News Analysis: Despite euphoria, AEC could face serious obstacles

Despite the optimism and euphoria expressed by leaders of the Association of Southeast Asian Nations (ASEAN) during the recent ASEAN summit in Kuala Lumpur, the establishment of the ASEAN Economic Community (AEC) by year end would be facing several obstacles, according to a respected Vietnamese expert.

"As assessed by the ASEAN Secretariat, the preparation of policies fully fulfilling the commitment to the integration of the governments is considered sufficient. However, enterprises of the less developed countries are not really well prepared for the integration," Tran Dinh Lam, Director of the Center for Vietnamese and Southeast Asian Studies in Vietnam's Ho Chi Minh City, told Xinhua in recent interview.

Lam said that a research conducted by the Institute of Southeast Asian Studies in Singapore on the awareness of the Vietnamese enterprises about the AEC, 63 percent of them think that the AEC will have minor effects on their business.

A survey made by Vietnam's Hanoi Young Entrepreneurs Association also showed that 80 percent of enterprises surveyed said that they are "very indifferent to and not interested in" the AEC integration, and only 20 percent, mostly large-scale enterprises, expressed interest.

"Due to different origin, historical context and development level of each country when they joined the ASEAN, the establishment of the AEC may face a number of obstacles," Lam said.

Lam cited differences in religion, culture, geography, levels of economic development of the member countries, the imbalance within each country, and the lack of consistency in the evaluation of the South China Sea disputes as among the barriers to the creation of a region-wide economic integration.

According to a recent survey by ASEAN, the economic community has been achieved by 92 percent, for the socio-cultural community, it is 82 percent but for the political and security community, it is only 12 percent. "This indicates that the biggest obstacle for the development of the AEC are political and security issues," Lam said.

To overcome this obstacle requires the solidarity of the ASEAN community in finding lasting solutions to political and security issues, especially on current maritime row in the South China Sea, Lam said.

According to Lam, the establishment of the AEC will bring enormous economic benefits to 10 ASEAN member countries, but the least developed countries in the community will face more challenges because their weak internal resources will make it difficult for them to compete with more developed members which have more experience in controlling quality of goods and services, in attracting investments and in organizing efficient business practices.

In addition, the poorly-trained workers in the least-developed ASEAN countries would result in low productivity, Lam said, adding that the small and medium enterprises (SMEs) of these countries do not care much about the AEC.

Because this new game requires strict compliance by all ASEAN members without regard to the levels development of each member, there is the tendency for the weaker countries to be at the mercy of the stronger members, the Vietnamese expert said.

Lam recommended that the administrative apparatus governing ASEAN countries should be specialized and managed by well-trained and competitively-selected technocrats.

According to the Vietnamese scholar, China's Belt and Road Initiative can make contributions to the ASEAN's common prosperity.

"This extremely ambitious initiative of China to connect Asia, Europe and Africa will create an economic zone stretching over one third of the earth's perimeter with 4.4 billion people," Lam said.

Lam stressed that the establishment the ASEAN Community in general and the AEC in particular will be significant milestones in the regional grouping with a combined population of 625 million and GDP of about 2,700 billion U.S. dollars. Endit