In our concluding section, we present two chapters that address why and how ASEAN champions might become more involved in the AEC. We also present data from previous research as well as our own on the circumstances that will determine their propensity to become involved.
Chapter 11 details our assessment on these questions and issues. We argue for better clarity on the role of the private sector, inclusive of both local and international firms; the consideration of a wider geographical region to realize the full benefits of a single market and production base, and the potential of regional production platforms for integrating financial and human resources.
Chapter 12 is our epilogue that features various commentaries from business leaders, academicians, and policy makers on the future of the AEC.
Introduction
Where is ASEAN headed? What is the future of the ASEAN Economic Community (AEC)? The jury is still out on what might happen to ASEAN, and based on current developments, it might take several years before any final verdict is reached. There are as many critics of ASEAN as there are supporters, with many other pundits simply acknowledging that this regional bloc faces a highly uncertain future.
Consider the two scenarios as outcomes of this question:
Scenario 1 – The Optimistic Narrative: Amid much fanfare the AEC was formally launched in December 2015. The formal declaration held in Malaysia was quietly mentioned in business news around the world. The implementation of the four pillars, duly recorded in the AEC Scorecard, was better than expected. Although progress was scored at 67.5 percent in 2010, it reached a high of 92 percent upon enactment. While the official AEC Scorecard was suspended, optimism was rekindled with new goals set for 2025. In the years leading to 2025, numerous firms from other countries had signed MOAs with various regional associations. Trade between ASEAN countries was expected to reach 60 percent, and the CLMV countries reported significant advances in infrastructural development, market openness, and institutional growth. A single production base, once a distant goal, came closer to reality as new regional agreements were reached on semiconductors, computers, peripherals, social media, and services to complement those already maintained in the automobile and electronic industries. China, Japan, South Korea, and India, once feared to have potential to overwhelm ASEAN, turned out to be significant partners in trade and investments. Already, a new blueprint for climate change and the reduction of poverty was being drawn.
Scenario 2 – The Pessimistic Narrative: Although the AEC was formally launched in December 2015, the reception throughout the world was much less enthusiastic than expected. In the years leading to 2025, however, there were ominous signals, such as sporadic demonstrators in various countries decrying adverse impacts on local industries and the corrupting entry of globetrotting multinationals. Despite heady efforts by the countries involved, progress in implementation barely reached 70 percent, due principally to the difficulties in dismantling nontariff barriers, prompting some ASEAN member countries to question whether intra-ASEAN trade could really be achieved. Moreover, the lack of a legal structure for compliance – long discarded in favor of the nebulous “Asian way” – impeded progress and triggered a gaping fissure between the more developed and less developed members of ASEAN. With growing doubts about the future of ASEAN, there were overtures for bilateral trade agreements with individual countries in the region and the looming specter of the Trans Pacific Partnership (TPP) further undermining the shared goals of a single ASEAN market and production base. Moreover, the dispute between China, Vietnam, and the Philippines over the Spratley Islands escalated to feverish heights, prompting a deep distrust of China’s intentions. In an ominous signal to the world, global investors and multinationals began to pour resources into China and India, further undermining the ASEAN initiatives.
Which of the two scenarios is most likely will be a subject of deliberation and speculation, depending in large part on political, economic, cultural, and institutional developments. In this chapter, we present a perspective from the standpoint of ASEAN’s most successful firms (ASEAN champions) and the role of foreign multinationals. The chapter is organized in three sections: (1) a reassessment of AEC’s four pillars, (2) a discussion of facilitators and barriers taken largely from other sources, and (3) an extended perspective that builds on quotations from firms interviewed for this study. In conclusion, implications for the private sector, specifically the ASEAN champions, and for future research are presented for further consideration.
Reassessing AEC’s Goals for Regional Integration
Single Market and Production Base
As indicated in Chapter 3, the objective of a single market and production base underpins a commitment to eliminating tariffs among participants, as well as to enhancing the mobility of investment and capital within ASEAN. In short, this commitment comports with the precepts of a free-market system. Correspondingly, five core elements comprise the goal of a single market and production base: (1) free flow of goods, (2) free flow of services, (3) free flow of investment, (4) freer flow of capital, and (5) free flow of skilled labor.
The popular narrative has been to focus on reducing trade barriers between ASEAN countries. This is understandable given the objective of creating a single market. In this regard, the AEC Scorecard has been encouraging in reporting this reduction, as literally 100 percent of merchandise goods will be traded freely, with services not far behind. Among supporters, this is the area in which the AEC has demonstrated significant and compelling progress.
Nevertheless, this is also the area that has received much scrutiny and skepticism. While a single market exudes confidence, approximating an idyllic scenario, the impressive strides recorded in the AEC Scorecard have been met with concerns about the lack of political will and the concomitant absence of a strict implementation regimen to ensure control and compliance (Inama & Sim, Reference Inama and Sim2015). Consistent with arguments from analysts (Inama & Sim, Reference Inama and Sim2015), which we will discuss later in the chapter, there is more potential and tractability regarding the goal of achieving a single production base (along with the free movement of labor, goods, and capital). Arguably, this is within the control of the private sector, both within ASEAN (such as the ASEAN champions) and among established foreign multinationals. Finally, as some commentators have noted, the added difficulty of tracking progress in terms of the AEC Scorecard is that metrics are generally self-reports that require more validation, and the data are organized by AEC objectives rather than by national compliance (Rillo, Reference Rillo2011, Reference Rillo and Das2013). Our analysis accentuates the need for an even more fine-grained measure, such as company reports on the factors that can facilitate or impede their participation. This issue is addressed later in this chapter.
Three areas demarcate the boundaries of this ongoing debate: (1) intra- and inter-ASEAN trade, (2) the type and pattern of exports that facilitate trade liberalization, and (3) the reliance on the “Asian way” to resolve conflicts and, in this case, to expedite trade transactions. We review each of these areas in turn.
Intra- and Inter-Regional Trade. This topic has previously been explored in Chapter 3, but we revisit the issues attendant to the topic as they relate to trade liberalization. To the extent that historical decisions foreshadow the intent and motivation of countries to trade, they represent a good gauge of what happens in the future, barring extraordinary events that change the trajectory of trade transactions. Taken in this context, ASEAN future trade signals a cautionary note: 26 percent of ASEAN exports are traded within the region, while 74 percent are traded outside the region. Similarly, intra-ASEAN imports represent 22 percent of its total trade, while 78 percent are inter-ASEAN exports (Exhibit 11.1). Even more ominous is that close to a significantly high proportion of intra-ASEAN exports are between two countries – Singapore and Malaysia.Footnote 1 To determine whether this pattern of trade lies burrowed in structural causes or is a matter of discretion, the nature of the types of exports and imports is examined in the next section.
Exhibit 11.1 ASEAN Intra- and Inter-Regional Trade (2013)
Types of Intra- and Inter-Regional Exports and Imports. In Exhibit 11.2, we present the top three exports for each ASEAN country for 2013. To a large extent, it can be discerned that most of these countries produce similar or related commodities, stemming largely from their history as former colonies that were historically employed to produce raw materials for manufacturing by the advanced/developed countries. Note the prevalence of petroleum, gas, minerals, integrated circuits, and rubber/footwear. In this regard, without significant change, the outlook of trade will be more competitive rather than complementary. The pattern of trade belies the reality that the nations of ASEAN will continue to export to countries outside of the region and will have minimal incentives to engage in direct trade with each other. One significant change will be policies adopted by the larger ASEAN community to promote trade liberalization among themselves. This will depend largely on noncoercive policies, notably the ASEAN Way, which is discussed in the next section.
