Jirayu Mahatongkum 1101

Advantages & disadvantages of Single Market and Production Base

The ASEAN Economic Community (AEC) is composed by original groups of 10

fragmented economies together into a single investment destination. ASEANs

members agreed to establish a single market and production base in 2007, according

to investasean.asean.org. A single market is a trade bloc of a nation bound by an

agreement to allow and help of free movement of goods, services, labors, capitals, and

also investments. Moreover, an international organization, the AEC, allows wide-range

cooperation and also maintain harmonious relationships within the nation. It envisions

ASEAN as a single market and production base, a highly competitive region, with

equitable economic development, and fully integrated into the global economy. Single

market and production base has come with a various advantages such as raising in

economic and market base however it also along with disadvantages such as increase

poverty in some regions, fewer job opportunities and abilities to buy product.

Single market and production base has lots of benefits: enable businesses and

industries to maximize their potential of the region as an integrated and investment

destination rather than having 10 fragmented economic, according to

investasean.asean.org. It also allows businesses to tap on product and services

complementation in the region, set up a network of industries across ASEAN, and take

part in the global supply chain. In addition, ASEAN-based companies can easily access

raw materials, product inputs, services, labors, and capitals wherever in ASEAN they

choose to set-up their operations. The larger market range can make greater

opportunities for economic growth and development. Business can totally focus on

their specialization products and services, save on product costs, and/or maximize

economies without necessarily leaving high capability market areas within the region.

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According to Thai-AEC.com stated that the single market and production base is one of

a significant strategy that helps ASEAN to drives their ASEAN's Economic. The

integration as a single market and production base have turned ASEAN into a more

competitive region within the world economy. A stronger regional economy will reduce

poverty through economic development to improve the living standards of the ASEAN

population. Moreover, Anchalee Pooittiwong has mentioned that single market makes

the ASEAN member reach the greater economic cooperation in financial policies,

trades, and human capitals in Asian Economic article. It also supports the good and

services, investments, labors mobilizations, and capital mobilizations. Therefore, single

market and production base help to improve regional agricultural and industrial

utilization, as well as expand trade, and improve transportation and infrastructure.

On the other hand, if we look at the other side of it the single market and production

base it also eect to some groups of people in negative way to some of the region.

Including, the non-skilled workers in many countries are hurt by forming a single market

and some of them are unemployed. Job opportunities become lesser for them because

when country trade laborer become worse due to the lower rate caused by the

specialization of goods in countries. According to Ahmad Iqbal mentioned that, To

have a better career progression, professionals should now take a time to upgrade or

learn relevant skills. Beside technical and management competence; sharping theirs

reporting and communication proficiency in English can be a strong complement to

overall skill set," in The Impact of ASEAN Economic Community (AEC) 2015 for skilled

professionals. As a matter of fact, ASEAN countries are expected to participate in

forming a single market. They are entitled to commit to underlying expense performing

actions for deepening economic integration. It induces to higher costs and additional

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expenditures. These issues would eect to people in working class which might leads

to increasing of poorness. Forming a single market may somehow distribute unfair

earning for its member-states. Also having a dierent currencies will cause abilities to

purchase products. Standard price doesnt get interested in some of the country. This

makes countries with low-value currency worse o by making them earn lesser than

other. Compared to those countries with high-value currency. According to What have

we learnt from Tom Yam Kung crisis? by Achara Deboonme, Tom Yum Kung crisis in

1997 Thailand borrowed a lot of money from foreign country to invest on real estate

such as buying house or building a construction. As a number of investments

increased, price of goods and services went higher than their actual price that it led to

Economic bubble. George Soros prediction had come true that Thai baht would be

depreciated, so he started to sell Thai baht which made Hedge Fund and others started

to do the same thing. Once Thailand wanted to payback loans, Thai currency devalued

so money became more expensive than before. As a consequence of the single market

it will increase the amount of poverty in some sector, decrease a job opportunities and

also equability to buy product.

In conclusion, single market and production base characterized by free flow of

goods, services, and investments, as well as free flow of capital and skills. It comes with

a lot of benefits such as having a larger market base that makes goods flows in ASEAN

region. Interregional trade in goods is likely to rising with the implementation of AEC as

is overall economic growth. On the other hand, the established of single market cause

some of the regions in negative sides. It made non-skill worker unemployed. Working

class was hurt by higher costs and more payout. Also, the dierence in currencies

causes the inequality of purchasing power.

 Jirayu Mahatongkum 1101

References

Achara, D.(2014). What have we learnt from Tom Yam Kung crisis?. Retrieved
March 2, 2017, from http://www.nationmultimedia.com/news/opinion/achara_deboonme/
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Aguilar, J.(2016), ASEAN as a Single Market: beneficial or not? Retrieved January

17, 2017, from https://www.youtube.com/watch?v=ENuwNDVAmY8

Ahmad, I.(2014). The Impact of ASEAN Economic Community (AEC) 2015 for
skilled professionals. Retrieved January 15, 2017, from https://www.linkedin.com/pulse/
20140903045205-27105697-the-impact-of-asean-economic-community-aec-2015-for-
skilled-professionals

Association of Southeast Asian Nation(n.d.), About AEC | ASEAN Economic

Community | ASEAN Investment. Retrieved January 15, 2017, from http://
investasean.asean.org/index.php/page/view/asean-economic-community/view/670/
newsid/755/about-aec.html

Is ASEAN Ready to Become a Single Market? (n.d.). Retrieved January 16, 2017,
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market/

Pooittiwong, A., and Ramire, B.(2016). ASEAN Economic Integration: Opportunities

and Challenges that Lie Ahead. Retrieved from January 16, 2017, https://
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challenges-that-lie-ahead/

Sakol, H.(2013). AEC : ?. Retrieved

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The EU single market: How it works and the benefits it oers. (n.d.). Retrieved
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