Economic growth of any country is the financial growth in terms of increased market value of those goods and services that are the core to the country’s economy in due course. Any country would very much target such growth along with its socio-cultural evolution and social progress. One can call them as the three pillars on which a country’s security, integrity and growth would depend upon. The definition of the first world countries or the ‘Developed Countries’ is yet again based on one or many criteria. A country with high gross domestic product (GDP) per capita based on its per capita income is one major criterion that terms the country to be a developed country. Industrialization is also associated with the financial aspects of a country where the country dominates in its tertiary and quaternary industrial sectors. Apart from such financial growth or stability the HDI or the Human Development Index of a country in combination with its national income is another aspect deciding on the ‘Developed’ status of a country. Life expectancy and education are the essential aspects of a country’s HDI.
Ten of the South East Asian countries initially included Indonesia, Malaysia, Philippines, Singapore and Thailand. Later on Brunei, Cambodia, Laos, Myanmar and Vietnam were included. These countries make up the Association of Southeast Asian Nations or ASEAN. The aim is to accelerate the income level in terms of financial growth, social progress and socio-cultural evolution of the 10 member countries. The initiative also made it possible to sort out the differences or to bring about suggestions peacefully among these participating countries.
What have been the achievements of the association so far?
Tremendous achievements in terms of trade and industry can be witnessed. Some of the achievements include;
- It has positively influenced the tariffs.
- For six of the participating members, the common effective preferential tariff rates are in fact zero.
- Five of its members have had trade facilitation where they have live implementation of single windows nationally with a well implemented and designed completely evened out access to the prominent ports and airports.
- These members have also achieved the best international practices along with liberalization of services and investment for which framework agreement has already been conducted and completed.
Challenges of economic integration
- Thorough and complete elimination of the non-tariff barriers which are seen hampering the protective measures of the association.
- Strengthening their trade facilitation which would involve the Active participation of all the states comprising the association. Improvement of the business climate is also called for which would reduce the cost involved in doing a business, licensing, etc.
- Expansion o the mutual recognition agreements that would ensure mobility of skilled labour.
Aims of the AEC and its influence
ASEAN Economic community is the economic integration created by the members of the Southeast Asian association. This is believed to be active from the year 2015. It is considered to by many economists to be an effort to achieve security and stability in terms of financial growth with increased GDP. The main objectives or aims of this community are as follows. Creating a single market and manufacturing foundation along with a highly competitive economic constituency. Complete integration into the global market along with impartial or reasonable economic development of all the participating states. Another objective which the association is actively aiming for is strengthening its position by increasing its competitive edge with regard to and especially of its small and medium enterprises (SME).
The role of the ACIA is to support and promote the active flow of investment within the 10 participating countries. Certain principles have been designed and implemented to achieve this free flow of investment. They include;
- Immediate grant of National treatment to the investors of the association.
- Elimination of all the barriers or hindrances of investments.
- Improving and achieving transparency.
- Undertaking measures that facilitate investment and reformation of processes and procedures aiding in investments.
Regional integration thus relies on factors like human resource development, acknowledgement of professional qualifications, and implementation of financial policies leading to financial growth and development of the concept of e-ASEAN. All these factors will influence flow of goods and services freely along with free capital flow and skied labour.