Exhibit 11.2 Three Main Export Commodities in ASEAN Countries (2012)
The ASEAN Way. A topic that has captivated many analysts and pundits is whether ASEAN has a forceful way of enforcing desired goals, such as the formation of a single market. Comparisons with the EU have been drawn, and perhaps unfairly, the verdict is that ASEAN lacks the necessary institutions and legal framework for enforcement (Beeson, Reference Beeson2009; Inama & Sim, Reference Inama and Sim2015). What emerges from these narratives is an informal method of cooperation that is referred to as the “ASEAN Way.” To this end, we review accounts on the extent to which the ASEAN Way can be transformed from an informal modality to a formal/legal code for accomplishing AEC’s goal of a single market.
Couched in its original formulation, the ASEAN Way is an informal agreement for extensive consultations without resorting to undue pressure or military means to resolve intramural conflicts (see Beeson, Reference Beeson2009; Acharya, Reference Acharya2012). It also reaffirms a belief that countries can progress on their pace of economic development without undue pressure from others (i.e., the principle of noninterference). It stands in contrast to the contractual and enforceable legal language that underlies most formal contracts in advanced Western societies (Acharya, Reference Acharya2012). In his rather extensive study, Jurgen Haacke synthesizes three distinctive elements of the ASEAN way: a method of resolving conflict through consultation, an inclusive decision-making process among designated participants, and a “process of identity-building” (Haacke, Reference Haacke2003, quoted by Beeson, Reference Beeson2009: 21).
The degree to which the ASEAN way has succeeded resembles the proverbial interpretation of a halfway-filled glass as being half empty or half full. For critics, the ASEAN way has been more a deterrent to regional integration that has prevented member countries from fully accomplishing goals because of the lack of enforceability (see Inama & Lim, Reference Inama and Sim2015). Understandably, this argument is credible from the standpoint of having reached the goal of a security community that is the hallmark of genuine regional integration. Moreover, critics – again perhaps unfairly – envision the EU as the gold standard to be emulated, though there are some questions whether the EU has indeed reached this standard of perfection (Beeson, Reference Beeson2009).
Even so, Jones (Reference Jones2005) argues that claims about noninterference are grossly overstated, and that, in fact, the meaning and context of noninterference reflects changing social forces as interpreted by the region’s dominant players. But, even as applied in the area of human rights where some degree of consensus is anticipated, the ASEAN Human Rights Declaration famously enacted in 2012 is subject to differing interpretations, depending on the progressiveness of member states (Davis, Reference Davis2014). In total context, therefore, the extent to which the ASEAN way can advance the cause of regional integration is far too restrictive, questionable, and contestable given historical trends arising from the geopolitical dynamics, patterns of intra- and inter-ASEAN trade, and uneven economic development among ASEAN countries.
Among sympathizers of the ASEAN way, the comparisons to the EU raise concerns surrounding whether the application of modernization, which we discussed in Chapter 1, again raises its ugly head in touting sheer emulation of the experiences of the advanced economies instead of creative adaptation based on the historical and institutional characteristics of Southeast Asia. In fact, these supporters of the Asian Way have argued that the very absence of direct military conflict and interregional skirmishes between the countries since the inception of ASEAN is sufficient progress. Moreover, they argue that the Asian Way that is an informal and consensual approach to decision is more effective than formal rules, particularly in that such an approach is more aligned and embedded in the cultures and traditions of countries of the region. Although these supporters do not go as far in arguing that the ASEAN Way will significantly advance trade liberalization, it can be inferred that this approach to more informal consensus building will evolve through the years and could become an integral glue in the transformation of ASEAN.
Our focus on the private sector, and on the ASEAN champions in particular, suggests that firms will only engage in trade liberalization to the extent that they have a competitive advantage or that they conceive of favorable opportunities in the future. Hence, firms that are already involved in extensive intra-ASEAN trade will continue to do so, and any reductions in tariffs and nontariff barriers will enable their resolve to trade, provided that they continue to reap competitive advantages. Contrariwise, firms that do not see any advantages in intra-ASEAN trade will refrain from trade, regardless of government-mediated barrier reductions. Some of these sentiments are discussed in the later part of this chapter. However, an issue that might serve most firms within the AEC is the proposal of a single production base and a competitive economic region, which is covered in the next section.
Single Production Base. A single production base, while hardly original, is a provocative and soothing image of the AEC: a collectivity of supplier–manufacturer networks (components, procurement, testing, prototype manufacturing, services, human resource management, and training) from different ASEAN countries tied closely together through a central production platform and bounded by long-term shared objectives, with manufactured products and services that are priced competitively in the world market. Dieter Ernst, an expert in global networks, describes this shift from partial to systemic globalization: “In order to cope with the increasingly demanding requirements of globalization, companies are forced to integrate erstwhile stand-alone operations in individual host countries into increasingly complex international production networks. Companies break down the value chain into discrete functions, and locate them wherever they can be carried out most effectively and where they are needed to facilitate the penetration of important growth markets” (Ernst, Reference Ernst1997: 3).
This recent development in globalization accentuates not only the transition of worldwide production from single countries in advanced economies to multiple locations in emerging markets, but also a shift in mindset from its initial orientation toward centralized control to systemic coordination between nodes of expert knowledge (Ando & Kimura, Reference Ando and Kimura2003). This is prompted by a concern to develop capabilities at a quicker pace and presumably lower cost (Ernst, Reference Ernst1997: 3; Ando & Kimura, Reference Ando and Kimura2003), if not an intent to move closer to sources of supply at present to lucrative consumer markets in the future. Moreover, it is argued that technology in emerging markets, particularly Asia, has now become sophisticated to the point that “global innovation networks” will materialize soon with knowledge hubs centered in Asia (Ernst, Reference Ernst2006; Reference Ernst2009).
However attractive this idea might be, its implementation within ASEAN has historically been a challenging one. The Philippines, once designated as a production base, failed in its sole attempt to establish this platform, while efforts in other ASEAN countries have either fizzled or remained dormant (Lim, Reference Lim2004). To be fair, the circumstances underlying these initiatives are different and less favorable in comparison to the resurgent goal and support for a single production base as a part of the AEC’s four pillars.
The potential for a single production base might be gleaned from the success of the Japanese in developing systemic networks for electronics and automobiles across East Asia, with strong connections to several ASEAN countries. In an extensive study of international production featuring firms and networks from the United States, Europe, and Japan, Ernst (Reference Ernst1997) identifies the following types of inter-firm production networks that can be broadly used as a guide for positioning interested firms within ASEAN:
supplier networks: provide major manufacturing inputs;
producer networks: integrate all production inputs into a common pool;
consumer networks: act as intermediaries to buyers and retailers;
standard coalitions: tasked with “locking in” firms with common product standards;
technology cooperation networks: facilitate exchange, development, and strategic partnerships.
From these different types of production networks, one implication for ASEAN is the purposeful plan of creating “systemic” rather than “partial” forms of globalization (Ernst, Reference Ernst1997). For these to succeed, the participation of small-to-medium firms is critical, as is keenly illustrated in Japan’s success. This relates to the third pillar of the AEC, which is discussed in the next section.
