Deutsche Botschaft Jakarta - The ASEAN Economic Community
The ASEAN
Economic Community:
can the reality match
the vision?
Contents
1. Introduction
5
2. Context: a growing region
Gross domestic products in ASEAN
Foreign investment
8
6
12
3. The AEC vision
The road to 2015
The AEC blueprint
An ambitious blueprint
14
14
16
18
4. The AEC reality
Progress to date
The challenges ahead
What will the new AEC look like?
21
21
22
29
5. Is Indonesia ready for the AEC?
Strengths
Weaknesses
Opportunities
Threats
33
33
36
38
40
6. What will the AEC mean for foreign investors?
42
7. A continuing journey
46
8. Find out more
48
EY The ASEAN Economic Community |
3
Introduction
Welcome to The ASEAN Economic Community: can the
reality match the vision?
1
In this publication, which builds on our earlier report
ASEAN 2015 and beyond: Are German investors missing
out?, we outline the growth story in the ASEAN region
and set out the ASEAN’s ambitious plans for the ASEAN
Economic Community (AEC) as it prepares to launch
later this year.1
All 10 ASEAN member states have signed up to the
blueprint for the AEC, which aims to create a tariff-free
zone while setting a timetable for the removal of nontariff barriers (NTBs) across the region.
Here, we review the progress toward greater economic
integration in the region, and set out the future
challenges – not least the dificulties in reducing NTBs.
We focus in particular on ASEAN’s most populous
country, Indonesia, and ask if it is ready for the AEC.
And, inally, as the growth of ASEAN member states
makes the region particularly attractive for foreign
investors, we ask what the AEC means for investors.
1 ASEAN 2015 and beyond: Are German investors missing out?
(AHK-ASEAN, EY and the German Embassies in ASEAN, March 2015).
EY The ASEAN Economic Community |
5
Chart 1: The member states of
the ASEAN Economic Community
Myanmar
51 million inhabitants
63e billion US$ GDP
1.222 US$ GDP per capita
Thailand
68 million inhabitants
374 billion US$ GDP
5.518 US$ GDP per capita
Cambodia
15 million inhabitants
17e billion US$ GDP
1.071 US$ GDP per capita
Singapore
6 million inhabitants
308e billion US$ GDP
55.307 US$ GDP per capita
6
Indonesia
254 million inhabitants
889 billion US$ GDP
3.504 US$ GDP per capita
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Vietnam
93 million inhabitants
186e billion US$ GDP
1.991 US$ GDP
per capita
Laos
7 million inhabitants
11e billion US$ GDP
1.716 US$ GDP
per capita
Philippines
108 million inhabitants
285 billion US$ GDP
2.646 US$ GDP per capita
Brunei Darussalam
0.4 million inhabitants
15e billion US$ GDP
35.730 US$ GDP per capita
Malaysia
30 million inhabitants
327 billion US$ GDP
10.871 US$ GDP per capita
Source: Populations of 2014 from The World Factbook; GDP and
GDP capita estimates of 2014 based on IMF data and EY assumptions.
EY The ASEAN Economic Community |
7
Context: a growing region
2
Gross Domestic Product (GDP) in ASEAN
After the recent boom in eficiency-driven markets,
particularly Brazil, Russia, India, China and South Africa
(BRICS), attention is now shifting to the ASEAN region.
In the past ive years, the GDP of ASEAN has grown by
5.6% on average. The International Monetary Fund (IMF)
predicts GDP growth will remain above 5% during 2015–
2020 for the ASEAN region.
Already, ASEAN accounts for more than 5% of the
world’s GDP. This proportion is rising: ASEAN created
US$2.4 trillion of nominal GDP in 2014, about two-thirds
the GDP of Germany and just under half that of Japan
(Chart 2).
Of the 10 ASEAN member states, Singapore has the
highest GDP per capita, at US$55,182 (Chart 1).
Indonesia’s GDP per capita is more than 14 times smaller,
at $3,745, but the country accounts for 36% of the total
GDP of the ASEAN region (Chart 2).
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Chart 2: ASEAN GDP compared to major
Asia-Pacific economies and Germany, 2014
South
Korea
US$1.4t
China
(mainland)
US$10.4t
Japan
US$4.9t
Taiwan
US$0.5t
India
US$2.0t
ASEAN
US$2.4t
Germany
US$3.9t
GDP of ASEAN countries,
Cambodia
2014
Brunei
1%
Myanmar
3%
Vietnam
8%
1%
Laos
0%
Indonesia
36%
Philippines
11%
Singapore
12%
Malaysia
13%
Australia
US$1.4t
Thailand
15%
Legend: t – trillion
Source: International Monetary Fund (IMF)
EY The ASEAN Economic Community |
9
As a result, industrial nations such as Germany, the US
and Japan face slightly decreasing shares of global GDP
based on purchasing-power-parity (Chart 3). Such
changes will eventually have a greater effect on the world
economy.
Chart 3: GDP based on purchasing-power-parity (PPP)
share of world total
GDP based on PPP in %
25
20
15
10
5
Source: IMF World Economic Outlook Database, April 2015
10
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2020
2018
2016
2014
2012
2010
2008
2006
2004
2002
2000
0
EY The ASEAN Economic Community | 11
Foreign investment
Foreign direct investment (FDI) into ASEAN continues
to grow, and now rivals FDI into China (Chart 4).
Japanese investors, for example, have already shifted
FDI from China to ASEAN. According to the Japan External
Trade Organization (JETRO)2, FDI by Japanese investors
into China in 2013 totalled US$9.1 billion, a dip of 32.5%
from 2012; compared to US$23.6 billion invested in
ASEAN in the same year, marking an increase of 120%.2
German companies are increasingly interested in the
ASEAN market: In our recent report, ASEAN 2015 and
beyond: Are German investors missing out?, 75% of the
135 German companies we interviewed plan either to
increase their FDI or to make their irst investment in
ASEAN in the coming years.3
Some 65% see the implementation of the AEC as a factor
that will increase their willingness to invest in the region
in future.
2 2014 JETRO Global Trade and Investment Report – On making Japan
a base for international business circulation (JETRO, August 2014).
3 ASEAN 2015 and beyond: Are German investors missing out?
(AHK-ASEAN, EY and the German Embassies in ASEAN, March 2015).
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Chart 4: Value of annual foreign direct investment
inflows (US$ million)
ASEAN overtakes China
140,000
ASEAN
China
120,000
100,000
80,000
Brazil
60,000
40,000
India
Russia
20,000
2014
2013
2012
2011
2010
2009
2008
2007
2006
2005
2004
0
South
Africa
Source: UNCTAD World Investment Report 2015
EY The ASEAN Economic Community | 13
The AEC vision
3
The road to 2015
The proposed launch of the AEC at the end of 2015
is a culmination of more than two decades of economic
integration.
