ASEAN Economic Community 2015
 

ASEAN ECONOMIC COMMUNITY 2015

ASEAN Economic Ministers (AEM) are working to achieve the ASEAN Economic Community (AEC) by 2015 to achieve the broader goal of the region becoming a single integrated seamless market and serve as an international production base. Global businesses should begin their business planning to prepare for this economic integration as ASEAN economies become more interdependent. To enable free flow of goods, reduce transaction cost and the cost of doing business in ASEAN, initiatives include trade facilitation, improved logistics, cooperation in customs as well as transportation and communications. Trade among Member Countries is expected to expand. Implementation of such initiatives will also enhance ASEAN’s attractiveness as an FDI and tourist destination.

The Framework Agreement on the ASEAN Investment Area (AIA) signed on 7 October 1998 contains one important FDI measure: immediate opening up of all industries for investment, with some exceptions (manufacturing, agriculture, fishery, forestry, mining and services) as specified in the Temporary Exclusion List (TEL) and the Sensitive List (SL), to ASEAN investors by 2010 and to all investors by 2020. AIA Ministers at their Meeting in September 2003 agreed to work out the scope of expanding the AIA to include services (such as, but not limited to, education services, health care, telecommunication, tourism, banking and finance, insurance, trading, e-commerce, distribution and logistics, transportation and warehousing, professional service such as accounting, engineering and advertising).

What then are the business opportunities?

There is a need to develop hard and soft infrastructure support facilities and services which businesses can meet in sectors like agro-industry, natural resources, tourism, transport, infrastructure and ICT. Critical are the air, sea and land transport logistics, ICT, and human resource development that can promote increased cross-border flow of goods and people to, from and within the region.

In food, agriculture and forestry sectors, the ASEAN Secretariat identifies cooperation areas like food security, food handling, crops, livestock, fisheries, agricultural training and extension, agricultural cooperatives, forestry and joint cooperation in agriculture and forest products promotion scheme.

In telecommunications and IT, businesses can meet needs to promote interoperability, interconnectivity, security, integrity, as well as construction and development of information infrastructure such as fixed/mobile communications networks, multimedia applications and Internet in ASEAN Member Countries.

Financial institutions can explore opportunities in rural and SME financing to promote SME activities and rural enterprises as well as develop tighter security measures against terrorist financing and money laundering.

Media, public relations, and communications practitioners can also provide their services to promote sub regions and to deliver business and other news on sub regions.

In the transport and communications sector, air transport service operators can jointly invest in and develop air commuter service operations in air alliances to develop cheaper air transport services to, from and within sub regions, especially in the routes that are not currently being serviced by any airlines or where the present supply of air services is still lacking. Businesses can also participate in regional activities to improve multimodal transport linkages and interconnectivity, review investment feasibility in the liberalisation in the air and maritime transport services, and further improve integration and efficiency of transport services and the supporting logistics systems.

Intellectual property (IP) and IP Rights (IPR) creation, commercialization, and protection in ASEAN remains important as the region work towards establishing a regional trademark filing system.

In the energy sector, opportunities exist to enhance energy security in ASEAN and in developing infrastructure, including energy facilities such as power stations (including rural and urban electrification), oil and gas pipeline network by using concessional loans, other schemes or private finance.

In the tourism sector, competency standards for restaurants, bars, housekeeping, tours and travels are being developed. This will increase regional confidence in tourism training outcomes and qualifications which will in turn stimulate intra-regional investment and flow of human resources in the sector.

Finally, in the services sector, ASEAN is developing Mutual Recognition Arrangements (MRAs) on trade in services. MRAs enable the qualifications of professional services suppliers to be mutually recognised by signatory member countries, hence facilitating easier movement of professional services providers in ASEAN region. MRAs have been concluded for Engineering Services, Nursing Services, and Architectural Services. A number of other MRAs in other areas are currently in different stages of negotiations, which include Accountancy, Medical Practitioners, Dental Practitioners, and Tourism. Businesses which are aware of the establishment of the ASEAN Economic Community (AEC) by 2015 and actively planning, committing and preparing themselves now will doubtless reap much of the harvest post 2015. This is the season to conduct in-depth market studies, feasibility studies and formulation of ASEAN market entry strategies.