Advent of the Era of the AEC and Its Impacts on Singapore and Indonesia(44)

Comparative Study on the Perception and Response of Singapore and Indonesia

What will be the ASEAN like in the time of the AEC? It may be too early to predict the ASEAN in the next 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 take up most parts of the region. 

This could explain why skeptical voices concerning the future of the AEC are ceaselessly echoed. The question is whether the AEC can evolve itself into something beyond a mere economic agreement body. 

Advent of the Era of the AEC and Its Impacts on Singapore and Indonesia(43)

Comparative Study on the Perception and Response of Singapore and Indonesia

Nevertheless, overall perception and response of Indonesia is assessed still lagging behind those of Singapore. This could explain why governmental attention and consideration for non-major players in the business sector including SMEs would be top priority for Indonesia to pave the way to the AEC. 

Truly speaking, as a backbone of the national economy, Indonesian SMEs have undertaken as much as 59% of the GDP and 97% of the business establishments.

Advent of the Era of the AEC and Its Impacts on Singapore and Indonesia(42)

Comparative Study on the Perception and Response of Singapore and Indonesia

Needless to say, Indonesia hasn't been sitting idle. As the largest market in the region, Indonesia has braced for this budding economic environment in its own way. The fact that Indonesia has already implemented a competition law would be an exemplary movement. 

As a matter of fact, only a few countries in the region have regulated fair trades by adopting a competition law like Indonesia. On top of that, larger local firms such as traditional family businesses are also deeming the AEC as a valuable chance for their new source of growth engines.

Advent of the Era of the AEC and Its Impacts on Singapore and Indonesia(41)

Comparative Study on the Perception and Response of Singapore and Indonesia

Besides, awareness of the importance of the AEC is not only high in the corporate sector but also considerably widespread among the general public in Singapore. This phenomenon may be associated with the unparalleled development history of the Singaporean economy in Southeast Asia. 

Actually, Singapore has been spotlighted much to reap the biggest pie of the AEC as the United States has benefited the most in the time of the NAFTA. Needless to say, Indonesia hasn't been sitting idle.

Advent of the Era of the AEC and Its Impacts on Singapore and Indonesia(40)

Comparative Study on the Perception and Response of Singapore and Indonesia

When it comes to the details of the perception of and the response to the AEC, however, Singapore is often evaluated ahead of Indonesia by and large. Proactive approach of SMEs in Singapore toward the AEC may demonstrate Singapore's skyrocketed anticipation for the new generation of a common market. 

Most experts have been in the same boat that the AEC may serve Singaporean SMEs armed with regional competitiveness well to navigate tremendous business momentums in one single market with 650 million populations. 

Advent of the Era of the AEC and Its Impacts on Singapore and Indonesia(39)

Comparative Study on the Perception and Response of Singapore and Indonesia

In addition, concerns of SMEs (Small and Medium-sized Enterprises) particularly in Indonesia that they may be isolated from the far-reaching age of the AEC are getting bigger. 

In spite of such negative voices raised, Singaporean and Indonesian governments have been regarded to take necessary steps to realize their commitments to the AEC as ambitiously set out in the AEC Blueprint.

Advent of the Era of the AEC and Its Impacts on Singapore and Indonesia(38)

Comparative Study on the Perception and Response of Singapore and Indonesia

As identified above, Singapore and Indonesia may have been claimed to pour continuous efforts to cope with the era of the AEC. Both countries have concentrated on the advent of the AEC and the impacts that the new regional economic community would bring to them.

Nevertheless, there are yet complaints especially from the private sectors in both countries that incomplete information sharing and insufficient corporate engagement on the core agendas of the AEC has been left shortages. 

Advent of the Era of the AEC and Its Impacts on Singapore and Indonesia(37)

Comparative Study on the Perception and Response of Singapore and Indonesia

In addition, in general, information concerning the AEC fails to reach most members of the business community largely due to the fact that both government and the ASEAN secretariat do not have a systematic mechanism to disseminate information. 

Results of SWOT analysis on the Indonesia's perception of and response to the formation of the AEC can be diagramed as below.