1992
ASEAN Free Trade Area (AFTA) agreement signed
• This establishes the Common Effective Preferential
Tariff scheme (CEPT): customs tariffs to be reduced
to 0–5% within 15 years
1998
ASEAN Investment Area (AIA) framework signed
• Foreign investors to receive “national treatment”
2003
“Bali Concord II” signed, agreeing to establish
the AEC on three pillars:
• Economic Community (AEC)
• Political-Security Community
• Socio-Cultural Community
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2007
AEC blueprint adopted
• Creates roadmap for setting up the AEC in 2015
2009
ATIGA (ASEAN Trade in Goods Agreement) signed
• Enhances CEPT scheme
2015
AEC to take effect on 31 December 2015
EY The ASEAN Economic Community | 15
The AEC blueprint
The ASEAN Community comprises three pillars:
• Economic Community (AEC)
• Political-security Community
• Social-cultural Community
Characteristics and elements of the Economic
Community (AEC) involve:
1. Establishing a single market and production
base. The aim is to break down barriers to trade
and investment, and to free up the movement
of skilled workers.
2. Developing a competitive economic region.
This will include:
• Breaking down non-tariff barriers (NTBs)
• Reducing transport costs by developing
infrastructure
• Encouraging innovation by enforcing intellectual
property rights more uniformly
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3. Building a region characterized by equitable
economic development. There will be support for
small businesses, as well as technical assistance
and capacity-building programs to help the region’s
less developed economies.
4. Integrating ASEAN into the global economy.
The AEC will in theory
be the “strongest”
Asia-Paciic FTA
EY The ASEAN Economic Community | 17
An ambitious blueprint
There are currently 119 free trade agreements (FTAs) in
the Asia-Paciic region. Most of them – including AFTA –
are considered “weak” agreements, with regard to
customs, controlling mechanisms and their many
exceptions.4
The AEC will be much more ambitious:
• Customs: The blueprint envisages a general tariff-free
zone without exceptions. The common objective for
ASEAN member states is “0% tariffs on 100% of traded
goods and services”.
• Non-tariff barriers: The ATIGA, signed in 2009,
envisages that countries remove NTBs according to
the following schedule:
• ASEAN-6 countries (Brunei Darussalam, Indonesia,
Malaysia, the Philippines, Singapore and Thailand):
2015
• CLMV countries (Cambodia, Laos, Myanmar,
Vietnam): 2015, with lexibility until 2018
4 The ASEAN Economic Community – A Work in Progress, p. 25 (Asian
Development Bank/Institute of Southeast Asian Studies, 2013).
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“ASEAN recognizes that the
group is far more inluential
collectively than individually.
The launch of the AEC at
the end of 2015 will forge
closer ties between otherwise highly diverse nations.”
Dr. Georg Witschel, Ambassador of the Federal
Republic of Germany to Indonesia
EY The ASEAN Economic Community | 19
The AEC reality
4
Progress to date
In some ways, ASEAN is already well down the road
to economic integration.
Tariff rates are almost zero on 99% of goods traded
among ASEAN-6 countries (Brunei Darussalam,
Indonesia, Malaysia, Philippines, Singapore and
Thailand), although much work remains to be done
on non-tariff barriers.
CMLV countries (Cambodia, Myanmar, Laos and
Vietnam) are set to abolish all import tariffs by the end
of 2015, with a three-year grace period on up to 7%
of items.5
However, there are signiicant challenges ahead if the
AEC is to be implemented successfully.
5 Source: Institute of South-East Asian Studies (ISEAS) 2013.
EY The ASEAN Economic Community | 21
The challenges ahead
Challenge 1: Slow reduction of NTBs
Many important trade barriers – such as import
limitations, mandatory registration or licensing of
products, standardized speciications, admissions
processes and customs handling – are “non-tariff”
barriers; that is, they do not involve a customs tariff.
Countries use them to protect their local markets by
complicating market access for foreign providers. This
means that, with regard to regional integration, their
impact is as important as customs tariffs.
Reducing NTBs in ASEAN is a gradual process. This is often
a result of poor past experience; e.g., after the ASEANChina FTA, some local companies in Indonesia were put
out of business by cheaper producers from China.
It can also take a long time to make changes, even when
the intention and willingness are there, because of the
lack of irm and consistent controlling mechanisms in
many ASEAN countries.
Indeed, some countries, such as Indonesia, have
not reduced their NTBs but have actually set up more
regulations to protect their domestic economies.6
6 Source: Economic Research Institute for ASEAN and East Asia (ERIA).
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“The issue right now is not
so much about wider trade
liberalization, but rather
about non-tariff measures
and technical barriers to
trade, which are much more
challenging to address than
tariffs alone.”
Anders Jonsson, Policy Analyst: South East Asia,
OECD
EY The ASEAN Economic Community | 23
Challenge 2: Public perception of the AEC
Another major challenge for the AEC is public awareness –
or rather, the lack of it. Well over half (about 55%) of
ASEAN SMEs do not know what the AEC is, according to
a survey by the Institute of South-East Asian Studies
(ISEAS) in 2013.7
In Indonesia, these numbers are even higher: more than
three quarters (77%) of Indonesian SMEs do not know
what the AEC is.
7 Institute of South-East Asian Studies, 2013.
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Challenge 3: Power and resources of ASEAN
Although the plans for the AEC are promising,
implementing them will be more dificult. ASEAN has no
power or mechanism to ensure individual countries keep
to their side of the bargain. The likelihood is that there
will be plenty of sticking points, especially on politically
sensitive issues, even if governments do recognize the
economic beneits of the AEC.
Related to this are the ASEAN Secretariat’s limited
resources. An article in The Diplomat recently noted that
the ASEAN Secretariat’s total budget for 2013 was
US$16 million, compared to approximately US$4.3 billion
for the European Commission (EC) in 2012. The ASEAN
Secretariat employed roughly 300 people, while the EC
employed 34,000.8
8 http://thediplomat.com/2014/09/
why-the-asean-economic-community-will-struggle.
EY The ASEAN Economic Community | 25
Further hurdles
Further challenges to the future of the AEC may be
summarized as follows:
• Language barriers and cultural differences could
inluence future agreements and implementations,
which might result in internal competitions.
• The increased movement of skilled workers across
borders is likely to meet resistance.
• Infrastructure deiciencies, which raise the transport
costs of doing business, will take years to address.