Competitive Economic Region
The main goal of a competitive economic region is “to foster a culture of fair competition.” The productive growth of an economy depends on a balance between large corporations and small-to-medium enterprises. In this regard, ancillary goals include the “introduction of a common competition policy within ASEAN, the establishment of a network of authorities and agencies charged with implementation, the focus on capacity building programmes, and regional guidelines for competition policy” (see ASEAN 2008. ASEAN Economic Community Blueprint. Jakarta: ASEAN Secretariat).
Consistent with the goal of a single production base, small-to-medium firms have to participate as suppliers, procurers, component manufacturers, or volume producers in support of an overarching manufacturing/service platform. To ensure this success, there has to be a free flow of goods, materials, and to some extent labor across different ASEAN countries. The current barriers to such fuller integration have been discussed in Chapter 2 and elaborated further in this chapter. A sample representation of how different parts and components might be sourced from different ASEAN countries for automobile production to enhance the competitiveness of the region is provided in Exhibit 11.3.
Integration into the Global Economy
The ASEAN Charter states: “ASEAN operates in an increasingly global environment, with interdependent markets and globalized industries. In order to enable ASEAN businesses to compete internationally, to make ASEAN a more dynamic and stronger segment of the global supply chain and to ensure that the internal market remains attractive to foreign investment, it is crucial for ASEAN to look beyond the borders of AEC. External rules and regulations must increasingly be taken into account when developing policies related to AEC.”
The charter attests to the reality that the world is becoming increasingly global. Isolation or autarky may become a dinosaur in historical trade archives. But what does integration into a global economy mean for the AEC? Two items are noteworthy: First, as stated in the charter, the AEC could be an attractive destination for foreign investment. Our earlier discussion of international production, a single production base, and a competitive region fall well into this category. A second item would be the AEC functioning as a strong platform for trade under the auspices of a single market. Per our earlier discussion, this goal might be more rhetorical than realizable at the present time.
We have alluded to several barriers – both structural and procedural – to a single market. The type of exports comprises the first barrier, and the lack of an enforceable protocol represents the second barrier. We intimated that firms will engage in intra-ASEAN trade to the extent that they retain or develop a competitive advantage. Further, we follow the lead of others in suggesting that a single production base holds more potential for short-term implementation than a flushed-out single market. Taken in the context of the AEC alone, these concerns are both palpable and compelling.
However, when the boundaries outside of ASEAN are extended, then there are more promising opportunities. One brewing platform is the ASEAN Plus Three (APT), with China, Japan, and South Korea comprising the other three in question (Beeson, Reference Beeson2007). Membership in this context is paramount in that the inclusion now comprises the most competitive region in Asia, with all three regarded as economic powerhouses. It can be arguably maintained, however, that the success of APT will also depend on ongoing relationships between Japan, China, and South Korea that have not been as complementary or as cooperative in recent years owing to historical disputes over Japan’s role in World War II as one specific example (Beeson, Reference Beeson2007, Reference Beeson2010). Nevertheless, the expanded objective of APT that goes beyond inter-ASEAN trade to monetary policy is regarded to be not only desirable but an imperative for genuine regional integration to occur (Thomas, Reference Thomas2002, quoted by Besson, 2007: 234). In this context, APT holds considerably more potential for extending trade significantly across a broader region (East Asia) than simply depending on, if not hoping, that lowered trade barriers will intensify intra-ASEAN trade. For an illustration of how a broader regional area could accommodate international partnerships and cooperation, see Exhibit 11.4.
Perceived Barriers and Facilitators to ASEAN Integration
In the next section, we address private sector perceptions regarding the AEC. In an informative study consisting of field interviews, Sanchita Basu Das (Reference Das2012) compiles a list based on a brainstorming session that was held at the ASEAN Studies Center at the Institute for Southeast Asian Studies in Singapore.
According to Das (Reference Das2012), optimism for integration is also accompanied by “caution and disappointment” owing to the slow pace of implementation. Das (Reference Das2012) provides several reasons why caution is needed. The AEC Scorecard is confined to official measures by way of self-reports. The scorecard lacks a comprehensive analysis of the full costs and benefits of integration. There is a lack of awareness and understanding of ASEAN agreements, particularly among the small-to-medium firms. The utilization rate of tariff preferences – or the current measure of ASEAN participation – is quite low. Those in the private sector attribute this to similar products that are imported from one another. The elimination of nontariff barriers remains an important goal and lingering concern. Some actors see government domestic policies that are oriented toward protecting local businesses as a problem.
Size matters. Larger firms are generally more informed about ASEAN developments and are also more favorably disposed to integration. ASEAN is considered an opportunity by firms (local and multinational) to diversify their portfolios and investments. There are language limitations, often reflected in the lack of proper translation of ASEAN documents, in the less developed countries of ASEAN (Das, Reference Das2012).
In addition, Das and her associates argue that under the “ASEAN Way,” agreements have preceded important operational details, and this has limited the full participation of the private sector. In all, there is a lack of awareness of ASEAN economic integration, and structural barriers – domestic policies and institutions – remain formidable roadblocks to changing the mindsets of those firms interviewed. We now turn to our own research on the ASEAN champions to assess their thoughts regarding ASEAN integration and initiatives.
Implications
In this book, we advocate the role of the private sector in ASEAN regional integration. By way of summary, our ASEAN champions are characterized as weathering dire institutional obstacles and capitalizing on opportunities that were either bequeathed to them by legacy and fortuitous circumstances, or forged through their own abilities to pioneer marketing strategies, build synergistic collaborations, leverage market power, deepen localization, develop appropriate management structures and processes, and internalize human assets and capabilities. Collectively, we have termed these their ability to “harness institutional grassroots,” which emphasizes the frontier-like settings that they were surrounded with and their enduring desire to nurture competitive advantages ahead of foreign competition.
In this section, we synthesize some generic implications for firms – ASEAN champions or foreign multinationals – becoming stronger players within ASEAN. In the case of our ASEAN champions, we paraphrase one observer who sees a trajectory in terms of “moving from national to regional champions.”
1. Expand on Opportunities for Broader Trade and Investment.
The underlying logic for a single market is the benefit derived from the free flow of goods and services (unimpeded trade) within the region. This logic comports with an enduring belief by mainstream orthodox economists that trade confers benefits to participating parties and that additional rents can accrue from the expansion of trade markets. As such, firms that are already engaged in intraregional trade can reap additional advantages, but those firms that have planned expansion in trade and investment are likely to benefit as well. Any ease in restrictions will also motivate foreign multinationals to intensify their activities in the region. Although there are shortcomings to trade liberalization, which we cover in this section, the elimination of formal and informal trade barriers should yield positive outcomes, particularly for the ASEAN champions that have already invested in this area. Some observations were put forth by ASEAN champions interviewed for this study.
In regard to air travel, the AEC will afford more opportunities for expansion. Specifically, Cebu Air sees opportunities to open up new routes in Southeast Asia, involving more cities and at a higher frequency. Furthermore, AEC will also spur tourism in the region. Nevertheless, according to an industry spokesperson, it is also believed that competition will intensify but companies could compete to the extent that they have resources and slack.
