The Association of Southeast Asian Nations, or ASEAN, was founded on 8 August 1967 in Bangkok, Thailand, with Indonesia, Malaysia, Philippines, Singapore, and Thailand, joining hands initially. Since then, ASEAN has made positive strides in regional integration and cooperation by unique modes of governance and adding Brunei, Vietnam, Myanmar, Lao, and Cambodia as members.

Although the social and economic integration initiatives are still within its early stages, it is believed that the real regional cooperation continues to grow. ASEAN aims to accelerate the economic growth, social progress, and cultural development in the regions through joint endeavors in the spirit of equality and partnership in order to strengthen the foundation for a prosperous and peaceful community of Southeast Asian Nations.

The United States sees ASEAN as vital to the success of its strategic rebalance to Asia especially since they provide assistance to each other in the form of training and research facilities in the educational, professional, technical, and administrative spheres.

They also collaborate more effectively for the greater utilization of their agriculture and industries, the expansion of their trade, including the study of the problems of international commodity trade, the improvement of their transportation and communications facilities, and the raising of the living standards of their peoples.

This unified cooperation also works to maintain close and beneficial cooperation with existing international and regional organizations with similar aims and purposes, and explore all avenues for even closer cooperation among themselves.

ASEAN is a close-knit community established between few countries in the Asian region for better mutual cooperation in social and commercial ways of life. Today, ASEAN provides great opportunities for business investors and promises to deliver on their expectations.

What are the Pros and Cons of Being Part of ASEAN in 2021?

It seems that most local businessmen are unaware or indifferent to the coming ASEAN (Association of Southeast Asian Nations) integration. However, ignoring its impact may prove disastrous to any business while knowledge of what it is will give you more time to adapt to the evolving situation.

Some are looking forward to the full effects of the integration, while there are also those against the idea. The integration is a unification of the participating countries’ markets which makes trading and working in the member countries easier. Here are some of the pros and cons regarding the integration.

Pros of Being Part of ASEAN

  1. More And Better Jobs

With the progressive dynamic between the ASEAN region, with easier and cheaper travel options, goods, and services, it only makes sense that it comes with the extended bonus of better employment opportunities. However, note that the continent makes up one-third of the global GDP.

You can only expect that Asia will keep doing what it can to maintain and exceed this performance. It is also highly beneficial to the region’s IT industry, seeing as how ASEAN has 700 million digital consumers. In fact, by 2025, the sector is expected to grow 500% to $200 billion. One of ASEAN’s goals, after all, is to decrease “unemployment and underemployment” across the region.

  1. More Study Options

Countries in the region now have more access to better jobs if they are better equipped for these emerging roles. Thankfully, even some of the countries’ education would be enhanced because of ASEAN integration.

For instance, last August 2017, Canada’s Minister of Foreign Affairs announced in the ASEAN regional forum in Manila that they would be offering a $10 Million Scholarship Program to support post-secondary students and mid-career professionals from Southeast Asia. The National University in Singapore offers scholarships for ASEAN countries for graduate coursework. These are only a few of the examples of quality international support for Filipino students.

  1. Easier And Cheaper Travel Options For Everyone

Notably, it only makes sense that ASEAN wants to provide easier travel services for their service providers. However, even citizens can enjoy the benefit of improved air, sea, or land travel. Thanks to ASEAN, there are now VISA-free entry countries like Cambodia, Indonesia, and Malaysia. In October 2017, during the 23rd ASEAN Transport Ministers Meeting, members signed several plans to improve transportation within the region.

  1. Cheaper Goods And Services

Other than better travel options, ASEAN also provides the platform for nations within the region to do more trade for goods and services. Tax on imported goods is lowered or even eliminated. Navotas Mayor John Rey Tianco said it best during the 50th ASEAN Anniversary, “A fully-implemented ASEAN Economic Community could mean lower taxes and tariffs for imported goods and this, in turn, could lead to lower cost of living and a greater purchasing power for us.”

  1. Larger Market

With the merging of available markets within the ASEAN region, everyone gets a fair chance of capturing a bigger flag. As an entrepreneur, you can now make yourself available not only to your local consumers but also to the massive number of foreign potential clients from neighboring countries. There is a larger pool of fish that you can gain from, which means a possibility of a bigger profit.

  1. More Investors

Note that a promising company is a promising company, no matter what country it is in. In this integration, there is a great chance that if your company is big in the local market, foreign investors can come in and invest in your company. The more investors the more money your company can use in order to expand or improve your services.

Cons of Being Part of ASEAN

  1. Fiercer Competition

Indeed, it is all fun and games with the idea that there is a larger market now until you realize that it is not as easy as before. Currently, more companies are now competing in the market, trying to capture even your own consumer base. Your strategies against local competitors won’t work as the new competitors will be bringing a different approach to the competition. Strategizing will not be easy.

  1. Hiring Challenges

One of the biggest hurdles in setting up a business in the ASEAN region is the challenge of hiring skilled labor, as each region in the ASEAN has its own set of oftentimes strict regulations concerning employing foreign resources. Note that finding the right team to grow your business is imperative but, thanks to companies such as New Horizons, one of Asia’s leading corporate and HR administration specialists, business owners don’t necessarily have to live in the country they wish to trade in to run a successful business.

  1. Cheap Imports And Double Standards

The risk of an influx of cheap materials flooding local markets and the existence of poor governance in some member countries remains one of the downsides of this regional unification. Another issue raised is the “double standard” on non-interference of ASEAN member-states. It is like a double-edged sword, in the sense that it could open discussions and at the same time block them.

  1. Costly Labour

Another hurdle that you will have to face in this integration is in hiring competent people. People are now able to apply to foreign companies, which simply entails that it will be harder for local companies to get excellent applicants. Most of them will opt to apply to foreign firms given the currency exchange rate and the ability of foreign companies to pay more. This might push firms to increase salary offers just to get quality applicants.

  1. High Cost of Living in Developed Cities

The cost of living in one of the most famous cities in the ASEAN can prove one of the biggest cons to trading in this area. For instance, a sovereign island city-state, Singapore has gained infamy for being one of the most expensive cities to live in globally thanks to a tendency towards high rent prices, high monthly utility bill costs, and high cost of education for ex-pats who often choose to enroll their children into international schools rather than the subsidized public schooling system.

Conclusion

Apart from the association’s success, it is important to understand that ASEAN isn’t a mere organization for leaders to get together and make merry. It is about the betterment of the people and the Economy. Knowing and planning for the coming ASEAN integration is essential for virtually all companies. Opportunities abound but so will competition. Being prepared is far superior to just waiting for it to happen before you react.

Joy Nwokoro