Strategic Intelligence Scanning

The AEC was established by the ten member nations of ASEAN to transform the Southeast Asia region into a single market and production based. The AEC is expected to provide the member states with competitive economic advantages and help improve its stability and prosperity.

The Association of Southeast Asian Nations, or ASEAN, was established on 8 August 1967 in Bangkok, Thailand, with the signing of the ASEAN Declaration (Bangkok Declaration) by the Founding Fathers of ASEAN, namely Indonesia, Malaysia, Philippines, Singapore and Thailand. It was originally launched as a political bloc and security pact.

Although ASEAN nations are definitely moving forward with the AEC, there are a lot fo challenges in fully implementing all of the aspects of the agreement. Because of these challenges, there have already been some setbacks. In November, 2012, ASEAN leaders decided to delay the launch of the AEC by 12 months from January 1st, 2015 to December 31st, 2015. 

The blueprint for AEC is based on four pillars:

• Single Market and Production Base
• Competitive Economic Region
• Equitable Economic Development
• Integration into teh Global Economy

Member countries need to achieve goals in each pillar by set deadlines for the AEC to be implemented. However, December 31, 2015, is not a single date when everything is 100% in place for the AEC. Some parts of the AEC have already been implemented and some things have some flexibility to be implemented beyond that set date.

The potential impact of the AEC is simple and clear, increased economic activity within the ASEAN nations. What is more important to look at are the potential risks for Thailand leading to and after its implentation.

• Poor ASEAN Governance: Experts say that the ASEAN Secretariat lacks the financial and intellectual resources to properly carry out its duties. The resources provided to it haven't changed in 15 years and is understaffed.
• Lack of Unity Among Member States: National interests are too often trumping a broader regional vision. Additionally, short-term thinking sometimes overrides the focus on long-term benefits.
• Lack of Ability to Enforce Commitments: ASEAN has no sanction mechanisms for non-compliance and non-cooperation to meeting the AEC goals.
• Low English Proficiency: English is the only official working language of ASEAN. However, very low English proficiency rates in ASEAN states is a huge challenge for ordinary citizens to become involved.
• Connectivity: ASEAN nations have a goal to increase regional connectivity but are currently only have 50% of their goals completed. This connectivity is related to road, rail, air and waterway transport as well as gas pipelines, electrical grids and ICT infrastructure.
• Higher competition: If Thai manufacturers don't improve standards in production then production could be more easily moved to another ASEAN country.
• Increased migration: Because workers can move more easily within ASEAN, more skilled workers may be lured away from Thailand to other countries.