ASEAN Economic Community can tap on a huge consumer market of more 630 million people
On Sunday (Nov 22), leaders of ASEAN and their dialogue partners will witness the signing of the Kuala Lumpur Declaration on the establishment of the ASEAN Community. One of the pillars of this is the ASEAN Economic Community (AEC), which has been eight years in the making.
Beginning Jan 1 next year, ASEAN's 10 member states will be a single market and production base, further opening up the market that has a combined population of 630 million. In July, Malaysia's Trade Ministry conducted a survey of some 1,000 small and medium scale industries. More than half of them had no idea what the ASEAN Economic Community was all about, let alone what it could do for their businesses.
Minister of International Trade and Industries Mustapa Mohamad said: "The finding was very disturbing. About 60 percent of SMEs were not aware of opportunities in other ASEAN countries - either they were not aware of what AEC stands for or they were not aware of the opportunities available in other ASEAN countries."
The Trade Ministry then embarked on a series of roadshows to raise awareness of the opportunities of a single market and production base in the ASEAN region.
Michael Raj, business editor at Bernama, said: "Exporters can export to each others' markets without any import duties but on the condition that ... the products have made-in-ASEAN content. It will be difficult in the beginning, but then they have to make adjustments, and companies in Southeast Asia need to change their strategies - one from national to an ASEAN regional strategy."
More than 70 percent of products made in ASEAN will have zero tariffs. This free movement of goods and services is expected to bring down prices of raw materials and cost of production.
Eight professions including doctors, nurses and accountants will be able to work in any ASEAN member country.
Above all, the AEC can tap on a huge consumer market of more than 630 million people, with half below the age of 30. With growing awareness of its benefits, more businesses are anticipating the rollout of the Community.
Mohd Fuad Ahmad, MD at Suci Harumatiques, said: "We can sell our flavours and products to neighbouring countries which have always wanted to have soursop flavour or special quinin flavour for their own taste."
Fione Tan from eOneNet.com said: "Now we can have access to a bigger population, for example, our neighbour Indonesia, above us Thailand and all of them have got a lot of online shoppers. Malaysia we only have 28 or 29 million population, but why not look around - the same product we can sell there, probably at even a higher price."
Last year, foreign direct investment into ASEAN nations totalled over US$136 billion, higher than that of the US and China.
With a single set of rules in doing business, ASEAN - which has the world's third largest workforce - looks set to draw in more foreign direct investment to power growth between five and six percent annually.
It is not the end, but rather a real beginning - ASEAN countries will have the next 10 years to get their act together, to further deepen their integration and narrow the income gap. However, all these will not be possible without maintaining regional peace and stability as ASEAN nations unite to forge a single identity.
