EDITORIAL - Preparing for economic integration

The Thais are learning to communicate in the different languages of neighboring Southeast Asian countries. Singapore is briefing its business community, including those operating small and medium enterprises, about the challenges of open regional competition. Across the region, briefings are being held in preparation for economic integration within the Association of Southeast Asian Nations.

In just four months, the ASEAN Economic Community will be in place, opening opportunities in a market of 650 million but also threatening the survival of those unprepared for competition. Economic integration, as the Europeans are showing, is not easy. While ASEAN economic integration is less ambitious than that of the EU and the euro zone, the creation of the AEC has been delayed a few times by disagreements on various issues, particularly on areas and economic activities that several countries feel must remain protected. Drawing up regional standards on many aspects including financial rules and professional qualifications is also proving to be complicated.

The creation of the AEC seeks to boost intra-regional trade and the free flow of capital, goods, skilled labor and services. It will be a boon to Filipinos seeking jobs abroad, but those working in the Philippines will also have to prepare for the entry of foreigners.

Open competition will break monopolies and oligopolies that often lead to lousy goods and services. New foreign investments and greater trade can mean more jobs. But many enterprises – particularly smaller operations whose owners have never even heard of the AEC – could be forced out of business by more efficient foreign competition, resulting in unemployment.

The government and private sector must intensify efforts to prepare for regional economic integration. At the very least, public awareness about the AEC must be raised, all the way down to micro entrepreneurs. Radical change can spell disaster or opportunity. The creation of the AEC must spell opportunity for Filipinos.