The foundation of the AEC and its implication for South Korea(7)

The foundation of the AEC and its implication for South Korea

A local expert in Indonesia pictures potential changes in the region that the AEC may bring in the upcoming days. "People in Vietnam will start to learn the Thai language to drive taxies in Bangkok. There will be Laotians who will pick up Javanese text books to become cab drivers in Jakarta."

Actually, Singapore has been importing housekeepers from its neighbors, Indonesia and the Philippines in particular. However, it will be highly likely that more human resources in various fields of the region will cross the borders of the ASEAN members with no limitation. In doing so, physical barriers will be torn down and regional exchanges and trades will be fairly accelerated.

The foundation of the AEC and its implication for South Korea(6)

The foundation of the AEC and its implication for South Korea

However, situation would be different if joint efforts of the 10 countries to cope with superpowers is designed and carried out. As the old saying goes, "United we stand, divided we fall", the countries will have their confidence built up step by step. 

The economic clout will be further strengthened if the ASEAN succeeds in actualizing the AEC. Consequently, the influence of the AEC on the regional security issues will be also growing bigger. Against this background, hopes are high that the beginning of the AEC will serve an opportunity to create a new landscape for the 21st century.

The foundation of the AEC and its implication for South Korea(5)

The foundation of the AEC and its implication for South Korea

For example, Singapore is acclaimed to be in the rich Northern Hemisphere while Cambodia only records per capita GDP of about 1,000 USD. In this sense, it is no wonder that a tough itinerary is anticipated on the way to the substantial integration of the AEC. In spite of the skepticism raised, the importance of the birth of a sizable single economic community shouldn’t be underestimated. 

Along with Africa and South America, the ASEAN has been called as the symbol of underdeveloped areas. Thus, major powers like America, the EU and China would remain invincible if the ASEAN members try to compete with them individually.

The foundation of the AEC and its implication for South Korea(4)

The foundation of the AEC and its implication for South Korea

Even short-term outlook is not an easy thing to challenge as emerging markets with high volatility consist of most parts of the region. This could explain why negative voices concerning the future of the AEC started to be echoed. The question is whether the AEC can evolve itself something beyond a regional agreement body. 

Doubts are cast upon the significant disparity of the social and cultural environment among the member countries. In addition, neither a single currency nor a central decision-making tower as those in the EU can't be found. There exists considerable economic gap in the region as well. 

The foundation of the AEC and its implication for South Korea(3)

The foundation of the AEC and its implication for South Korea

The AEC has been expected to draw huge attention from the international society ever since it came into the world. It isn’t too much to say that agendas of the AEC blueprint 2025 such as elimination of tariffs, facilitation of skilled labor mobility, liberalization of investment and promotion of connectivity have been greatly valued to the global community. 

In fact, meaningful progress was already achieved since more than 70% of the intra-regional trade has been conducted free from any types of tariff. What will be the ASEAN like in the time of the AEC? It may be too early to forecast the AEC in 10~20 years when the AEC just pulled up its anchor. 

The foundation of the AEC and its implication for South Korea(2)

The foundation of the AEC and its implication for South Korea

However, all countries may share their uniformed look at the 'AEC(ASEAN Economic Community)'. It is because the AEC came to the 2nd year of its ambitious inauguration 47 years after the establishment of the ASEAN in 1968. Along with the ASEAN Political-Security Community and the ASEAN Socio-Cultural Community, the concept of the AEC was born from the ASEAN 2025 adopted by the leaders of the ASEAN. 

According to the AEC blueprint 2025, part of the ASEAN 2025, the AEC rests on four pillars: a single market and production base, a competitive economic region, equitable economic development, and integration with the global economy.

The foundation of the AEC and its implication for South Korea(1)

The foundation of the AEC and its implication for South Korea

The ASEAN(Association of Southeast Asian Nations), the 7th largest economy in the world, seems quite noisy in the wake of the new year, 2017. Assassination at the airport of the capital city of Malaysia triggered huge fury from all over the world as the North Korean regime is suspected of the mastermind of the incident. 

While Myanmar is under international criticism for the massacre of its minority group, Indonesia sees social conflict with controversy of the majority religious party’s alleged attempt to exercise influence on the political sector. 10 ASEAN members are faced with their own weighty political or diplomatic issues as mentioned. 

Startup boom in Southeast Asia and its implication for India to improve indispensable public services(6)

Startup boom in Southeast Asia and its implication for India to improve indispensable public services

However, venture capitals, symbols of adventurous money would remain indifferent unless they feel confident of more gains than losses by stepping into the digital frenzy in Southeast Asia. This also holds true to Korean startups and venture capitals gearing up to carve out the Southeast Asian market. 