• Political instability and regulatory overkill, combined
with a high incidence of corruption, may prevent
ASEAN member states from integrating.
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“It’s dificult. There are
different languages,
different systems and
different ethnicities and
very little homogeneity.”
Seng-Leong Teh, Partner,
EY Indonesia and Singapore
EY The ASEAN Economic Community | 27
What will the new AEC look like?
The act of launching the AEC on 31 December 2015 will
not transform the ASEAN region overnight. As long as the
tariff-free trade plays a minor role compared to the
individual diverse NTBs in ASEAN member states, the AEC
will not become a true “single market”. If realized, the AEC
could make ASEAN a common market, with free low of
goods, services, investment and labor – and freer, but not
free, low of capital.
“Free trade area
with beneits”
How ASEAN General Secretary Le Luong Minh
described the emerging AEC at a meeting
with ambassadors of EU member states on
7 October 2014.
EY The ASEAN Economic Community | 29
Indeed, ASEAN countries will still have issues creating a
“common market”. Failure to meet the initial requirements
within individual countries will prevent the AEC becoming
what it is intended to be. The free low of labor, for
example, is today only accessible in eight occupational
areas.
Initially the AEC will therefore be an economic alliance with
a highly diverse group of member states that strengthens
ASEAN’s competitiveness on a global scale, creating
incentives for investors. There is already evidence of
increased investment: FDI into Indonesia grew by 22.8% in
Q1 2015.9
This increased competitiveness should lead to better
global integration for the ASEAN region, which is likely to
continue to improve and prosper.
9 http://www.indonesia-investments.com/news/news-columns/
domestic-foreign-investment-in-indonesia-on-the-rise-in-q12015/
item5510.
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“With ASEAN we have
embarked on a longer
journey. Even the new date
of 31 December [2015]
should be seen more as
an aspirational milestone
rather than a inal deadline.
Will everyone be 100%
ready by then? No. But we
deinitely are on the move.”
William Chea, Partner, EY Thailand
EY The ASEAN Economic Community | 31
Is Indonesia ready
for the AEC?
5
Indonesia has the largest population in ASEAN, with 254
million inhabitants. As a “test case” of how the wider
ASEAN might fare in the AEC, here we outline the
strengths, weaknesses, opportunities and threats facing
Indonesia, as the 2015 launch gets closer.
Strengths
• Indonesia’s vast population is an indisputable strength
(Chart 5), as are its favorable demographics, with the
average age being 29.2 years.
• Highly competitive wages.
• The possibility of tariff-free trade with other ASEAN
member states, due to the launch of the AEC.
• The 2014 Indonesian Government’s gross debt, as a
proportion of GDP, is just 25.0% compared to the G8
average of 108.6% (Canada, France, Germany, Italy,
Japan, Russia, UK and US)10
10 IMF.
EY The ASEAN Economic Community | 33
Chart 5: Population of ASEAN member states in 2014
300
250
200
150
100
50
La
os
Ca
m
bo
di
a
M
al
ay
si
a
M
ya
nm
ar
Th
ai
la
nd
Vi
et
na
Ph
m
ili
pp
in
es
In
do
ne
si
a
Br
un
Si
ei
ng
ap
or
e
0
Source: The World Factbook
• Resistant and strong domestic market
• Robust domestic demand makes up about two thirds
of GDP
• Exports represent around 30% of GDP
• Natural resources (oil, natural gas, coal)
• Strategic location
• Indonesia’s current economic growth is forecast to be
above ive percent per year until 2020 (Chart 6)11
11 IMF.
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Chart 6: Indonesia’s economic growth
Average over
14 years: 7.27%
(1983–1996)
GDP growth (in %)
15
Average over
Forecast growth
past 10 years: 5.79% based on IMF
(2005–2014)
estimate
10
5
Rarely influenced
during financial crisis
0
−5
Oil crisis
−10
2020e
2015e
2010
2000
1995
1990
1985
1980
2005
Asian financial crisis
−15
Sources: GDP annual growth data from World Bank (1980–2013)
and estimates from IMF World Economic Outlook Database,
April 2015 (2014–2020)
EY The ASEAN Economic Community | 35
Weaknesses
Among ASEAN member states, Indonesia has the most
restrictive NTBs; these add 30% on costs on more than
half of imported goods.12 In addition to such cost drivers,
Jakarta’s Tanjung Priok has the longest customs
clearance time of any of the ASEAN ports (Table 1).
Other weaknesses include:
• Infrastructure deiciencies
• Instable politics
• Corruption
• Risk of natural disaster
• Severe environmental pollution
• Language barriers
• Diverse population with more than 15 ethnic groups
• Governance and bureaucracy
• Poor education levels/educational system
• Rising wages
• High inlation
• Stagnating productivity13
12 ERIA – AEC Blueprint Implementation Performance and
Challenges: Non-Tariff Measures and Non-Tariff Barriers.
13 ILO Global Wage Database, ILO Trends Economic Models,
January 2014.
14 Institute of South-East Asian Studies.
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Table 1: Customs clearance for ASEAN ports14
Singapore
1–1.5 days
Thailand (Laem Chabang)
1–1.5 days
Philippines (Manila)
1–5 days
Cambodia (Sihanoukville)
Vietnam (Haiphong and Saigon)
2 days
2–3 days
Malaysia (Kelang)
2–3 days
Myanmar (Yangon)
3–5 days
Indonesia (Tanjung Priok)
4–7 days
EY The ASEAN Economic Community | 37
Opportunities
• The ASEAN region’s middle-class population is
predicted to double to 400 million by 2020.15
This is likely to herald a signiicant rise in demand
for consumer goods.
• Primarily beneiting investors in industries such
as e-commerce, health care, tourism and inancial
services.
• Companies are planning to operate more production
hubs in Indonesia, especially in manufacturing and
production industries (Chart 7).
• Tariff-free trade with other ASEAN member states as
well as reduction of NTBs
• ASEANs numerous free-trade agreements with other
partners (e.g., China, India, South Korea, Japan,
Australia, New Zealand).
15 ASEAN 2015: Seeing around the corner in a new Asian landscape
(Nielsen, 2014).
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Chart 7: How many factories do you operate in ASEAN
today? How many will you operate in five years?
