The Southeast Asian nations officially launched an EU-inspired economic bloc on Thursday which is aimed at boosting the region’s trading clout and attracting more investment, but analysts said a true single market was still a long way off.
The 10-member Association of Southeast Asian Nations (ASEAN) hailed the project as a “milestone” in combining the economic force of a resource-rich and growing market of more than 600 million people.
The vision for the ASEAN Economic Community (AEC) is a single market with a free flow of goods, capital and skilled labour which should help the region compete with the likes of China for foreign investment.
The new bloc “will contribute significantly to the region’s growth and create developmental opportunities for all,” said Vivian Balakrishnan, the foreign minister of ASEAN member Singapore.
But experts say such an idea is difficult, if not impossible, to achieve in a region marked by extremes in development levels, democratisation, and institutional capability.
The official launch of the AEC has no practical effect, and diplomats have said that the ASEAN – regularly criticised for a lack of concrete achievements – was keen not to miss its own deadline of 2015 set several years ago.
Research group Capital Economics said the establishment of the AEC was “no game changer”, and it was likely to fall short in tackling major challenges such as reducing non-tariff barriers and improving infrastructure.