Advent of the Era of the AEC and Its Impacts on Singapore and Indonesia(52)

Comparative Study on the Perception and Response of 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(51)

Comparative Study on the Perception and Response of 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(50)

Comparative Study on the Perception and Response of 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(49)

Comparative Study on the Perception and Response of 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(48)

Comparative Study on the Perception and Response of 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(47)

Comparative Study on the Perception and Response of Singapore and Indonesia

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.

 

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

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(45)

Comparative Study on the Perception and Response of Singapore and 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. 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(44)

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.

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

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.

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

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. 

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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.