 

Advent of the Era of the AEC and Its Impacts on Singapore and Indonesia(36)

Comparative Study on the Perception and Response of Singapore and Indonesia

Major players already have a good and comprehensive understanding about the AEC. The major players are large companies whose activities are related to export-import, foreign companies, and foreign affiliates or local companies that are involved in international production networks. 

However, the number of major players is very small and accounts for less than one percent of the total number of business establishments in Indonesia.

Advent of the Era of the AEC and Its Impacts on Singapore and Indonesia(35)

Comparative Study on the Perception and Response of Singapore and Indonesia

In 2007 Indonesia introduced a new investment law aimed at making Indonesia more attractive to foreign investors. Indonesia is one of the few countries in the ASEAN that has promulgated a competition law and has established an independent agency in charge of competition policy – the Commission for the Supervision of Business Competition.

Larger firms tend to have better knowledge about the existing FTAs and, in general, are more optimistic than smaller ones. This is true also with regard to the AEC.

 

Advent of the Era of the AEC and Its Impacts on Singapore and Indonesia(34)

Comparative Study on the Perception and Response of Singapore and Indonesia

Ever since Indonesia initiated trade liberalization in the mid-1980s, it has significantly reduced tariff rates, more or less across the board. In 2004 Indonesia introduced a two-phase tariff harmonization program with the main objective of moving towards low and uniform tariff rates and avoiding tariff escalation. 

As a member of the WTO and the ASEAN, Indonesia has submitted to commitments for services liberalization at the global and regional levels to the General Agreement on Trade in Services (GATS) and the ASEAN Framework Agreement on Service (AFAS).

Advent of the Era of the AEC and Its Impacts on Singapore and Indonesia(33)

Comparative Study on the Perception and Response of Singapore and Indonesia

According to the papers by Hadi Soesastro and Raymond Atje (p. 72-77.) and Widdi Mugijayani and Pratiwi Kartika (p. 210-212.), Indonesia's major perception of and response to the formation of the AEC can be summarized as below. 

To its credit the Indonesian Government has taken the necessary steps to incorporate its commitments to the AEC into the country's national economic development programs. With regard to its commitments to the AEC, there is, unfortunately, no simple way to verify the degree of the Indonesian Government's compliance.

Advent of the Era of the AEC and Its Impacts on Singapore and Indonesia(32)

Comparative Study on the Perception and Response of Singapore and Indonesia

According to the papers by Hadi Soesastro and Raymond Atje (p. 72-77.) and Widdi Mugijayani and Pratiwi Kartika (p. 210-212.), Indonesi's major perception of and response to the formation of the AEC can be summarized as below. 

To its credit the Indonesian Government has taken the necessary steps to incorporate its commitments to the AEC into the country's national economic development programs.

Advent of the Era of the AEC and Its Impacts on Singapore and Indonesia(31)

Comparative Study on the Perception and Response of Singapore and Indonesia

Going forward, Singapore will focus on capacity building and human resource development in the ASEAN countries to help them prepare for the 2015 deadline. 

In this respect, Singapore has spent more than US$120 million cumulatively in various initiatives and training programs to help narrow the gaps among ASEAN economies. Results of SWOT analysis on the Singapore's perception of and response to the formation of the AEC can be diagramed as below.

 

Advent of the Era of the AEC and Its Impacts on Singapore and Indonesia(30)

Comparative Study on the Perception and Response of Singapore and Indonesia

A more basic reaction from businesses is tied to the process itself of drawing up the ASEAN economic agreements. An underlying concern is that the agreements are concluded without the involvement of or consultation with the private sector. 

Consequently, there is lack of familiarity or limited knowledge of the workings and details of the agreements and their impact on business.

Advent of the Era of the AEC and Its Impacts on Singapore and Indonesia(29)

Comparative Study on the Perception and Response of Singapore and Indonesia

SME leaders in Singapore have urged fellow companies to expand within the region and to seriously consider investing in ASEAN neighbors for the many benefits that an integrated ASEAN economic community can bring. 