Increased number of
factories over the next five years
Number of factories today
17
24
3
0
6
0
27
0
11
54
8
70
81
74
90
79
Br
un
ei
La
os
Ca
m
bo
di
a
M
ya
nm
ar
Vi
et
na
m
Si
ng
ap
or
Th e
ai
l
Ph and
ili
pp
in
es
M
al
ay
si
In
a
do
ne
si
a
1
0
51
24
Source: Economist Corporate Network
Response from 75 companies with manufacturing operations in ASEAN
EY The ASEAN Economic Community | 39
Threats
• Empirical studies show that trade liberalization is highly
beneicial to market actors. However, there are two
important exceptions to this:
• Local companies operating just above break-even
might be pushed out of the market;
• State-owned enterprises, usually unaccustomed to
open markets, may be left behind (there are 139
state-owned companies in Indonesia – within ASEAN,
only Vietnam has more).
• Investment conditions/prohibitions in certain business
ields (Negative Investment List)16
• Ineficient implementation of investment plans for
infrastructure development
• Indonesian economy depends heavily on commodity
exports and lately faces changes:
• Commodity cycle has passed its peak
• Weaker demand especially of China and Japan
• Current account deicit due to imports outstripping
exports (Chart 8) which puts high pressure on the
currency with a trend of a weaker Rupiah
16 The Negative Investment List indicates which sectors are open to foreign investors in Indonesia, and the percentage of foreign ownership
permitted. (Source: www.bkpm.go.id).
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• Dependence on monetary policy of the US Federal
Reserve
• If economic conditions tighten, consumers may be
less likely to spend
Chart 8: Indonesian current account
10.6
5.1
2009
2010
1.7
2012
2011
−24.4
Numbers in billion US$
Sources: World Bank
2013
−29.1
EY The ASEAN Economic Community | 41
What will the AEC mean
for foreign investors?
6
From foreign investors’ point of view, the main
opportunity from the launch of the AEC is that tariffs on
goods and services will, in theory, be limited to those
imported from outside the ASEAN region. Tariffs within
the ASEAN countries will no longer apply.
By 2016, foreign investors with a production hub within
the ASEAN region will largely beneit from the AEC
arrangements. Investors may, for instance
• Concentrate production lines in a chosen ASEAN
country, thus creating economies of scale, and then
export the inished product tariff-free to other ASEAN
countries as well as to ASEAN’s free-trade partners in
the region (China, India, South Korea, Japan,
Australia, New Zealand);
• Identify comparative advantages of individual ASEAN
countries and then split the manufacturing process to
different countries.
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In our recent report, ASEAN 2015 and beyond: are
German investors missing out?, 91% of the German
investors we surveyed cited ASEAN’s internal market
as a key factor driving them to invest.17 Most expected
the implementation of the AEC to make ASEAN more
attractive as a production hub and to simplify
international trade.
Our survey showed that German investors are realistic
about the AEC but recognize the opportunities – even if
these may take time to develop.
17 ASEAN 2015 and beyond: Are German investors missing out?
(AHK-ASEAN, EY and the German Embassies, March 2015).
EY The ASEAN Economic Community | 43
Closer ties with Europe
Further in the future, there is also the possibility of an
FTA between the EU and ASEAN.
According to research company Ecorys, for example, an
ambitious “FTA Plus” agreement between the EU and
ASEAN would lead to GDP growth of 0.23% inside the EU,
and growth in ASEAN ranging from 3.66% in Indonesia to
15.27% in Vietnam. For the EU, missing out on what could
be the fastest growing market in the next 5–10 years
could be costly.
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“Within ASEAN, different
countries are beginning
to establish their own
competitive advantages.
For example, Thailand is
one of the automobile
centers of Southeast Asia.
The Japanese have brought
their entire auto supply
chain into Thailand,
and are also exporting
from Thailand into other
countries in ASEAN.”
Seng-Leong Teh, Partner, EY Indonesia and Singapore
EY The ASEAN Economic Community | 45
A continuing journey
The launch of the AEC in late 2015, as discussed above,
will not be the end of the journey to ASEAN economic
integration. It will be just the latest step along that road.
Many hurdles both intra-regional and national will
continue to challenge on true economic union.
7
It is, however, likely to be a signiicant step: one that
strengthens the region’s global competitiveness, leading
to even further growth, and one that increases incentives
for international investment. Despite the indisputable
challenges to doing business in parts of ASEAN, at a time
of lackluster growth in other regions, many international
investors will feel that the potential reward is well worth
the effort.
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“10 states with 600 million
potential consumers and
workers bring an ininite
amount of business
opportunities, especially
in automotive, logistics and
infrastructure.”
Thomas Wirtz, Partner, EY Indonesia
EY The ASEAN Economic Community | 47
Find out more
For more information, read ASEAN 2015 and beyond: are
German investors missing out?.18 This March 2015 report
is the result of cooperation between AHK-ASEAN, EY and
the German Embassies in ASEAN.
8
The following online sources may also be useful:
The Association of Southeast Asian Nations
www.asean.org
ASEAN competition policy and law
www.aseancompetition.org
Asia-Studies.com
www.asia-studies.com
Germany Trade & Invest
www.gtai.de
Indonesia Investments
www.indonesia-investments.com
Institute of Southeast Asian Studies
www.iseas.edu.sg
18 ASEAN 2015 and beyond: Are German investors missing out?
(AHK-ASEAN, EY and the German Embassies, March 2015).
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ASEAN 2015 and beyond:
Are German investors missing
out?
In our report we comprise opportunities
offered by the AEC; things you need to
consider before entering the ASEAN
market; cultural, iscal and legal
obstacles you need to be aware of and
other interesting questions. We present
the results of a survey among 135
entrepreneurs in Germany, as well as
our assessment of the ASEAN market.
The Organisation for Economic Co-operation and
Development
www.oecd.org
United Nations Conference on Trade and Development
www.unctad.org
World Bank
www.worldbank.org
EY The ASEAN Economic Community | 49
Contacts
Holger Seubert
Head of Economic Department
Embassy of the Federal Republic of Germany
Jl. M. H. Thamrin No. 1
Menteng Jakarta Pusat DKI
Jakarta 10310, Indonesia
Tel: +62 21 3985 5141
wi-1@jaka.diplo.de
Thomas Wirtz
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Head of German Business Center
PT Ernst & Young Indonesia
Indonesia Stock Exchange
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Jl. Jend. Sudirman Kav. 52–53
Jakarta 12190, Indonesia
Tel: +62 21 5289 5031
thomas.wirtz@id.ey.com
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APAC no. 00000313
SKN 1506-087
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ey.com
Economic Community:
can the reality match
the vision?
Contents
1. Introduction
5
2. Context: a growing region
Gross domestic products in ASEAN
Foreign investment
8
6
12
3. The AEC vision
The road to 2015
The AEC blueprint
An ambitious blueprint
14
14
16
18
4. The AEC reality
Progress to date
The challenges ahead
What will the new AEC look like?
