"There are dangers in allowing such an important issue to remain vague," Prasarn Trairatvorakul, governor of the Bank of Thailand, said recently.
Many point to the lack of awareness among businesses of the likely consequences for them when the AEC approaches in 2015 and that Asean integration could spawn risks and opportunity losses.
Some may argue that big companies and banks in Thailand have already seized opportunities by establishing footholds in the 10 Asean countries. Some examples are Charoen Pokphand Group, Banpu, Indorama Ventures and Bangkok Bank.
However, SMEs, which account for 99.6 per cent of all businesses in the country, may not thoroughly realise what will be coming down the pike with the wave of AEC liberalisation and when it will be materialised, as they are usually busy struggling with hectic day-to-day operations.
"One of the greatest risks that may arise is not from the AEC itself, but from ensuring that businesses and stakeholders understand what exactly is at stake," Prasarn said during the Sasin Update Talk-Reunion 2011 on the "Asean Economic Community 2015: Opportunities or Threats?
"The greatest threat is remaining complacent and not preparing for these changes," he said.
Authorities ought to paint a picture about what could be expected from the AEC so preparations can be made in time for plausible gains and challenges, he said.
The AEC is designed around five main pillars -- free trade in goods, free trade in services, free flow of skilled labour, free flow of investment, and freer flow of capital.
Many opportunities will be presented by the AEC. With about 600 million people in this regional community, demand for goods and services will explode. Then, mass production for economies of scale will likely follow and bring production costs down, said Arin Jira, deputy secretary-general of the Federation of Thai Industries (FTI).
Through integration, the region's bargaining power with trading partners will increase, he said.
After the AEC takes shape, huge flows of trade, services, investment and workers are anticipated to flow across Asean countries' boundaries - much bigger than the already large flows at present.
According to the FTI, the gross domestic product of the 10 Asean countries combined reaches US$2 trillion, about 5.4 times that of Thailand. Asean's foreign direct investment totals $50 billion, of which about 60 per cent comes from China. International trade touches $2 trillion while international tourists to these countries number 6.5 million, second only to France in the world.
"It's really important to think regionally in several dimensions. [One is] in terms of your market. What country you are in. What's your demographics," said Sethaput Suthiwartnarueput, a well-known economist and visiting professor at Chulalongkorn University's Sasin Graduate Institute of Business Administration.
Sourcing of inputs and branding are also among the critical issues for businesses to think about, he said.
Discrepancies in materials, regional laws, rules and regulations have to be sorted out to lessen the difficulties in mobilising trade, services, people, investment and capital among countries. More than that, joint ventures and many more foreign business partners will most likely penetrate all member countries, including Thailand, and gear up competition as high as they can everywhere from manufacturing and tourism to the capital markets.
Foreign investors would likely welcome the AEC and grab its future to pave the way to gain access to other larger markets like China and India, said Mathew Verghis, lead economist at the World Bank.
Member-country workers in most professions will be able to move freely among the member countries. However, the language used for communicating among nations may delay skill development or even act as a major obstacle for some.
Arin said Thailand should change its education system to one with a greater concentration on foreign languages especially English. Government assistance is also required to help boost the private sector's competitiveness.
This is seen as the only way of communicating among people in the 10 Asean nations. With extensive job training and English-language skills, Thai workers could be equipped with higher professional and language capabilities, and then earn higher income and enhance their purchasing power when fiercer competition through the AEC really comes.
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