The larger players, being more experienced, point out that whilst the ASEAN agreements are being help up as the way forward, delays or non-implementation of signed agreements are too common occurrences.

Advent of the Era of the AEC and Its Impacts on Singapore and Indonesia(28)

Comparative Study on the Perception and Response of Singapore and Indonesia

Thus, while Singapore acknowledges that some problems are faced by the ASEAN countries in implementing the AEC Blueprint, there is an urgent need to persevere in order for the region to remain competitive and relevant to the global economy. 

While it fully supports efforts taken to accelerate internal integration towards AEC 2015, the ASEAN needs to deepen its engagement with key trading partners in parallel. It is significant that SMEs  tend to be in the more optimistic category in relation to regional integration. 

Advent of the Era of the AEC and Its Impacts on Singapore and Indonesia(27)

Comparative Study on the Perception and Response of Singapore and Indonesia

Singapore remains committed and continues to work closely with the other ASEAN countries to achieve the goals of the AEC as set out in the AEC blueprint. According to the latest AEC Scorecard, Singapore has registered more than 93 percent implementation of the requirements in the AEC Blueprint for the period 2008 to 2009.

Singapore believes that a strong and competitive ASEAN is important in the face of growing challenges posed, not just to the Southeast Asian economy, but the global economy.

Advent of the Era of the AEC and Its Impacts on Singapore and Indonesia(26)

Comparative Study on the Perception and Response of Singapore and Indonesia

Relied upon the findings from the papers, SWOT analysis can be further applied for both countries. This is to verify internal strengths and weaknesses, as well as external opportunities and threats of Singapore and Indonesia in the time of the AEC. 

Originating from a strategic planning tool in the business area, SWOT analysis will prove itself handy to demonstrate where Singapore and Indonesia are placed. According to the papers by Juliana Giam (p. 280-281.) and Ong Keng Yong (p. 132-133.), Singapore's major perception of and response to the formation of the AEC can be summarized as below.

Advent of the Era of the AEC and Its Impacts on Singapore and Indonesia(25)

Comparative Study on the Perception and Response of Singapore and Indonesia

In other words, the perception of and response to the formation of the AEC in Singapore and Indonesia are intensively discovered in the papers. Accordingly, perspectives of Singapore and Indonesia can be drawn out respectively. 

The 4 papers are 'Deadline 2015: Assessing Indonesia's Progress towards the AEC' by Hadi Soesastro and Raymond Atje, 'Role of the Singapore Private Sector in ASEAN Economic Integration' by Juliana Giam, ASEAN Economic Integration: Perspectives from Singapore' by Ong Keng Yong and 'Perspective of the Indonesian Business Sector on the Regional Integration Process' by Widdi Mugijayani and Pratiwi Kartika.

Advent of the Era of the AEC and Its Impacts on Singapore and Indonesia(24)

Comparative Study on the Perception and Response of Singapore and Indonesia

Though probably considered somewhat outdated, this rare publication still delivers meaningful messages by providing country-specific insights with special highlights on crucial economic road maps of the individual members toward the era of AEC. 

This is no exception to Singapore and Indonesia as well. Against this background, 4 papers of the book may seem fairly useful in offering comprehensive view of how well Singapore and Indonesia are prepared in accomplishing the goals of the AEC.

Advent of the Era of the AEC and Its Impacts on Singapore and Indonesia(23)

Comparative Study on the Perception and Response of Singapore and Indonesia

As shortly mentioned at the introductory part, the ASEAN Studies Centre of the Institute of Southeast Asian Studies in Singapore came up with a book titled 'Achieving the ASEAN Economic Community 2015: Challenges for Member Countries & Businesses' in 2012. According to the foreword of the book, papers compiled in the volume were presented during the ASEAN Roundtable on 29 April 2010 and a brainstorming session on 23 September 2010. 

The book basically looks over the prospects for achieving an ASEAN Economic Community by 2015 and the obstacles in the way of its achievement from the aspects of each of the member states of ASEAN. 

