ASEAN ECONOMIC COMMUNITY: CHALLENGES AND PROSPECTS

Association of Southeast Asian Nations (ASEAN) was established to address political and security issues on 8 August 1967 in Thailand during the Cold War. Four decades la, in the late 2015, ASEAN Economic Community (AEC) launched to promote economic, political, social and cultural cooperation across the region. As third largest economy in Asia, ASEAN provided a huge market and benefit to over 600 million people in this continent. A single market and production, a competitive economic region, equitable economic development and integration into global economy are the four objectives of AEC. AEC Blueprint 2015 ensure that ten ASEAN Member States are economically integrated, shared prosperity, more proactive, responding to new developments, seizing new opportunities and cultivating its collective identity and strength to engage with the world. Besides the opportunities and strengths, AEC faces numerous challenges. Lack of similarity, development gaps, slow in action and weak ASEAN Secretariat are the weaknesses of ASEAN to achieve AEC's goals. ASEAN members embarked on a combination of multilateral and unilateral measures to reduce barriers to trade in goods, services and investments. These measures have made barriers ASEAN region is projected to rank as the fourth-largest economy in the world by 2050. ASEAN is often seen as an alternative for Chinese and Indian markets. This paper suggests that for ASEAN to become more globally competitive in a wide range of sectors and industries, it must invest in institutions, infrastructure, education, managing labor migration, boosting productivity and wages and improving job quality. AEC integration serves to promote good and services, investment, labor and capital mobilization.