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

Comparative Study on the Perception and Response of Singapore and Indonesia

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. 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 Impact on Singapore and Indonesia(21)

Comparative Study on the Perception and Response of Singapore and Indonesia

Its product portfolio continues to evolve, tracing ASEAN economic development and consumer trends through years. 

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.

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

Comparative Study on the Perception and Response of Singapore and Indonesia

They are Singapore's Super Group for brand reach and Indonesia's WIKA for corporate transformation. 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. 

Advent of the Era of the AEC and Its Impact 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 as evidences of commercial viability in the age of the AEC. 

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

Comparative Study on the Perception and Response of Singapore and Indonesia

The goals of the AEC go with the interrelated four pillars upon which the AEC Blueprint is based. 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 Impact 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.