Inauguration of the AEC and Its Impacts on Relation between Singapore and Indonesia(15)

Comparative Research on Relationship of Singapore and Indonesia in the AEC Aspect

Though all ASEAN members have been closely related with each other over the history, each country shows different interests in the nascent 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 and industrial structure are all dissimilar, more or less. This disparity inevitably leads to an economic gap among the ASEAN members.

Inauguration of the AEC and Its Impacts on Relation between Singapore and Indonesia(14)

Comparative Research on Relationship of Singapore and Indonesia in the AEC Aspect

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 as shown below. 

And a step further from the inauguration of the AEC, AEC Blueprint 2025 picturing the strategic direction of regional economic integration for the next 10 years was already adopted at the 27th ASEAN Summit in November 2015.

Inauguration of the AEC and Its Impacts on Relation between Singapore and Indonesia(13)

Comparative Research on Relationship of Singapore and Indonesia in the AEC Aspect

The AEC has been perceived to open a new phase of more cohesive economic integration in Southeast Asia. It is because the AEC's ultimate target is to become an Asian version of the European Economic Community (EEC), the precursor of the European Union (EU). 

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

Inauguration of the AEC and Its Impacts on Relation between Singapore and Indonesia(12)

Comparative Research on Relationship of Singapore and Indonesia in the AEC Aspect

The joint vision 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. As projected by the AEC Blueprint, the AEC was finally launched on the 31th of December, 2015.

Inauguration of the AEC and Its Impacts on Relation between Singapore and Indonesia(11)

Comparative Research on Relationship of Singapore and Indonesia in the AEC Aspect

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. 

In January 2007, ASEAN Leaders collectively agreed to accelerate the establishment of the ASEAN Community from 2020 to 2015.

Inauguration of the AEC and Its Impacts on Relation between Singapore and Indonesia(10)

Comparative Research on Relationship of Singapore and Indonesia in the AEC Aspect

This was in line with the ASEAN Vision 2020, which aimed to transform 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. 

The AEC Blueprint 2015 was initiated at the 38th ASEAN Economic Ministers Meeting (AEM) in Kuala Lumpur.

Inauguration of the AEC and Its Impacts on Relation between Singapore and Indonesia(9)

Comparative Research on Relationship of Singapore and Indonesia in the AEC Aspect

The first articulation of the concept of ASEAN economic integration was 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. 

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

Inauguration of the AEC and Its Impacts on Relation between Singapore and Indonesia(8)

Comparative Research on Relationship of Singapore and Indonesia in the AEC Aspect

In this context, taking a brief look at how 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.

Inauguration of the AEC and Its Impacts on Relation between Singapore and Indonesia(7)

Comparative Research on Relationship of Singapore and Indonesia in the AEC Aspect

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

Since its foundation slightly over 50 years ago, ASEAN has evolved into one of the most dynamic regions with agile economic achievements in the world. Experts point out that ASEAN's outstanding performance has been attributed to its economic cooperation and integration initiatives picking up steam over the past two decades.

Inauguration of the AEC and Its Impacts on Relation between Singapore and Indonesia(6)

Comparative Research on Relationship of Singapore and Indonesia in the AEC Aspect

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 assessment on the impacts of the AEC on interstate relationship between Singapore and Indonesia will be demonstrated. 

This study will be concluded with brief recommendations especially for the governments of Singapore and Indonesia in hopes of stalwart execution of the AEC driven by the pursuit of reciprocally-flourishing relation of the two countries.