Similar opportunities abound for other industries. For example, CPF Trading, a subsidiary of CPF, sees Vietnam and Malaysia as excellent outlets. In addition, the company has increased investments in Laos (a new feed mill plant), Cambodia (a new silo for maize), and the Philippines (agro-industrial businesses). Investing in these local markets is seen to be more effective than sheer exports. In the case of Jollibee, the AEC could result in easier importation of goods that will lower the company’s raw material sourcing and provide more affordable meals to its consumers. In addition, regional expansion will benefit the company in improving training and labor mobilization in overseas operations. In the case of Thai Union Frozen Products (TUF), it expects the United States to remain the company’s largest overseas market for its seafood products, but it also expects heightened demand from ASEAN countries once the AEC is formally launched. TUF has a positive outlook on the ASEAN integration and expects the AEC to support the growth of the Thai seafood industry as it pushes for trading expansion and product pricing.
In the case of power generation, prospects for the AEC look promising. Philippines’ Meralco sees a possible advantage from ASEAN integration in terms of a freer flow of goods and services that are part of the company’s cost of operation (Remo, Reference Remo2013). In the hospitality industry, prospects for growth are bullish. The Philippine BPO sector may even begin catering to other ASEAN companies who have yet to enter the Philippines. According to a company official, there is optimism in the hospitality sector in terms of labor. Furthermore, he believes that the Philippines has a lot of potential in medical tourism as well.
More intraregional trade will open new vistas for penetrating local markets and fashioning cooperative strategies. For the Dao-Heuang Group, the removal of import duties will only improve relations with neighboring countries, as well as encourage joint ventures and facilitate the ease of knowledge transfers. For EEI, in addition to a single market, additional advantages will accrue from the influx of workers from the region, especially from Burma and Cambodia, which could offer competitive wages, provided that there is significant reduction in investment barriers and labor restrictions. For Far Eastern University, there are opportunities for joint training programs and partnerships. Similarly, QAF Brunei seeks better ways of hiring skilled and technical resources from others in the region. For the Holcim Group, more trade will facilitate the transfer of key resources. Summing up, a spokesperson for this cement company opined that integration will likewise promote a more integrative and less insular mind-set. SM sees that it can gain more tenants from ASEAN countries.
Investment opportunities abound. In the case of Thai Brewery, a company official noted that it plans to target growth economies through different levels of investments, presumably with liberalized investments in the region. The company plans to use Myanmar and Vietnam as a starting point for Thai Beverage to increase its market share and become the leading beverage firm in Southeast Asia. These countries would be the focus for the company since they are emerging markets. Even so, adjusting to different cultures is imperative, and the task is not taken lightly.
2. Strengthen Competitiveness by Enhancing Core and Distinctive Competencies.
In sports, a widely held belief is that the best offense is an excellent defense. This is applied to a variety of sports, including basketball, tennis or football, but the idea is the same: that excellent defenses lead to botches, errors, and penalties that can be converted to productive offensive plays. Taken in our context, firms that are in the best position to engage in trade and investment across their borders are also strong and competitive in their own right in their respective national markets.
Competitive strength can be assessed by the ability of a firm to acquire, develop, enhance, and leverage competencies – a school of thought in strategic management called the resource-based theory of the firm (Barney & Clarke, Reference Barney and Clarke2007). Such competencies, in turn, can be provisionally classified as core, which is central to achieving a firm’s corporate strategy, and distinctive, which is an area in which a firm excels relative to competitors. While it is ideal to have both types, most firms are only able to maintain core competencies because distinctive competencies can be eroded by falling entry barriers or by sheer imitation. As applied to our ASEAN champions, we observe the following:
For the Aboitiz Power Corporation, the cost and reliability of power supply (its core competencies) will play a key role and affect the competitiveness of Philippine products. In the past, the energy industry has become more competitive by capitalizing on efficiencies from the volume of available power supply.
Ayala Land, on the other hand, sees strengths from enhancing its abundant human resource pool. Similarly, TOA (Thailand) Paint intends to use the competencies of its brand – continuous improvement of products and services, maintenance of strength of cooperation with business alliances, and most importantly, and development of potential of human resources – as leverage in AEC expansion.
Innovation is necessary to sustain competitive advantages. Vietnam’s Vinamilk recognizes the need to raise its standards and further uplift the quality of its products. It hopes to do so by upgrading both production and management systems. Furthermore, the company is keen on adopting new agricultural and manufacturing practices in farming to improve the quality of the raw milk it uses in producing its products. Masan Consumer plans to address AEC integration by investing in research and development and maintaining its strengths in sales and marketing.
Tapping new resource pools is essential to maintaining an advantage. Building on its expertise in construction, Mudajaya sees opportunities for integration when it comes to new market access and skilled labor. Mudajaya foresees the on-streaming of major power plant projects in the near future, and it also intends to capitalize on these initiatives given its strong track record and technical capabilities in power plant construction. With the largest ICT workforce of 6,500 experts and roughly 17,500 people overall, FPT considers its corporate culture to be the “power” that binds the company and leads it to sustainable development. As FPT prepares to become a global leader, it recognizes the need to first establish its leadership in the regional market.
ASEAN integration would encourage more investments, allowing greater demand as a country continues to grow. Phnom Penh Water Supply Authority (PPWSA) expects that with more investments there will be an increase of demand for water in Cambodia, hence the need for the company to also increase production and supply. According to a company official, 15 percent of PPWSA’s revenue is sourced from commercial industries. Revenues from commercial industries can be increased beyond 15 percent when private companies in Cambodia start benefiting from ASEAN integration.
The ASEAN Economic Integration in 2015 is seen as a “game changer” by a leading executive of SM Prime. She opines that the company needs to think globally in its current and future endeavors. The move to consolidate SM Prime’s property interests was made in response to regional integration. Due to the consolidation, an industry expert notes that SM Prime is one of the largest property players in the region and has an economy of scale upon entering integration.
3. Adopt a Purposeful Plan to Develop Human Talent and Resources.
The formalization of the AEC will indubitably reorder strategic priorities, initiatives, strategies, and resources. Firms will need to assess current assumptions and re-examine the far-reaching consequences of extant and projected strategies. Among the pivotal areas of consideration borne out of our interviews is the positioning of human resources. Without question, respondents think that this is a specific area that will be most affected by regional integration, whether in terms of accrued benefits or anticipated risks.
If corporate strategies are the cognate of purposeful action, it is the human aspect that can either lubricate or impede their effective implementation. Currently, some firms are better positioned than others simply because of the abundance or dearth of skilled and unskilled labor in their local markets. Of interest to many in terms of regional integration is the planned free flow of skilled labor. In this regard, several areas are illuminated by respondents in this study.
One immediate benefit is the free movement of skilled labor. Specifically, an industry spokesperson from PTT Exploration and Production PCL (PTTEP) notes that the company is open to worldwide human resource procurement, especially in terms of engineers and geologists. In fact, this spokesperson argues that, given that Thailand only produces twenty petroleum engineers per year and that the company has quite aggressive growth targets, there is a need to employ non-Thai professionals in order to continue to meet growth targets.
Similarly, integration would provide several opportunities for Adinin. One of these opportunities is the ability to tap resources – especially oil and gas – outside of Brunei. Human resources through free flow of labor are also seen as beneficial for the company when integration begins. For Musa Adnin, ASEAN integration would allow Adinin to easily access highly skilled labor such as engineers and other technical specialists that it needs to promote the growth of the company, provided that harmonization of standards takes place.
