Private sector urged to rake in benefits from the AEC
Although the Asean Economic Community is being touted as a game changer for Southeast Asia, its benefits will be lost unless the private sector spares no effort to extract maximum advantage from the ambitious single-market plan, observers say.
This means businesses, small and medium-enterprises enterprises and young entrepreneurs will have only themselves to blame if they fail to exploit what is surely an initiative that potentially offers immense opportunities.
With 625 million people, the consumer base is enormous, which is why it comes as no surprise that officials and trade and economic ministers are working feverishly to establish the AEC by the end of this year.
At the 47th Asean Economic Ministerial (AEM) chaired by Malaysia, member economies expressed their countries’ unwavering commitment to realise the AEC.
The AEC has undoubtedly become synonymous with the 10-member grouping to the extent that it felt as if there were no other issue that could have taken centre stage at the AEM and Related Meetings.
With adverse conditions such as the meltdown in stock markets, depreciating currencies and plummeting oil prices, the clarion call for Southeast Asian economies to work together even more closely must only get louder.
The crux of the matter is a far more integrated regional economy via the AEC, for which Asean must go beyond the symbolic hand-clasping gesture among leaders and ministers to crystallise freer flow of trade in goods and services.
The current economic malaise seems to be getting worse by the day, but as ministers pointed out, Asean is not going to stop the region’s work towards the AEC.
"No roll-back on our commitments," Malaysian International Trade and Industry Minister Mustapa Mohamed declared at the onset of the meetings, which his country is chairing.
Malaysia has submitted suggestions such as broadening the use of the Chinese yuan in trade and investment to counter the strengthening US dollar. It argues that this is practical as Asean economies are much more in tune with trading with China because of its proximity and the magnitude of their trading volume with the Chinese economy.
Therefore, it comes as no surprise that officials involved in the AEC are working around the clock to make it a reality by the end of the year.
For the man in the street who might be oblivious to the brouhaha as to what the AEC is all about, it basically means freer movement of goods and services within the region without much hassle.
It would also enable the freer flow of investment capital and skilled labour and would entail tariff reductions and streamlining of certain administrative procedures.
Its supporters claim this will means greater business opportunities for the layman, as it would even boost business for street vendors to multinational companies in the region, which means it would have widespread benefits.
The Asean bloc has achieved 91.5-per-cent compliance towards making the AEC a reality, with the remaining 8.5 per cent still being ironed out, such as issues pertaining to transport and expediting cargo clearance.
Some 463 of the 506 prioritised AEC blueprint measures have been implemented.
Last year, Asean attracted US$136 billion (Bt4.83 trillion) worth of foreign direct investment, which surpassed inflows to China, and received 105 million tourist arrivals.
However, it must be noted that the AEC is a non-binding agreement and permits backloading, and neither should there be misperceptions that "red tape" related to trade and investment and movement of people in Asean will disappear come 2016.
It took 17 years "almost" to eliminate the region’s tariffs under the Asean Free Trade Agreement. The fact that Afta, which was a binding agreement, took so long to implement has somewhat raised doubts among the business community as to whether the AEC, which on the contrary is non-binding, can take off in a much shorter time.
Mohd Emir Mavani Abdullah, group chief executive of Felda Global Ventures Holdings, said the AEC would be both beneficial and challenging.
Streamlining regulatory, policies and infrastructure is not easy.
"What we worry about is if [in the long run] there will be changes in governments and policies," he said.
Concerns such as these need to be addressed by the respective governments.
He also alluded to the fact that there is no place for protectionist tendencies in the AEC.
There should be strong commitments from all member states to help develop one another’s markets, CIMB Group Holdings CEO Zafrul Aziz said on the AEC.
Equally important is for the people, especially the younger generation who make up 60 per cent of Asean’s population, to understand and embrace the AEC wholeheartedly so as to reap its benefits.
The mission is to ensure that this talented, creative, hard-working and demanding segment of Asean’s population is given the opportunities to thrive in a competitive global environment.
Economic integration only has meaning if it leads to equitable and inclusive growth that provides opportunities for Asean’s growing young population.
And whether in trade, investment or people, the AEC is not an end goal but a work in progress and a crucial journey that the private sector, SMEs and young people especially must take without hesitation, its supporters say.
