Home' acuity : Acuity May 15 Contents BEN POWER
is a finance writer and communications consultant.
“It’s a mistake to suggest ASEAN is
trying to replicate the EU.
They don’t want to be an EU.”
SALLY PERCIVAL WOOD
FOCUS SOUTHEAST ASIA
acuity | MAY 2015
we know what happened in the EU.”
Still, if there is progress “it will
be a major change to our regional
architecture,” ACCI’s Clarke says.
“Australian business needs to
understand what it means and try and
work out what’s in it for them. Early
sight on this will be really important.”
Clarke says the media has been
focused on business with China and
India, as well as large individual
projects. But he says there needs to be a
greater focus on ASEAN and the AEC.
“We think the ‘open economy’ of
ASEAN provides some opportunities
and some threats,” he says.
Clarke says that if ASEAN countries
harmonise, that could lead to
efficiencies and lower costs, which
would increase competition for
Australian and New Zealand firms.
By the same token, firms based in
Australia and New Zealand could
exploit that by partnering with more
efficient firms in the ASEAN region.
“We need to grasp the opportunities
rather than being hit by the threats,”
Siah Hwee Ang agrees the AEC, if
there is greater integration, creates
threats and opportunities.
“With the AEC, the floodgates will
open to members,” he says.
“We might see a lot more transactions
between them than under current
ASEAN arrangements. It means a lot
more competition than we are used to
encountering there. In one way it can be
a threat to Australia and New Zealand
for certain kinds of products.”
Siah Hwee Ang says that greater
competition will be manifested in
mid-range goods such as electronics
and food. High-end goods, such as
New Zealand honey and milk powder,
should be impacted less because
ASEAN countries aren’t as focused on
producing them to high standards.
But there are also opportunities. Siah
Hwee Ang says that Australian and New
Zealand businesses will be able to more
easily gain a foothold in one ASEAN
country, then operate in other member
nations without establishing a presence
in every country there.
He agrees that the AEC is “a very big
“Nobody knows what is going to
happen at the end of the year,” he says.
“It is possible that despite the AEC,
there are so many differences in
regulation that will actually hamper a
lot of opportunities.”
But Siah Hwee Ang says that with 620
million people ASEAN can’t be ignored.
“We are talking about a relatively
untapped space,” he says, adding that
ASEAN countries also like Western
Like Percival Wood, Siah Hwee Ang
says that Australian and New Zealand
businesses are fearful of doing business
in Southeast Asia. “Very few want to go
there – it’s unknown.”
But he says that firms who have
taken the risk are actually doing well in
Australia and New Zealand also
need to focus on ASEAN for strategic
purposes including diversification,
which means government has a role.
New Zealand is currently reviewing
its ASEAN strategy for the next five
years. “ There is discussion around how
we can do much more with ASEAN
compared with previously,” Siah Hwee
“I expect to see a lot more in terms of
what we can do with ASEAN to diversify
risk away from China.”
Clarke says ASEAN and the AEC
haven’t been a focus of the Australian
government, but should be.
“No one in Australia has a good sight
on what this is and what’s going on
across ASEAN,” he says.
Percival Wood agrees that ASEAN
needs to become a greater priority.
“We do need to be focused on
it; engaging a little bit more. The
opportunities are very significant
for Australia. It’s the fastest growing
economic region, and there are massive
opportunities if you can leverage
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