The world is becoming more
globalized, there is no doubt about that. It is true that people say the world
is becoming smaller due to the existence of technology and its impacts. A
student from Indonesia could easily interact and share interests with another
student in Middle East, a single housewife from Vietnam could search for
Mexican recipe in some blogs and try cooking, or a Burmese artist can now sell
his or her art products in European market. Around the globe all kind of
individuals and groups are connected easily and no single crisis could slow
down their activities, not even an economic crisis. As quoted from Nairn (2009)
in one of his articles entitled ‘Globalization’, Globalization is such a
diverse, broad-based, and potent force that not even today's massive economic
crash will dramatically slow it down or permanently reverse it. Love it or hate
it, globalization is here to stay.
In his critics, Nairn
explained that globalization is
the cause of today’s financial collapse, growing inequality, and insecurity
around the world. The cost of globalization is suffered by most nations, which
eventually bring international integration in the effort to minimize the costs.
The nations becoming international community which collectively think of
actions to be taken in a global level for every world’s challenge.
Just like what happened in
Southeast Asia as a region. With countries that are culturally rich, this
region got huge influence by both internal and international forces that
significantly change the countries’ society, culture, economy, environment, and
many other aspects. This was chronologically explained by Schmidt and Rasiah
(2010) in their book entitled ‘The New Political Economy of Southeast Asia’.
In their book, Schmidt and
Rasiah mentioned that in fact ASEAN was formed in 1967 to strengthen ties among
the free market economies. They also emphasized that Political alliances changed dramatically when
the Cold War ended following the collapse of the Soviet Union as the former
command economies of Vietnam, Laos and Cambodia quickly inserted themselves
into ASEAN and the regional trade integration process that was begun in 1991,
i.e. the ASEAN Free Trade Area (AFTA). This was becoming the hope for countries
with underemployment or unemployment problem, such as the Philippines, Timor
Leste, Indonesia, and Myanmar. The free trade area was once expected to open
more job opportunities to Southeast Asian citizens.
The region dreamt of having
a single market to share together, where there will be no restrictions in
competing among private businesses all across the region. Buyers and sellers are
allowed to do transaction freely based on a mutual agreement on price without
state intervention in the form of taxes, subsidies or regulation. Ideally the
market will have no interference,
except by the forces of demand and supply.
As explained on an online article
posted on http://smallbusiness.chron.com/ by Gerald Hanks entitled ‘Explain the Advantages &
Disadvantages of Free Market Economies’, free market economies allow business owners to
innovate new ideas, develop new products and offer new services. Instead
of government-enforced price controls, as seen in many socialist and communist
countries, a free market economy allows the relationships between product
supply and consumer demand to dictate prices. The lack of government control
allows free market economies a wide range of freedoms, but these also come with
some distinct drawbacks. The objective for any company in a free market economy
is to make profit. In many cases, companies may sacrifice worker safety,
environmental standards and ethical behavior to achieve those profits.
An
online article by Laurel Teo (2014) entitled ‘ASEAN as a Single Market: What,
When, How, and Really?’ published on https://blogs.cfainstitute.org pointed out several highlights
of ASEAN potential as listed below:
·
Combined GDP of US$2.4 trillion in 2013, making it the
seventh-largest economy in the world if it were a country. Projected to be
fourth largest by 2050.
·
Population of 600 million, ahead of North America or the European
Union. Labour force is third largest in the world, behind only China and India.
·
Almost 60% of total growth since 1990 has been derived from productivity
gains.
·
ASEAN’s five key members (Indonesia, Malaysia, the Philippines,
Singapore, and Thailand) together pulled in more foreign direct investments
than China in 2013 (US$128 billion vs US$117 billion)
The idea of ASEAN Economic
Community (AEC) will be focusing on capital markets. When implemented, the
measures proposed will ensure that within ASEAN: Capital can move freely across
borders, issuers are free to raise capital anywhere, and Investors can invest
anywhere.
Theoretically the idea of
AEC is so ideal and almost too good to be true, the blue print is there but the
implementation is going slowly in terms of speed and extent. Most of people in
the world convinced that a full integration of
AEC will not happen by the end of 2015. The ASEAN governments can only open
doors, clear trade barriers, and prepare the infrastructure. This would only be
an empty frame, however, without the private sector’s involvement.
REFERENCES
Hanks, Gerald. Explain the Advantages & Disadvantages of Free Market Economies.
Retrieved from: http://smallbusiness.chron.com/explain-advantages-disadvantages-market-economies-70553.html
Nairn, Moses. (2009).
Globalization. ProQuest Social Science Journal. Retrieved from: http://e-resources.perpusnas.go.id:2057/docview/224027022?pq-origsite=summon
Schmidt, Johannes Dragsbaek & Rasiah,
Rajah. (2010). The New Political Economy of Southeast Asia. Cheltenham: Edward
Elgar Publishing. Retrieved from: http://e-resources.perpusnas.go.id:2066/ehost/ebookviewer/ebook/bmxlYmtfXzM0Mzg0Nl9fQU41?sid=7e14d16b-08a7-42dd-a092-0d8fa3d242c9@sessionmgr110&vid=0&format=EB&lpid=lp_1&rid=0
Teo, Laurel. (2014). ASEAN as a Single Market: What, When, How, and Really?. Retrieved
from https://blogs.cfainstitute.org/marketintegrity/2014/06/21/asean-as-a-single-market-what-when-how-and-really/
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