President Joko “Jokowi” Widodo has said that Indonesia should be
ready to compete in the ASEAN Economic Community (AEC), set to start in
January, although business communities fear the country could lose out
amid increased competition and could be flooded with products and
commodities from other ASEAN members.
Jokowi said on Saturday that
nearly all heads of states of ASEAN member countries had expressed fear
that their respective countries would be flooded by products and
commodities from Indonesia and therefore, they considered that Indonesia
would benefit from the commencement of the community.
“The ASEAN
Economic Community is only two weeks from now. Many have asked me if we
are ready,” Jokowi said when speaking at the Association of Indonesian
Engineers (PII) congress in Jakarta on Saturday, as stated in a press
release from the Presidential Office.
“Why should we be afraid?”
the President continued, adding that the key to winning the competition
was infrastructure. Therefore, he added, the government would boost
infrastructure development across the country by allocating Rp 313
trillion (US$22.50 billion).
“We should no longer move backward.
We should not hesitate. All that has been done and will be done is in
the interests of the people,” he stressed.
As an example, he said
that Indonesia had 800 kilometers of toll roads and would develop
another 1,000 kilometers of highways within the next five years. His
government would also continue railway projects outside Java and would
boost energy supplies by deregulating licensing procedures for
investors.
He said he understood that many doubted the
government’s capability to materialize its plans because in the past
numerous projects had been planned but not followed up.
The
President cited his own experience in announcing plans to develop
railway projects in Sumatra. “[Someone asked me], ‘It is true Pak?
Don’t just break ground [on the project]. It was 30 years ago [that the
project was first planned], but it has never been implemented’,” Jokowi
said, quoting a complaint from a resident.
Similarly, according
to Jokowi, Indonesia should prepare to accept membership of the
Trans-Pacific Partnership (TPP) and be ready to compete in a market of a
wider group of countries, namely Australia, Brunei Darussalam, Canada,
Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, Vietnam
and the US.
The President acknowledged that many people did not
agree with the idea to join the group, but stressed the need for
Indonesian people to prepare themselves to compete in the global market.
“Our vision should be ready to compete. We should have courage to face
[the competition],” he said. (bbn)
Comment :
The ASEAN Economic Community (AEC) was officially launched on the very last day of 2015. In this article, I agree with Mr. President that Indonesia should be ready to compete in ASEAN Economic Community (AEC), but many people, especially in Indonesia, will argue there will be no significant changes to their daily life.
There have been many agreements on various aspects of the free-trade area and the process of the AEC. Yet, the implementation of those commitments and agreements is still in question. In this regard, there are at least two measures that can be used to assess whether ASEAN has achieved its single market and production base objectives: first, the elimination of trade barriers both in terms of tariff reduction and non-tariff barriers; and second, a high degree of interdependency among the ASEAN member states in terms of their trade relations, which can be seen from comparing intra- and extra-ASEAN trade relations.
The higher of the degree of intra-ASEAN trade relations, the higher the degree of interdependency among ASEAN member countries, which also means a higher possibility of integration. According to the AEC Chartbook 2014, since 2003, the original members of ASEAN, known as ASEAN-6, have made rapid progress in reducing tariff rates to zero for over 50 percent of the agreed commodity list.
There have been no crucial changes in trade relations among ASEAN members. Nevertheless, hindering factors are still widely prevalent, particularly on non-tariff measures. These include different standards and regulations that impede the free flows of goods, services, investment and capital, as well as skilled labor. In addition to that, there are many other non-tariff measures, including administrative charges, certificates of approval, import licensing, quantity-control measures, internal taxes and other prohibition measures.
The implementation of mutual recognition arrangements on the free flow of skilled labor has also encountered obstacles due to stern domestic regulations. Furthermore, lack of transparency without strong institutional support under the ASEAN secretariat general in Jakarta worsens the pessimistic outlook surrounding the creation of the AEC.
Right up to the time of its official launching on Dec. 31, 2015, there had been a tacit view that ASEAN had not yet reached its intended objective of creating a single market and production base, let alone attained other similarly crucial pillars, including the establishment of a highly competitive economic region with equitable economic development that is fully integrated into the global economy.
These aims are still far from a reality. Thus, it should be admitted that we are not really there yet.
To conclude, in order to create tangible regional integration in ASEAN, there must be a unified ASEAN. There must be strong political will from members. In this context, the members should no longer postpone thinking about how to change the game from a loose cooperation of governments to having a central entity, which will play crucial role in shaping ASEAN’s course.
This, however, does not necessarily mean creating a supra-national institution, which would be against the nature of ASEAN members, but it does mean a more decisive role for the ASEAN secretariat in governing the process of regional integration.
Moreover, there should be a common understanding not only among ASEAN leaders but also members of society that ASEAN as a single entity will be more meaningful and have more bargaining power and more competitiveness in the global economy than ASEAN members could achieve individually.
Source :
http://www.thejakartapost.com/news/2015/12/12/indonesia-should-be-ready-compete-aec-jokowi.html
