The Association of Southeast Asian

The Association of Southeast Asian Nations (ASEAN) agreed to set up the ASEAN Economic Community (AEC) in three years in order to bolster the economy of Southeast Asian countries in a world where powerhouses such as India and China are rapidly progressing. As these ten nations merge to create a single market, they reward themselves by implementing policies that will affect numerous sectors of each country’s economy. Therefore, Thailand, as a member of the AEC, will be faced with difficulties as well as opportunities. The establishment of the AEC will affect Thailand’s tourism, Thai labor movement and foreign investment in Thailand, all of which will be explained in details in the following paragraphs.
The first effect of the AEC on the economy of Thailand is the country’s tourism. The fact that the AEC will remove the entry visa requirement for travelers from other Southeast Asian nations will cause more people to come to Thailand and strengthen the tourism sector. On the other hand, countries, such as Vietnam, are ready to attract travelers away from Thailand. The Thai economy will definitely risk losing business to nearby nations if there is no quality tourism industry. Consequently, to remain competitive after 2015, the Department of Tourism is carrying out higher service standards across the sector. Thai small and medium enterprises should focus on communicating to connecting with and communicating to an online customer base. This will result in Thailand having the edge to remain on top of other Southeast Asian countries.
The second effect of the AEC on the economy of Thailand is the country’s movement of labor. The AEC enables the free movement of capital, labor and services all over Southeast Asian countries, thus professionals will be approved and have freedom to work in other Southeast Asian nations. Incentives like higher salary in nations, like Malaysia and Singapore, could negatively affect Thailand provided that skilled workers are drawn away. As a result, changes, such as incentives that are introduced exclusively for skilled employees who decide to work in Thailand, could help the country prepare for this consequence that this new movement could have on the Thai economy.
The third effect of the AEC on the Thai economy is overseas investment in Thailand. Southeast Asian countries’ liberation of trade in movement of labor and services leads to the expected increase of the overseas share ownership ceiling. For this reason, new opportunities will exist for Thailand to act as an overseas investor itself. Fields considered to be prime initial investment targets are the high-potential service industries that already illustrate huge profit margins. In Thailand, current laws that restrict foreigners’ ability to own property, are perhaps a significant challenge for the new allowances to persuade future investors. As a consequence, overseas investment within Thailand and among other nations will seriously be dependent on finding resolutions to questions about investment modes, joint ventures, and composition of board of directors to mention a few.
On the whole, there are, without any doubt, more factors that contribute to the effects of the AEC on the Thai economy but Thailand’s tourism, Thai labor movement and foreign investment in Thailand represent the most significant outcomes of the establishment of the AEC. Accordingly, the path to 2015 will demonstrate how capable the ASEAN is to meet challenges and achieve its goals.