Local startup founders have made unanimous voices that success stories of mainland Chinese startups have inspired them a lot. It is a shame that Korean startups are rarely mentioned for role models of Southeast Asian young entrepreneurs. Beginning with promising industries including fintech, education and mobile games, now is the right time for Korean startups to hit the digital road hard in Southeast Asia.

Startup boom in Southeast Asia and its implication for India to improve indispensable public services(5)

Startup boom in Southeast Asia and its implication for India to improve indispensable public services

This could explain why global investment experts have been paying close attention to this area where youngsters covering around half of the overall population are jumping on the brand new era of digital economy. There are yet pending issues to tackle in startup fever in Southeast Asia. 

Poor IT infrastructures in non-urban areas, shortage of high-skilled workforces and widespread financial illiteracy have chronically taken roots in most parts of Southeast Asia. With the exception of Singapore, capital markets and legal and institutional systems for startups in the region aren’t well devised and developed as well. 

Startup boom in Southeast Asia and its implication for India to improve indispensable public services(4)

Startup boom in Southeast Asia and its implication for India to improve indispensable public services

Why startup markets in Southeast Asia are much spotlighted? High growth potential in the region would be singled out above all things. The number of internet users in key countries of Southeast Asia like Vietnam and the Philippines has been increasing the fastest in the world. 

According to an article from the Wall Street Journal, whopping 120,000 online users are newly reported in the region on a daily basis. There is further prediction that 480 million people almost nearing the entire population of the EU (European Union) will be accessed to internet in Southeast Asia by 2020. 

Startup boom in Southeast Asia and its implication for India to improve indispensable public services(3)

Startup boom in Southeast Asia and its implication for India to improve indispensable public services

To name a few, startups aiming for improving the productivity of aquaculture industries or producing eco-friendly shopping bags to provide customized solutions for Southeast Asia where primary industries still considerably counts are loomed large. In addition, indigenous family conglomerates have joined the startup wave by setting up venture capitals and navigating business chances. 

This is no exception to Korean investment firms. As centered on Indonesia and Vietnam, two countries in the region respectively representing the maritime and the continental Southeast Asia, news of Korean venture capitals eagerly exploring lucrative investment opportunities are heard now and then.

Startup boom in Southeast Asia and its implication for India to improve indispensable public services(2)

Startup boom in Southeast Asia and its implication for India to improve indispensable public services

Consequently, unicorn startups, privately held startup companies valued at over $1 billion has been emerging one by one. Lazada, an e-commerce platform in Singapore and Gojek, an Indonesian app-based ride-hailing service provider are presentable cases. It is mainly young Southeast Asians equipped with experiences of studying in Western countries who initiated startup craze in the region. 

As more and more young generations across the region rush to kick off their own companies, business models of startups are getting shaped up in a various way. For example, attempts to introduce mobile technology to region-specific circumstances have been drawing huge attention. 

Startup boom in Southeast Asia and its implication for India to improve indispensable public services(1)

Startup boom in Southeast Asia and its implication for India to improve indispensable public services

Startup boom deserves to be named as one of the hot issues in Southeast Asia these days. Startup markets across Southeast Asia have been rapidly gaining momentums. As a matter of fact, locally born leaders of the digital economy such as Grab in Malaysia which acquired the Southeast Asian business unit of Uber in early 2018 have been acclaimed for changing the conventional industrial map in the region. 

According to Tech in Asia, a Singapore-based online technology media, startups in Southeast Asia enjoyed as much as $7.9 billion in investment in 2017. This figure is more than tripled than the total startup investment of $2.5 billion in 2016. This is far startling because investment in Southeast Asian startups failed to reach even $1 billion in 2013. 

Right Time for Korean Startups to Ride on Digital Fever in Southeast Asia(7)

Right Time for Korean Startups to Ride on Digital Fever in Southeast Asia

This also holds true to Korean startups and venture capitals gearing up to carve out the Southeast Asian market. Local startup founders have made unanimous voices that success stories of mainland Chinese startups have inspired them a lot. 

It is a shame that Korean startups are rarely mentioned for role models of Southeast Asian young entrepreneurs. Beginning with promising industries including fintech, education and mobile games, now is the right time for Korean startups to hit the digital road hard in Southeast Asia.

Right Time for Korean Startups to Ride on Digital Fever in Southeast Asia(6)

Right Time for Korean Startups to Ride on Digital Fever in Southeast Asia

There are yet pending issues to tackle in startup fever in Southeast Asia. Poor IT infrastructures in non-urban areas, shortage of high-skilled workforces and widespread financial illiteracy have chronically taken roots in most parts of Southeast Asia. 

With the exception of Singapore, capital markets and legal and institutional systems for startups in the region aren’t well devised and developed as well. However, venture capitals, symbols of adventurous money would remain indifferent unless they feel confident of more gains than losses by stepping into the digital frenzy in Southeast Asia.