AEC Set To Transform Asean Into Economic Superpower

By Mikhail Raj Abdullah KUALA LUMPUR, Jan 27 (Bernama) -- ASEAN has truly gained traction as an potentially dynamic economic entity with huge prospects for trade and investment. This will undoubtedly take on greater prominence with the realisation of the Asean Economic Community (AEC) by the end of this year. Undoubtedly, the AEC has created a conducive environment for local companies to increase sales, open operations outside their domestic market and enable sourcing on a region-wide basis. Its significance by being the seventh largest economy in the world with a combined Gross Domestic Product (GDP) of US$2.5 trillion, has attracted more non-ASEAN countries to be dialogue partners with it including Bangladesh and Timor Leste. Realising its potential back then, Australia was the first to come on board as a dialogue partner, quickly followed by China, Japan, South Korea, New Zealand, India, the United States, Russia, Canada and the European Union. To take this significantly further, ASEAN is in talks to realise the Regional Comprehensive Partnership (RCEP) to create a highly competitive economic area with dialogue partners with which it has free trade agreements. The regional grouping's potential is also set to gain greater momentum with Malaysia -- holding the chair for ASEAN this year, bent on driving regional transformation and powering growth through holistic platforms. They include not only stepping up government-to-government (G-G) or business-to-business (B-B) interaction, but more importantly at the people-to-people level so citizens also gain from its plans and not just the elitists. For Malaysia, the clarion call is for local companies to look regional, particularly with the realisation of the AEC which would expand boundaries for its workers and the country's citizens. If anything else, a regional populace of 625 million versus a domestic populace of 30 million plus the combined GDP of US$2.5 trillion offers opportunities under AEC. Collectively, it has the economic power to emerge as a dynamic production base and business for global companies including creating much needed employment opportunities in the region. Therefore, the 1,000 or so Malaysian companies which have a foothold in Asean can expand operations even further as the AEC aims to emerge as an integrated economic region encompassing regional economies. Among Malaysian companies already operating as regional or even global firms include the likes of Petronas, Sime Darby, Ingress, Axiata, AirAsia, Maybank, CIMB, law firm ZICOlaw, SapuraCreest Petroleum and Pathlab. Besides the big names, there are also others such as biscuit manufacturer, Hup Seng, Julie's, Ramly, Mamee, Safeguards, Hai-O, Mastech, Success Transfer Corporation and consumer-based NTPM Holdings. For Malaysians, AEC also means employment opportunities, especially for engineers, technicians, financial analysts, accounts and in other specialised skills, as ASEAN companies expand into Malaysia and vice-versa. About 27 per cent of Malaysia's global trade of US$103.96 billion (RM374.7 billion) in 2013 was with ASEAN while foreign direct investment inflows from ASEAN into Malaysia amounted to US$6.2 billion. These figures cannot be ignored for they prove that Malaysia's economic fortunes via ASEAN is inextricably linked which means it should be pursued with greater vigour for Malaysians to maximise and reap its benefits. As such, the perception that regional firms would come and rob Malaysians of their business, investments, employment opportunities and take away our privileges do not hold water as an expanded economy rakes in greater benefits. Such a debate also rages on in other ASEAN countries but "this is the nature of global trade" as aptly pointed out by International Trade and Industry Minister Mustapa Mohamed. Concerns that there would be free movement of labour is also a misconception as under the AEC, the agreement is for freer movement of skilled workforce. Given ASEAN's wide agenda, it would be prudent for leaders meeting for the summit in April in Kuala Lumpur to decide that the secretariat be empowered as its staff strength is only 300 now compared to the EU's 300,000. Malaysia's hosting of the ASEAN ministerial meetings and summits is both timely and crucial for it will set the stage for what could potentially be the emergence of a single market and a regional economic superpower via the AEC. -- BERNAMA