21
21
22
29
5. Is Indonesia ready for the AEC?
Strengths
Weaknesses
Opportunities
Threats
33
33
36
38
40
6. What will the AEC mean for foreign investors?
42
7. A continuing journey
46
8. Find out more
48
EY The ASEAN Economic Community |
3
Introduction
Welcome to The ASEAN Economic Community: can the
reality match the vision?
1
In this publication, which builds on our earlier report
ASEAN 2015 and beyond: Are German investors missing
out?, we outline the growth story in the ASEAN region
and set out the ASEAN’s ambitious plans for the ASEAN
Economic Community (AEC) as it prepares to launch
later this year.1
All 10 ASEAN member states have signed up to the
blueprint for the AEC, which aims to create a tariff-free
zone while setting a timetable for the removal of nontariff barriers (NTBs) across the region.
Here, we review the progress toward greater economic
integration in the region, and set out the future
challenges – not least the dificulties in reducing NTBs.
We focus in particular on ASEAN’s most populous
country, Indonesia, and ask if it is ready for the AEC.
And, inally, as the growth of ASEAN member states
makes the region particularly attractive for foreign
investors, we ask what the AEC means for investors.
1 ASEAN 2015 and beyond: Are German investors missing out?
(AHK-ASEAN, EY and the German Embassies in ASEAN, March 2015).
EY The ASEAN Economic Community |
5
Chart 1: The member states of
the ASEAN Economic Community
Myanmar
51 million inhabitants
63e billion US$ GDP
1.222 US$ GDP per capita
Thailand
68 million inhabitants
374 billion US$ GDP
5.518 US$ GDP per capita
Cambodia
15 million inhabitants
17e billion US$ GDP
1.071 US$ GDP per capita
Singapore
6 million inhabitants
308e billion US$ GDP
55.307 US$ GDP per capita
6
Indonesia
254 million inhabitants
889 billion US$ GDP
3.504 US$ GDP per capita
| EY The ASEAN Economic Community
Vietnam
93 million inhabitants
186e billion US$ GDP
1.991 US$ GDP
per capita
Laos
7 million inhabitants
11e billion US$ GDP
1.716 US$ GDP
per capita
Philippines
108 million inhabitants
285 billion US$ GDP
2.646 US$ GDP per capita
Brunei Darussalam
0.4 million inhabitants
15e billion US$ GDP
35.730 US$ GDP per capita
Malaysia
30 million inhabitants
327 billion US$ GDP
10.871 US$ GDP per capita
Source: Populations of 2014 from The World Factbook; GDP and
GDP capita estimates of 2014 based on IMF data and EY assumptions.
EY The ASEAN Economic Community |
7
Context: a growing region
2
Gross Domestic Product (GDP) in ASEAN
After the recent boom in eficiency-driven markets,
particularly Brazil, Russia, India, China and South Africa
(BRICS), attention is now shifting to the ASEAN region.
In the past ive years, the GDP of ASEAN has grown by
5.6% on average. The International Monetary Fund (IMF)
predicts GDP growth will remain above 5% during 2015–
2020 for the ASEAN region.
Already, ASEAN accounts for more than 5% of the
world’s GDP. This proportion is rising: ASEAN created
US$2.4 trillion of nominal GDP in 2014, about two-thirds
the GDP of Germany and just under half that of Japan
(Chart 2).
Of the 10 ASEAN member states, Singapore has the
highest GDP per capita, at US$55,182 (Chart 1).
Indonesia’s GDP per capita is more than 14 times smaller,
at $3,745, but the country accounts for 36% of the total
GDP of the ASEAN region (Chart 2).
8
| EY The ASEAN Economic Community
Chart 2: ASEAN GDP compared to major
Asia-Pacific economies and Germany, 2014
South
Korea
US$1.4t
China
(mainland)
US$10.4t
Japan
US$4.9t
Taiwan
US$0.5t
India
US$2.0t
ASEAN
US$2.4t
Germany
US$3.9t
GDP of ASEAN countries,
Cambodia
2014
Brunei
1%
Myanmar
3%
Vietnam
8%
1%
Laos
0%
Indonesia
36%
Philippines
11%
Singapore
12%
Malaysia
13%
Australia
US$1.4t
Thailand
15%
Legend: t – trillion
Source: International Monetary Fund (IMF)
EY The ASEAN Economic Community |
9
As a result, industrial nations such as Germany, the US
and Japan face slightly decreasing shares of global GDP
based on purchasing-power-parity (Chart 3). Such
changes will eventually have a greater effect on the world
economy.
Chart 3: GDP based on purchasing-power-parity (PPP)
share of world total
GDP based on PPP in %
25
20
15
10
5
Source: IMF World Economic Outlook Database, April 2015
10
| EY The ASEAN Economic Community
2020
2018
2016
2014
2012
2010
2008
2006
2004
2002
2000
0
EY The ASEAN Economic Community | 11
Foreign investment
Foreign direct investment (FDI) into ASEAN continues
to grow, and now rivals FDI into China (Chart 4).
Japanese investors, for example, have already shifted
FDI from China to ASEAN. According to the Japan External
Trade Organization (JETRO)2, FDI by Japanese investors
into China in 2013 totalled US$9.1 billion, a dip of 32.5%
from 2012; compared to US$23.6 billion invested in
ASEAN in the same year, marking an increase of 120%.2
German companies are increasingly interested in the
ASEAN market: In our recent report, ASEAN 2015 and
beyond: Are German investors missing out?, 75% of the
135 German companies we interviewed plan either to
increase their FDI or to make their irst investment in
ASEAN in the coming years.3
Some 65% see the implementation of the AEC as a factor
that will increase their willingness to invest in the region
in future.
2 2014 JETRO Global Trade and Investment Report – On making Japan
a base for international business circulation (JETRO, August 2014).
3 ASEAN 2015 and beyond: Are German investors missing out?
(AHK-ASEAN, EY and the German Embassies in ASEAN, March 2015).
12
| EY The ASEAN Economic Community
Chart 4: Value of annual foreign direct investment
inflows (US$ million)
ASEAN overtakes China
140,000
ASEAN
China
120,000
100,000
80,000
Brazil
60,000
40,000
India
Russia
20,000
2014
2013
2012
2011
2010
2009
2008
2007
2006
2005
2004
0
South
Africa
Source: UNCTAD World Investment Report 2015
EY The ASEAN Economic Community | 13
The AEC vision
3
The road to 2015
The proposed launch of the AEC at the end of 2015
is a culmination of more than two decades of economic
integration.
