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Is Thailand ready for Asean Economic Community?

Publication Date : 13-01-2014

 

Much has been said about the AEC (Asean Economic Community) and its far-reaching implications for Thailand. During the past two years, the country has been the most active within Asean as far as the AEC campaign is concerned. As much as 8 billion baht (US242 million) in various forms were spent to "raise awareness and preparedness of Thailand and the Thai people for the AEC."

The emphasis has always been largely concentrated on the economic-related activities even though there are two additional pillars concerning political/security and social/cultural which are equally important.

During the peak of AEC campaign, literally all government agencies - in Bangkok and provincial areas especially the ones bordering neighbouring Asean members - received special budget to organise seminars or events on the AEC and its imminent arrival. The Ministry of Education, Ministry of Commerce and Ministry of Culture and Social Development received the bulk of funding. Even the Ministry of Defence was given over 200 million baht as part of the preparation for the AEC.

On top of it, at least 100,000 key district and provincial officials attended seminars on the AEC and related Asean issues during 2011-2012 period. It must be noted here that at district and provincial levels, officials and agencies based in the north and northeast are the biggest beneficiaries in the AEC campaign, judging from roadside billboards and other publicity.

Some remote primary schools even set up Asean-related showcases such as libraries of various sizes as well as information board on Asean members' histories, flags and other cultural aspects albeit other schooling facilities are still lacking. Students memorise Asean slogans, Asean countries while the Metropolitan Waterworks Authority advertises proudly its drinking water as clean and safe to welcome AEC. A huge temple in Banglamung District, Chonburi, was not coy in stating that the current renovation is part of the journey towards AEC.

Indeed, the government was quite satisfied with the campaign's outcome as it was able to embed the AEC concept in public consciousness. In recent months, the campaign has somewhat died down due to increased political tension and budget constraints.

Culling from media reports and official reactions on the AEC 2015 deadline, the general public still do not have a proper understanding of the AEC and its implications. Most of the views were focused on perceived fear, especially fear of losing jobs and influx of migrant workers. They feel the country is not all that ready and would be losers because the country is not well prepared. The ability to communicate in English has repeatedly been cited as the most important instrument to compete with other Asean members in the AEC.

That explains why Ministry of Education was allocated over 500 million baht to improve English proficiency among students, especially those attending vocational schools. Government officials are also urged to hone English language skills. But the vocational students are the focus group because of the importance of small and medium enterprises (SMEs) play in promoting business activities in Asean. Nearly over 90 per cent of new business investment in the grouping is related to SMEs.

SMEs entrepreneurs from Singapore and Malaysia are models for Thais especially on the operation of franchise business and English proficiency. Big Thai companies have no such problem as they are well funded and staffed to take on overseas operations. Unfortunately, none of them have embraced and approached Asean as an entity with its distinctive norms and wisdoms. Malaysia's Air Asia and CIMB Bank are unique in this sense.

To be fair, Thailand has done better in fulfilling action plans related to two AEC strategies - equitable economic development and integration with the global economy. In its latest report to Asean leaders last year, Thailand's score on AEC preparedness was nearly 86 per cent, higher than the Asean average of around 80 per cent.

Upon a close scrutiny, one could easily see potholes in Thailand's commitment to AEC under the single market and production base strategy, especially in the areas of service and direct investment. For example, Thailand has to do more to promote the 70 per cent foreign equity ownership in the service and 51 per cent in the logistic sectors, to name but a few. Other Asean members also have similar problems in coping with the sensitivity behind border measures. But the ongoing political turbulence in Thailand has made its full implementations more difficult.

Sad but true, the political/security and socio/cultural pillars have not received attention that they deserve. In comparison with other core Asean members, Thailand has done pretty well in all areas except in areas of conflict prevention and social justice related issues. Indeed without continued progress on these fronts, the AEC sustainability will be greatly affected. As such, the much heralded Asean Community (AC) will remain an aspiration.

 

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