Even so, challenges remain, such as the need to develop people who understand the business, its targets, and its strategies. It is also a challenge for people of different cultures and languages to work cohesively as a team. Thus, people preparation and development needs to cope with these future realities of an integrated ASEAN. In the case of EDL, human resources may become a concern. The company is worried that it may not be able to reach the 2015 deadline for ensuring that its workforce is competitive, specifically in the ability to speak English. The company is considering taking advantage of integration by hiring specialists to train its workforce, which would be easily done within an area that allows free movement of labor. The company plans to use such specialists as tools for knowledge transfer, in hopes of making the EDL Generation’s workforce competitive in the long run.
Pruksa Real Estate sees this labor movement as problematic because the Thai construction industry has experienced labor shortages since 2010. According to a company official, the shortages are said to be fueled by an increasing demand for infrastructure and residential projects. Free movement of labor may encourage Pruksa’s foreign workers to move back to their home countries, as most of them are from Thailand’s neighboring countries such as Laos and Cambodia. This would result from ASEAN integration providing greater job opportunities to Thailand’s neighboring countries, where Pruksa’s foreign workers would choose to work in their home countries instead of in a foreign state such as Thailand.
Although SCG has already established plants in several ASEAN countries, the company feels that there is a further need to study the different market cultures in each ASEAN country. Besides localization challenges, it was noted by a company official that SCG sees people development as a continuing challenge in ASEAN. Specifically, the company’s investments in constantly training new employees from different ASEAN countries is seen as a logistical and investment challenge that SCG has to face once ASEAN integration starts in 2015. Regardless, the company views these challenges as short-term road blocks vis-à-vis the long-term benefits of ASEAN integration.
Human capital is key to preparing for competition. A company official noted that Yoma’s human capital serves as its comparative advantage when ASEAN begins integrating in 2015. This is due to Yoma’s depth of management, which is difficult to imitate. Within Myanmar, greater competition promoted by ASEAN integration would be more advantageous for less developed economies. This is because countries such as Myanmar will become targets for companies from developed countries that would try to invest and exploit untapped opportunities. For Yoma, an increase in investments would lead to productive growth, such as the establishment of factories that would provide Myanmar’s people with increased job opportunities.
Summarecon stands to gain from the free movement of labor once the AEC is created. During the interviews, it was noted that the company currently suffers from a lack of skilled human resources. For instance, the company sees a huge gap in the number of skilled contractors. Thus, it has even taken it upon itself to train its contractors to properly build houses to the company’s standards. It is also embarking on setting up a low-level institute to train contractors because of this. Thus, if the free flow of labor and business comes to fruition, in the short to medium term, this could help fill the gap in the level of skilled workers needed by the company.
4. Formulate a Defensive Posture against Better Financed Competitors.
Despite the enthusiasm surrounding the AEC, respondents realize that regional integration is a mixed blessing and that the impact would be felt differently across nations and industry sectors. While trade liberalization opens up vistas for more intensive intraregional trade, it also brings about the entry of better financed multinationals into the region. After all, a single market and production base act as incentives for foreign investment.
Unless regional firms are competitive, they can fall prey to such multinationals. An industry expert noted: “We have to adjust ourselves, and we have to. I mean, can we foresee what other competitors do? If they do better than us, we have to do better than them. I mean it goes hand in hand like this is a competition. It’s a free [competitive] market.” Furthermore, the economic differences between the advanced and less developed countries in ASEAN become more prominent when considering the entry of foreign multinationals. Some concerns are echoed in the responses detailed below. Suffice to say, it is prudent for firms to develop defensive strategies and contingency plans under varying economics and assumptions about competition. The tenor of the responses is presented as follows.
There is a fair amount of skepticism about regional integration. From interviews, it was suggested that one reason is the difficulty of harmonizing laws and regulations among ASEAN member states. This is important in that integration without harmonization would be difficult, especially in areas where there are conflicting laws and regulations. Another reason is the difficulty of removing nontariff barriers. Moreover, it will take time before the full benefits emanating from the free flow of labor and capital can be realized. In this regard, some respondents suggest looking at the model of the EU for ways to accelerate the integration process.
Other experts believe that medium- and smaller-sized business will be more affected by the AEC than big businesses. Retaining employees given the freer movement of labor when ASEAN integrates is likewise another challenge.
Competitive strength matters. Although some companies within ASEAN have stronger branding strategies than others, success is not guaranteed. As one spokesperson opined, “… Despite the fact that we have a very strong brand, despite the fact that we’re very strong and despite the fact that our management is very strong in technology and that the product is very strong, we actually do not, as I said before, [have] the capability or the capacity to go out and conquer the rest of ASEAN.” In terms of foreign competition, battles are expected to rage in matters of price and production capacity, but other experts also think that government assistance could make the difference in spelling out a firm’s advantage over others. In the cement industry, for example, cost competition is both a detriment and an advantage when foreign cement companies start competing in the Philippine market.
Creating a new mind-set is important. ASEAN integration would encourage the flooding of cheap goods into local markets. One analyst noted, “among the losers is agriculture. If sugar and rice from Indonesia is cheaper and sold in the Philippines, local farmers would suffer. This is something that should be addressed seriously because these are the sources of social unrest.” An observer indicated that even in a growing market like Indonesia, companies can no longer afford to remain completely inward and must look for opportunities abroad by strengthening existing structures and investing in areas that the company has yet to enter.
ASEAN could be stabilizing or destabilizing, depending on actions that firms take. With freer trade, unintended consequences may include leakages to destabilization. For instance, if a country within ASEAN were to be adversely affected economically by integration, it may pass between countries, resulting in an increase in inflation. One respondent suggested, “At first, [ASEAN integration] is more of a caution for us to be honest. What else I think is the wrong step forward and because it’s just the nature we do, [it] is not an immediate obvious opportunity where we’re going…” This point particularly resonated in the airline industry.
Localization may prove to be an advantage against foreign competition. PT Sumber Alfaria sees ASEAN integration as minimally affecting its business. According to a company spokesperson, this is due to the fact that the retail industry in Indonesia is very local as opposed to other lines of business. The local understanding of the market is of high importance within the retail industry, which the company can use as an advantage. One other company stated that it will continue to focus on the development of product quality, which it believes will be brought about by a stronger human resource pool and more investments in technology.
5. Create Opportunities for Extensive Networking.
Networking and connectivity provide the hallmark of purposeful interaction and collaboration. When fully realized, a collaborative union validates the statutes and intents of any given regional integration. Even so, this is not as easily realized and oftentimes remains a “work in progress.” Much like any union, such as a joint venture or strategic partnership, a high-performing network evolves through a process of familiarity, shared goals, planned cooperation, and mutual trust. The potential for failure, specifically the nonrealization of the goals of the partnership, could also be high, reflecting the difficulty of sustaining prolonged cooperation, such as an equity joint venture, over time (see Park & Ungson, Reference Park and Ungson1997).
The gains in any successful partnership can be enormous and significant. As indicated earlier, benefits accrue from sheer agreements on common goals to a more sophisticated network such as a regional manufacturing platform. In the latter, small and medium-sized firms are able to participate in meaningful ways as suppliers, prototype manufacturers, retailers, or volume producers, depending on the nature of the strategic partnership. In this study, a number of respondents alluded to anticipated partnerships, the challenges attendant on these collaborative agreements, and even more grandiose schemes to develop a regional platform.
