Report on Progress: 100th days of ASEAN Economic Community
Habibah Hermanadi, Intern Staff ASEAN Studies Center UGM
Last Monday, 11th of April 2016 marked the 100 days of the establishment of ASEAN Economic Community. From this point it is only necessary to question where has ASEAN brought themselves into in the past 100 days? There are several of policies planning and activities brought by member states government, but had the member states discussed what matters for them in the practicality of the community? Through the political economic scope we will assess the progress of the ASEAN Economic Community in the last 100 days, progress in the sense of comprehensive improvements and agendas in all economic aspects macro and micro.
Early on April, a meeting was held among finance ministers and central bank governors from the Association of Southeast Asian Nations, the meeting had agreed upon the forming of collective interest and to make efforts toward realizing financial integration in the region by 2025 (Kyodo News, 2016), During the meeting which was held in Vientiane, the representatives from the 10-member states of ASEAN welcomed the launch late last year of the ASEAN Economic Community and pledged to promote financial inclusion and stability based on a blueprint for the coming decade for the AEC. True, the ASEAN Economic Blueprint requires mature economic policies and regulates the flow of finance among each state before furthering the integration; therefore out of the meetings the representatives had set their agenda in putting in place the appropriate monetary, fiscal and macroprudential policies. This is a gesture of continued efforts toward liberalizing financial services and developing capital markets as pillars for realizing regional financial integration.
The financial integration focused on the creation of ASEAN Banking Integration Framework, where the representatives formulated a standard of Qualified ASEAN Bank or QAB, in the status quo QAB system has been studied on a limited trial basis through bilateral agreements, not yet implemented in the ASEAN scale. However, ASEAN put its commitment through the AEC meaning that there is a need for broader implementation. As the meeting in Vientiane set a new time line, it also calls for creating by 2025 a system letting eight of the 10 ASEAN members share bond market disclosures and framework for retail investors to buy government bond (Tamaki, 2016). As part of the ASEAN economic community agenda these policies viewed to be critical as it could make fundraising within the bloc simpler, more flexible, and it will speed the infrastructure development.
Still within the finance platform, the outcome of the meeting addressed the Seventh Package of Financial Services Commitments and aimed on fully liberalizing the insurance sector. On May the 3rd the commitments would be ratified making several ASEAN states to abide the new “fully liberalized the cross-border supply of international maritime, aviation and transit insurance” (Boon, 2016). The meeting basically reviewed tasks in the ASEAN financial and monetary integration roadmap in terms of liberalization of financial services and capital. Through capital and market development, the states members came up with the seventh package of financial services liberalization and are ready to launch the eighth round of negotiation this year (Vietnam News, 2016), these packages are created and ratified to further open the financial services market, with a focus on further liberalizing insurance services in the region. Ministers and central governors from the member states had pledged to continue removing existing obstacles to trade and direct investment.
It is reflected the readiness of ASEAN member states through the meetings and how they set the finance environment after the launch of ASEAN Economic Community. Supposedly this meetings and ratified commitments were conducted before the launch of the community, regulation and liberation of finance should have been part of the preparation towards AEC back in 2015; therefore within the last 100 days the policies are created to touch the community better rather than just government meetings discussing financial matters. Whether it is part of the members’ strategy or another form of ASEAN’s way of hindering themselves from an actual community-based integration, the AEC does make progress. Hopefully within the next 100 days the progress will not only cover higher institution agenda nor will it postpone what is critical for the community. It is the time for the regional community to be included in the policies and implementations and what is best for the community discusses in the next summit, not until ASEAN could talk and asses what is practical and viable for the community and set aside the tedious agendas actual progress can be made. It is only logical that the involvement and contribution of the community will facile the path towards economic union
Sources:
Kyodo News. (2016, April 5). Asean ministers push for financial integration by 2025. Retrieved April 11, 2016, from <http://www.bangkokpost.com/news/asean/922381/asean-ministers-push-for-financial-integration-by-2025>
Tamaki, K. (2016, April 5). ASEAN cautiously speeds steps toward financial integration. Retrieved April 11, 2016, from <http://asia.nikkei.com/Politics-Economy/International-Relations/ASEAN-cautiously-speeds-steps-toward-financial-integration?page=1>
Boon, R. (2016, April 06). AEC makes progress on insurance, investment schemes. Retrieved April 11, 2016, from <http://www.straitstimes.com/business/aec-makes-progress-on-insurance-investment-schemes>
Vietnam News. (2016, April 5). ASEAN finance ministers commit to cautious fiscal policies. Retrieved April 11, 2016, from <http://vietnamnews.vn/economy/294831/asean-finance-ministers-commit-to-cautious-fiscal-policies.html>
