March 31, 2015 7:30 pm JST
AEC Forum

ASEAN should step up integration

CLIFF VENZON, Nikkei staff writer

BANGKOK -- Member states of the Association of Southeast Asian Nations should strive harder in meeting targets if they wish to see the full potential and benefits of an integrated regional economy, speakers at a forum on Tuesday said.

     With dismantled barriers and fulfilled plans for regional logistics and transport connectivity, ASEAN stands to reap immense economic benefits, said Ruth Banomyong, a professor at Thammasat Business School at a forum titled "Era of the AEC: Scenarios, Stakes, and Strategies." Nikkei Asian Review was one of the conference organizers

     Findings of Banomyong's simulation research show that if the ASEAN master plan on connectivity is executed by 2030, countries are well positioned for greater economic expansion, he said. "[But] not all countries will benefit at the same level," Banomyong noted.

     Nine months away from the formal establishment of the ASEAN Economic Community on December 31, nearly 80% of the targets spelled out in the blueprint have been achieved, said Jayant Menon, Asian Development Bank Lead Economist.

     And with AEC just around the corner, Menon conceded that not all targets are going to be met before the deadline.

     "But it doesn't matter. This [AEC] is a journey, not a destination. And in fact, work will never end, it will continue," said Menon.

     But the remaining issues, such as dealing with sensitive non-tariff barriers on customs and trade mobility policies, are the most crucial, according to Kavi Chongkittavorn, a senior fellow at the Institute of Security and International Studies in Thailand.

     "The remaining 20% -- this will be the most difficult. This is what the future of the AEC is all about. This is what will happen from the 31st of December," he said.

     But as ASEAN members move to seal agreements with regard to breaking non-tariff barriers, governments should ensure that these deals are going to be implemented back home, Menon said.

     On efforts to unify regional capital markets, The Stock Exchange of Thailand President Kesara Manchusree said Southeast Asian bourses should cooperate further to become more competitive globally.

     "It's not just competing with the neighboring countries but competing with the global market. That is more important," she said.

     Meanwhile, as large companies prepare for offshore expansion, small and medium enterprises should not be left behind. National government should find ways, through financing or through enabling policies, to build up the capabilities of smaller businesses, speakers said.

     "They go to other countries, they do business matching, but they discover that at the end of the day they can't even connect with the neighboring countries [because] the information itself is not sufficient. It is really about giving them the skills to understand if they really want to move within the AEC," Banomyong said.   

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