Looking ahead towards a full Asean Economic Community

FROM a business perspective, South-east Asia has long been an interesting but unsynchronised collection of smaller markets, but that is rapidly changing. More than 11 years in the making, the Asean Economic Community (AEC) will come into existence on Dec 31, 2015. As Asia rolls into a new year, the dream of a single market and production base encompassing the 10 members of the Association of Southeast Asian Nations (Asean) will become formal reality, a milestone in a project which looks set to deliver a new round of growth and opportunities for regional and international investors.

An economically unified Asean will represent a market of 640 million people with a combined GDP of US$2.4 trillion: if it were a nation, it would already be the world's seventh largest economy, 25 per cent larger than India. McKinsey and Company forecasts that the number of middle-class households in the region will more than double to 163 million between now and 2030.

The road to the AEC has been long, and the celebrations at the end of this year will not mark the end of the journey. The latest AEC scorecard came out in 2012, and estimates that member nations had achieved 67.5 per cent of their integration targets by that date. Further progress has been made since then, but some of the most thorny issues - including free trade in food products and key service sectors - remain works in progress.