A month on, how the AEC has begun


A month on, how the AEC has begun


There’s a strong chance that most people reading this have not noticed the slightest difference to their business position since the 1st of January this year and the official start of the Asean Economic Community (AEC).

The borders have not suddenly become any more porous than they were beforehand, inter-country trade hasn’t suddenly become any easier and skilled labour hasn’t suddenly become easier to find.

The 10 member-countries of the Association of Southeast Asian Nations (Asean) may have all agreed to join the AEC, but the reality is that three of them, Cambodia, Laos and Myanmar have been granted a two-year extension on becoming fully-fledged members. So, for the next two years at least, the AEC really consists of seven nations, not 10.

While people in Singapore, for example, are generally upbeat about the advent of the AEC in relation to easier travel and work opportunities, there are still some concerns. These centre around protectionist non-tariff import measures and regulations that might block the free flow of skilled labour.

Notably, a survey conducted on the AEC found only 25 percent of respondents believed the AEC would bring Asean closer to becoming a ‘community’, while 33 percent thought it would not.

The rhetoric is one thing, the reality is another, at least at this early stage. There still appears to be insufficient awareness among the public of all the member states about just how the AEC is meant to work.

The biggest hurdle, economically anyway, for the member states to overcome is protection, both of sovereign interests and native industries. Too much protection will inevitably lead to a less effective and powerful economic group as a whole.

In reality, along with a number of its neighbours, Thailand is not fully prepared for the AEC. As an editorial in The Nation newspaper pointed out, ‘Thais could do much better in terms of understanding foreign languages…and in bracing for the inevitable influx

of skilled workers. We need to be open-minded about unfamiliar cultures and beliefs. The success of the regional endeavour depends on everyone being ready to do business openly and with confidence.’

This year, in particular, will be a great test for the AEC as a business model as the governments of the bloc, and businesses, settle down to find ways of working together.

As The Nation noted, ‘Rather than seeking merely to enrich states and entrepreneurs, the AEC has as one of its chief goals the eradication of poverty, or at least its significant reduction…In pursuit of this aim, the politicians, the bureaucrats and the deal-makers must keep the welfare of ordinary people steadfastly in mind.’ Sadly, given the venal nature of many, such a lofty ideal looks good on paper, but the reality is often different.