The real test

 
AseanAffairs     15  August 2011

The 43rd annual Asean Economic Ministers meeting just concluded in Indonesia and the the actions proposed indicate that this is “crunch time” for the member states of the Asean community.

The main issue is that the principles guiding the Asean Economic Community (AEC) push member states toward greater cooperation between themselves and greater economic openness to the rest of the globe. To do this requires member states to make new laws, and amend or do away with laws that are conflict with the openness proposed by the AEC.

The member states are a mixed bag when it comes to their degrees of separation.

On one end is Myanmar that in spite of its recent sham election, remains quite isolated from the rest of the world, the express intent of the ruling junta. For example, all arrivals at the Yangon airport have their pictures taken as they arrive and there are many Myanmar soldiers strolling about with AK-47s casually slung over their soldiers.

On the other side is Singapore, one of the world’s leading economies. Prime Minister Lee Hsien Loong recently said Singapore must stay open to the world, attracting global winners to invest with diverse teams creating jobs and prosperity for Singaporeans.

At the recent meeting in Indonesia priority was given to the trade in goods, however, the real issue is the elimination of strict national laws on services.

The problem is that even the leading Asean economies, Indonesia, Thailand Malaysia and Singapore, do not yet produce top-quality graduates in a number of fields.

This is the reason why the The service sector is the only factor holding up the India-Thailand Free Trade Agreement. India produces a large number of graduates in the engineering and IT field that could help drive the Thai economy. It is hoped that the FTA will be finalized by the end of the year.

A fear that foreign workers will displace locals and nationalism are two highly sensitive issues that Asean member states will need to overcome for a successful implementation of the AEC when 2015 rolls around.