The long-awaited ASEAN Economic Community is finally born
On 31 December 2015, the Association of Southeast Asian Nations (ASEAN) launched the ASEAN Economic Community (AEC).
The AEC represents an important milestone in the economic integration of Southeast Asia, since it allows the free flow of goods, services, investments, and skilled labour, as well as the freer movement of capital across the region. The AEC is founded, indeed, on four basic initiatives: creating a single market and production base; increasing competitiveness; promoting equitable economic development; and further integrating ASEAN with the global economy.
Economic integration is not an immediate process, though: the AEC Blueprint 2025, i.e. the AEC founding legal document adopted by the ASEAN Leaders at the 27th ASEAN Summit on 22 November 2015 in Kuala Lumpur (Malaysia), sets a 10-year timeframe (2016-2025) to reach these goals, providing broad directions through gradual strategic measures.
But the AEC represents only a step in a broader integration project among the ten ASEAN nations, which aims to create also a political-security community (including a joint military force) and a socio-cultural community by 2025. These objectives are set in a very ambitious document titled ASEAN 2025: Forging Ahead Together, which was adopted at the Kuala Lumpur Summit.
However, the ASEAN has to face many challenges in order to reach these stated goals. According to the Asian Development Bank, one of the key challenges is bridging the perceived "development divide" between the older and economically more advanced members - Brunei, Indonesia, Malaysia, Philippines, Singapore, and Thailand, known as the ASEAN-6, and the four newer members - Cambodia (1999), Lao People's Democratic Republic (1997), Myanmar (1997), and Viet Nam (1995). Moreover, the flexibility that characterizes ASEAN cooperation, the celebrated "ASEAN way," may hand member states a convenient pretext for noncompliance. How to enforce the accords remains an issue: currently, indeed, the economic integration commitments lack sufficient mechanisms to ensure compliance.
But if these challenges are overcome, the AEC has the potential to become an influential actor in the international system. If ASEAN were a single economy, indeed, it would currently be the seventh largest in the world, with a GDP of over $2.4 trillion, a population of 600 million people, and the third largest labour force in the world.
More information can be found on the website of the ASEAN Economic Community.