargo along this route has shown an average quarterly growth rate of more than 160%. Links between Indonesia and the Philippines have led to the increased movement of people between Indonesia and the Philippines. There is likewise a link from Cotabato to Labuan, which serves as a transit point for Philippine goods bound for Brunei. Traditional craft also continue to sail the Zamboanga - Labuan and Zamboanga - Manado routes. Uniform port dues of US$ 0.04/GRT and dockage fees of $ 0.02/GRT/day for Bruneian, Indonesian, and Philippine EAGA-plying vessels are already being levied in selected ports around these countries. In addition, the BIMP-EAGA Shipping Association was formed during the 7th Sea Links Working Groups Meeting in Davao in July 1999. It was incorporated to identify opportunities for the shipping sector, as well as advocate necessary policy amendments for the development of the industry in EAGA. In construction and infrastructure, the Construction Working Group has endorsed the Pan-EAGA Multi-Modal transport Network System, an ambitious plan to integrate key cities of the growth area. This project calls for the construction and/or upgrade of roads, the erection of border-crossing stations, and the continued improvement of shipping services in the component areas of EAGA. In tourism, Malaysia's Ekran Berhad has built and opened in March 1998 a US$ 300m resort in Samal Island in Davao. It is by far the largest cross-border investment of one EAGA constituent to a neighbouring area, and forms part of the Samal Island Tourism Estates Program of the Philippine Department of Tourism. Incidentally, the Philippine tourism industry is said to have most benefited from the EAGA initiative in terms of tourist arrivals. Largely because of the increase in investments in this sector, tourist arrivals in Central and Southern Mindanao have continued experiencing a general increase, totalling slightly less than a million arrivals in the period covering 1996 to Q2 1997. On the other hand, ecotourism has large potentials in the Borneo Island area of EAGA, particularly Brunei and Sarawak, Malaysia. The RM 12m (US$ 3.16m), 10,736-hectare Loagan Bunut National Park in Sarawak is the first in the State, and is expected to be competed in 2001. Its features will include a 5.8-km access road, 40-person hostel, chalets, function rooms, water pumps, treatment plants, among others. GSM communications has become a standard facility in more than 70 cities and towns around EAGA, bringing businessmen closer than ever before, and making cross-border business transactions the next practical step in commercial expansion.
In taking these progressive measures, the environment was certainly not left out. Joint efforts of Malaysia and the Philippines have led to the acclamation of the Turtle Islands Preservation Program - an endeavour that has garnered the Paul Getty Award for environmental protection and wildlife preservation. EAGA Concept Feasible Perhaps the strongest statement of EAGA's viability comes from the Asian Development Bank, after concluding its Investigative Report on the region. The ADB has formulated a development strategy to accelerate private sector-led economic development, improve export competitiveness, and enhance the attractiveness of EAGA to local and foreign investment. In attaining sustainable development, this strategy is based on economic complementarities; shared natural resources, information, & technology; the specialisation and regionalisation of production. Eventually, ADB envisages that EAGA becomes a significant part of ASEAN's wholistic development.
