Inauguration of the AEC and Its Impacts on Relation between Singapore and Indonesia(48)

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

Private sectors in Singapore, especially SMES have been aggressive in broadening their horizons across the region to excavate fresh 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 cross the borders of Southeast Asia may turn out a wishful thinking. This even holds true to the relationship between Singapore and Indonesia.

Inauguration of the AEC and Its Impacts on Relation between Singapore and Indonesia(47)

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

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. In general, Singapore is appraised more prepared to browse the age of the AEC than Indonesia.

Inauguration of the AEC and Its Impacts on Relation between Singapore and Indonesia(46)

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

The economic clout will be increasingly strengthened if the ASEAN even succeeds in fully actualizing the AEC. As a result, the influence of the ASEAN on the regional security and political issues will be also growing bigger. 

Under this circumstance, hopes are higher than ever that the beginning of the AEC will serve a drastic opportunity to create a new landscape for the 21st century in the world. In this sense, the roles of Singapore and Indonesia can't be overemphasized when the era of the AEC starts to be vigorously unfolded.

Inauguration of the AEC and Its Impacts on Relation between Singapore and Indonesia(45)

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

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

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.

Inauguration of the AEC and Its Impacts on Relation between Singapore and Indonesia(44)

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

For instance, IMF's statistics proves that Brunei, an oil-producing country was shined with its per capita GDP of 33,200 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. 

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 skepticism surfaced, the importance of the birth of a sizable single market shouldn’t be underestimated.

Inauguration of the AEC and Its Impacts on Relation between Singapore and Indonesia(43)

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

What will be the ASEAN like in the time of the AEC? It may be too early to predict the AEC in 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 comprise most parts of the area. 

The question is whether the AEC can evolve itself into something beyond a mere economic agreement body or not. Above all things, doubts are cast upon the considerable economic gap among the member countries.

Inauguration of the AEC and Its Impacts on Relation between Singapore and Indonesia(42)

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

To cope with the new economic environment and to survive the unavoidable race with Singapore, the Indonesian government shouldn't make little efforts to enhance overall capabilities of its industries, SMEs in particular. In doing so, the AEC will be more likely shaped up evenly to both Singapore and Indonesia. 

Then relationship between the two countries may maintain the status quo, at least and the neighbors will rather seriously devote themselves to seeking mutual prosperity across the region.

Inauguration of the AEC and Its Impacts on Relation between Singapore and Indonesia(41)

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

In the meantime, there stands a possibility that Singapore's readiness on edge for the AEC powered by internationally-claimed competitiveness may impose burdens on Indonesia. Severe damages on the economic interests of Indonesia caused by Singaporean enterprises, if repeatedly happens, may spark political conflicts between the two countries. 

This is in line with my stance that Indonesia, as a whole, needs to pay attention to the inauguration of the AEC in a more desperate manner.

Inauguration of the AEC and Its Impacts on Relation between Singapore and Indonesia(40)

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

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

Figures from Statistics Indonesia, a central government agency have it that Indonesian SMEs have undertaken as much as 60% of the GDP as a backbone of the national economy.

Inauguration of the AEC and Its Impacts on Relation between Singapore and Indonesia(39)

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

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, small number of countries in the region has 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 to miss for their future growth engines.