KLGA5 - Slot 1 Mr. Hisham Idris

1. ASEAN ECONOMIC
COMMUNITY
(AEC): OPPORTUNITIES &
CHALLENGES
Ministry of International Trade and Industry, Malaysia
11 November 2015
1

2. Driving Transformation, Powering Growth 2
This is ASEAN’s
time. And that is
why it is
essential that we
continue with
the measures to
establish the
ASEAN
Economic
Community
(AEC) – ASEAN
Summit, KL, 27

3. 3
CONFLICTS:
 Indonesia-Malaysia (Confrontation 1962-66)
 Philippines-Malaysia (over Sabah)
 Singapore secession from Malaysia
 Mindanao, Southern Thailand
 (ASA – Malaya, Thailand and the Philippines - 31 July 1961 )
and MAPHILINDO (Indonesia, Philippines and Malaysia-
Realization of Dr Jose Rizal Vision -1963)
COMMUNISM:
 Cold War, arms race, proxy wars
 Indochina War: Vietnam, Laos, Cambodia (1955-1975)
 Burma: 1962
FAKTOR PENUBUHAN ASEANFAKTOR PENUBUHAN ASEAN
POORANDLOW- LEVEL OF
ECONOMIC DEVELOPMENT

4. Tun Abdul Razak
(Malaysia)Adam Malik
(Indonesia)
arciso R. Ramos
(Filipina)
S. Rajaratnam
(Singapura)
Thanat Khoman
(Thailand)
 Founding fathers of ASEAN
4
Bangkok Declaration 1967 “Representing the
collective will of
the nations of
Southeast Asia to
bind themselves
together in
friendship and
cooperation and,
through joint
efforts and
sacrifices, secure
for their peoples
and for posterity
the blessings of
peace, freedom
andprosperity”

5. Keahlian ASEAN Selain Negara Pengasas
5

6. ASEAN – at a glance
Population 625 million
- Youth 60%
GDP USD2,398 billion
GDP Growth 4.4%
GDP per capita USD3,837
Total Trade USD2.53 trllion
- Intra-ASEAN USD608 billion
- Ratio to GDP 104.7%
Total FDI USD136 billion
- Intra-ASEAN USD23 billion
Tourist Arrivals 102 million
- Intra-ASEAN 45 %
Driving Transformation,
Powering Growth
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7. ASEAN Community – 3 Pillars
• Rules-based
Community of Shared
Values and Norms
• Good Governance
• Human Rights
• Adherence to the
Principles of
Democracy
• Single Market and
Production Base
• Competitive Economic
Region
• Equitable Economic
Development
• Linkages to Global
Economy
• Education and Human Resource
Development
• Science and ICT
• Entrepreneurship
• Poverty Alleviation & Social Safety Net
• Health
• Natural Disasters & Environment
• ASEAN’s Cultural Heritage and
Regional Identity
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Driving Transformation,
Powering Growth

8. AEC JOURNEY
AEC
2015
 Peace, solidarity, stability and harmony
 Commendable rates of economic growth
 Reduction in development gaps
 Improving the well-being & quality of life, poverty
reduction
 Strengthening regional cooperation & collaboration
 Gaining global recognition as a dynamic regional
groupingDriving Transformation, Powering Growth 8

9. SKOP AEC 2015
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10. 10
Driving Transformation, Powering
Growth
OTHER AREAS OF AEC 2015
 Intellectual Property Rights (IPR):
o strengthening domestic IP systems to
deliver timely, quality and accessible IP
services through a strong IP regime;
and
o acceding to core international
agreements.
 Competition Policy: National
competition law in all Member States
 Consumer Protection: Focus on ensure
consumer legislation in all Member
States, consumer access to
information, information exchange
mechanism for recalled/banned
products and consumer redress
mechanism.
Taxation: Network of bilateral
agreements to address issues
on double-taxation.
SME Development: SME
Master Plan, SME
Development Council (Public
and Private Sector
representatives) and
information exchange on best
practices.
Narrowing the Development
Gap: Initiative for ASEAN
Integration (IAI) and capacity-
building programs.

11. 11Driving Transformation, Powering Growth
STRENGTHENING CONNECTIVITY
► Development of rail/road/highways/port networks.
► Regional power transmission grid & Trans-ASEAN gas
pipeline.
► ICT – Broadband corridors.
► Transport Agreements/Protocols, e.g.
 ASEAN Framework Agreement on Multimodal
Transport (AFAMT)
 ASEAN Framework Agreement on Facilitation
of Goods in Transit (AFAFGIT)
 ASEAN Framework Agreement on the
Facilitation of Inter-State Transport (AFAFIST)
 Open Skies Policy
 Single Shipping Market
On-Going Efforts

12. 12
RASIONAL AEC

13. 13
PENCAPAIAN AEC SEJAK 2007?
Barangan
Tarif Penghapusan Fasilitasi Perdagangan
(Pengurangan NTB , Mudah)
Perkhidmatan
Liberalisasi 128 subsektor perkhidmatan ;
ekuiti asing sehingga 100%
Pelaburan
Peningkatan pelaburan yang lebih baik ; ACIA
memperuntukkan liberalisasi , perlindungan ,
kemudahan dan promosi
Mobiliti Kemahiran
MRA di 8 profesion - Perubatan , Pembinaan dan
Pelancongan sektor
Sistem Kewangan
Bersepadu
Perkhidmatan kewangan yang lebih liberal , rejim akaun
modal dan pasaran saling berkaitan modal
ASEAN Bersepadu
Infrastruktur fizikal; Liberalisasi perkhidmatan
penerbangan penumpang dan kargo - Dasar Langit
Terbuka dan Pasar Penerbangan Tunggal ASEAN
Perhubungan Global
ASEAN
FTA dengan rakan-rakan Dialog