The development of an EAGA Information Network has commenced, with the Working Group on Telecommunications in charge. A prototype has been tested, using four Internet servers around EAGA. The Network will be launched as soon as the nitty-gritty data requirements have been filled. Opportunities are aplenty in EAGA's tourism industry as well. Tourist hotels and resorts and bus and chartered aircraft companies are only a handful of what can be realised. Opportunities also beckon in construction, telecommunications, pharmaceuticals, oleochemicals, biotechnology, electronics, and textiles. Many projects of these general backgrounds are in their MOU stages, and still others have already taken off. Thanks to a generally pro-active private sector, EAGA development hasn't totally stalled despite the turmoil brought by the 1997-1998 Asian financial crisis. The EAGA cooperation has impacted on the citizenry in myriad ways. In Brunei, continuing EAGA activities have raised consciousness of doing business with Sabah and Sarawak, evidenced in part by the increase in inquiries of this matter. In a separate but related effort, relevant authorities in Brunei are negotiating with their counterparts in Malaysia to establish car and passenger ferry services between Muara and Menumbok in Sabah. There is also a proposal to establish direct shipping services between Brunei and Mindanao in the Philippines. The direct air connection between Davao and Manado has contributed to increased Indonesian trade with Mindanao. EAGA has also led to investments in timber ventures in Kalimantan, as well as a five-year project to develop a 12,000-hectare oil plantation in Sanggau, also in this province. In Malaysia, the Sabah BIMP-EAGA Council was formed to cater specifically to the growing interest of Malaysian businessmen in the growth region. Sabah is also the recipient of another development in the telecommunications industry. International Communications and Electronics (ICE), an Australian Northern Territory company, has entered into a multi-million dollar joint venture with Malaysian partners to construct a RM140 million Sabah Ducting System (SDS), aimed to provide internal and external links throughout Sabah. The economic boom around the Western Mindanao and Northeastern Sabah niche has brought about some improvement to local traders. Indonesia has also provided crucial assistance to the Philippines' initiatives for peace in its south. To sum up, the EAGA is an initiative of four ASEAN governments to pave the way for increased economic and social activity between neighbours by re-establishing ancient links. The opportunities that emerge as a result of this pro-activeness are intended to energise the private sector into expanding business activities for them to be the primary engine of EAGA's growth. EAGA is consistent with today's global associations, and with continued synergy and cooperation among its leaders and people, EAGA may soon play an integral part in ASEAN's overall development. EAGA's achievements in the last four years manifest that it has made one small leap in this direction. [ Authored by EABC. All rights reserved. Disclaimer of responsibility and liability applies. ] | |||||||||||||
The EAGA Senior Officials |
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| Brunei Darussalam | Dato Paduka Haji Danial bin Haji Hanafiah Permanent Secretary Ministry of Industry & Primary Resources Bandar Seri Begawan, Brunei Darussalam |
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| Indonesia | Prof. Dr. Eriyatno Expert for Institutional Development Finance and Industry / International Relations Jakarta, Indonesia |
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| Malaysia | Raja Zaharaton Raja Zainal Abidin Deputy Director General Economic Planning Unit (Macro) Prime Minister's Department Kuala Lumpur, Malaysia |
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| Philippines | Sebastian L. Angliongto Chairman Mindanao Economic Development Council (MEDCo) Davao City, Philippines |
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Andrew Dy, BIMP-East Asean Business Council
EAGA comprises 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. Its land area of roughly 1.54 million square kilometres is home to about 45.6 million people (1996).
The Davao - Kota Kinabalu route in particular registered an incoming and outgoing passenger load increase of 35.95 and 51.71 percent respectively, while the Davao - Manado link grew 19.22 and 24 percent, incoming and outgoing passenger load respectively. Two more routes connecting Brunei and Palawan, and Kota Kinabalu and Manado have been proposed and are currently being studied by relevant airline companies for their feasibility. An MOU between RBA and a new airline, Mindanao Express (Corporate Air), to realise the Palawan-Brunei link is already in effect, agreed upon during the State Visit of HE President Estrada of the Philippines to Brunei. EAGA has also seen the birth of another airline in Sarawak-based SAEAGA Air, but was unfortunately driven to closure by the Asian financial crisis.
The Mindanao Economic Development Council (MEDCo), Philippine Secretariat for EAGA, reports a 23.68 and 57.80 percent increase in M/V Tilongkabila's incoming and outgoing passengers for the first quarter of 1998. Moreover, another Indonesian vessel, M/V Ellyana has begun to sail this route. Already, it has serviced 1,301 passengers in the first quarter of 1998, and posted an average 56.18 percent Philippine-bound occupancy rate.
The Samal Island Casino Resort is accessible by a 45-minute boat ride from Sta. Ana wharf in Davao City. Brunei has also reportedly made substantial investments in the tourism sector in Mindanao, bringing total EAGA investments in the area to over $ 500m.
In financial services, it may be only a matter of time before EAGA can boast of a Growth Fund to jumpstart important projects requiring large amounts of capital. Malaysia's Suria Capital Holdings, Land Bank of the Philippines, and Development Bank of the Philippines have signed an MOU to establish what the EAGA Growth Fund I, a US$ 150m, closed-end, 20-year equity fund that will participate in viable projects to catalyse development in the region.