Benefits of the Asean Economic Community (AEC)
It 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 will be expanded to zero tariffs on almost all goods by 2015.
The USITC's Asean: Regional Trends in Economic Integration, Export Competitiveness, and Inbound Investment for Selected Industries Report noted that the AEC is coming at a time when it is recognized that investment in emerging markets is more desirable than in the US and Europe
SMEs accounted for 96% of enterprises and between 50-85% of domestic employment across Asean. Integrating these SMEs and supporting them in the inital period will be a challenge throughout ASEAN but particularly in the lesser developed ASEAN countries.
Tourism opportunity. 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 also MICE facilities such as convention centers, reported the newspaper.
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
hese are vast and ambitious pursuits, and 2015 is less than three years away. Businesses need to have an international mindset, which gives them the appetite and ability to make cross-border investments and acquisitions. Momentum has been established, as seen from many investments and merger and acquisition activity that has occurred in the region.
Still, we 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 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.