The ASEAN Way: Big Bang or Fizzle?
By the end of the year, the 10 countries that makeup the Association of Southeast Asian Nations (“ASEAN”) are expected to unite under a single economic community known as the ASEAN Economic Community (“AEC”). Similar to its Western counterpart, the European Union (“EU”), the AEC will enable a freer flow of trade, capital and labour among the member nations of ASEAN.
However, much unlike the EU, the AEC has the challenging task of bringing together countries with very disparate levels of development and income — a vast undertaking that has made businesses and investors in the region both eager and concerned.
The case for a single economic trading bloc in Southeast Asia is compelling. The region is home to around 600 million people with a combined nominal GDP of more than US$2.3 trillion, which would make it the sixth largest economy in the world. Undoubtedly, the introduction of the AEC will transform the business, investment and labour landscape of Southeast Asia forever.