The many benefits of the AEC

That seems to be a common misperception about the Asean economic community that actually will only be launched at the end of next year.

At the many roadshows organised by the ministry on Asean this year, minister Mustapa Mohamed and his officials would often be queried on the same subject. “That seems to be the perception among many Malaysians. We want to allay this fear. There is no such thing.

“Many businesses are worried about the sudden increase in competition with foreign products, but that won’t be so. Foreign businesses have been coming into Malaysia gradually over the last 10 years, and this has been done in stages. Next year is just symbolic – 2015 is just the semi completion of the AEC 2015,” Mustapa stressed during a media town hall meet on the AEC recently.

The AEC aims to group Asean countries into a single market and production base. Consumers will have access to a cheaper and wider range of goods and services and enjoy more extensive consumer protection. Although Malaysia will, in a few months, assume the Asean chair – rotated annually among members – work has already begun among ministry officials to meet the various stakeholders to explain the AEC and its benefits.

But with so many outreach programmes planned for various target groups, ministry officials are finding it a struggle to fulfil requests to talk on the AEC. Time is of essence. Among officials, fatigue is setting in.

“We are struggling to meet the stakeholders’ demand. Some have three Asean outreach programmes a week to attend.

“It is good that many people are interested to know about Asean. But more out there have no inkling what Asean is. It is just a name.”

Efforts to further explain what comes next year and beyond should not just be the ministry’s job. There must be a major media blitz.

The message must be clear – why we are hosting the Asean summit, the importance of Asean economic integration and how Malaysian businesses and public benefit.

Who better to explain to the man on the street, private sector and government officials than Prime Minister Najib Razak himself, possibly via an address to the nation.

The rakyat must be made aware of the advantages in the opening of the regional economy. Take the open skies policy, which has benefitted low-cost airlines in the region.

Malaysia is the top beneficiary of the open skies policy with the liberalisation of the region’s air transport industry. AirAsia, which has more than 10,000 staff, has been leveraging on this policy with operations all over the region.

Another good example is Kilang Makanan Mamee and Perfect Food’s Julie Biscuits, two local companies known for their food products and already a household name in Asean, debunking growing fears of SMEs facing bankruptcy as a result of the open market.

Instead, the AEC, officials say will create business and job opportunities in member countries as it also allows free movement of skilled labour within Asean countries.

The AEC will also enable free flow of goods whereby member states  eliminate import duties and remove all forms of non-tariff barriers.

To date, customs import duties have been substantially eliminated and beginning next year, 97.3 per cent of the products traded in the region will be duty-free.

Cambodia, Laos, Myanmar and Vietnam are given flexibility to maintain duties of 1-5 percentage point over tariff lines, which will be eliminated in January 2018, as they are the latecomers to the grouping.

From five economies and now 10, countries are knocking on Asean doors to engage its members. 

After nearly five decades, Asean economies form the seventh largest economy in the world and third largest in Asia, with combined GDP of US$2.5 trillion, according to the ministry’s statistics. 

Surely Asean is doing something right. This record speaks for itself.