ASEAN ECONOMIC COMMUNITY (AEC)
WEEK 11:
ASEAN ECONOMIC COMMUNITY (AEC)
INTRODUCTION
ASEAN Economic Community (AEC) is one of the pillars
ASEAN besides of ASEAN Political Security and ASEAN Socio-Cultural Community.
Formation of ASEAN Economic Community is in 2015 with the aims of way to
promote political, economic and align with cultural cooperation across the
region. This pillar has been outlined in the ASEAN Vision of 2020. ASEAN
Economic Community involves all the 10 ASEAN members. The AEC represents the region's
ultimate goal of economic integration. ASEAN is envisioned as a single market
and product base, a highly competitive region with equitable economic
development, and fully integrated into the global economy.
ASEAN Economic Community (AEC) was also aimed to
strengthening integration through free movement of services, investment,
capital and also the skilled workers. The AEC covers a wide range of areas,
including mutual recognition of standards, intellectual property rights,
competition policies, infrastructure development, and narrowing the development
gap between ASEAN regions. In order to narrowing the development gap between
the regions, there are so many obstacles that occur such as lack of facilities
such as in transportation system and also utilities system. Through higher
education and vocational training, it can enhance the knowledge, increase the
job search opportunities and also can improve the standard of their livings.
Therefore, integration in higher education and vocational training can narrow
the gaps between the regions suitable with the ASEAN Economic Community’s
formation.
COMPETITION
AND INTEGRATION OF ACADEMIC EDUCATION AND VOCATIONAL TRAINING IN ASEAN ECONOMIC
COMMUNITY
“WHAT”
This
article discusses the opportunities and challenges of Vietnam's participation
in the AEC in terms of higher education and vocational training, as well as
potential solutions for increasing competition and improving integration. As we
know, Vietnam is a developing country with a lower-middle-income economy. From
trade to security to education and training, Vietnam's integration into the
ASEAN Economic Community (AEC) is expected to bring many opportunities as well
as many challenges for the country in 2015. In the long run, education
integration will help to close the cultural and educational gaps between member
countries.
The challenges
that face by Vietnam before the integration is their qualification of the labour
force and educational environment. Currently, Vietnam has two types of human
resources which are unskilled/general and high-quality, with unskilled human
resources outnumbering high-quality workers. In addition, Vietnam has a
shortage of qualified labour, skilled technical workers, and the quality of
human resources in Vietnam is also lower than in many other countries (World
Bank, 2013). Despite that, Vietnamese workers have always had the best
professional skills and attitudes, but they lag behind many other countries
when it comes to communication, English proficiency, and soft skills (World
Bank, 2012). Training centres need to address this immediately. They turn out
employees who are highly qualified on paper, but who lack the practical skills
to get the job done.
Other challenges that highlighted in this
article before integration is policies and preparation for competition and
global integration. "International integration of higher education and
vocational training by 2020" is another project underway in Vietnam.
Through this project, we can see that, the policies and preparations put in
place by the Government, Ministry of Education and Training are perfectly
suited to the current situation. In contrast to this, the government only sets
policies but does not provide specific instructions to the agencies.in
addition, “Dissemination of the ASEAN Economic Community and the Free Trade
Agreement to which Vietnam is a party" is a workshop to disseminate the
people about AEC. However, this workshop is not generating a wave of public
awareness, particularly for businesses and students. There is a study that
indicate many businesses believed AEC had no or little impact on their business
and many of business still do not understand about AEC. As a result, the
government must demonstrate its role in concrete actions, not just policies.
Furthermore,
this article also highlighted about the opportunities of Vietnam’s
participation in AEC which is higher education and vocational training
opportunities in the future, as well as how best to manage them. Because of the
AEC, labour market changes will be directly impacted in each country as well as
across the region. As a result, the movement of workers in the region is
essential to the process of promoting cooperation and trade between countries. Besides
that, highly specialized personnel can freely switch jobs between this country
and any other member of this group. In addition, more high-quality human
resources will be available in Vietnam as administrative barriers are reduced
to almost zero. However, in stark contrast, the best Vietnamese employees may
also leave the company to work in other countries with higher wages and better
working conditions. Then, in developing countries like Vietnam, Laos, Cambodia,
and Myanmar, labour is plentiful and young, but the rate of worker overtraining
or skilled workers is low (ILO, 2014). In contrast, in Singapore, Malaysia, and
Thailand, the workforce ages. Having higher education and vocational training
enable the growth of the country’s labour market in the coming years. But the
country must develop strategies to manage and retain employees in order to
avoid the "brain drain" phenomenon.
“HOW”
Based
on this article, we can see a few solutions taken by several ASEAN members for
the establishment of AEC in the future. Firstly, they give more focus on
education especially for higher-level education and vocational training. Just
like in Singapore, 20% budget spend every year only for education, where there
a lot of students that make a loan with the government and after they finish
their study they will work for the government. By that it helps to develop
their country like Singapore being the develop country among the ASEAN member.
Next solution is, potential and development solutions such as, potential of
education market, promote the establishment of a national vocational
qualification framework, standardize system structure, actively integrate and
improve the efficiency of international cooperation in education training,
active learning and others. These solution use by Vietnam in achieves AEC. For
example, the solution that use by Vietnam is human resources should be more
active in learning and training. It means Students must be more proactive in
their learning, particularly in specialized disciplines, by studying and practicing
English (communication and qualification) on a regular basis, training a strong
and positive attitude toward learning, self-improvement in working style and
labor techniques, and exchanging necessary communication skills, presentation,
teamwork, and other software. Foreign students must also learn to adopt a
selected lifestyle and conduct.
