JUSTINE NOEL A/L FRANCIS

COHORT 10



ASEAN SHOULD BECOME ONE COUNTRY

The Association of Southeast Asian Nations (ASEAN) is a political and economic organisation of ten
countries located in Southeast Asia, which was formed on 8 August 1967 by Indonesia, Malaysia, the
Philippines, Singapore and Thailand. Since then, membership has expanded to include Brunei, Cambodia, Laos,
Myanmar (Burma) and Vietnam. Its aims include accelerating economic growth, social progress, sociocultural
evolution among its members, protection of regional peace and stability, and opportunities for member
countries to discuss differences peacefully. The motto of ASEAN is "One Vision, One Identity, One
Community".
The idea that ASEAN should become one country politically is quite insane. The people of the ASEAN
countries are too diverse politically, culturally, and religiously to come together and form a single country.
However, the 10 countries that make up the Association of Southeast Asian Nations (ASEAN) are now moving
towards economic integration. I strongly support this move and firmly believe that this is a step in the right
direction. First announced more than 10 years ago, the ASEAN Economic Community (AEC) is due to be
established by 2015.
Distractors often say that ASEAN moves like a crab ... it takes two steps forward, one step backwards
and one step sideways. They may be right because we dont often know if ASEAN is moving forward at all. But
if we analyse ASEANs progress decade by decade, for each decade, ASEAN is far ahead after every 10 years
and thats the magic of ASEAN. For instance, while it is true that inter-ASEAN trade has remained at 25% of
total ASEAN trade with the world since decades ago but the difference is this. Total ASEAN trade with the
world was roughly US$400bil (RM1.31 trillion) in 1990, so 25% of that was US$100bil, now it is around US$2.2
trillion, so 25% of that is over US$500bil which means it has gone up five times even though it has remained at
25%. This shows inter-ASEAN trade has grown significantly and will continue to grow in terms of volume.
Thats the way I see it moving ahead and winning, like the proverbial tortoise.
Under the ASEAN Economic Community (AEC), a single regional common market of ASEAN countries
will be created by 2015. The regional integration's objective is to create a competitive market of over 600
million people in ASEAN countries: Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines,
Singapore, Thailand, and Vietnam. There will be free flow of goods, services, investment capital and skilled
labor following the liberalization. These will include tariff reductions and streamlining of certain
administrative procedures. Many businesses have begun preparing themselves three years ahead of time to
meet the challenges and opportunities of the ASEAN Economic Community (AEC).
The cases for the ASEAN Economic Community are many. Firstly, it will be viewed as a single large
market and as such, help increase ASEAN competitiveness with China and India.
Apart from the task of dealing with China and India, AEC will open more regional cooperation and will
improve the scale efficiencies, dynamism and competitiveness of ASEAN members. AEC will enable easier
movement of goods, services, investment, capital and people. Ultimately, it will offer new ways of
coordinating supply chains, or access to new markets for established products.
All ASEAN countries are more important to foreign investors if they are considered as one node in a
larger regional market of nearly 600 million people - a single market. The ASEAN Free Trade Agreement could
be expanded to zero tariffs on almost all goods by 2015. Therefore, ASEAN can choose to remain engaged
with the global economy through regional-level free trade agreements. Today, ASEAN already has such
agreements with China, Japan, Korea, India, Australia and New Zealand.
The ASEAN Economic Community is an idea whose time has come. This is because, today it is
recognized that investment in emerging markets is more desirable than in the US and Europe. In light of this
tendency, there will be no shortage of funding coming from within ASEAN, the Asia Pacific or even the US and
Europe. These investments can bring about badly needed capital for some countries, allowing them to
leapfrog from the 20th century into the 21st in terms of competition in mature countries such as Thailand and
Malaysia.
The AEC could also reap benefits in the aspect of tourism potential. Asians travels more in the region
and there are more travelers from other countries that have begun to reach out to Asia as new visitors. The
trends were evident at the recent Hub City Forum, held by the Pacific Asia Tourism Association (PATA), where
more than 100 travel industry executives discussed the tourism potential, government's spending to upgrade
facilities both for leisure attractions like museums and MICE facilities. The term "MICE" in the context of
travel is an acronym for Meetings, Incentives, Conferences and Exhibitions. It refers to a specialized niche of
group tourism dedicated to planning, booking and facilitating conferences, seminars and other events. MICE
tourism opportunities are particularly large and hopefully countries that have the most experience in this area
such as Thailand and Singapore could render their assistance to those with weak MICE experience. Recent
examples of this are Thailand with Vietnam and also some talk in Thailand about rendering assistance in Laos
and possibly Cambodia.
Last but not least, is the benefit of internationalization of health care under the AEC. Health care is
one of the sectors to be internationalized. This is definitely a big challenge as it is more complicated than just
the popularity of Singapore and Thailand's "medical tourism" that patients travel from one country to another
seeking better care at lower cost. The legal and licensing frameworks are still needed to be worked
out. However, the formation of AEC offers immense potentials for the free-flow of health services, etc. in the
region. In an encouraging development, the Bangkok Post in mid-March highlighted programs by Thailand's
largest medical service BGH and other Thai hospital groups to step-up the pace of mergers and acquisitions
and joint ventures in other AEC countries to help give them a better platform to better take care of developing
AEC opportunities.
In conclusion, it has to be emphasized that the AEC is definitely a work in progress. Some efforts will
go faster and bear quicker fruit than others. Some endeavors will face more challenges and may be less crisply
implemented. Still, I believe the future is clearly in favor of the AEC and that it offers clear opportunities and
challenges that all businesses need to be thinking about and be preparing for. Those who fail to do so, have
no one to blame but themselves for missing out on a wonderful new opportunity for sales, investment and
engagement with Asia.