The government must be alert on that because whatever the economic cooperation is taken, it brings opportunity and threats. We must minimize the threats and optimalize the opportunities.The ASEAN Charter, signed in 2007, serves as the legal basis for the establishment of the ASEAN Economic Community (AEC). In the Charter, the 10 ASEAN member countries agreed to bring the AEC starting date forward from 2020 to the end of 2015.
The preparatory steps have been made by the Indonesian government ahead of the implementation of the ASEAN Economic Community (AEC) 2015. A basic quation is whether or not Indonesia can become a winner at the AEC? The intriguing question now is how ready Indonesia is to face the AEC, and what steps the government has taken since the agreement was made? And a more spesific question is what a threat will affect Indonesia following the implementation of the AEC?
As we know, the AEC is aimed at enhancing a regional economic integration among the ASEAN nations with the following key characteristics: 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 AEC areas of cooperation include human resources development and capacity building, recognition of professional qualifications, closer consultation on macroeconomic and financial policies, trade financing measures, enhancing infrastructure and communications connectivity, development of electronic transactions through e-ASEAN, integrating industries across the region to promote regional sourcing and enhancing private sector involvement for the building of the AEC. In short, the AEC will transform ASEAN into a region with free movement of goods, services, investment, skilled labor and a freer flow of capital.
The AEC will combine the markets of the 10 ASEAN member countries into one giant bloc with a combined gross domestic product (GDP) of US$2.7 trillion. The AEC serves as a means of achieving national economic and political interests, especially in anticipation of the dynamic and rapid economic growth in East Asia and India.
The formation of the AEC is important for Indonesia by considering its significant presence in ASEAN in terms of both population and GDP. Therefore, the ASEAN economic integration, growth, prosperity and competitiveness are now inseparable from Indonesia.
It should be understood that the AEC 2015 is a process, not an event. Despite the fact that the year 2015 is a political target of the regional leaders, the ASEAN economic integration does not end there; it will only become increasingly intense. Essentially, the process will become increasingly attractive, highly competitive and effective so as to make it remain relevant in the ever-changing global economy.
Opportunity and Threat of AEC
It must be recognized that the implementation of AEC in late December 2015 will give opportunity and also threat to Indonesia and also to other ASEAN member countries because almost certainly it has an unfair condition in business matters and just only the ASEAN member countries which are ready to face the AEC 2015 will reach a lot of gain.
Why is that? With the establishment of the AEC, the integrated ASEAN market of over 600 million people will be widely open to small and medium-sized enterprises (SMEs). If Indonesia’s SMEs can control the domestic market, then they will control 40 percent of the ASEAN market.
But in the other sides, we must understand that if the ability of SMEs to compete in the ASEAN market must be questioned. Realizing that situation, the government has pledged to make a continual effort to develop and empower SMEs, with a focus on the enhancement of human resources and product standards so as to increase product competitiveness.
On top of that, the government is also striving to speed up technology transfers to allow Indonesia’s SMEs to be more innovative, which is integral to compete with foreign SMEs. It is important that Indonesia’s SMEs acquire information technology and communications to boost their competitiveness in facing the increasingly tight competition.
Further measures have been implemented by the government to enhance the ability of SMEs to compete in the ASEAN market by, among other things, providing them with easy access to capital and information as well as enhancing their human resources capacity and acquisition of knowledge and technology. Certainly, more significant measures are still needed in terms of inclusive participation from all elements of Indonesian society in boosting their self-preparation for the AEC.
Meanwhile for business groups, the upcoming AEC) will create more opportunities than threats to local businesspeople as they will gain greater access to a bigger market. But in this issue, Indonesia has many problems because some of the business groups or private sector remain part of the problems as, for example, revealed by the increasing of Indonesia's foreign debt, which is dominated by the business groups or private sector.
In regards to the support of liberalization of the service sector, especially related to the movement of skilled manpower, ASEAN member countries signed the Mutual Recognition Agreement (MR A) on Nov. 19, 2007. The MR A is an initial important step to promote the movement of skilled workers.
To date, eight MRA and MRA frameworks have been agreed upon covering technical services, architects, nurses, medical practitioners, dentists and dental service workers, accountants, surveyors and tourism professionals.
On the MRA items that will be competed at the AEC 2015, the Indonesian government must be honest to evaluate the level of its competitiveness in such sectors as technical services, architects, nurses, medical practitioners, dentists and dental service workers, accountants, surveyors and tourism professionals.
For example, if we are talking about the tourism sector, even tourism professionals have many aspects that need to be understood such as on time aspects, services, quality, attitude, and security matters. On time aspects, until now we have already seen the frequent delayed flights in Indonesia. In services, we have several problems as a result of the lack of infrastructures. Even in the security sector, massive rallies and political uproar remain part of the fact of life in the country.
Indeed, the President of the Republic of Indonesia has displayed his strong commitment to the country’s preparation for the AEC 2015 by issuing a series of policy instrument that ministries, institutions, regional governments and other stakeholders can use as a reference to drive collaboration in enhancing Indonesia’s preparatory efforts.
Regarding and remembering the implementation of AEC 2015 that has been signed, the Indonesian people and government must be ready for dealing with the opportunities and challenges that go along with the AEC. The implications of globalization and liberalization will also challenge Indonesia. After AEC 2015, we have already faced with two biggest polar economic cooperation, namely the AIIB and Trans-Pasific Partnership.
The government must be alert on that because whatever the economic cooperation is taken, it brings opportunity and threats. We must minimize the threats and optimalize the opportunities. Last but not least,there is no free lunch. Defending our national interest should be done whatever the risk will be taken.
*). The writer earned his masters degree from the University of Indonesia (UI).
Pewarta: By Toni Ervianto *)Editor : M. Tohamaksun
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