causes and effect rian
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Muchammad Febrian Ibrahim
6511040048
ASEAN Economic Community (AEC)
ASEAN Economic Community (AEC)
is one of the three pillars of ASEAN Integration
concepts mutually agreed by the Heads of State
of the 10 members of ASEAN meeting in Bali in
2003 which was inaugurated by the Declaration
of ASEAN Concord II, known as Bali Concord
II. The main concept of the AEC is to create
ASEAN as a single market and production base
unity where there is free flow of goods, services, factors of production, investment and
capital as well as the elimination of tariffs for trade between ASEAN countries are then
expected to reduce poverty and economic inequality among countries member countries
through a number of mutually beneficial cooperation.
Through the realization of the AEC, ASEAN's major bargaining power in the global
economy becomes more robust. Then other opportunities to see the declared purpose of the
AEC through the Bali Concord II, the ASEAN economic region creating a stable, prosperous,
highly competitive and where there is free flow of goods, services, investment and capital,
equitable economic development and reducing socioeconomic inequalities in year 2020.
Through the free flow of investment, funding imbalances
in ASEAN countries are expected to overcome, with stronger
bargaining position ASEAN as an integrated economic
community expected foreign direct investment (FDI) will be
channeled into ASEAN in which all members can benefit from
these funds is not only a state only if each move by themselves
on behalf of their respective countries. In this case the
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beneficiaries are developi ng countries, and ofcourse poor countries within ASEAN because
ASEAN has been divided in terms of the
economy as in some group 1) Countries
experiencing "Significantly transformed
economies" that can be compared with developed
countries, namely Singapore, 2 ) Countries with
"Emerging Economies", namely Indonesia, Malaysia, Philippines, Thailand and VietNam,
and 3) Countries that belong to the "poorest nations" in the world such as Laos, Myanmar and
Cambodia.The challenge in the realization of the free flow of goods and services within the AEC
is because there are still trade tariffs among ASEAN countries despite six ASEAN countriesincluding Indonesia have agreed to significantly reduce trade tariffs within ASEAN for a
number of items included into the Inclusion List (IL) to a maximum of only 5 %. The
following table lists a number of ASEAN trade tariffs for intra-regional trade. So this essay
we will discuss the causes and effects of formation of ASEAN Economic Community (AEC).
The ASEAN region has a strategic value in economic geography. It can be seen from
the ASEAN countries are geographically located between two continents and two oceans that
allow each trade through the ASEAN countries. ASEAN countries has a number of
populations and natural resources is enormous, especially Indonesia. So with a large
population, abundant natural resources and strategic location, ASEAN has great potential to
attract the world market.
Lack of harmony among the ASEAN countries is one reason for the need for ASEAN
economic community such as a conflict between Indonesia with malaysia, malaysia to
singapore, singapore with Indonesia, and many others. The point on the border of any
country's borders and conflicts often affect bilateral relations. Thus the need for a program to
strengthen relations between ASEAN countries and one way is by ASEAN economic
community.
The low standard of living in ASEAN. ASEAN countries is a regional that have
standard of living is still relatively low. Although there is a rich country, including per capita
income of USD 60,500 is singapore. However, when compared to other ASEAN countriesthat value is still too far. Especially when compared to the Cambodians who only had revenue
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of USD 2100 it was happening inequality. For those with the ASEAN Economic Community
is expected to equalize incomes or living standards in all countries in ASEAN.
The low of skilled labor in ASEAN that can compete internationally. Unskilled labor
in ASEAN is also the reason why the formation of the ASEAN Economic Community. Since
there are many people from ASEAN countries to work abroad just to be rude employee. And
low skills of a country can be seen from the number of unemployed a country and a country's
level of education. The more unemployment then be able to define that a country has a
population with low skills. For those with the ASEAN Economic Community is expected to
spur the spirit of any country or any people to want to learn to face stiff competition. And in
the future can also fighting poverty.
According to Trade Minister Mari Elka Pangestu, collectively, ASEAN's total trade
with the world in the three years begin 2008 untill 2010 has increased. Which reached 1.89
trillion U.S. dollars in 2008, in 2009 had dropped to 1:53 trillion dollars and increased again
to 2:04 trillion U.S. dollars in 2010. Of the total number of intra-ASEAN trade worth 470
billion U.S. dollars in 2008, 376 billion U.S. dollars in 2009, and 519 billion dollars in 2010.
The increase in trading volume is positive symptoms. But we also can not disbelieve
that the development of the above tends to be slow and volatile. Ambitious effort to realizethe vision of ASEAN is under severe test and threatened to fail. There are at least two
indicators (factors) that gives a logical reason anticlimactic threat of the ASEAN Economic
Community.
First, the Internal Factors. In terms of internal
economic readiness of ASEAN Countries in value is
still weak. There are economic disparities among
ASEAN countries, which are too far away, so that
economic integration even more to make the economy
more unequal. Take the example of Indonesia. After
one year passing of the ASEAN-China Free Trade
Area, Indonesia considered to have failed in increasing the volume of external trade. China
imported goods flooding the domestic market forcing employers, especially small-medium
enterprises have gone out of business, unable to compete with China, which has large capital,
high productivity and low prices. Or the most heartbreaking, in July 2011 only Indonesia hasto import 298 925 tonnes of salt from China, India and Australia.
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In terms of security. Investment, trade or any economic activity in desperate need of
stability and security. ASEAN is a region highly prone to conflict both internal and
international. Indonesia and Malaysia are still bersetegang around the border and employment
settings. Thailand and Cambodia border still shootout two countries. Austaralia, Timor Leste
and Indonesia also conflict in a dispute over the Timor Gap. Examples of cases in the
increasingly make us pessimistic view of ASEAN integration opportunities materialize 2015.
Second, the external factor. Pessimism is growing stronger when found international
political-economic developments that tend conflictual past few months. International
situation like flash floods that could not be predicted where and where its mouth upstream.
North Africa trapped in uforia democracy gave birth to the civil war. Europe in the maze of
financial crisis that is threatening the integrity and sustainability of the European Union.
Japan suffered a catastrophic nuclear meltdown followed Sunami coupled with a budget crisis
due to the mounting national debt.
Has not stopped there. America as one of the granaries of the world economy was on
the ropes. U.S. debt has now reached 16.30 billion U.S. dollars, exceeding the gross domestic
product (GDP) is only 14.6 billion U.S. dollars. The immediate budget crisis for the effect of
the U.S. and global economy, given the U.S. dollar has been used as an economic barometer
of world trade.
However, if the ASEAN countries to implement
the AEC it well, they will get a lot of benefits. The first
is the creation of a stable economic area in ASEAN. It
can be seen from the amount of income each country is
high and not going far enough differences to other
developed countries. When the ASEAN countries are
quite advanced and stable so they will not be reliant on a
large country like the United States, China, Australia,
and others. Because in ASEAN already has a single
market that can meet their own needs.If the income of a country is higher and less dependentto other country, so automatically economic growth will be increased.
In addition, if the AEC can be implemented it well, so the trade between countries
become very easy. We are free to sell in other countries and other people selling freely in ourcountry. If we are able to trade well, indirectly it can reduce the level of poverty due to the
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increasing number of jobs in ASEAN. Not only that, with the AEC it will create a lot of
skilled labor in the ASEAN. Workforce ready to compete internationally. And everyone will
get the spirit to improve its ability for high competition demands.
But if there is a country that is not ready to be the AEC, the country only be worse off
because cant compete with other countries. It took quite a long time and a good preparation
of all ASEAN members to compete in the ASEAN economic community. The better
preperation in ASEAN country the better result for the future.
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