The many benefits of AEC


Reaching out to the Malaysian public and businesses on Asean economic integration.

ONE question posed by a university student during a Ministry of Trade and Industry outreach programme in June was whether Malaysia will be swarmed by cheap products and labourers from other Asean countries come Jan 1, 2015.

That seems to be a common misperception about the Asean economic community that actually will only be launched at the end of next year.

At the many roadshows organised by Miti on Asean this year, Minister Datuk Seri Mustapa Mohamed and his officials would often be queried on the same subject.

“That seems to be the perception among many Malaysians. We want to allay this fear. There is no such thing.

“Many businesses are worried about the sudden increase in competition with foreign products, but that won’t be so. Foreign businesses have been coming into Malaysia gradually over the last 10 years, and this has been done in stages.

“Next year is just symbolic – 2015 is just the semi completion of the AEC 2015,” Mustapa stressed during a media townhall meet on the AEC (Asean Economic Community) recently.

The AEC is targeted to be launched at the end of next year, with the aim of grouping Asean countries into a single market and production base. Consumers will have access to a cheaper and wider range of goods and services and enjoy more extensive consumer protection.

Although Malaysia will, in a few months, assume the Asean chair – rotated annually among its members – work has already begun among Miti officials to meet the various stakeholders to explain the AEC and its benefits.

But with so many outreach programmes planned for various target groups, ministry officials are finding it a struggle to fulfil requests to talk on the AEC.

Time is of essence. Among officials, fatigue is setting in.

“We are struggling to meet the stakeholders’ demand. Some have three Asean outreach programmes a week to attend.

“It is good that many people are interested to know about Asean. But more out there have no inkling what is Asean, it is just a name.”

Efforts to further explain what comes next year and beyond should not just be Miti’s job.

There must be a major media blitz.

The message must be clear – why we are hosting the Asean summit, the importance of Asean economic integration and how Malaysian businesses and public benefit from the integration.

Who better to explain to the man on the street, private sector and government officials than Prime Minister Datuk Seri Najib Tun Razak himself, possibly via an address to the nation.

The rakyat must be made aware of the advantages in the opening of the regional economy. Take the open skies policy which has benefitted low cost airlines in the region.

Malaysia is the top beneficiary of the open skies policy with the liberalisation of the region’s air transport industry.

AirAsia, which has more than 10,000 staff, has been leveraging on this policy with operations all over the region.

Another good example is Kilang Makanan Mamee Sdn Bhd and Perfect Food’s Julie Biscuits, two local companies known for their food products and already a household name in Asean, debunking growing fears of SMEs facing bankruptcy as a result of the open market.

Instead, the AEC, insists officials, would create business and job opportunities in member countries as it also allows free movement of skilled labour within Asean member countries.

The AEC will also enable free flow of goods whereby member states are to eliminate import duties and remove all forms of non-tariff barriers.

Todate, Customs import duties have been substantially eliminated and beginning next year, 97.3% of the products traded in the region will be duty-free.

Cambodia, Laos, Myanmar and Vietnam are given flexibility to maintain duties between one and five per cent over tariff lines, which will be eliminated in January 2018, as they are the late comers into the grouping.

From five economies and now 10, countries are knocking on Asean doors to engage its members. After nearly five decades, Asean economies form the seventh largest economy in the world and third largest in Asia, with combined GDP of US$2.5 trillion (RM7.9 trillion), according to Miti statistics.

It has the third largest labour market in the world and there is rising demand for consumer goods and services, with increasing middle class population and rising per capita income of US$3,800 (RM12,000).

Over 300 global MNCs are doing business in the region and Asean continues to be a popular tourist destination. In 2012, it recorded 89 million tourist arrivals of which 45% were intra Asean.

Surely Asean is doing something right. The record speaks for itself.

The views expressed are entirely the writer’s own.

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