Advent of the Era of the AEC and Its Impacts on Singapore and Indonesia(22)

Comparative Study on the Perception and Response of Singapore and Indonesia

WIKA has moved into distinct sectors, among them industry, infrastructure and building, energy and industrial plant construction, realty and property, as well as investment. 

After successfully participating in the development of infrastructure and construction projects in Indonesia, WIKA is expecting to expand in ASEAN and beyond. WIKA has expanded into Sarawak in Malaysia and East Timor. As a state owned company, WIKA is a keen supporter of the AEC. 

Advent of the Era of the AEC and Its Impacts on Singapore and Indonesia(21)

Comparative Study on the Perception and Response of Singapore and Indonesia

Currently, Super Group has 15 manufacturing facilities, with manufacturing and packaging plants in Singapore, Malaysia, Thailand and Vietnam, as well as in China and puts out more than 300 products across categories. 

Super Group aims to forge ahead with its regional expansion. Founded as an electrical supplies and water pipe fitter in 1960, WIKA in Indonesia has been transformed into a holding company in construction, engineering procurement construction and investment, with 10 subsidiaries.

 

Advent of the Era of the AEC and Its Impacts on Singapore and Indonesia(20)

Comparative Study on the Perception and Response of Singapore and Indonesia

Business outlines of the two examples incubating the potential of the AEC go like this. Super Group in Singapore has been progressively attempting to reach consumers in Southeast Asia with its instant food and beverage products since 1987. 

Super Group has begun to roll off its manufacturing lines for newer products as its consumer base has become increasingly affluent. Its product portfolio continues to evolve, tracing ASEAN economic development and consumer trends through years. 

Advent of the Era of the AEC and Its Impacts on Singapore and Indonesia(19)

Comparative Study on the Perception and Response of Singapore and Indonesia

As a result, Singapore and Indonesia has enjoyed the benefits of the ASEAN economic integration over the years. Singapore has been actively expanding its business domain all over the region with its service-oriented policy initiatives. For Indonesia, fruits of strategic focuses on economy of scale have been harvested across the secondary industry. 

The ASEAN Secretariat report cited above illustrates two cases (p. 18-22.) as evidences of commercial viability in the age of the AEC. They are Singapore's Super Group for brand reach and Indonesia's WIKA for corporate transformation.

Advent of the Era of the AEC and Its Impacts on Singapore and Indonesia(18)

Comparative Study on the Perception and Response of Singapore and Indonesia

Above all, Singapore has been acclaimed the most advance country with per capita GDP of 60,300 USD in 2017. In particular, Singapore is leading the region this year as it chairs the ASEAN summit and subsequent summits. In contrast with Singapore, Indonesia is ranked the first place in terms of the economic size.

Indonesia has occupied as much as 40% of the regional GDP and has consistently beefed up its clout across Southeast Asia. Consequently, both Singapore and Indonesia have played enormous roles in the course of the ASEAN economic integration 

Advent of the Era of the AEC and Its Impacts on Singapore and Indonesia(17)

Comparative Study on the Perception and Response of Singapore and Indonesia

For example, in spite of the recent economic boost, CLMV countries (Cambodia, Laos, Myanmar and Vietnam) are estimated to possess only around 5% share of the overall ASEAN GDP (Growth Domestic Product). 

In this regard, this paper primarily concentrates on two countries. They are Singapore and Indonesia in the maritime Southeast Asia. The two countries shouldn't be thought lightly of in any economic point of view in the region.

Advent of the Era of the AEC and Its Impacts on Singapore and Indonesia(16)

Comparative Study on the Perception and Response of Singapore and Indonesia

Though all the ASEAN members have been closely related with each other over history, each country shows different interests in the era of the AEC. This is mainly because 10 countries aren't in an identical economic situation. 

Components of a national economy such as natural resource reserves, labor force abundancy, industrial structure and infrastructure condition are all dissimilar, more or less. This disparity inevitably results in economic gap among the ASEAN members.

Advent of the Era of the AEC and Its Impacts on Singapore and Indonesia(15)

Comparative Study on the Perception and Response of Singapore and Indonesia

They are a single market and production base, a highly competitive economic region, a region of equitable economic development and a region fully integrated into the global economy. 