Despite many benefits, networks face the challenge of harmonizing different market cultures and language barriers and overcoming logistical obstacles and the lack of institutional facilitators. To reduce cultural distance, firms – such as Boon Rawd Brewery, for example – favor partnerships with firms in Thailand’s neighboring countries, particularly in Myanmar, Laos, Cambodia, and to a certain extent Vietnam. It was noted during the interviews that this is due to the fact that areas near the borders of Thailand and its neighboring countries tend to have a similar market culture. Moreover, geographical constraints within Indochina are not as prominent compared to those in other areas of Southeast Asia, making it easier for the company to establish distribution networks with minimal costs.
To minimize any adverse impact from direct competition, the Energy Development Corporation (EDC) has been preparing itself for ASEAN integration mostly by increasing cooperative and joint venture projects abroad. For EDC, the opportunity to diversify its services beyond renewable energy construction and management is a major plus. While there are possible opportunities to provide technical services, drilling services, and consultancy services to other companies within ASEAN also involved in geothermal and renewable energy, it was also noted that competition could intensify for participants and could be disruptive to corporate strategies.
In the case of PetroVietnam Gas Joint Stock Corporation (PV Gas), the company intends to gradually reach out to become “one of the top gas corporations in the region.” From company reports, it is stated that its parent company is currently active in the trans-ASEAN pipeline project, a project aimed to link existing and prospective pipeline networks in the ASEAN countries and build a regional gas grid by the year 2020. As such, company spokespersons surmised that with this active participation, the company will be looking forward to establishing networks and building its presence across ASEAN.
For Pruksa Real Estate, it was disclosed by a company representative that the bordering area includes Udon Thani province of Thailand, which could act as a gateway to Vientiane, Laos. It was likewise noted that Udon Thani contains all the facilities to support people’s lifestyles, which includes infrastructure linking Udon to Vientiane, Laos’s capital city. This province is said to be suitable as a hub for investment in Laos when the ASEAN Economic Community is formed in 2015, due to the complete facilities and accessibility between Vientiane and Thailand. Even so, the company also notes that labor mobility is a double-edged sword and could create risks for the company.
For the telecommunications industry, potential benefits of a network could be realized through an ongoing alliance with five other broadcasting companies in the ASEAN region, recognizing the economies of scale that could benefit media companies in the long run as the ASEAN integration takes place. Company records disclose that the alliance, named SMART, consists of Media Nusantara Citra (Indonesia), the Philippines’ ABS-CBN, Thailand’s BBTV, Vietnam’s International Media Corporation, Malaysia’s Media Prima, and Singapore’s MediaCorp.
The impediments to successful networking arise from the lack of information. One respondent opined that his company is not aware of what ASEAN policy makers are doing that would benefit his company or industry. “I think the lack of knowledge [is a challenge] you know. I mean, I don’t know what’s going on in ASEAN. To tell you the truth, I have no idea what’s going on, what kind of policy they tend to make. There’s only so little people who knows the advantage of being in ASEAN.”
Similarly, other experts reported that the lack of information about ASEAN integration – especially in the private sector – continues to be a challenge. To address this gap, governments of ASEAN members should cooperate more with the private sector, and that integration should be done step by step to ensure that several roadblocks are mitigated. Issues such as immigration and visa restrictions should be tackled incrementally in order for integration to be successful. One industry expert notes: “… I actually think that the overexpectation is also based on ignorance of not understanding what the integration really means: the lack of some very evident, easy-to-understand small steps.”
Despite the challenges and problems facing the AEC, respondents are generally optimistic and see benefits trumping the costs of regional integration in the long run. Although they did not explicitly address this issue, the respondents expect the lack of infrastructure to remain a major obstacle to overcome, particularly because it is outside their control. Even so, the respondents are bullish about the prospects of enhancing the human resource base that is anticipated with the AEC. One such pundit proclaimed: “The key is education in each country. Give them the right skills, the education there. From that the people then start to move around, they have the qualification and the skills to move around, wherever it’s good to provide them with the best. Generally, we’re hoping we’ll grow.”
Conclusions
With any book that extols the virtues of exemplary firms, there is the persistent concern that today’s champions might soon be tomorrow’s failures. In fact, with each publication of the best firms came searing criticisms of this “select the winners’ approach. Although methodological deficiencies have been readily addressed, the most serious criticism is that success tends to be ephemeral, and every too often, firms listed as high performing in a period of time are not able to sustain their performance systematically over time. Most of these narratives draw on economist Joseph Schumpeter’s much acclaimed proposition that the dynamism of capitalism lies in the continuous disruption of evolving technologies that gives rise to upstarts displacing incumbents (Schumpeter, Reference Schumpeter1934/Reference Schumpeter1994). In his empirical case-work, Harvard marketing and strategy guru Clayton Christensen (Innovators’ Dilemma, 1997) illustrated how new upstarts dislodge incumbents and blindsided by consumers’ preferences for less radical technological innovations.
In this context, how might one assess the future of the ASEAN champions? Drawing from management professor Rita McGrath’s work, The End of Competitive Advantage (2013), we agree that success cannot indeed be sustained over time. In Chapter 1, we acknowledge that late bloomers can play a key role in the AEC as well. In all, we adopt McGrath’s perspective that the overarching issue is not as much longevity, but how exemplary firms, such as the ASEAN champions, capitalize and exploit advantages during the period, however temporary, in which they are successful. Hence the extent to which they participate in the AEC will have enduring influences in the future of ASEAN.
ASEAN integration will constitute a challenge, even a daunting one. Its success will depend on the ability of the regional members to address and overcome a number of barriers, as well as capitalize on factors that facilitate integration. Among the beacons of optimism is the enthusiasm for the region’s munificence in human resources, from the standpoint of both maintaining national prominence and enabling more integration. While there are formidable barriers to greater intraregional trade, there are also promising venues for a broader platform, such as the Asian Plus 3 (APT). Our final chapter presents snapshots from different commentators on their prognostications for ASEAN in the immediate future.
Living in interesting times – the well-weathered Chinese adage – evokes various interpretations – anticipation, restlessness, and eventfulness. The evolution of ASEAN from its fledging origins in 1967 to its formal enactment as the AEC in December 2015 has been closely watched by pundits and critics in the world’s economic stage with a tepid sense of excitement and precariousness. While we have no crystal ball to forecast what will happen, we have a good idea of the issues and concepts that have preceded the anticipated launch of the AEC. In this final chapter, we present a potpourri of ideas, statements, beliefs, arguments, and speculations of an assortment of thought leaders from government and industry about the AEC.
Jaime Augusto Zobel de Ayala, Chairman and CEO, Ayala Corporation
from the article “What Does ASEAN Mean to You?” published October 28, 2011, by the ASEAN Business Club (http://www.aseanbusinessclub.org/what-does-asean-mean-to-you):
“A fully implemented and operating AEC will open greater opportunities for our business in terms of broadening the market for our products and services, enhancing our materials sourcing and procurement, expanding pool of capital and human resources and expanding manufacturing platforms. It will also expand partnerships across the region. A fully implemented AEC also improves overall competitiveness of nations and business and therefore further raises standards altogether to ensure we remain relevant in a One ASEAN market.”
