Thailand Must Prepare Soon For Asean Community

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WATCHDOG

Thailand must prepare soon for Asean community

By Nophakhun Limsamarnphun

The Nation

DISTRACTED by the domestic political instability over the past four to five years, Thailand has missed the chance of properly preparing itself for the Asean Economic Community (AEC).

Apart from a few experts at the commerce and foreign ministries, few Thai politicians are fully aware of this important development, which will end up reshaping Thailand in an unprecedented way for years to come.

The AEC, which comes into effect in 2015, represents the most ambitious effort of the 10 Asean countries to integrate their economies and create a single market and production base. AEC will also lead to the free flow of goods, services, investment and skilled labours as well as capital.

It is part of the Asean Charter, which includes the Asean Security Community and Asean Social and Cultural Community.

On January 1, six original Asean member countries - Thailand, Malaysia, Indonesia, Philippines, Singapore and Brunei - brought their import duties down to zero, covering both manufactured goods and agricultural products.

In 2015, another four new Asean members, Cambodia, Laos, Vietnam and Burma, will follow suit with zero import duties on most products.

In addition, Asean members will remove non-tariff barriers and allow Asean nationals to have ownership equity of up to 70 per cent in the service sector.

Initially, the sectors would be information, communications and technology (ICT), healthcare, tourism and aviation for which the 70-per-cent equity ownership rule will apply from this year onwards.

Member countries have also adopted the Asean Comprehensive Investment Agreement (ACIA) to liberalise the region's investment sector, provide better protection to investors and facilitate new investment schemes.

ACIA covers five sectors - agriculture, fisheries, forestry, manufacturing and minerals as well as other related services.

ACIA covers both foreign direct investment (FDI) and portfolio investment. The beneficiaries are Asean investors and their non-Asean counterparts who have already invested in Asean countries or so-called foreign-owned Asean-based investors.

Besides ACIA, member countries have also adopted the Mutual Recognition Agreement (MRA) to facilitate a free flow of skilled labour. MRA initially covers seven professions: engineers, architects, doctors, accountants, nurses, dentists and surveyors.

So what has changed so far for Thailand and its people? First, there are zero import duties on most goods from other Asean countries. For the government, this means no more revenue from import tariffs.

Second, the size of markets for Thai goods and, soon, selected services has been enlarged from 66 million consumers in Thailand alone to 580 million across Asean.

Third, cross-border competition is becoming fiercer for Thai enterprises.

Fourth, non-tariff trade issues are becoming more important due to the fall of the tariff wall.

Fifth, there will be a freer flow of capital within Asean and a free flow of selected skilled jobs across national borders.

All these current and upcoming challenges need to be addressed in a timely manner by a competent government, but we have not seen much preparation for it so far.

In short, the government needs to help the private sector boost the quality of Thai goods and services amid increased competition. Second, Thai businesses and industries need to lower their cost. Third, Thai farmers need to improve their crop variety and per-rai productivity.

Fourth, the government needs to intervene in farm prices. Fifth, more funds need to be set up to help farmers and businesses to adapt to the new environment.

Sixth, Thailand needs to embrace advanced technologies to boost competitiveness while spending more money on research and development.

Seventh, labour skills need to be sharpened, while the enforcement of industrial and health standards need to be more stringent, especially on cheap but shoddy imported products.

-- The Nation 2010-02-13

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[Paul123456]

Perhaps ASEAN may be able to save Thailand from developing into a failed state and de facto province of China.

[KhaoNiaw]

They could also have included the greater importance of English and other language skills. With freer movement of employment in certain sectors, companies will be able to bring in people with the necessary job skills and experience and also language proficiency if they can't find it here.

[SomTumTiger]

Perhaps ASEAN may be able to save Thailand from developing into a failed state and de facto province of China.

That was an amazing insight Paul. Thanks for sharing.