THE APPROACHING AEC PUZZLE

Issue : June / July 2015 Risk Managment
 

            Beyond the New Year celebrations, what will happen between the last minute of December 31 and the first minute of January 1? Will there be fanfare to mark the official dawn of the ASEAN Economic Community – the EU-like trading block of Southeast Asia? Will the deadline need to be postponed again, like it was in 2012? And if the deadline holds, is the region really going to become a single market where goods, services and labour flow freely like in the EU?

            These questions grow louder as the clock ticks towards the end of 2015. The questions reflect doubts regarding the ability of ASEAN to operate as a united community. Europe took 50 years to realize the European Union. Critics say that ASEAN’s policy of non-interference will prevent the region from creating full equality. How can one region encompasses all the differences – Western-style democracy, authoritarian states, military juntas, communism, absolute and constitutional monarchies, the largest Muslim nation in the world, a devout Catholic country and hubs of Buddhism, not to mention the cultural and linguistic obstacles?

            Such issues were considered at a roundtable discussion, “AEC – Will ASEAN Get There in Time”, at the Foreign Correspondents’ Club of Thailand at the end of February.

            Narongchai Akrasanee, the current minister of energy, said it was misleading to look at the AEC as a copy of the EU.

            “First and foremost, we need to make some corrections,” he said. “ASEAN countries did not look at the EU as a model for creating the AEC.”

            According to Mr Narongchai, the idea of a single market arose when some ASEAN countries become more industrialized and needed to expand markets and production bases. Countries like the Philippines, Thailand, Malaysia and Indonesia had budding industrial sectors and needed to reduce tax for exports in order to expand their markets. The idea of the AEC was floated in 1997, before being officially adopted in 2007.

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