Opportunities and Challenges Indonesia facing AEC 2016

ASEAN Economic Community (AEC) or the ASEAN Economic Community (AEC) is a form of economic integration of the ASEAN community. Free trade among ASEAN member countries in Southeast Asia aims to make ASEAN into a region that is stable, prosperous and competitive.

AEC describe the main characteristics in the form of a single market and production base, a competitive economic region and equitable economic development region and in the region fully into the global economic area.

Embodiments of AEC 2015 will put ASEAN as a region third largest market in the world backed by the third-largest number of population (256 million people) after China (1,367 billion people) and India (1,252 billion people). ASEAN trade liberalization will ensure the smooth flow of goods to the supply of raw materials in the ASEAN region due to tariff and non tariff barriers that do not exist anymore (smartplantersblog.wordpress.com 29 November 2014 “The potential of Indonesia in facing MEA”).

For Indonesia, the AEC will be a good opportunity for trade barriers tend to diminish even be non-existent. This will impact on increasing exports which in turn will increase the GDP of Indonesia. On the other hand, emerging new challenges for Indonesia in the form of commodities traded homogeneity problems, for example for agricultural commodities, rubber, wood products, textiles and electronic goods (Santoso, 2008).

On the investment side of this condition can create a climate that supports entry of Foreign Direct Investment (FDI), which can stimulate the growth of technology, job creation, human resource development and easier access to the world market.

In the aspect of employment, the professionals who have the expertise that both can easily get a job and can easily work abroad because of the presence of AEC.

Challenges faced by Indonesia with the AEC that if Indonesia does not perform a variety of strategies that Indonesia will be left behind with other ASEAN member countries.