• Asean Economic Community launch does not mean ‘economic integration’

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    WE made a quick and informal survey of how much journalists know about the feared “establishment of the Asean Economic Community (AEC) in 2015,” which is supposed to make the 10 countries that make up Asean an integrated economy.

    We found 90 percent of the 26 journalists we talked to appallingly ignorant of the facts of the subject.

    Most thought the “forced integration” of the Asean-member countries’ economies will happen “by 2015” and that’s only “a few months away.”

    Well, these journalists were business and foreign affairs reporters, columnists and section editors.  We have to be forgiving of their lack of accurate knowledge since the Philippine Institute for Development Studies itself, an institution we very much respect, seemed to be fostering the wrong idea.

    PIDS’ Wednesday, October 8, Update, has an article “IN FOCUS: Transport and logistics” which is, as usual with PIDS products, full of correct analysis and data. But it said in its opening sentence: “With the establishment of the ASEAN Economic Community (AEC) in 2015 just a few months away, the issue of adequate transport and logistics has come to the fore. The AEC’s goal of establishing a free trade area that will ensure the free flow of goods, services, skilled labor, and investments will depend heavily on the quality of the country’s road, air, and sea transportation….”

    The PIDS article correctly diagnoses our transport and logistics problem of having in front of us “the significant work that still needs to be done to upgrade the Philippines’ infrastructure and to make it a competitive hub that can tap into regional and global production networks.”

    But the “Asean Economic Community”–if PIDS means the full economic integration of the 10 Asean countries–will not be established in 2015.  In fact, Manuel V. Pangilinan, who is a foremost captain of industry, business tycoon and multi-media owner, has said, “”We should not be seduced by the conceptual elegance of integration, whose merchants sell the concept as if it were snake oil or a silver bullet that can produce an economic miracle. It simply is neither. If anything, the reality is that ASEAN integration will take a long, long time to realize, certainly not in our lifetime.”  This is from an article in Interaksyon by former Times reporter Likha Cuevas-Miel.

    A business page article the other day about the important National Cooperative Summit that ends today, said “More than 4,000 stakeholders attending the 12th National Cooperative Summit will address challenges and opportunities for the local cooperative movement ahead of the integration of economies of the Association of Southeast Asian Nations (Asean) in 2015 during the three-day  conference…”

    It’s wrong to say that Asean integration will happen “by 2015.”  PIDS’ saying that the establishment of the Asean Economic Community is in 2015 is accurate but not the truth about the subject.  The AEC will, indeed, be launched in 2015, but on New Year’s Eve–December 31. This means that the AEC will operationally come alive only after the New Year holidays in January 2016.

    And there is a possibility that despite Asean Secretary-General Surin Pitsuwan’s vows, the start of the AEC could again be postponed–because businessmen in the countries poorer than Singapore and Thailand are not happy with the December 31, 2015 date.  In 2012, the AEC’s commencement was moved to December 31 from the original January 1, 2015.

    The media are wrong to say that the AEC will unite Asean the way the European countries were turned into the European Union. The EU has a single currency, the euro, a parliament and a court.  The Asean Economic Community will only aim to promote the free flow of goods, investment funds, and labor and services.

    But it is a fantasy to think that because of AEC, Filipino nurses will immediately be able to work in any hospitals in an Asean country.

    Under the AEC, scorecards will be kept to mark each country’s compliance with common market rules.  But delinquents will not be punished.

    It will be many years before Asean gets economically integrated.

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