The Business Times

AEC will be a welcome economic catalyst

Published Tue, Dec 22, 2015 · 09:50 PM
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ASEAN has far greater economic potential when viewed as a whole rather than the sum of its parts. As a region, Asean trade is on course to double to US$2.8 trillion by 2025, fuelling a doubling of its middle class to 120 million. This will add the equivalent of "two Britains" to world consumption - a consumer spurt mirroring China's between 2000 and 2010. The question is: How can the nations of South-east Asia pull together to turn impressive projections into a future reality?

Boosting intra-regional trade is one sure way of spreading wealth. Intra-Asean trade accounts for about 25 per cent of South-east Asia's total, compared with 50 per cent in the case of intra-region trade in the European Union.

To help address this shortfall in potential, Asean's 10-member countries are forming the Asean Economic Community (AEC). The AEC will create a single market and production base by freeing the flow of goods, services, investment and skilled labour across South-east Asia. And it will be a mechanism to facilitate the region's further opening to, and integration with, the global economy.

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