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15. 15‘Driving Transformation, Powering Growth’

16. 16
ASEAN FTAs
AFTA ACFTA AKFTA AJCEP AIFTA AANZFTA
Entry Into Force 1993 2005 2007 2008 2010 2010
Market Size
(Mil.)
625 1,989 672 749 1,881 650
Economic Size
(US$ tri.)
2.5 12.8 3.9 7.1 4.5 4.1
Coverage Goods
Services
Investment
DSM
Goods
Services
Investment
DSM
Goods
Services
Investment
DSM
Goods
Services
Investment
DSM
Goods
Services
Investment
DSM
Goods
Services
Investment
DSM, MNP
E-Commerce
IPR
Competition
Econ Coop
Regional Comprehensive Economic
Partnership Agreement (RCEP)
Regional Comprehensive Economic
Partnership Agreement (RCEP)
ASEAN – Hong Kong FTAASEAN – Hong Kong FTA
ON-GOING FTAs NEGOTIATIONS
 > 3 billion people (almost 50% of global population)
 RCEP economies combined GDP > USD17 trillion
 RCEP economies > 40% world trade

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MALAYSIA AND AEC
 Market: 30 million vs 625 million.
 27% of Malaysia’s global trade (RM374.7 billion -
2013) is with ASEAN.
 FDI inflows from ASEAN into Malaysia: USD6.2
billion (2013).
 FDI flows from Malaysia into ASEAN: USD5.8 billion
(2013).
 Employment opportunities for Malaysians, especially
for engineers, technicians, financial analyst,
accountants and in other specialized skills, as ASEAN
companies expand into Malaysia and vice-versa.
 Regional base forMalaysian companies and SMEs.
 Investments from 3rd
countries using Malaysia as a
base.

18. PKS MALAYSIA DI ASEAN
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Driving Transformation,
Powering Growth

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SYARIKAT-SYARIKAT MALAYSIA DI ASEAN
Driving Transformation,
Powering Growth

20. 20
SYARIKAT-SYARIKAT ASEAN DI MALAYSIA
Driving Transformation,
Powering Growth

21. 21
SYARIKAT-SYARIKAT MULTINASIONAL ASING
Driving Transformation,
Powering Growth

22. MALAYSIAN NETWORKS
( > 1,000 MALAYSIAN COMPANIES IN ASEAN)
Driving Transformation, Powering
Growth 22
Malaysia-Myanmar
Business Council
Malaysia-Thai
Chamber of Commerce
Malaysia-Singapore
Business Council
Malaysia-Indonesia
Business Council
Malaysia Business
Council Cambodia
Malaysia-Philippines
Business Council
Malaysia Business
Chamber Viet Nam

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Driving Transformation, Powering
Growth
AEC 2015: NOT A NEW INITIATIVE
 AEC is not a new initiative.
 Liberalization in the context of AEC involves:
o Elimination of import duties for intra-ASEAN trade;
o Removal of equity restrictions on services and investments in
ASEAN;
o Removal of other forms of impediments, such as limiting the number
of services providers, etc.;
o Facilitation of intra-ASEAN trade and investment by removing
cumbersome procedures, rules and regulations; and
o Facilitating the mobility of skilled people.
 The main goal is to remove, to the maximum extent possible,
barriers within the region to facilitate trade and economic
activities.

24. VISI EKONOMI ASEAN PASCA 2015
• Integrasi ekonomi ASEAN diteruskan melalui Visi Ekonomi ASEAN
Pasca 2015 yang merangkumi fokus berikut:
– Integrated and Highly Cohesive Economy;
– Competitive, Innovative and Dynamic ASEAN;
– Resilient, Inclusive and People Centered ASEAN;
– Enhanced Sectoral Integration and Cooperation; and
– Global ASEAN.
• Visi Ekonomi ASEAN Pasca 2015 akan turut meliputi tindakan-
tindakan di bawah Komuniti Ekonomi ASEAN 2015 yang masih
belum dicapai.
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Driving Transformation,
Powering Growth

25. Driving Transformation, Powering
Growth
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KEY TAKEAWAYS ON AEC
OPPORTUNITIES ARE CREATED CHALLENGES TO
OVERCOME
RISKTO BE
UNDERSTOOD
 Strategic location
and ASEAN
centrality
 Huge market
potential combined
with China, India
and Japan
 Hub of FTAs and
future
transformational
trade agreements
such as TPP and
RCEP
 Manufacturing
connectivity and
technological
links with
Northeast Asia
 Potential hub for
education, health,
tourism, R&D,
logistics and
financial services
 Growing
competitive
ASEAN market
 Non tariff barriers rising
 Rules based ASEAN
community not in place
 Development gaps:
income, human capital,
institutions,
infrastructure, good
governance, regulatory
coherence
 Lack of ratification and
implementation of
ASEAN Agreements
 Inadequate private
sector engagement
 Incomplete
achievement of AEC
 Vulnerability to
external economic
shocks
 Territorial disputes &
regional tensions
 Rise of China and
India as economic
powerhouses

26. Terima kasih
Block 10, Government Offices Complex,
Jalan Tunku Abdul Halim, 50622 Kuala Lumpur, Malaysia
Tel: 603-8000 8000 | Fax: 603-6201 2337
Email: webmiti@miti.gov.my | Website: www.miti.gov.my