New International Organisation of Employers (IOE) paper explores opportunities and challenges of the ASEAN Economic Community (AEC)
New International Organisation of Employers (IOE) paper explores opportunities and challenges of the ASEAN Economic Community (AEC).
The leaders of the Association of Southeast Asian Nations (ASEAN) adopted the ASEAN Economic Blueprint at the 13th ASEAN summit on November 2007, which was to serve as a Coherent Plan for Establishing the ASEAN Economic Community (AEC) in 2015 aimed at deepening economic integration to address the biggest problems of the region, including the shortage of skilled labour. Since 2007, there has been significant progress.
However, the start of 2015 brings widespread concern that the AEC may not be launched by the end-2015 deadline. An important reason for this scepticism is the lack of awareness of the AEC across the region. An ASEAN Secretariat survey in 2013 found that three out of four ASEAN citizens lack even a basic understanding of the AEC. This awareness deficit exists not only within the mass population, but among businesses. An ILO survey reveals that only 46 per cent of ASEAN employers fully understand the impact the AEC will have on their enterprise, in particular in terms of skills and education. The ILO report further indicates a lack of awareness on the part of enterprises of the role of Mutual Recognition Agreements (MRAs) in facilitating a ‘freer’ movement of skilled labour.
The lack of business understanding of the opportunities of regional integration not only impedes the successful and timely completion of the AEC, it also hinders businesses in preparing themselves for both the positive and negative aspects. Enterprises that are unaware may miss out on opportunities, including the intensified movement of goods, services, capital, investment and skilled labour to improve competitiveness and further create economic growth. In addition, new challenges will emerge in the labour market such as the skills mismatch, brain drain in the richer countries and a potential expansion of the informal sector. To ensure smooth business adaptation, enterprises will need to have a better understanding of the AEC itself, as well as its implications on the labour market. With this in mind, this IOE guidance paper prepares national employers’ organisations and companies in ASEAN by focusing on the potential impacts on workforces, enterprise operations and competitiveness.
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