The AEC in 10 years time

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The AEC in 10 years time

According to an article written just after the British decided to exit the European Union and published in the East Asia Forum, ‘The AEC blueprint involves much more than economic integration; it is about concerted domestic reform and good governance, which has potential benefits for all. The drive towards a more inclusive Asean is already embodied in the text of the Asean blueprints; the challenge is in their implementation.’ With Brexit having repercussions beyond just Britain and Europe, the question must be asked about where the AEC is likely to be by 2025.

The AEC Blueprint 2025 talks about creating ‘effective, efficient, coherent and responsive regulations, and Good Regulatory Practice (GRP)’. As the East Asia Forum article notes, ‘Better performing institutions — as reflected in regulatory quality, government effectiveness and control of corruption as well as reduced administrative burden on firms — enhance investment attractiveness and increase foreign investment inflows.’ Of course, that would have been, and probably still is, the mantra of the European Union.

By improving the ‘ease of doing business’ in Asean, small and medium enterprises (SMEs) can benefit as much as large companies, and this encourages entrepreneurship. Improving the business environment for SMEs helps to increase total employment and household income.

‘Currently there is a huge gap in how Asean member states perform on the World Bank’s governance indicators. Singapore ranks among the best in the world; Brunei Darussalam and Malaysia are the next best in Asean; while Laos and Myanmar bring up the rear among the Asean countries and remain very far down the global average.’

That said, ‘Asean provides many examples of successful development to learn from and emulate in institutionalising good regulatory practice. For example, Vietnam’s Project 30 and Malaysia’s PEMUDAH could provide a model for future institutions in less developed Asean economies, ‘ notes the East Asia Forum piece.

Vietnam’s Project 30 is the comprehensive inventory, review and simplification of all administrative procedures on the four levels of government. ‘Project 30 resulted in an accessible electronic database of about 5000 existing administrative procedures. 93 percent of those procedures had been simplified by December 2014, and enhanced investors’ confidence in Vietnam’s reform efforts.’

In Malaysia, the PEMUDAH Task Force, which was made up of senior government officials and prominent business people, ‘has been central to the country’s drive to reform and modernise regulations.’ Of course these reforms are completely internal to the countries concerned and designed to enhance their singular position as potential places for international investment, but even so, the knock-on effect should run right through the AEC over time.

Continued next issue

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