Evaluating ASEAN Economic Community Blueprint 2025: Will it Bridge or Widen Development Gap

The ASEAN Summit held in Singapore in 2007 was a concrete step towards the AEC target. In the same year, ASEAN held its 12th Summit in the Philippines to discuss and design the AEC 2015, known as the AEC Blueprint 2015. The AEC Blueprint 2015 outlines various steps and strategic initiatives to establish the AEC as an integrated economic region. The AEC Blueprint 2015 includes several key characteristics, namely: creating a single market and production base in the region, creating a region where goods, services, investment, and labor can move freely, enhancing a more competitive economic region, including infrastructure and the application of fair competition policies, promoting inclusive economic development to reduce economic disparities among member states through initiatives such as the development of SMEs and economic cooperation across various sectors, integrating with the global economy to connect with global markets through free trade agreements and economic cooperation outside the region.

After more than a decade of planning and preparation for the AEC, it was officially launched on December 31, 2015. With the launch of the AEC, ASEAN became a more integrated regional organization, with approximately 600 million consumers and a collective GDP of around USD 2.4 trillion. ASEAN also contributed about 7% of global GDP. Amid global challenges that increasingly bind countries together, the AEC serves as a relevant framework to maintain regional economic stability and reduce the occurrence of crises. From an ideational framework, the AEC is the ultimate realization of regional economic integration. If trade and investment laws operate harmoniously, the goals of the AEC will be achieved and strengthened. 

In practice, the AEC has several regulations that must be followed to ensure its successful implementation. These regulations include: to enhance trade, the AEC established the ASEAN Single Window, the development of sustainable food production through the ASEAN Integrated Food Security, building long-term infrastructure to develop the capital market and the liberalization of ASEAN capital to achieve financial integration, improving physical connectivity in the region through the ASEAN Highway Network, ASEAN Power Grid, and the Singapore-Kunming Railway Link. Additionally, ASEAN initiated consumer protection, promoted tourism, fostered public-private partnerships, and worked to minimize regional development disparities. If these objectives are achieved, ASEAN will become one of the most competitive economic blocs in the international system.

However, in its implementation, by 2015, the goals were not fully achieved due to the differing conditions experienced by each member state. Each ASEAN member faces various domestic and international pressures, including challenges in balancing product standardization and efficiency, trade competition, the treatment of foreign and domestic investors, and the loss of domestic industry competitiveness to foreign industries. Moreover, the economic resources of each ASEAN member state are not the same, and this has contributed to the development disparities between member countries. 

In my opinion, the AEC in 2015 was not fully successful, and ASEAN seemed to rush its implementation, despite the fact that the member states have differing capabilities. As a result, development disparities became more pronounced. As we know, Singapore is the most economically advanced country in Southeast Asia, followed by Malaysia, Indonesia, and Brunei Darussalam. However, the other member countries do not share the same fate as the aforementioned nations. Singapore, being wealthier than the other members, did not consider the conditions of the other member states and maximized the benefits of the AEC to gain profits, as trade is its main source of revenue. Wealthier ASEAN countries became even wealthier, while the poorer ones became poorer, further widening the development gap between ASEAN countries. 

On November 22, 2015, ASEAN established the AEC Blueprint 2025 to move forward together with a commitment to sustainable economic integration. The vision of the AEC Blueprint 2025 is to: continue the positive economic development of 2009, articulate various aspirations, and strengthen the AEC with stronger regulations, greater focus on the people, and improved living standards for the citizens of ASEAN member states within a framework of sustainable development. The AEC Blueprint 2025 has the following characteristics: a) Adding elements of financial integration, financial inclusion, facilitating the movement of skilled workers, conducting business visits, and enhancing participation in the global value chain, b) Creating a more competitive, innovative, and dynamic ASEAN, c) Enhancing connectivity and sectoral cooperation in areas such as transportation, information and communication technology, e-commerce, food, energy, agriculture, forestry, tourism, minerals, and others, d) A resilient, inclusive ASEAN that is more people-oriented. 

Looking at the AEC 2025 framework, ASEAN has a strong spirit of economic integration. If AEC 2025 can be implemented well and maximally, ASEAN will become one of the competitive economic partners in the international system. However, if ASEAN does not consider the conditions of other member states, it will widen the development gap, just as it did with AEC 2015. If a development gap occurs, it will trigger disputes among member states due to envy over the unfair distribution of ASEAN funds, and force economically weaker member states to join AEC, which could worsen ASEAN's future conditions. 

A possible solution that could be adopted is that ASEAN should strengthen the mechanism of redistribution or ASEAN development funds to the less developed member states. The stronger ASEAN member states can provide technical assistance, infrastructure development, and strengthen economic institutions in the weaker ASEAN countries before the implementation of AEC 2025. Furthermore, ASEAN can adopt a gradual approach or policy differentiation, giving more time and adjusting to the natural resources possessed by weaker ASEAN member states before integration into AEC 2025, such as Cambodia, Laos, Vietnam, and Myanmar. These countries should be given more time and flexible policies to adopt AEC 2025 trade regulations. Lastly, ASEAN can create preferential policies in investment and trade so that the lagging member states will find it easier to attract foreign investors or access markets within the ASEAN bloc.