1992
ASEAN Free Trade Area (AFTA) agreement signed
• This establishes the Common Effective Preferential
Tariff scheme (CEPT): customs tariffs to be reduced
to 0–5% within 15 years
1998
ASEAN Investment Area (AIA) framework signed
• Foreign investors to receive “national treatment”
2003
“Bali Concord II” signed, agreeing to establish
the AEC on three pillars:
• Economic Community (AEC)
• Political-Security Community
• Socio-Cultural Community
14
| EY The ASEAN Economic Community
2007
AEC blueprint adopted
• Creates roadmap for setting up the AEC in 2015
2009
ATIGA (ASEAN Trade in Goods Agreement) signed
• Enhances CEPT scheme
2015
AEC to take effect on 31 December 2015
EY The ASEAN Economic Community | 15
The AEC blueprint
The ASEAN Community comprises three pillars:
• Economic Community (AEC)
• Political-security Community
• Social-cultural Community
Characteristics and elements of the Economic
Community (AEC) involve:
1. Establishing a single market and production
base. The aim is to break down barriers to trade
and investment, and to free up the movement
of skilled workers.
2. Developing a competitive economic region.
This will include:
• Breaking down non-tariff barriers (NTBs)
• Reducing transport costs by developing
infrastructure
• Encouraging innovation by enforcing intellectual
property rights more uniformly
16
| EY The ASEAN Economic Community
3. Building a region characterized by equitable
economic development. There will be support for
small businesses, as well as technical assistance
and capacity-building programs to help the region’s
less developed economies.
4. Integrating ASEAN into the global economy.
The AEC will in theory
be the “strongest”
Asia-Paciic FTA
EY The ASEAN Economic Community | 17
An ambitious blueprint
There are currently 119 free trade agreements (FTAs) in
the Asia-Paciic region. Most of them – including AFTA –
are considered “weak” agreements, with regard to
customs, controlling mechanisms and their many
exceptions.4
The AEC will be much more ambitious:
• Customs: The blueprint envisages a general tariff-free
zone without exceptions. The common objective for
ASEAN member states is “0% tariffs on 100% of traded
goods and services”.
• Non-tariff barriers: The ATIGA, signed in 2009,
envisages that countries remove NTBs according to
the following schedule:
• ASEAN-6 countries (Brunei Darussalam, Indonesia,
Malaysia, the Philippines, Singapore and Thailand):
2015
• CLMV countries (Cambodia, Laos, Myanmar,
Vietnam): 2015, with lexibility until 2018
4 The ASEAN Economic Community – A Work in Progress, p. 25 (Asian
Development Bank/Institute of Southeast Asian Studies, 2013).
18
| EY The ASEAN Economic Community
“ASEAN recognizes that the
group is far more inluential
collectively than individually.
The launch of the AEC at
the end of 2015 will forge
closer ties between otherwise highly diverse nations.”
Dr. Georg Witschel, Ambassador of the Federal
Republic of Germany to Indonesia
EY The ASEAN Economic Community | 19
The AEC reality
4
Progress to date
In some ways, ASEAN is already well down the road
to economic integration.
Tariff rates are almost zero on 99% of goods traded
among ASEAN-6 countries (Brunei Darussalam,
Indonesia, Malaysia, Philippines, Singapore and
Thailand), although much work remains to be done
on non-tariff barriers.
CMLV countries (Cambodia, Myanmar, Laos and
Vietnam) are set to abolish all import tariffs by the end
of 2015, with a three-year grace period on up to 7%
of items.5
However, there are signiicant challenges ahead if the
AEC is to be implemented successfully.
5 Source: Institute of South-East Asian Studies (ISEAS) 2013.
EY The ASEAN Economic Community | 21
The challenges ahead
Challenge 1: Slow reduction of NTBs
Many important trade barriers – such as import
limitations, mandatory registration or licensing of
products, standardized speciications, admissions
processes and customs handling – are “non-tariff”
barriers; that is, they do not involve a customs tariff.
Countries use them to protect their local markets by
complicating market access for foreign providers. This
means that, with regard to regional integration, their
impact is as important as customs tariffs.
Reducing NTBs in ASEAN is a gradual process. This is often
a result of poor past experience; e.g., after the ASEANChina FTA, some local companies in Indonesia were put
out of business by cheaper producers from China.
It can also take a long time to make changes, even when
the intention and willingness are there, because of the
lack of irm and consistent controlling mechanisms in
many ASEAN countries.
Indeed, some countries, such as Indonesia, have
not reduced their NTBs but have actually set up more
regulations to protect their domestic economies.6
6 Source: Economic Research Institute for ASEAN and East Asia (ERIA).
22
| EY The ASEAN Economic Community
“The issue right now is not
so much about wider trade
liberalization, but rather
about non-tariff measures
and technical barriers to
trade, which are much more
challenging to address than
tariffs alone.”
Anders Jonsson, Policy Analyst: South East Asia,
OECD
EY The ASEAN Economic Community | 23
Challenge 2: Public perception of the AEC
Another major challenge for the AEC is public awareness –
or rather, the lack of it. Well over half (about 55%) of
ASEAN SMEs do not know what the AEC is, according to
a survey by the Institute of South-East Asian Studies
(ISEAS) in 2013.7
In Indonesia, these numbers are even higher: more than
three quarters (77%) of Indonesian SMEs do not know
what the AEC is.
7 Institute of South-East Asian Studies, 2013.
24
| EY The ASEAN Economic Community
Challenge 3: Power and resources of ASEAN
Although the plans for the AEC are promising,
implementing them will be more dificult. ASEAN has no
power or mechanism to ensure individual countries keep
to their side of the bargain. The likelihood is that there
will be plenty of sticking points, especially on politically
sensitive issues, even if governments do recognize the
economic beneits of the AEC.
Related to this are the ASEAN Secretariat’s limited
resources. An article in The Diplomat recently noted that
the ASEAN Secretariat’s total budget for 2013 was
US$16 million, compared to approximately US$4.3 billion
for the European Commission (EC) in 2012. The ASEAN
Secretariat employed roughly 300 people, while the EC
employed 34,000.8
8 http://thediplomat.com/2014/09/
why-the-asean-economic-community-will-struggle.
EY The ASEAN Economic Community | 25
Further hurdles
Further challenges to the future of the AEC may be
summarized as follows:
• Language barriers and cultural differences could
inluence future agreements and implementations,
which might result in internal competitions.
• The increased movement of skilled workers across
borders is likely to meet resistance.
• Infrastructure deiciencies, which raise the transport
costs of doing business, will take years to address.
• Political instability and regulatory overkill, combined
with a high incidence of corruption, may prevent
ASEAN member states from integrating.
