ASEAN ECONOMIC COMMUNITY: WHAT DOES IT MEANS FOR CAMBODIAS ECONOMY - - PowerPoint PPT Presentation

ASEAN ECONOMIC COMMUNITY: WHAT DOES IT MEANS FOR CAMBODIA’S ECONOMY AND BUSINESSES

Join Membership Briefing

3 August 2016

• Mr. HING Vutha

ASEAN INFOGRAPHIC

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• ASEAN has been transformed into an increasingly well-regulated,

dynamic and creative platform for trade and commerce

Source: ASEAN (2015). ASEAN Economic Community 2015: Progress and Key

• Achievements. Jakarta, The ASEAN Secretariat.

AEC: WHAT & WHERE IS IT NOW?

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To establish ASEAN as a single market and production base, transforming it into a more integrated, dynamic and competitive region for trade and commerce; The AEC Blueprint as a comprehensive master plan to chart the region’s integration journey;

GOALS AND COMPONENTS

AEC INVOLVES FIVE FUNDAMENTAL LIBERALISATIONS

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• Eliminate tariff and non-tariff barriers
• Trade facilitation such as harmonisation of tariff

lines, and simplifying and harmonising customs procedures

free trade in goods

• It involves the removal of restrictions on barriers

to trade in services such as foreign ownership, market access, and mobility of service providers.

free trade in services

• Achieve free and open investment regime & enhance

ASEAN’s attractiveness as an investment destination

• ACIA cover: investment liberalization, protection,

facilitation and promotion

free flow of investment

• Strengthens ASEAN capital market development

and integration

• Allows greater capital mobility

freer flow of capital

• Facilitate mobility of professional within ASEAN
• Covers 8 professions

freer flow of skilled labour

IT’S A WORKING PROGRESS

Gradual Implementation No abrupt change Journey, rather than destination, toward a more

• pen ASEAN

The establishment of AEC 2015 is a major milestone in ASEAN integration agenda ASEAN leaders agreed on post-2015 measures and action plans toward AEC 2025 vision

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AEC AND ITS POTENTIAL IMPACTS

BENEFITS FOR WHOLE ECONOMY

Increase investment and trade; participate in regional production networks Positive effects on productivity, private sector development Stimulate economic growth Lock in some sensitive domestic reform agendas Improve investment and business climate

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AEC BECOME MORE MEANINGFUL FOR BUSINESSES

The AEC will bring more opportunities for business partnerships or mergers and acquisitions With lower tariffs and easier access to regional markets, export firms will be able to expand more easily. Producers will benefit from lower production costs due to cheaper inputs sourced from other ASEAN countries. Mobility will increase and thus workforce diversity will also

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HOW BUSINESSES VIEW AEC?

HIGH OPTIMISM

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International companies’ attitude toward integration are

• verwhelmingly positive with regard to both their business and the

regional economy

Source: BCG (2014), Winning in ASEAN: How Companies Are Preparing for Economic Integration, Boston: Boston Consulting Group

For local businesses, majority of firms believe that AEC will bring some opportunities for their companies

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[CATEGOR Y NAME]

[PERCE NTAGE]

Somewhat

• f an
• pportunit

y 70% No idea 26%

How much of an opportunity do you believe the AEC poses to your company?

Source: CAMFEBA(forthcoming), AEC Guide for Businesses in Cambodia

Yes I understan d it well, 33% No I don't understan d / not sure, 67%

Do you understand the AEC and its implication for your business

PREPARING FOR INTEGRATION

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The vast majority of companies reported that they are taking action to prepare their organizations

Source: BCG (2014), Winning in ASEAN: How Companies Are Preparing for Economic Integration, Boston: Boston Consulting Group

FOR BUSINESSES IN CAMBODIA

Majority of firms surveyed are generally not yet well prepared for the AEC

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Incorporate AEC in strategic planning Increase penetration of existing Cambodia’s market Expand internationally and enter more ASEAN markets Investing in better understanding of other ASEAN markets Adjust product or services offerings Invest in international talent Be part of regional supply chains Invest in innovation and technology Prepare HR plan (skill recruitment)

To what extent is your enterprise making the following adjustment/preparation for AEC?

Already in action Planning Considering Wait and see No plan

Source: CAMFEBA(forthcoming), AEC Guide for Businesses in Cambodia

[SERIE S NAME] [VALUE ] [SERIE S NAME] [VALUE ] [SERIE S NAME] [VALUE ] [SERIE S NAME] [VALUE ] [SERIE S NAME] [VALUE ]

PREPARING FOR AEC

KEY LAST MESSAGE

AEC is a journey rather than a destination…..That journey is to move toward a more open ASEAN

“The formal establishment of the AEC by end-2015 marks a major milestone in ASEAN’s effort to fulfil the goal of an integrated region ... The implementation of the AEC measures does not mean that ASEAN will become a single economic entity by 1 January 2016; rather it sends a strong signal that positive measures have been put in place towards a more liberalised and integrated economic region.”

Chairman of ASEAN Economic Minister (during the 21st ASEAN Economic Ministers Retreat, 28 February-1 March 2015 in Malaysia)

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THANK YOU

• Mr. Hing Vutha

Head, Economics Unit CDRI Email: Vutha@cdri.org.kh Tel: 011 766 268