Experts have high hopes for AEC
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Experts are bullish about the prospects for the Asean Economic Community (AEC), however, they are sceptical whether it could meet its 2015 target if Europe's sovereign debt crisis deepens.
Speaking at the World Economic Forum on East Asia 2012 last week, Omar Lodhi, chief executive officer at Singapore-based Abraaj Capital, was bullish about Asean’s greater integration, though he was sceptical whether it could stay on target amid the worsening situation in Europe.
“My concern is the target year of 2015. Will it be on time?” Lodhi asked.
“The scale of Europe’s crisis is very large. In terms of economic growth, there will likely be an impact. The progress of Asean’s integration could slow down,” said Tai Hui, regional head of research for Southeast Asia at Standard Chartered Bank.
Obviously, the world is going to be increasingly volatile in the next three to five years and problems can be more complex, Hui noted.
Hui said that AEC aims to promote growth in the Asean region and help mitigate risks that could come from the globe and within Asia.
As Asean’s greater integration was coming closer, Hui suggested that the business sector should prepare itself.
“Do they understand what the AEC is about? Do they understand the rules and regulations?” he added.
With combined gross domestic product of US$2 trillion (Bt60 trillion) and a population of 600 million, Asean has managed to grow intra-region trade to $242 billion in 2010 from $156 billion in 2005, according to Standard Chartered.
Asean’s total banking revenue is estimated at about $80 billion.
A number of Asean countries still need to develop and strengthen their infrastructure and prepare financing needs and banking services.
“When they start investment [in Asean countries], they will need loans, bank accounts, risk management and others,” said Lyn Kok, president and chief executive officer at Standard Chartered Bank (Thai).
“There will likely be small risks and plenty of opportunity,” she said.
