The establishment of the AEC and its implication for South Korea(10)

The establishment of the AEC and its implication for South Korea

South Korean business people navigating new growth chances have unanimously pointed out that Japanese business presence is dominant in the region. Moreover, China is speeding up recently by utilizing its extensive networks across the region. 

China has maintained robust retail and wholesale channels in most part of the ASEAN since around the 16~17th century when the Western forces first embarked on their rush to Southeast Asia. Unlike competitors heading forward, South Korea is often regarded encountered with shabby circumstance.

The establishment of the AEC and its implication for South Korea(9)

The establishment of the AEC and its implication for South Korea

In doing so, physical barriers will be torn down and regional exchanges and trades will be fairly accelerated. This will also gear up the possibility of the realization of the AEC overcoming the concern that the AEC blueprint 2025 may remain a mere declaratory gesture.

As a matter of fact, a global war without guns has been underway to attract the ASEAN actively stretching itself to the world. For instance, Japan has been striving to enhance its clout on the AEC by devoting itself to investment on the infrastructure and key industries.

The establishment of the AEC and its implication for South Korea(8)

The establishment 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.

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

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

The establishment of the AEC and its implication for South Korea

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

The establishment of the AEC and its implication for South Korea

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. For example, Singapore is acclaimed to be in the rich Northern Hemisphere while Cambodia only records per capita GDP of about 1,000 USD.

 

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

The establishment of the AEC and its implication for South Korea

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. 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 establishment of the AEC and its implication for South Korea(3)

The establishment of the AEC and its implication for South Korea

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 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.

 

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

The establishment of the AEC and its implication for South Korea

10 ASEAN members are faced with their own weighty political or diplomatic issues as mentioned. 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.

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

The establishment 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.

Expansion of Mobility Services and Its Impact on the Development of a Cashless Society in Indonesia(14)

Spread of mobility service and Indonesian cashless society

Of course, cashless society is still at its infant stage. A life without cash may not ring a meaningful bell to those staying in less-developed parts of Indonesia. 

However, hopes are higher than ever that a cashless society primarily enabled by unprecedentedly fast expansion of mobility services will surely advance the national dream of digital Indonesia into reality.

 

Expansion of Mobility Services and Its Impact on the Development of a Cashless Society in Indonesia(13)

Spread of mobility service and Indonesian cashless society

It goes without saying that such spread of mobility services accelerated by actualization of e-payment on mobile gadgets has raised the expectation of a cashless society in Indonesia. 

As a result, financial environments without coins and bills have been realizing inch by inch. For instance, it is commonly observed that IT-savvy youngsters enjoy full benefits of a cashless society with Go-Jek or Grab on a daily basis. 

Expansion of Mobility Services and Its Impact on the Development of a Cashless Society in Indonesia(12)

Spread of mobility service and Indonesian cashless society

In a country where less than 10% of the population holds credit cards, implementation of e-payment system on mobile devices served as a game changer for the leapfrog of the mobility market. 

As users can make payments within their balance in the mobile wallet, overall access to mobility services was considerably upgraded. In other words, mobility services in Indonesia became more and more prevalent with no concern for possession of cash or credit cards.

Expansion of Mobility Services and Its Impact on the Development of a Cashless Society in Indonesia(11)

Spread of mobility service and Indonesian cashless society

Huge success of two mobility startups in Indonesia can be partly attributed to the introduction of e-payment methods to their applications. For example, after purchasing a few electronic wallet-related startups, Go-Jek added Go-Pay, an e-payment function to its application in April, 2016. 

In contrast, Grab announced official business partnership with OVO, an electronic payment platform backed by Lippo Group and have it transplanted to mobile application in December, 2016.