The graph below explains key milestones of the AEC and four pillars of the AEC. And a step further from the inauguration of the AEC, AEC Blueprint 2025 guiding the strategic direction of the regional economic integration for the next 10 years was additionally adopted at the 27th ASEAN Summit in November 2015.

Advent of the Era of the AEC and Its Impacts on Singapore and Indonesia(14)

Comparative Study on the Perception and Response of Singapore and Indonesia

As projected by the AEC Blueprint, the AEC was finally launched on the 31th of December, 2015. The AEC has been perceived to open a new phase of more deepened economic integration in Southeast Asia. It is because the AEC's ultimate target is to become an Asian version of the EEC (European Economic Community), the precursor of the EU (European Union). 

Consequently, 10 member states have put considerable efforts to keep pace with the new economic norm envisioning a single market in the region. The goals of the AEC go with the interrelated four pillars upon which the AEC Blueprint is based.

Advent of the Era of the AEC and Its Impacts on Singapore and Indonesia(13)

Comparative Study on the Perception and Response of Singapore and Indonesia

In January 2007, at the 12th ASEAN Summit, the ASEAN leaders collectively agreed to accelerate the establishment of the ASEAN Community from 2020 to 2015. 

The joint vision for an integrated future was adopted by leaders in November 2007 at the 13th ASEAN Summit and culminated in the ASEAN Economic Community (AEC) Blueprint. It is a blueprint that has served as a comprehensive master plan to chart the region's journey towards the formal establishment of the AEC.

Advent of the Era of the AEC and Its Impacts on Singapore and Indonesia(12)

Comparative Study on the Perception and Response of Singapore and Indonesia

The AEC Blueprint 2015 was initiated at the 38th ASEAN Economic Ministers Meeting (AEM) in Kuala Lumpur. The AEM agreed to develop a single and coherent plan progressing step by step to the AEC. 

In essence, this was undertaken by identifying the characteristics and elements of the AEC consistent with the Bali Concord II, involving clear targets and timelines for implementation, while taking into account the ASEAN member states' varying levels of development.

Advent of the Era of the AEC and Its Impacts on Singapore and Indonesia(11)

Comparative Study on the Perception and Response of Singapore and Indonesia

It was not until 2003, at the 9th ASEAN Summit, that the ASEAN leaders first declared the formation of an 'ASEAN Economic Community' as stated in the Bali Concord II. 

This was in line with the ASEAN Vision 2020, which aimed to transform the ASEAN into a stable, prosperous and highly-competitive region with equitable economic development, reduced poverty, and socio-economic disparities, progressing in tandem with the establishment of the ASEAN Political Security Community and the ASEAN Socio-Cultural Community.

Advent of the Era of the AEC and Its Impacts on Singapore and Indonesia(10)

Comparative Study on the Perception and Response of Singapore and Indonesia

The first articulation of the concept of ASEAN economic integration is revealed in the Framework Agreement on Enhancing ASEAN Economic Cooperation signed in Singapore in 1992. The Agreement highlighted the importance of cooperation in the areas of trade; industry, minerals and energy; finance and banking; food, agriculture, and forestry; as well as transport and communications.

This Framework Agreement eventually led to the establishment of ASEAN's earliest key agreements including The Agreement on the Common Effective Preferential Tariff Scheme for the ASEAN Free Trade Area in 1992.

Advent of the Era of the AEC and Its Impacts on Singapore and Indonesia(9)

Comparative Study on the Perception and Response of Singapore and Indonesia

In this context, taking a brief look at how the ASEAN economic integration has been developed and eventually led to the establishment of the AEC would be meaningful. 

A publication from the ASEAN Secretariat titled 'ASEAN Economic Community 2015: Progress and Key Achievements' describes the road towards the AEC. Summary of the report (p. 3-6.) can be introduced as below:

Advent of the Era of the AEC and Its Impacts on Singapore and Indonesia(8)

Comparative Study on the Perception and Response of Singapore and Indonesia

As widely known, the ASEAN consists of 10 member states. 5 countries including Myanmar, Thailand, Laos, Cambodia and Vietnam are located in the continental ASEAN. Remaining 5 countries, Malaysia, Singapore, Indonesia, Brunei and the Philippines are positioned in the maritime area. 