26
| EY The ASEAN Economic Community
“It’s dificult. There are
different languages,
different systems and
different ethnicities and
very little homogeneity.”
Seng-Leong Teh, Partner,
EY Indonesia and Singapore
EY The ASEAN Economic Community | 27
What will the new AEC look like?
The act of launching the AEC on 31 December 2015 will
not transform the ASEAN region overnight. As long as the
tariff-free trade plays a minor role compared to the
individual diverse NTBs in ASEAN member states, the AEC
will not become a true “single market”. If realized, the AEC
could make ASEAN a common market, with free low of
goods, services, investment and labor – and freer, but not
free, low of capital.
“Free trade area
with beneits”
How ASEAN General Secretary Le Luong Minh
described the emerging AEC at a meeting
with ambassadors of EU member states on
7 October 2014.
EY The ASEAN Economic Community | 29
Indeed, ASEAN countries will still have issues creating a
“common market”. Failure to meet the initial requirements
within individual countries will prevent the AEC becoming
what it is intended to be. The free low of labor, for
example, is today only accessible in eight occupational
areas.
Initially the AEC will therefore be an economic alliance with
a highly diverse group of member states that strengthens
ASEAN’s competitiveness on a global scale, creating
incentives for investors. There is already evidence of
increased investment: FDI into Indonesia grew by 22.8% in
Q1 2015.9
This increased competitiveness should lead to better
global integration for the ASEAN region, which is likely to
continue to improve and prosper.
9 http://www.indonesia-investments.com/news/news-columns/
domestic-foreign-investment-in-indonesia-on-the-rise-in-q12015/
item5510.
30
| EY The ASEAN Economic Community
“With ASEAN we have
embarked on a longer
journey. Even the new date
of 31 December [2015]
should be seen more as
an aspirational milestone
rather than a inal deadline.
Will everyone be 100%
ready by then? No. But we
deinitely are on the move.”
William Chea, Partner, EY Thailand
EY The ASEAN Economic Community | 31
Is Indonesia ready
for the AEC?
5
Indonesia has the largest population in ASEAN, with 254
million inhabitants. As a “test case” of how the wider
ASEAN might fare in the AEC, here we outline the
strengths, weaknesses, opportunities and threats facing
Indonesia, as the 2015 launch gets closer.
Strengths
• Indonesia’s vast population is an indisputable strength
(Chart 5), as are its favorable demographics, with the
average age being 29.2 years.
• Highly competitive wages.
• The possibility of tariff-free trade with other ASEAN
member states, due to the launch of the AEC.
• The 2014 Indonesian Government’s gross debt, as a
proportion of GDP, is just 25.0% compared to the G8
average of 108.6% (Canada, France, Germany, Italy,
Japan, Russia, UK and US)10
10 IMF.
EY The ASEAN Economic Community | 33
Chart 5: Population of ASEAN member states in 2014
300
250
200
150
100
50
La
os
Ca
m
bo
di
a
M
al
ay
si
a
M
ya
nm
ar
Th
ai
la
nd
Vi
et
na
Ph
m
ili
pp
in
es
In
do
ne
si
a
Br
un
Si
ei
ng
ap
or
e
0
Source: The World Factbook
• Resistant and strong domestic market
• Robust domestic demand makes up about two thirds
of GDP
• Exports represent around 30% of GDP
• Natural resources (oil, natural gas, coal)
• Strategic location
• Indonesia’s current economic growth is forecast to be
above ive percent per year until 2020 (Chart 6)11
11 IMF.
34
| EY The ASEAN Economic Community
Chart 6: Indonesia’s economic growth
Average over
14 years: 7.27%
(1983–1996)
GDP growth (in %)
15
Average over
Forecast growth
past 10 years: 5.79% based on IMF
(2005–2014)
estimate
10
5
Rarely influenced
during financial crisis
0
−5
Oil crisis
−10
2020e
2015e
2010
2000
1995
1990
1985
1980
2005
Asian financial crisis
−15
Sources: GDP annual growth data from World Bank (1980–2013)
and estimates from IMF World Economic Outlook Database,
April 2015 (2014–2020)
EY The ASEAN Economic Community | 35
Weaknesses
Among ASEAN member states, Indonesia has the most
restrictive NTBs; these add 30% on costs on more than
half of imported goods.12 In addition to such cost drivers,
Jakarta’s Tanjung Priok has the longest customs
clearance time of any of the ASEAN ports (Table 1).
Other weaknesses include:
• Infrastructure deiciencies
• Instable politics
• Corruption
• Risk of natural disaster
• Severe environmental pollution
• Language barriers
• Diverse population with more than 15 ethnic groups
• Governance and bureaucracy
• Poor education levels/educational system
• Rising wages
• High inlation
• Stagnating productivity13
12 ERIA – AEC Blueprint Implementation Performance and
Challenges: Non-Tariff Measures and Non-Tariff Barriers.
13 ILO Global Wage Database, ILO Trends Economic Models,
January 2014.
14 Institute of South-East Asian Studies.
36
| EY The ASEAN Economic Community
Table 1: Customs clearance for ASEAN ports14
Singapore
1–1.5 days
Thailand (Laem Chabang)
1–1.5 days
Philippines (Manila)
1–5 days
Cambodia (Sihanoukville)
Vietnam (Haiphong and Saigon)
2 days
2–3 days
Malaysia (Kelang)
2–3 days
Myanmar (Yangon)
3–5 days
Indonesia (Tanjung Priok)
4–7 days
EY The ASEAN Economic Community | 37
Opportunities
• The ASEAN region’s middle-class population is
predicted to double to 400 million by 2020.15
This is likely to herald a signiicant rise in demand
for consumer goods.
• Primarily beneiting investors in industries such
as e-commerce, health care, tourism and inancial
services.
• Companies are planning to operate more production
hubs in Indonesia, especially in manufacturing and
production industries (Chart 7).
• Tariff-free trade with other ASEAN member states as
well as reduction of NTBs
• ASEANs numerous free-trade agreements with other
partners (e.g., China, India, South Korea, Japan,
Australia, New Zealand).
15 ASEAN 2015: Seeing around the corner in a new Asian landscape
(Nielsen, 2014).
38
| EY The ASEAN Economic Community
Chart 7: How many factories do you operate in ASEAN
today? How many will you operate in five years?
