Washington, February 9:

Southeast Asia, which has linked up with China to set up the world’s largest free trade area, should weed out corruption to realize its potential as a growth and investment hub, the top US business lobby in Asia said today.

“A critical downside of the investment environment is corruption — what we used to call out of concern for diplomatic niceties ‘transparency’,” said Martin Sullivan, chairman of the US-Association of Southeast Asian Nations (ASEAN) Business Council. “We need to stop tiptoeing around this issue, it is too important,” said the CEO of American International Group Inc. (AIG), the world’s largest insurer, as he formally took the council’s helm Wednesday at a ceremony in Washington. Most ASEAN countries consistently fare poorly in any global yardstick on clean government.

Out of a clean score of 10 on the Berlin-based Transparency International’s corruption perceptions index, only Singapore and Malaysia came out above five. Sullivan lamented that decisions on major new investments in the region were made a “great deal more difficult by the prospect of dealing with corrupt government bureaucracies, or a shifting tax structure, or a contract open to interpretations and-/or abrogation. “As long as these issues rate so high in the minds of the inve-stors, ASEAN will never live up to its potential,” he said, “Our direct interest ? If the ASEAN economy is not living up to its potential, neither are investors. The council has for a long been enga-ged in talks with ASEAN governments about the need for predictable and liberal investment environments.”