Nov 19, 2012

Cambodia - AEC to come into effect at end of 2015

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ASEAN leaders have agreed to launch the grouping’s much-awaited economic community on Dec. 31, 2015, providing ample time for member states to further prepare themselves ahead of the single integrated market.

Indonesian Trade Minister Gita Wirjawan told Indonesian reporters that the decision was made during the plenary session of the 21st ASEAN Summit on Sunday.

“The timing was discussed during the ASEAN Economic Ministers Meeting [AEM] on Saturday, with several countries proposing implementation to start at the end of 2015,” he said after accompanying President Susilo Bambang Yudhoyono to the summit.

“ASEAN leaders have agreed with the date as several countries have to undergo ratification process through their parliaments.”

He added that each member state was happy with the date, which would allow them sufficient time to prepare, especially since the regional average on a scorecard marking progress toward completing requirements that have be fulfilled to start the ASEAN Economic Community (AEC) was 74.2 percent.

“So we have ample time to fulfill the remaining 24 percent to 25 percent of the requirements,” he said.

Gita added that during the plenary session, Yudhoyono highlighted the importance of strengthening domestic connectivity in Indonesia before embarking on region-wide connectivity programs.

“We can do this by building more seaports, airports, railways as well as power generation plants,” he said.

Beyond connectivity, other issues highlighted at the summit were abolishing both tariff and non-tariff barriers, strengthening economic integration in Southeast Asia, and empowering small and medium enterprises.

Gita added that during a meeting between the grouping’s leaders and the ASEAN Business Advisory Council (ABAC), results of a survey were revealed that indicated ASEAN and Indonesia were the place of choice for investment.

“Some 36 percent of respondents believe that ASEAN is the best region to invest in the world, while 50 percent of respondents pick Indonesia, despite inefficiencies, to invest in among other ASEAN countries,” he said.

Ahead of the AEC, he continued, Indonesia had to strengthen its import substitution efforts and to improve its downstream industry to become a production base in ASEAN instead of being a mere market.

Citing an increase in the import of raw materials, he said the country needed to shift from a consumption to a production paradigm, adding that it was in the country’s interest to increase the proportion of locally sourced goods and services.

Novan Iman Santosa

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