It has been predicted that growth in the Association of South-east Asian Nations (Asean) will surpass EU economic growth once the region's economies have been unified. The Malaysian minister of international trade and industry, Mustapa Mohamed, announced during the World Economic Forum, which was held in Jakarta on April 19 to 21, that Asean would grow by 5% per year in the coming decade, while the EU would grow at less than 2% per year. According to these figures, Asean economic growth would outpace that of the EU in 10 to 15 years. His statement, backed by numerous economists, came as the Asian Economic Community (AEC) is set to be established by the end of 2015 as a single market for the free flow of work, goods, services and investment.

The 10 countries that make up Asean – Indonesia, Malaysia, the Philippines, Thailand, Singapore, Brunei, Cambodia, Laos, Myanmar and Vietnam – had an aggregate population of more than 600 million and a GDP of more than $2400bn, as of 2013. The EU’s GDP in the same year was $14700bn, but Mr Mohamed maintained that Asean’s young, fast-growing population would soon compete with Europe’s, which is ageing. Agriculture dominates the emerging economies, services and tech lead in Singapore, and manufacturing is strong across Asean’s other countries, according to greenfield investment monitor fDi Markets. Once fully integrated, the bloc of south-east Asian countries is predicted to become the seventh largest economy in the world.

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Mr Muhamed did however note that the AEC would not have a single currency, monetary policy or central bank. Disparities between wealthier and poorer countries in the bloc – for instance, Singapore compared with developing Cambodia and Laos – would also prove obstacles to a smooth integration.  

“Lack of political will to implement initiatives to remove non-tariff barriers is the biggest impediment to forming a single market,” Lawrence Yeo, principal consultant at Singapore-based consulting firm AsiaBIZ Strategy, told fDi. “This is because complying with and implementing AEC commitments depends on voluntary national actions.” Confidence in ASEAN integration depends on several factors, including time frame and implemented level of integration, Mr Yeo added. “It is not realistic to expect 100% full seamless integration or delivery of all key deliverables by December 2015, noting the original timeline was 2020.”

Many at the forum were nonetheless optimistic. Malaysian budget airline AirAsia CEO Tony Fernandez told forum participants that the AEC’s creation "will simplify business, it will raise standards and it will bring prosperity", he said. "If there is a true economic community, everyone benefits."