Deeper economic integration needed to achieve AEC 2025 vision

KUALA LUMPUR: The further removal of trade barriers, supportive national and regional policies, and investments in digitalisation are the key focus areas for Asean to achieve its ASEAN Economic Community (AEC) 2025 Vision, said Deutsche Bank.

In its "Reimagining ASEAN to 2025" report, which examined Asean's progress in realising the target, the bank said the region was in a strong position with Indonesia, the Philippines and Vietnam expected to post a minimum 5% growth in 2017 and 2018.

But for a highly prosperous, deeply integrated Asean to materialise, ongoing efforts to advance critical reforms have to be intensified within the next decade, said the report.

"If the AEC vision is to become a reality, governments must make sure there are no unnecessary barriers restricting integration.

"While there has been an understandable tendency for governments to hesitate before making extensive regulatory reforms, it is important that they do the cost-benefit analysis and push through change wherever it is possible and appropriate," Deutsche Bank said in a statement on Friday.

The bank said key milestones for the AEC project would be in areas such as the full operationalisation of the Asean Single Window for customs clearances, the establishment of a firm and meaningful process for the removal of non-tariff barriers, and the full implementation of trade facilitation measures including the World Trade Organisation Trade Facilitation Agreement.

The report also highlighted the fundamental role that digital technology could play in facilitating integration and sustainable economic growth, saying digital economy is the future.

Harnessed effectively, digital technology could benefit everyone, but this required the positioning of digitalisation as a central pillar in the AEC vision of a single economic market, it said.

Digital technology could bring a number of opportunities, but without sufficient regional cooperation, it could also be seen as a competitive threat and lead to divisive outcomes, it added. - Bernama