CHALLENGES
OF ASEAN ECONOMIC COMMUNITY (AEC)
1.0 Single Market and Production Base.
ASEAN Economic Community aims to create single market and
production base which is consists of five elements. The five elements are free
flow of goods, free flow of services, free flow of investments, free flow of
capital and free flow of skilled labor. The first elements which is free flow
of goods followed by implementation of ASEAN Free Trade Area (AFTA) as well as
ASEAN Trade in Goods Agreements (ATIGA). Generally, AFTA is policy that has
made to reduce tariff which means that ASEAN members of countries can import
and export goods with low cost. This policy can bring benefits to ASEAN members
of countries to develop economic growth by import more goods. However, this can
lead to disadvantages which is difficulties complying with rules of origin.
This policy makes many countries take this incentive because tariff whether
very low or zero. Due to high-level product fragmentation in the region,
administrative costs of proving origin as well as the high import content make
many members are unable to comply.
The second elements are free flow of services. In other word,
liberalization has slow practiced in AEC which means that the existing
commitments are insufficient. Liberation where in particularly in banking and
financial services has led to flexibilities introduced under the ‘ASEAN-X’
formula that allows member states to liberalize according to each country’s
readiness
2.0 Highly Competitive Economic Region.
AEC has aim to improve countries business environment so, there is
two components of AEC second pillar which is competition policy and
intellectual property rights (IPR). IPR can improve business even small
business and firm such as farmer in order to innovative in improving quality of
goods and services. However, it is also has become challenges to AEC when the
competition policy and IPR are difficult areas to reform. Although ASEAN
members of countries has one objective in implementing AEC but, due to
different levels of development among members of ASEAN countries makes the
uniformity is hard as they often clashing national interests, cooperation, and
coordination. It is taking more time to be uniformity to has common interest
especially in implementation.
3.0 A Region of Equitable Economic
Development
Basically, it focusses on the
integration of Cambodia, the Lao PDR, and Myanmar that have been accelerate. As
younger members begin to catch up to the economic conditions of the original,
higher-income ASEAN states, the research suggests that the process of
convergence has begun. It
entails bolstering ASEAN's small and medium enterprises (SMEs) through flagship
projects under the ASEAN SME Development Strategic Action Plan. The ASEAN Business
Incubator Network consists of thirty business incubators and innovation centres
that have been established (ABINet). Then, the ASEAN Business Incubator Network
(ABINet) had promoted the business matching and development. The awareness of
the financial facilities and market opportunities available for ASEAN SMEs had
improve through the ASEAN SME Guidebook towards the AEC 2015. Furthermore, the
development of a quantitative tool to track progress in implementing AFEED's
principles and identify appropriate policy solutions has started the
implementation of AFEED.
4.0 Integration into the Global Economy
It is referring towards the most
significant progress that has resulted in a thriving "Factory ASEAN."
All through the 1980s and 1990s,
ASEAN members embarked on a combination of multilateral and one-sided measures
to diminish boundaries to exchange in products, administrations, and
speculations. These measures have made ASEAN one of the foremost globally integrated
districts within the world. Agreeing to the MGI Connectedness List which
measures countries’ integration into the worldwide economy based on their
inflows and surges of products, services, finance, individuals, and information
and communication, the five ASEAN nations rank among the world’s 50 most
connected countries. The five ASEAN nations are Singapore, Malaysia, Thailand,
Philippines, and Vietnam. ASEAN’s long-standing commitment to openness is one
of its characterizing highlights and must be burnished to support and progress
regionalism in Southeast Asia.
CONCLUSION
When
ASEAN Economic Community is executed, those ASEAN members need to be proactively
incorporate in order to gain international experience in vocational education to
maintain their principles of independence, autonomy, fairness, and mutual
benefit cooperation with the member states. Furthermore, they should encourage
multilateralism which is diversification of forms of collaboration with foreign
investors in term of education and training at home and abroad, and also take
this chance to fully engage with resources to increase the scale and quality of
human resources. They should clearly understand the existing circumstances and
rapidly adopt the changes to promote national education development with
suitable and effective regulations. ASEAN Economic Community give benefit
towards the ASEAN country in order to enhance the quality of education and also
human resource in order to produce high quality of product and service as it
lead to encourage other foreign investor to invest in ASEAN country.
References
Association
of Southeast Asian Nations. (n.d.). Overview. Retrieved from
europarl.europa.com:
https://www.europarl.europa.eu/meetdocs/2004_2009/documents/fd/04_asean-generalin/04_asean-generalinfo.pdf
Jayant Menon, A. C.
(2015). ADB Economics Working Paper Series. Realizing An ASEAN Economic
Community: Progress and Remaining Challenges, 1-27.
Kenan Foundation
Asia. (2018, May 5). What is the AEC? Why does it matter? And where is it
going? Retrieved from kenan-asia.com:
https://www.kenan-asia.org/what-is-the-aec-why-does-it-matter-and-where-is-it-going/
Menon, J. (2015 ,
may). realizing an asean economic community. Retrieved from
https://www.adb.org/sites/default/files/publication/160067/ewp-432.pdf
Tien Minh, D. (2015).
Competition and Integration of Academic Education and Vocational Training in
ASEAN Economic Community. 1, 130-145.
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