Since its foundation slightly more than 50 years ago, the ASEAN has evolved into one of the most dynamic regions with speedy economic achievements. Experts have pointed out that the ASEAN's remarkable performance has been greatly attributed to its economic cooperation and integration initiatives picking up steam over the last two decades. 

Advent of the Era of the AEC and Its Impacts on Singapore and Indonesia(7)

Comparative Study on the Perception and Response of Singapore and Indonesia

My argument will move on to potential benefits and drawbacks the two countries may enjoy or suffer by performing SWOT analysis . In the final section, results of comparative examination on the impacts of the AEC on Singapore and Indonesia will be demonstrated. 

This study will be concluded with brief suggestions especially for the governments of the two countries in hopes of stalwart execution of the AEC in the near future.

 

Advent of the Era of the AEC and Its Impacts on Singapore and Indonesia(6)

Comparative Study on the Perception and Response of Singapore and Indonesia

In this research, largely relied upon the papers from 'Achieving the ASEAN Economic Community 2015: Challenges for Member Countries & Businesses' by the ASEAN Studies Centre of the Institute of Southeast Asian Studies in Singapore and other publications of the ASEAN Secretariat in Indonesia, I will discuss the perception and response of two distinguishing economies in the region, Singapore and Indonesia to the formation of the AEC.

Singapore, the most advanced economy and Indonesia, the largest economy has led the ASEAN so far.

Advent of the Era of the AEC and Its Impacts on Singapore and Indonesia(5)

Comparative Study on the Perception and Response of Singapore and Indonesia

Under this circumstance, it is no wonder that academic attempts to browse the era of the AEC have been carried out over the past decade. Researches prospecting the possible changes and impacts that AEC may bring to the region have been mainly addressed.

However, country-level reports are not easily seen as most studies have been focused on the investigation and prediction of the region's overall economy in the wake of the AEC. In particular, comparison of the AEC's influence on individual ASEAN member states has rarely been made. My quest starts at this point.

 

Advent of the Era of the AEC and Its Impacts on Singapore and Indonesia(4)

Comparative Study on the Perception and Response of Singapore and Indonesia

The AEC has drawn huge attention from the global society ever since discussions over the formation of the new regional economic community became the talk of the town. It isn't too much to say that agendas of the AEC Blueprint 2015 such as elimination of tariffs, facilitation of skilled labor mobility, liberalization of investment have been greatly valued to the international community. 

In that more than 95% of intra-regional trades have been conducted free from any types of tariff, expectation for meaningful progresses of the AEC gets bigger and bigger.

Advent of the Era of the AEC and Its Impacts on Singapore and Indonesia(3)

Comparative Study on the Perception and Response of Singapore and Indonesia

Along with the ASEAN Political-Security Community and the ASEAN Socio-Cultural Community, the concept of the AEC was first emerged in the ASEAN Vision 2020 articulated in 1997. Then in 2003, leaders of the ASEAN member states declared the formation of an ASEAN Economic Community by 2020 as an agreed goal of the regional economic integration. 

According to the AEC Blueprint 2015, a comprehensive master plan accelerated the formal establishment of the AEC from 2020 to 2015, AEC rests on four pillars; a single market and production base; a competitive economic region; equitable economic development; and integration with the global economy.

Advent of the Era of the AEC and Its Impacts on Singapore and Indonesia(2)

Comparative Study on the Perception and Response of Singapore and Indonesia

While Myanmar is still under international criticism for the massacre against its minority group, Indonesians witness social conflicts with controversy over the majority religious party's alleged attempt to exercise influences on the political sector. 

Though the ASEAN members are faced with their own weighty political or diplomatic issues, all countries pay close attention to one regional watershed in common. It is the AEC (ASEAN Economic Community) which marked the 3rd year of its ambitious inauguration 48 years after the establishment of the ASEAN in 1967.