“I think the ASEAN has sufficiently defined itself as an entity in terms of what it wants to achieve – that is to create a stable, competitive, and prosperous economic region. The challenge is in the implementation of the big ideas that already exist. A commitment to the region also has a way of raising standards which by itself can define ASEAN. This ultimately creates strong nations individually and therefore a strong ASEAN.”
Teresita Sy-Coson, Vice Chairperson, SM Investments Corporation
from the article “Tessie Sy on ASEAN Integration: Awareness Up, IT to Lead,” published October 30, 2014 by Rappler (http://www.rappler.com/business/73540-asean-integration-tessie-sy-forbes):
U Thura Ko Ko, Chairman, ASEAN Business Club Forum 2015
from the article “Structured Channels for Private Sector’s Industry-Based Input and Participation Critically Missing in ASEAN – Impeding Real Partnership for Meaningful Integration,” published May 19,2015 by the ASEAN Business Club (https://aseanbusinessclub.squarespace.com/press-release/2015/5/19/structured-channels-for-private-sectors-industry-based-input-and-participation-critically-missing-in-asean-impeding-real-partnership-for-meaningful-integration):
“The ASEAN economic region is increasingly recognised as a major global economic and trading powerhouse but more needs to be done to bring the benefits of economic integration to the region’s SMEs and micro enterprises who are so critical to creating opportunities, employment and inclusive prosperity across all our citizens.”
Serge Pun, Chairman, Serge Pun & Associates (SPA) Group
from the article “ASEAN States ‘Too Disparate’ to Come Together for Common Market,” published May 19, 2015, by the ASEAN Business Club (http://www.aseanbusinessclub.org/latest-news/2015/5/19/asean-states-too-disparate-to-come-together-for-common-market):
“Talking pragmatically, the convergence of the AEC is really not easy. It goes against the entire ASEAN culture of noninterference, of maintaining sovereignty and independence. But then again, we all realise we have to do it. So even though the future is very unclear, we just have to leap with it, take a leap of faith – and hope we land somewhere.”
Piyush Gupta, Chief Executive Officer, Development Bank of Singapore
from the article “Bankers Lament Slow Pace of ASEAN Integration,” published May 19, 2015, by the ASEAN Business Club (http://www.aseanbusinessclub.org/latest-news/2015/5/19/bankers-lament-slow-pace-of-asean-integration):
“There is tremendous opportunity and need for ASEAN to integrate the financial and capital markets. If we collectively put our minds to it and given today’s technology, there are big opportunities waiting to be seized.”
Nestor Rañeses, Director, University of the Philippines Institute for Small-Scale Industries
from the article “ASEAN Integration: An Opportunity, Not a Threat to PH SMEs,” published May 12, 2014, by Rappler (http://www.rappler.com/business/57824-asean-integration-smes):
“The ASEAN integration will happen, whether we like it or not. We will never be ready unless we do something about it. There will be winners and losers. To win, we must systematically improve our abilities and capabilities to compete now.”
Ambassador Delia Albert, Former Philippine Secretary of Foreign Affairs
from her speech “Building the ASEAN Community through Integration,” delivered April 29, 2014, at The Peninsula Manila, for the Management Association of the Philippines (http://map.org.ph/attachments/article/279/ALBERT,%20DELIA%20-%20%20Building%20the%20ASEAN%20Community%20Through%20Integration.pdf):
“At this point however the building of the ASEAN Community architecture should not only be the function of diplomats but more importantly it is the responsibility of the wider community of stakeholders – including of course the private sector who stand to gain with the success of ASEAN. For the past 47 years diplomats and other technical people have contributed to bringing about where ASEAN is today, one of the most successful regional organizations in the world.”
Cesar Purisima, Finance Secretary of the Philippines
from the article “Integration Just the Start for ASEAN,” published February 16, 2014, by Business World (http://www.bworldonline.com/content.php?section=TopStory&title=Integration-just-the-start-for-ASEAN&id=83514):
“The ASEAN is in the right place of the world for the next 30 to 50 years. If looked at as a single country, ASEAN will be among the top ten economies in terms of population, and probably among the youngest with an average age of twenty-seven years old … the young and the middle class are the drivers of growth. However, we cannot capitalize on these opportunities if we do not do the right things. … We have to accept that although we can reap countless benefits from integration in the future, we have to strive much harder to achieve them. We have to ensure first that our institutions, our standards, and our people grow to be harmonized.”
“Businesses will boom if ASEAN integrates successfully but this is not possible without their participation. … That is the challenge for the private sector, to become a catalyst for integration itself. It will be a more daunting challenge for smaller sections of the private sector but this is where the government can step in to facilitate the sharing of information.”
Moe Thuzar, Lead Researcher for Socio-Cultural Affairs for the ASEAN Studies Centre of the Institute of Southeast Asian Studies (ISEAS)
from the article “ASEAN’s Missing Links Need to be Bridged,” published March 5, 2015, by The Straits Times (http://www.straitstimes.com/opinion/aseans-missing-links-need-to-be-bridged):
“A successful regional effort, however, has to be given effect by implementation and commitment at sub-regional and national levels. In fact, implementation is most crucial at the national level. Public servants in the relevant national agencies need to be prepared for the changes that will take place with better regional connectivity, greater use of the knowledge economy and new procedures under a more seamless regulatory framework. Businesses also need to play their part and be ready to adapt to regional changes rather than claim protection for fear of external competition. It is all about changing mindsets and cultivating an outlook that sees the benefit of working regionally.”
from the article “ASEAN at 45,” published August 8, 2012, by the ASEAN Studies Centre (http://asc.iseas.edu.sg/images/stories/pdf/ASEAN_at_45.pdf):
“ASEAN is progressing. Much of it is happening at the national level. At the regional level, ASEAN facilitates the sharing and exchanging of ideas, challenges and concerns. ASEAN member states can build on this foundation as they continue their journey toward regional integration.”
Simon Tay, Chairman, Singapore Institute of International Affairs
from the article “ASEAN Economic Integration Faces Tough Road Ahead,” published December 30, 2014, by Today Online (http://www.todayonline.com/world/asia/asean-economic-integration-faces-tough-road-ahead?singlepage=true):
“The analogy is that we are waiting for a train of complete integration. The train will probably be a bit late and it’s running slower than we had hoped, but it has not been knocked off of the rails. But if we try driving it too fast, we will also have a derailment. So I think a steady, step-by-step process is needed.”
Rodolfo Severino, Head of the ASEAN Studies Centre of the Institute of Southeast Asian Studies and Former ASEAN Secretary General
from the article “Look Beyond 2015,” published January 5, 2014, by The Straits Times (http://news.asiaone.com/news/asia/look-beyond-2015):
“AEC 2015 should be seen as a re-affirmation of the aspiration for and commitment to efficiency in trading, market openness and linkages with the international community. It should not be regarded as a target year, in which ASEAN, its objectives and the way it does things are suddenly transformed. Rather, it should be regarded as a benchmark or milestone for the measurement of progress toward regional economic integration.”