Increased number of
factories over the next five years
Number of factories today
17
24
3
0
6
0
27
0
11
54
8
70
81
74
90
79
Br
un
ei
La
os
Ca
m
bo
di
a
M
ya
nm
ar
Vi
et
na
m
Si
ng
ap
or
Th e
ai
l
Ph and
ili
pp
in
es
M
al
ay
si
In
a
do
ne
si
a
1
0
51
24
Source: Economist Corporate Network
Response from 75 companies with manufacturing operations in ASEAN
EY The ASEAN Economic Community | 39
Threats
• Empirical studies show that trade liberalization is highly
beneicial to market actors. However, there are two
important exceptions to this:
• Local companies operating just above break-even
might be pushed out of the market;
• State-owned enterprises, usually unaccustomed to
open markets, may be left behind (there are 139
state-owned companies in Indonesia – within ASEAN,
only Vietnam has more).
• Investment conditions/prohibitions in certain business
ields (Negative Investment List)16
• Ineficient implementation of investment plans for
infrastructure development
• Indonesian economy depends heavily on commodity
exports and lately faces changes:
• Commodity cycle has passed its peak
• Weaker demand especially of China and Japan
• Current account deicit due to imports outstripping
exports (Chart 8) which puts high pressure on the
currency with a trend of a weaker Rupiah
16 The Negative Investment List indicates which sectors are open to foreign investors in Indonesia, and the percentage of foreign ownership
permitted. (Source: www.bkpm.go.id).
40
| EY The ASEAN Economic Community
• Dependence on monetary policy of the US Federal
Reserve
• If economic conditions tighten, consumers may be
less likely to spend
Chart 8: Indonesian current account
10.6
5.1
2009
2010
1.7
2012
2011
−24.4
Numbers in billion US$
Sources: World Bank
2013
−29.1
EY The ASEAN Economic Community | 41
What will the AEC mean
for foreign investors?
6
From foreign investors’ point of view, the main
opportunity from the launch of the AEC is that tariffs on
goods and services will, in theory, be limited to those
imported from outside the ASEAN region. Tariffs within
the ASEAN countries will no longer apply.
By 2016, foreign investors with a production hub within
the ASEAN region will largely beneit from the AEC
arrangements. Investors may, for instance
• Concentrate production lines in a chosen ASEAN
country, thus creating economies of scale, and then
export the inished product tariff-free to other ASEAN
countries as well as to ASEAN’s free-trade partners in
the region (China, India, South Korea, Japan,
Australia, New Zealand);
• Identify comparative advantages of individual ASEAN
countries and then split the manufacturing process to
different countries.
42
| EY The ASEAN Economic Community
In our recent report, ASEAN 2015 and beyond: are
German investors missing out?, 91% of the German
investors we surveyed cited ASEAN’s internal market
as a key factor driving them to invest.17 Most expected
the implementation of the AEC to make ASEAN more
attractive as a production hub and to simplify
international trade.
Our survey showed that German investors are realistic
about the AEC but recognize the opportunities – even if
these may take time to develop.
17 ASEAN 2015 and beyond: Are German investors missing out?
(AHK-ASEAN, EY and the German Embassies, March 2015).
EY The ASEAN Economic Community | 43
Closer ties with Europe
Further in the future, there is also the possibility of an
FTA between the EU and ASEAN.
According to research company Ecorys, for example, an
ambitious “FTA Plus” agreement between the EU and
ASEAN would lead to GDP growth of 0.23% inside the EU,
and growth in ASEAN ranging from 3.66% in Indonesia to
15.27% in Vietnam. For the EU, missing out on what could
be the fastest growing market in the next 5–10 years
could be costly.
44
| EY The ASEAN Economic Community
“Within ASEAN, different
countries are beginning
to establish their own
competitive advantages.
For example, Thailand is
one of the automobile
centers of Southeast Asia.
The Japanese have brought
their entire auto supply
chain into Thailand,
and are also exporting
from Thailand into other
countries in ASEAN.”
Seng-Leong Teh, Partner, EY Indonesia and Singapore
EY The ASEAN Economic Community | 45
A continuing journey
The launch of the AEC in late 2015, as discussed above,
will not be the end of the journey to ASEAN economic
integration. It will be just the latest step along that road.
Many hurdles both intra-regional and national will
continue to challenge on true economic union.
7
It is, however, likely to be a signiicant step: one that
strengthens the region’s global competitiveness, leading
to even further growth, and one that increases incentives
for international investment. Despite the indisputable
challenges to doing business in parts of ASEAN, at a time
of lackluster growth in other regions, many international
investors will feel that the potential reward is well worth
the effort.
46
| EY The ASEAN Economic Community
“10 states with 600 million
potential consumers and
workers bring an ininite
amount of business
opportunities, especially
in automotive, logistics and
infrastructure.”
Thomas Wirtz, Partner, EY Indonesia
EY The ASEAN Economic Community | 47
Find out more
For more information, read ASEAN 2015 and beyond: are
German investors missing out?.18 This March 2015 report
is the result of cooperation between AHK-ASEAN, EY and
the German Embassies in ASEAN.
8
The following online sources may also be useful:
The Association of Southeast Asian Nations
www.asean.org
ASEAN competition policy and law
www.aseancompetition.org
Asia-Studies.com
www.asia-studies.com
Germany Trade & Invest
www.gtai.de
Indonesia Investments
www.indonesia-investments.com
Institute of Southeast Asian Studies
www.iseas.edu.sg
18 ASEAN 2015 and beyond: Are German investors missing out?
(AHK-ASEAN, EY and the German Embassies, March 2015).
48
| EY The ASEAN Economic Community
ASEAN 2015 and beyond:
Are German investors missing
out?
In our report we comprise opportunities
offered by the AEC; things you need to
consider before entering the ASEAN
market; cultural, iscal and legal
obstacles you need to be aware of and
other interesting questions. We present
the results of a survey among 135
entrepreneurs in Germany, as well as
our assessment of the ASEAN market.
The Organisation for Economic Co-operation and
Development
www.oecd.org
United Nations Conference on Trade and Development
www.unctad.org
World Bank
www.worldbank.org
EY The ASEAN Economic Community | 49
Contacts
Holger Seubert
Head of Economic Department
Embassy of the Federal Republic of Germany
Jl. M. H. Thamrin No. 1
Menteng Jakarta Pusat DKI
Jakarta 10310, Indonesia
Tel: +62 21 3985 5141
wi-1@jaka.diplo.de
Thomas Wirtz
Partner, Transaction Advisory Services,
Head of German Business Center
PT Ernst & Young Indonesia
Indonesia Stock Exchange
Building Tower 1, Level 13
Jl. Jend. Sudirman Kav. 52–53
Jakarta 12190, Indonesia
Tel: +62 21 5289 5031
thomas.wirtz@id.ey.com
Contacts
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