Informative World

ASEAN Economic Community (AEC) Blueprint – What Is the Impact on Thailand Property Investment?

ASEAN, or the Association of Southeast Asian Nations, was formed in 1967. It was formed with the primary objective of creating mutually beneficial relationships between its members and creating a stable economic and political environment for the region. ASEAN paves the way for the AEC, or Asian Economic Community. In some ways it can be compared to the European EC, however in ASEAN the member states retain their sovereignty and economic independence.

The original five members of ASEAN were Indonesia, Malaysia, the Philippines, Singapore and Thailand. They formed ASEAN in the post Vietnam War era, largely as a response to the rise of Japan as a world player, and the increased presence of the US military in the region. The present membership has now increased to ten countries with Brunei, Cambodia, Laos, Myanmar and Vietnam joining ASEAN in the interim years.

The combined population total of the ASEAN nations currently sits at 633 million. This figure is projected to rise by 8.5% to 714 million by 2035. For such a relatively small population, especially compared to giants like China and India, the ASEAN GDP is remarkably healthy. With a total GDP of US$2,400 Billion in 2014, it is firmly among the top ten of the world’s economies.

The main objectives of ASEAN are to promote and enable growth in economic, social, and cultural areas which will provide mutual prosperity for all member states. There is also a strong focus on ensuring political and social harmony amongst the respective countries, which will provide a peaceful and safe environment for the region. Other areas that are covered in the aims section of the ASEAN website are;

  • Collaboration in economic, social, cultural, technical, scientific, and administrative fields.
  • Assistance in training and research
  • Collaboration in the ultilisation of agriculture and industry to expand trade
  • Promote Southeast Asian studies
  • Ensure cooperation with existing international and regional organizations with similar aims and purposes

The AEC Blueprint was ratified in 2008, with 2015 being nominated as the cut off year for the members to implement the policies laid down in the charter. Specific initiatives include the move to integrate new members into the Asian Economic Community, and to begin work on reducing the development gap between different nations.

Although Thailand has been a member of ASEAN since its inception, it is currently falling behind other members in regards to implementing some of the initiatives laid out in the ASEAN charter. Although it started off well with extensive public education programs, this progress was waylaid due to the civil and political unrest in recent years.

This is very apparent when you compare the progress made by other members, specifically Singapore and Malaysia. They are thailand property leading the pack when it comes to implementing initiatives. They are an excellent model for how Thailand might pick up its feet in order to really reap the benefits and opportunity for continued growth that ASEAN can provide.

There are three main areas where Thailand is failing to keep up with Singapore and Malaysia. The first is ensuring that the population has adequate proficiency in the English language. The second is getting small to medium sized businesses on board with the role they need to play in integrating with the wider Asian community. Both of these areas are crucial, and are fundamentals that have been laid out in the charter for effective ratification.

The third, and perhaps most important area, is combating the resistance to expanding foreign ownership of businesses and properties. The concept of free trade and enterprise amongst ASEAN members is a fundamental part of the charter, and a key indicator of a member’s implementation of the initiatives. The demands of the charter mean that Thailand will also need to improve significantly in this area, but it may struggle while still facing unrest within its borders.

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