Sanchita Basu Das, Lead Researcher for Economic Affairs at the ASEAN Studies Centre of the Institute of Southeast Asian Studies (ISEAS)
from the article “Increased Transparency, Streamlining of the Processes and Inter-Agency Coordination within ASEAN Is Key,” published April 26, 2013, by The Business Times (http://asc.iseas.edu.sg/images/stories/pdf/BT260413.pdf):
“The time is ripe for ASEAN to continue with its attractiveness to the international community. While internally the incremental liberalisation as well as improved facilitation is attracting FDI, the external conditions are also offering opportunities. Thus, by implementing the key AEC measures in the run-up to Dec 31, 2015, ASEAN will establish the foundation for an integrated and globally connected economic community. The implementation of the rest of the AEC initiatives can be carried out beyond 2015.”
from the article “AEC Should Be Seen as a Work in Progress,” published May 20, 2015, by The Business Times (http://asc.iseas.edu.sg/images/Sanchita-AEC-BT-20May2015.pdf):
“The AEC should be seen as a work in progress, where some promises have been met, but significant challenges remain. Nevertheless, now, more than ever, is the time when the countries should come together to strengthen the economic community. The AEC-2015 may not be able to deliver on a fully integrated single market and production base for ASEAN stakeholders, but it will help ASEAN members to withstand the next global crisis with confidence, whenever it arrives.”
from the article “AEC Not Just about the Economics,” published January 31, 2015, by East Asia Forum (http://www.eastasiaforum.org/2015/01/31/aec-not-just-about-the-economics):
“The success of the AEC can be observed in ASEAN’s assertive manner in dealing with the international community. Going forward, the AEC – as a strategic project – will continue to be developed to attract more FDI into the region, help member countries participate in global supply chains, and strengthen member countries’ bargaining power in international economic, financial and strategic matters. And that has to be a good thing for ASEAN.”
Niceto Poblador, former Management professor at the University of the Philippines Mindanao and member of the Management Association of the Philippines
from the article “Bracing for the ASEAN Economic Integration,” published September 23, 2013, by Business World (http://www.bworldonline.com/content.php?section=Opinion&title=Bracing-for-the-ASEAN-economic-integration&id=76873):
“On balance, we believe that the potential benefits from AEC far outweigh the perceived problems and difficulties associated with it. In responding to the situation, business organizations should therefore focus their attention and devote their energies on the advantages that integration offers, rather than sulk over the problems and uncertainties that lie ahead. It is our belief that thriving in the emerging regional economic community requires business strategies intended to develop the firm’s human capital, which includes not only knowledge and human skills, but also an organizational culture that nourishes mutual trust and collaboration – intangible assets that are the main drivers of business success in the global economy.”
David Abrenilla, Founder and Managing Director, Philippine SME Business Exposition
from the article “ASEAN Integration Cuts Both Ways as Opportunity, Challenge – SMEs,” published November 18, 2014, by Business World (http://www.bworldonline.com/content.php?section=Economy&title=asean-integration-cuts-both-ways-as-opportunity-challenge——smes&id=98133):
“It’s a two-sided knife. ASEAN integration is both an opportunity and a challenge. There is still a lot of room for improvements and there is still a lot of work ahead of us. I think as a regional community, to be able to compete on a global level, we have to innovate and do things. Companies need to invest in infrastructure. If they won’t be able to do it, they won’t be able to compete, and if you’re not able to compete, you’ll be forced to close shop.”
H.E. U Thein Sein, President of the Republic of the Union of Myanmar
from his opening statement at the 25th ASEAN Summit, November 12, 2014, in Nay Pyi Taw, Myanmar (published by the ASEAN website at http://www.asean.org/images/pdf/2014_upload/OpeningStatementeng201525summit.pdf):
“There is no room to be complacent with our achievements and we should not rest on our laurels made so far. Our Community building is a work in progress. The evolvement of ASEAN Community in 2015 will be a new beginning for a new ASEAN calling for greater unity and integration, enhanced operational efficiency, better coordination, stronger resilience and greater competitiveness of the Community.”
Yab Dato’ Sri Mohd Najib Tun Abdul Razak, Prime Minister of Malaysia
from his opening statement at the 26th ASEAN Summit, April 27, 2015, in Kuala Lumpur, Malaysia (published by the ASEAN website at http://www.asean.org/images/2015/april/26th_asean_summit/PM%20-%20Opening%20Ceremony%20-%20PMO%20-%20A4%202.pdf):
“Our potential, after all, is huge. We already have the third largest workforce in the world. We have a largely youthful, talented and increasingly skilled population of over 600 million people. Our burgeoning middle class makes us one of the most potent and dynamic regions – leading one publication to ask last week if ASEAN was Asia’s ‘hottest investment’.
“This is ASEAN’s time. And that is why it is essential that we continue with the measures to establish the ASEAN Economic Community. We must accelerate programmes to harmonise standards, increasing capital market and financial integration, and promoting the freer movement of goods, services, investments and talents between our countries. The results of such reforms would be transformative. It would result in a further 7 trillion dollars spending on infrastructure. This potential growth would mean astonishing improvements both to our economies and to the standards of living of our citizens. And those prizes are within our grasp.”
H.E. Dr. Susilo Bambang Yudhoyono, Former President of the Republic of Indonesia
from his speech at the 2011 ASEAN Business and Investment Summit, November 17, 2011, in Bali, Indonesia (published by the ASEAN website at http://www.asean.org/news/item/speech-he-dr-susilo-bambang-yudhoyono-president-of-the-republic-of-indonesia-at-the-asean-business-and-investment-summit):
“ASEAN is a region fast being transformed. We are becoming an ASEAN Community. One defining feature of that ASEAN Community – we hope – is the spread of opportunity. Our citizens have acquired constitutionally guaranteed equality – but providing equal opportunity for all remains a challenge. The business community – from ASEAN and beyond – is indispensable in this effort. You have the power to change, to build, to empower, and to prosper. We believe that the best investments are those that are for the long haul, beneficial to the people, environmentally sustainable, and contribute to progress.”
H.E. Nguyen Tan Dung, Prime Minister of the Socialist Republic of Vietnam
from his opening statement at the 16th ASEAN Summit, April 8, 2010, in Hanoi, Vietnam (published by the ASEAN website at http://www.asean.org/news/item/statement-by-he-prime-minister-nguyen-tan-dung-at-the-opening-ceremony-of-the-16th-asean-summit):
“The goal of an ASEAN Community manifests in itself the Member States’ shared vision, earnest desire and strong determination. This goal is firmly premised upon the significant achievements in ASEAN cooperation over more than four decades. The problems that ASEAN is to address are neither new nor confined to the year 2010 alone. What is important now is our resolute and strong actions, harmoniously combining national interests with the common ones of the entire region, thus improving the quality of our ‘unity in diversity.’ Reality shows that ASEAN is truly a regional organisation with vitality and adaptability to the changes of the time. Undoubtedly, ASEAN’s vision, determination, resilience, success and time-honoured values all serve as the foundation of our conviction that ASEAN shall make further accomplishments in the process of community building.”
Federico Macaranas, Economics professor and AIM ASEAN 2015 Project Co-Director, Asian Institute of Management
from his concluding remarks at the 5th ASEAN Leaderspeak Forum, November 25, 2014, at the Asian Institute of Management:
“In December 2015, ASEAN is supposed to announce to the world that it is finally being integrated. But it is a mistake to believe that the integration means we have solved all the problems so that we can live as one happy family. We believe that ASEAN is a process rather than an outcome. We believe ASEAN is a journey, rather than an end.”
