OFF INTO THE WILD WET YONDER How does this...
Big Business Excited for ASEAN Integration
For those of you who maybe don’t regularly follow economic news, Southeast Asia is set for a sea change by the end of 2015. The Association of Southeast Asian Nations (ASEAN) is pushing for the free flow of goods, capital, and labor within this emerging region. The creation of this historic trading bloc will supposedly help propel their individual economies forward, towards not only more efficiency and better performance but also a more influential position amongst the global community, not too dissimilar to the European Union (EU) started in 1993.
Understandably, big business is very excited about this integration. According to a survey by the Boston Consulting Group (BCG), approximately 80% of companies surveyed revealed that they regard the ASEAN integration as a chance to accelerate growth within their respective industries.
ASEAN first agreed to form a regional trade bloc in 1992. Back then the association only included Brunei, Indonesia, Malaysia, the Philippines, Singapore, and Thailand. The six-member association managed to eliminate tariffs on almost all goods traded between the bloc, resulting in the expansion of trade and cross-border investment. These successes have helped convince Cambodia, Laos, Myanmar, and Vietnam to join, and now ASEAN totals 10 member nations.
The complete integration of these economies would currently rank it as the seventh largest in the world and would be projected to surpass Germany as the fifth largest by 2020.
Even more ambitious, though, are the future goals to issue a single visa and currency, and even form a united regional Olympic team. But all this seems rather hopeful at best this early on in the game.
Interestingly, although these businesses see opportunity, they also know that integration equals more competition. The majority feel competition is inevitable, not only from within the region, but also from outside.
Granted, big business can almost always easily adapt to an increase in competition, as well as assimilate and localize for each individual market, but small and mid-sized businesses will have to be savvy and become more open minded if they want to take advantage of any potential opportunities. Moreover, the risk of becoming irrelevant in a larger economy has never been more apparent for many small businesses in the region.
Of course the biggest question for now is, can ASEAN actually meet that 2015 target date? The optimism from business leaders in the area falls flat when asked about whether they think ASEAN governments can get it done in time. Only 25% of business execs surveyed revealed enthusiasm for governments in the region to meet the deadline.
As such, companies are not sitting around waiting for ASEAN governments to roll out the red carpet, and are already pursuing ventures and business activities that will make any future official integration seem more complementary than anything else.
In the meantime, kick back and enjoy this ASEAN Secretariat-produced (and most curious) video introducing the ASEAN community (complete with rainbows and fairy dust).