The Dream of an Integrated ASEAN Economy
In 2015, a planned major change in the ASEAN region will finally be implemented, that if successful, can have lasting effects on our economy, our livelihoods and even our society. I am, of course, talking about the ASEAN Economic Community (AEC) which is tentatively scheduled to happen in 2015.
What exactly does this “economic integration” mean?
The AEC was envisioned back in 2003 during the ASEAN Concord II as a way of integrating the various economies in the region into a single competitive market that involves the free transfer of goods and services between all the member nations of ASEAN. The AEC has its foundations on the idea of a single free-flowing market in a fast growing region that is integrated into the global economy.
So what can we expect from this proposed AEC in a more concrete and relatable level?
First of all, we can probably anticipate an increased amount of foreign companies setting up shop in the Philippines. The free movement of investments and businesses means that a company from Malaysia can set up operations in the Philippines with minimal effort and red tape. This has a dual effect on us as consumers and business owners. On the consumer side, this means more choices and potentially cheaper goods as the regional companies try to outdo each other in terms of quality and prices. On the other hand, business owners can expect a much competitive environment due to the entry of foreign companies.
Professionals from the member nations of ASEAN can also look forward to improved labor mobility. Like goods, the AEC is designed to give ample opportunities to skilled laborers for employment opportunities even across different borders.
Other benefits include the increased tourism and the free flow of capital that will benefit all the member regions of ASEAN in the long run.
However, the proposed goals of the AEC will not be easy to achieve. Even now, most of the ASEAN countries admit that full integration might not happen in 2015.
On one hand, there is the conundrum of successfully linking economies of different sizes and capabilities into a single entity. One of the biggest question marks is how local industries will survive with entry of competitors from other countries in the region. SMEs are especially vulnerable as they might not have the resources to remain competitive. The reality is that many businesses are unprepared for the upcoming integration.
The other challenge is how the social and cultural differences between the member nations can be resolved. Most Southeast Asian countries have little in the way of a regional ASEAN identity. Beyond the close proximity, there is very little overlap between the cultures of each country.
While the proposed economic integration is merely months away, it seems that there is still years of work to be done before an actual functioning ASEAN Economic Community can succeed. How fast the region can effect meaningful integration depends on how the governments and leaders of the ASEAN nations handle the challenges involved.
About the Author:
Bwayan Jordison, is a gamer, toy collector and a forex trader at Metisetrade Inc.. He often writes articles to help and educate everyone about the foreign exchange market.
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