Global businesses should begin their business planning to prepare for this economic integration as ASEAN economies become more interdependent.
To enable the free flow of goods and reduce transaction and business costs in the ASEAN region, initiatives include trade facilitation, improved logistics, and co-operation in customs, transportation and communications. Trade among members is expected to expand. The implementation of such initiatives will enhance ASEAN’s attractiveness as an FDI and tourist destination.
The framework agreement on the ASEAN investment area, signed in 1998, contains an important FDI measure: the opening up of all industries for investment, with some exceptions, to ASEAN investors by 2010 and to all investors by 2020. In 2003, ministers agreed to expand the investment area to include education, health care, telecommunications, tourism, banking and finance, distribution and logistics, transportation, professional services and others.
What are the business opportunities? Hard and soft infrastructure support facilities and services are needed in sectors such as natural resources, tourism, transport, infrastructure and information and communications technology (ICT). Critical are air, sea and land transport logistics, ICT and human resource development, which can promote an increased crossborder flow of goods and people to, from and in the region.
Businesses that are aware of the plans for the AEC and are actively planning, committing and preparing will reap much of the harvest post-2015. Now is the time to conduct in-depth market studies and to formulate market-entry strategies.
Lawrence Yeo is CEO of AsiaBIZ Strategy, a Singapore-based consultancy that provides Asia market research and investment/trade promotion services.