Southeast Asian nations officially launched an EU-inspired economic bloc Thursday aimed at boosting the region’s trading clout and attracting more investment, but analysts said a true single market was still a long way off.
The ten-member Association of Southeast Asian Nations hailed the project as a “milestone” in combining the economic force of a resource-rich and growing market of more than 600 million people.
The vision for the Asean Economic Community is a single market with a free flow of goods, capital and skilled labour, which should help the region compete with the likes of China for foreign investment.
Philippine Trade undersecretary Victorio Dimagiba said consumer protection and rights would be strengthened as the integration of Asean Economic Community came into full force.
Dimagiba said a regional network to address consumer complaints has been created prior to integration proper. “From the consumer point, we have set up a network of exchanging developments in the area of consumer welfare. We have set up an Asean network of consumer complaints handling,” he said.
The network is a website or an online platform that is capable of managing inter-regional complaints and queries for 600 million consumers in Asean. The site will also manage exchanges of data on voluntary and mandatory recall of goods and services.
Dimagiba said the inter-regional consumer welfare site was close to crafting a five-year roadmap to support the concerns of an economy of 600 million consumers.
The Asian Development Bank said once all the 10 countries in Asean merged into one economy, it would be seventh largest in the world. It could be fourth largest by 2050 if the growth trend continued.
The new bloc “will contribute significantly to the region’s growth and create developmental opportunities for all,” said Vivian Balakrishnan, the foreign minister of Asean member Singapore.
But experts say such an idea is difficult, if not impossible, to achieve in a region marked by extremes in development levels, democratization, and institutional capability.
The official launch of the AEC has no practical effect, and diplomats have said Asean—regularly criticized for a lack of concrete achievements–was keen not to miss its own deadline of 2015, set several years ago.
Research group Capital Economics said in a note the establishment of the AEC was “no game changer”, and it was likely to fall short in tackling major challenges such as reducing non-tariff barriers and improving infrastructure.
“Asean, with its tradition of non-interference into the affairs of member countries, an absence of penalties for non-compliance, and a lack of a powerful central bureaucracy, is ill-equipped to tackle these obstacles,” it said.
John Pang, a senior fellow at Singapore’s S. Rajaratnam School of International Studies, said there would be only “slow and incremental progress” in integrating the economies of Southeast Asia.