What does it mean to be part of the Asean Community?

Nov 24, 2015 02.00PM |

by Rohini Samtani

ASEAN leaders from all 10 Southeast Asian countries gathered in Kuala Lumpur over the weekend to declare the establishment of a formal community in the Asean region, named the Asean Economic Community, or AEC. Here are seven aspects of the agreement you should know about.

1. Combined market

A major feature of the agreement, which has been eight years in the making, posits the creation of one united market across the region. “We now have to ensure that we create a truly single market and production base, with freer movement of goods and services,” said the Malaysian prime minister Najib Razak, who is also the chairman of Asean. As such a bloc, it will be the seventh largest economy today, and has the potential to be the fourth largest in the world as early as 2030.

2. Free trade 

The Asean countries have already taken economic measures in the past, including removing most tariff barriers, increasing the competitiveness of Asean’s manufacturing industry in the global market and reducing costs for all stakeholders. But currently politically sensitive sectors including agriculture, auto-production and steel remain protected. “Now we have to assure freer movements and removal of barriers that hinder growth and investment,” Mr Najib said.

3. Cheaper production overseas

The short-term impact of the creation of this integrated Community would be that more Singaporean firms could now move production of lower value goods to countries elsewhere in Asean, where labour is cheaper. Experts said that the creation of the Asean Community has various salient features which will encourage Singaporean firms to shift its production to lower-cost countries in the region. The creation of the Community firstly brings more awareness of the advantages of expanding overseas, a standardisation of customs procedures and in turn easier shipment of goods.

4. Changing landscapes in the South China Sea dispute

Chinese premier Li Keqiang, who was present at the Asean Summit in Kuala Lumpur, urged Southeast Asian nations to set aside their differences as tensions rise over the disputed South China Sea islands, the state news agency Xinhua reported. The newly formed Asean Community, which promises deeper political ties, includes Vietnam, the Philippines, Malaysia, Taiwan and Brunei who all have territorial claims in the South China Sea. Deeper cooperation between Asean nations might lead to a new found political relationship between these nations and China in their claims over South China Sea territories.

5. Easier work visas

It would now be easier for citizens of Asean countries to work in other countries in the region. Semi-skilled workers will be able to move around for jobs, but they will be limited to jobs in eight sectors: engineers, architects, nurses, doctors, dentists, accountants, surveyors and tourism professionals. However, these account for only 1.5 per cent of the total jobs in the region, and host countries still would still be able to impose constitutional regulatory hurdles restricting the inflow of talent.

6. Benefiting the elites not the masses?

Mr Jerald Joseph, the head of Malaysian rights group Dignity International, has cited the annual haze as a metaphor for an impending problem the free movement of goods and services across Asean might bring. Calling the haze a by-product of what AEC plans to achieve – by giving cheaper labour and untapped resources to Asean businesses in any member country – he fears that the union could end up benefitting the region’s elites, not the masses. Just as the haze was a result of high profits for palm oil companies, but ended up harming everyone else.

7. An integrated Asean identity

Singapore Prime Minister Lee Hsien Loong highlighted that “Apart from these specific, tangible items [referring to economic and political guidelines], we will be able to discuss with our other Asean partners on ideas [like] how we can strengthen the sense of Asean one-ness and identity.” The lack of a strong sense of Asean identity is one reason why Asean finds it difficult to make progress together, he said. However, Wathshlah Naidu of Women’s Aid Organisation Malaysia (WAO) called the human rights agenda of Asean in the Asean Community Vision 2025 “rather fragmented and established in silos”, adding that gender equality and the diversity of Asean was not comprehensively reflected in the vision. “Eliminating all forms of discrimination and human rights violations is fundamental towards achieving regional integration that is rooted in achieving equality of all Asean countries and its peoples,” she said.


Featured image Signing Ceremony ASEAN 2025-4 by Flickr user ASEAN Secretariat. 

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