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.

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

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

The question is whether the AEC can evolve itself into something beyond a mere economic agreement body. Above all things, doubts are cast upon the massive disparity of the social and cultural environment among the member countries. 

There exists considerable economic gap in the region, too. For instance, Brunei, an oil-producing country was shined with its per capita GDP of 28,240 USD in 2017  while Cambodia, one of the poorest countries in the region only recorded per capita GDP of 1,390 USD during the same period.