Advent of the Era of the AEC and Its Impacts on Singapore and Indonesia(1)

Comparative Study on the Perception and Response of Singapore and Indonesia

The ASEAN(Association of Southeast Asian Nations), the 6th largest economy in the world appeared quite noisy in the first half of 2018. Singapore seems advantaged with its efforts to raise its national reputation as the hub of neutral diplomacy after successfully hosting the historical summit between North Korea and the United States. 

Internal disorder in Malaysia triggered by the opposition party's recent victory on general election looms large as the new Prime Minister, the comeback kid at 92 has clarified his policy shift apart from the previous cabinet. 

Advent of the Era of the AEC and Its Impacts on Singapore and Indonesia(49)

Advent of the Era of the AEC and Its Impacts on Singapore and Indonesia

Although local perspectives on the AEC mostly extracted from the publications cited above are utilized as primary sources of my argument, this paper may be potentially exposed to criticisms designating lack of real comments on the spot. I can't help agreeing this view and admitting drawbacks of my research to some extent. 

In this context, I will try to allocate more time in listening to the ASEAN’s opinions to have my research upgraded. Needless to say, plentiful hands-on experiences to check real-time developments of the AEC would provide my succeeding papers with more colorful and up-to-date judgements in the region.

Advent of the Era of the AEC and Its Impacts on Singapore and Indonesia(48)

Advent of the Era of the AEC and Its Impacts on Singapore and Indonesia

Expectation is unprecedentedly snowballing that physical barriers will be torn down and regional exchanges of goods and services will be fairly propelled with the extra active commitments of the Indonesian government to the AEC. 

Brisk engagement of the Singaporean government for the success of the AEC should be continued, too. In short, this is the right time for both Singapore and Indonesia to hit the AEC road to the better tomorrow of the ASEAN.

Advent of the Era of the AEC and Its Impacts on Singapore and Indonesia(47)

Advent of the Era of the AEC and Its Impacts on Singapore and Indonesia

In general, Singapore is appraised more prepared to explore the age of the AEC than Indonesia. Private sectors in Singapore, especially SMES have been aggressive in broadening their horizons across the region to excavate new growth chances. 

However, the future of the AEC may be overshadowed unless Indonesia fails to utterly nudge itself to the AEC. Then rosy pictures on the AEC where skilled labor forces in various fields will freely crossing the borders may turn out a wishful thinking.

 

Advent of the Era of the AEC and Its Impacts on Singapore and Indonesia(46)

Advent of the Era of the AEC and Its Impacts on Singapore and Indonesia

In this sense, the role of Singapore and Indonesia can't be overemphasized when the era of the AEC starts to be vigorously unfolded. Two countries have represented the ASEAN in two essential ways. 

While Singapore tops the region with its world-level economic status, Indonesia covers alarmingly about 40% of the overall ASEAN economy. Therefore, both countries have been immensely highlighted as key stakeholders of the newly-born economic community.

 

Advent of the Era of the AEC and Its Impacts on Singapore and Indonesia(45)

Advent of the Era of the AEC and Its Impacts on Singapore and Indonesia

However, situation would be different if joint efforts of the 10 countries to confront superpowers is designed and implemented. The countries will be surely observing their confidence built up step by step. The economic clout will be increasingly strengthened if the ASEAN succeeds in fully actualizing the AEC. 

As a result, the influence of the ASEAN on the regional security and political issues will be also fortified. Under this circumstance, hopes are higher than ever that the beginning of the AEC will serve a precious opportunity to create a new landscape for the 21st century in the world.

Advent of the Era of the AEC and Its Impacts on Singapore and Indonesia(44)

Advent of the Era of the AEC and Its Impacts on Singapore and Indonesia

In this realistic angle, it is no wonder that a tough itinerary is forecasted on the way to the substantial realization of the AEC. In spite of the pessimism surfaced, the importance of the birth of a sizable single market shouldn't be underestimated. 

Along with Africa and South America, the ASEAN has been looked down on as a symbol of an underdeveloped area. Thus, major powers including America, the EU and China would remain invincible if the ASEAN members try to compete with them individually.