Achieving the ASEAN Economic Community 2015: Challenges for Member Countries and Businesses

Achieving the ASEAN Economic Community 2015

Author(s):  Sanchita Basu Das

ISBN:           9-789814-379649

Publisher:  Singapore: Institute for Southeast Asian Studies

Year:           2012

Price:           $42,90

Reviewed by John Walsh, D.Phil., Director, SIU Research Centre

The ten member states of the Association of Southeast Asian Nations (ASEAN) represent a significant bloc of some 600 million people, all of whom now (with the transition from autocracy to some form of democracy and openness in Myanmar) are part of the capitalist system of production and consumption. ASEAN has already achieved one of its principal goals by helping to ensure that no two active members of the Association have gone to war with each other. This in itself is no mean feat. It has been achieved by focusing on the economic aspects of life and setting political, cultural and human factors into the background. This method succeeded because it meant no intervention into the political systems of other member countries, which would raise tensions and reduce the level of cooperation given the caliber of some of the military tyrants who still squat in power in certain countries. It also succeeded because of the very high levels of intra-regional (and in some cases intra-state) income inequality which meant that powerful incentives existed for cross-border investments to take place and these provided an additional means of stability because of the provision of jobs, higher incomes and aspirations to ownership of basic consumer goods. To some extent, this might be viewed as a form of what David Harvey called a ‘spatial fix,’ that is, a time-limited method of stabilizing capitalism by encouraging absorption of labour and capital in a different area. This is an approach that needs regular maintenance and reconfiguration and the SEAN Economic Community (AEC) may be viewed in this context. It is due to be introduced in 2015 and it is likely that at least some provisions will be introduced before the end of that year. Public and even business awareness of the AEC has been quite limited in most parts of the region so it is important that more information is provided and more public engagement encouraged. This book is the result of one such initiative organized at the Institute of Southeast Asian Studies (ISEAS) at the National University of Singapore (NUS), which is at the very heart of the unfortunately rather slender intellectual resources of ASEAN. ISEAS organized workshops with submissions from various contributors in 2010 and the publishing of this volume in 2012.

The AEC Blueprint calls for actions in creating progress in three principal areas: a single market and production base; a competitive economic region and a more equitable form of economic development. Under the first heading come requirements for free flow of goods, services, investment, capital and skilled labour. Under the second heading come issues of competition policy, consumer protection, e-commerce, intellectual property rights and infrastructure development. Under the third heading come SME development, narrowing the development gap and integration with the global economy (this summary is provided by Hoi, 2012). A moment’s reflection will prompt understanding of how fiendishly difficult the required negotiations will be and what a challenge this would be for the limited technical capacity available to the ASEAN Secretariat and the individual states themselves. It is difficult enough to try to make progress as much narrower grounds in the European Union, where all members enjoy a comparatively affluent lifestyle compared with, for example, the people of Laos or Myanmar. How much more difficult will it be to balance the interests of small and rich countries such as Singapore and Brunei Darussalam with those of large archipelagos such as Indonesia and the Philippines? Even when agreements can be reached and guidelines for progress established, it is far from clear that organizations, institutions, firms and individuals will be able to meet those guidelines. Consequently, the book is organized so as to cover different levels of activity. There is a short introductory section of two chapters provide overviews of readiness for the AEC from a regional perspective. Then there are two more substantial sections, which form the main part of the book and which deal with readiness first from a country-level perspective and then from the business-level within industrial countries. There are nine papers in the first of these sections (Myanmar is not covered) and seven in the second of them (Cambodia, Laos and Myanmar are all omitted here). There is then a final concluding chapter.

The majority of the chapters is written by consultants and adopt a similar approach as a result. This features a systematic evaluation of the matter at hand – i.e., the level of preparedness of country X or the levels of preparedness of firms in country Y – and almost entirely using such objective data as are available. There is little if any room for flair in the writing or the posing of other intellectual questions along the way. This is clear from checking each paper from the references used and finding how few of them there are and, also, how similar in provenance they are. There are research centre reports, working papers, papers presented at workshops of like-minded people and economics journals.  These are all very well and perfectly adequate to their task but there is a tendency to rely on the same comparatively narrow range of sources and to present the findings in the same way and even in the same order. While this shows admirable consistency and attention to detail, it does mean that there is a certain disconnection between writers and potential readers who are not specialists in the subject and used to a similar form of discourse to analyse it. This issue is somewhat exacerbated by the vocabulary mostly employed, with its talk of coordination, linkages, efficiency and network externalities. Again, there is nothing wrong with using these terms but there will be a need at some stage (and preferably with some urgency) to connect this material into that which directly appeals to a wider audience. It also poses a question as to the purpose of this book, other than to complete a process of workshop organization.

In the brief concluding chapter by editor Sanchita Basu Das, several policy recommendations are made, as follows:

–          The most important task is to raise awareness of the benefits of the AEC to business people;

–          The information gap (between public and private sectors) must be bridged quickly;

–          The AC scorecard should be made transparent, detailed and readily available for the private sector;

–          Trade facilitation processes should be given priority;

–          Skilled worker qualifications and abilities vary so widely that there may be a need for an ASEAN-wide tertiary education level entry age examination;

–          More should be done to strengthen and unlock the potential of small and medium-sized enterprises;

–          ASEAN leaders should help in building capacity for less-developed countries;

–          Changes must be made to domestic regulations at all levels to move towards harmonization (Das, 2012).

Of these eight recommendations, five are explicitly made on behalf of private sector organizations and all eight call upon the state to lead the way. As in the case of Southeast Asia and indeed East Asia more generally, there is little consideration given to the notion that a small state should just get out of the way of the private sector or that markets will develop and function autonomously. Some might consider this problematic but it nevertheless represents an accurate assessment of the capacity of the institutions involved, particularly in terms of mainland Southeast Asia.

Overall, then, this is a useful contribution to knowledge concerning the readiness of ASEAN members and their businesses or the forthcoming AEC that would assist in the subsequent transmission of that knowledge to wider audiences.

References

Das, Sanchita Basu, “Conclusion and Recommendations for an Effective AEC,” in Sanchita Basu Das, ed., Achieving the ASEAN Economic Community 2015: Challenges for Member Countries and Businesses (Singapore: ISEAS, 2012), pp.327-32.

Harvey, David, “Globalization and the ‘Spatial Fix,’” Geographische Revue, Vol.3, No.2 (2001), pp.23-30.

Hoi, Lim Jock, “Achieving the AEC 2015: Challenges for Brunei Darussalam,” in Sanchita Basu Das, ed., Achieving the ASEAN Economic Community 2015: Challenges for Member Countries and Businesses (Singapore: ISEAS, 2012), pp.21-36.

Suggested citation: 

John Walsh (2014). Review of  “Achieving the ASEAN Economic Community 2015: Challenges for Member Countries and Businesses”, by Sanchita Basu Das,  East Asian Integration Studies, Vol. 7, no.14, Internet file: https://asianintegration.org/index.php?option=com_joomlib&task=view&id=128&Itemid=75