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AEC Focus - Lessons from "Brexit" for the AEC

Source: Asia Insurance Review | Aug 2016

With elements of the ASEAN Economic Community modelled after the European Union – a single market and freer movement of goods, services and labour – there are lessons that can be heeded from the recent “Brexit” event, according to a report in Thailand’s The Nation. 
   The report noted the demographic trends of voters, with those in the lower income category and older citizens forming the majority of those who chose to leave the EU. 
   Evidently, those who gained little to no economic benefit from an integrated market place are likely to be amongst those disenfranchised by freer economic conditions. 
   While the AEC has from the start sought to overcome the differences among its member populations, with programmes designed to bridge the gaps between new and old and rich and poor nations, ASEAN’s inability to address crucial socio-economic inequalities remains an unsettling fact, the report said. 
Only 8 professions have free flow of labour
In terms of freer flow of labour that the AEC advocates, only eight specific professions have been cleared so far. Hence, the vast majority of semi-skilled workers are unlikely to derive any advantage. 
   In fact a 2014 study by the International Labour Organisation and Asian Development Bank found that the ASEAN Mutual Recognition Arrangements signed in 2009 tend to benefit just 1% of Southeast Asian workers.
   As seen in Britain, it is the segment that is “left behind” which is most prone to causing fractures to regional unity. 
“If regionalism and globalism appear to be of no benefit, nationalism flourishes, and with it prejudice and disharmony,” the report said. 
   While ASEAN is unlikely to disintegrate in the near future, leaders should pro-actively address the root causes of disunity, it concluded. 
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