TOWARD ASEAN ECONOMIC COMMUNITY, GOVERNMENT ADMIT DOMESTIC REGULATIONS ARE STILL THE PROBLEM

The closer it gets to the implementation of Asean Economic Community the harder Asean member countries strived to straighten out various issues related to commitment on liberalization in service. Unfortunately the difficult implementation of measures by most of the countries were the main challenge toward declaration of Asean Economic Community 2015.

The Minister of trade Thomas Lembong stated in Jakarta on Tuesday (25/8) that the obstacles for Indonesia to fulfill commitment was domestic regulation inn service such as Perpres No. 39 2014 on Negative Investment List (DNI). To fulfill the commitment, adjustment of regulation would be inevitable.

Data of the Ministry of Trade had it that the implementation of AEC blue print by end of July 2015 had reached 91.5% or 463 commitments out of total 506 initiative commitment. Of the 506 commitments, there were 54 commitments regarded as high priority measures. Indonesia’s position was slightly better than the average countries, with implementation level of 992.7% or 469 of total; 506 initiatives. Indonesia still had to complete 37 remaining initiatives.

Besides, Indonesia was also striving to make Asean make adjustment to liberalization target in service whereby to be fulfilled by all member countries. Indonesia was striving to persuade Asean countries to support the proposition to lower foreign ownership of shares in investment from 70% to 51%.

Somehow Lembong claimed he remained optimistic in facing heavy challenges because of Asean strength in facing global changes. According to Lembong, the process of AEC declaration 2015 making was difficult because most of Asean states found it hard to implement the commitment to the policy agreed to.

To quote data of the Ministry of Trade, today Asean GDP came to USD 2.7 trillion almost double that of 2007. Growth of real GDP in Asean 2015 was projected to be 4.6% and would increase until 5.1% in 2016. Asean’s main export market was notably unchanged and remained consistent in traditional markets with the composition as follow: Asean 25.5%, China 11.6%, Uni Europe 10.2%, the USA 9.5%, Japan 9,3%. Total intra-Asean trading increased more than 50% against 2007 which came trading increased more than 50% against 2007 which came to USD 2.53 trillion.

In investment, total FDI entering Asean in 2014 was posted at USD 136.2 billion, the main origin being from EU 21.5%; infra Asean 17.9%, Japan 9.8% the USA 9.6% and China 6.5%.

The quote survey outcome run by the Center of Innovation and Collaboration (CIC) PPM Management (2014) it was seen that only around 50% of companies in Indonesia were ready to innovate, and yet innovation was the key factor in facing AEC competition.

Still about the survey the human resource factor was the most conspicuous weak spot of 230 companies being respondent. It was the weakness in human resources that placed Indonesia in 87th position – a slump compared to 85 in 2013 in global innovation index released by Cornell Universirt, INSEAD, and WIPO of UN.

In Southeast Asia, Indonesia’s position was lower than Singapore (7), Malaysia (33) Thailand (48) and Vietnam (71). The position was reserve against the number of researchers for every million people in the respective countries. Malaysia for example, had 15 times more researchers than Indonesia. (SS)

Business News - August 28, 2015