ASEAN Integration

Rationale

The Association of Southeast Asian Nations (more commonly known as ASEAN) is a

political and economic organization aimed primarily at promoting economic growth and regional

stability among its members.

The Association of Southeast Asian Nations (ASEAN) was established on 8 August 1967

in Bangkok by the five original member countries: Indonesia, Malaysia, the Philippines,

Singapore, and Thailand to promote political and economic cooperation and regional stability.

Brunei Darussalam joined on 8 January 1984, Vietnam on 28 July 1995, Laos and Myanmar on

23 July 1997, and Cambodia on 30 April 1999.

The ASEAN nations came together with three main objectives: 1.)To build capacity and

promote cooperation and understanding among the Members of ASEANSAI through the

exchange and sharing of knowledge and experiences in the field of public sector auditing so as to

strengthen the audit institutions; 2.)To provide a conducive environment and facilities to promote

research, training, and continuous education among the Members of ASEANSAI through the

sharing of best practices and exchange of lessons learned; and 3.) To serve as a centre of

information and as an ASEANSAI link with other international organizations and institutions in

the field of public sector auditing.

Further, ASEAN and its Member States reaffirm and adhere to the fundamental

principles contained in the declarations, agreements, conventions, concords, treaties and other

instruments of ASEAN. ASEAN and its Member States shall act in accordance with the

following Principles:
 Respect for the independence, sovereignty, equality, territorial integrity and national

identity of all ASEAN Member States;

 Shared commitment and collective responsibility in enhancing regional peace, security

and prosperity;

 Renunciation of aggression and of the threat or use of force or other actions in any

manner inconsistent with international law;

 Reliance on peaceful settlement of disputes;

 Non-interference in the internal affairs of ASEAN Member States;

 Respect for the right of every Member State to lead its national existence free from

external interference, subversion and coercion;

 Enhanced consultations on matters seriously affecting the common interest of ASEAN

 Respect for fundamental freedoms, the promotion and protection of human rights, and the

promotion of social justice;

 Upholding the United Nations Charter and international law, including international

humanitarian law, subscribed to by ASEAN Member States;

 Abstention from participation in any policy or activity, including the use of its territory,

pursued by any ASEAN Member State or non-ASEAN State or any non-State actor,

which threatens the sovereignty, territorial integrity or political and economic stability of

ASEAN Member States;

 Respect for the different cultures, languages and religions of the peoples of ASEAN,

while emphasizing their common values in the spirit of unity in diversity.

 In addition, ASEAN Economic Community has transformed the 10 countries of

Southeast Asia into a single market that allows free flow of goods, services, investments and

skilled labor. One of the projected scenarios is the mobility of professionals among the ten-

member countries. This anticipated labor mobility can be both a factor and a driving force for

economic growth.

The market outlook across ASEAN are the priority occupations being opened up those

under the Mutual Recognition Agreements/Arrangements (MRAs), these include Engineering

services, Nursing Services, Architectural Services, Surveying, Accountancy Services, Medical

Practitioners, Dental Practitioners, and MRA on Tourism Professionals which covers six general

labor groupings such as Front Office, Housekeeping, Food Production, Food and Beverage

Services (for Hotels), Travel Agency, Tour Operations (for travel purposes).

But under MRAs, recognition is not automatic. There is a process for the determination

of standards and other requirements for recognition to be undertaken from the origin and host

countries. The concept of free flow is not absolute or totally free. This is a managed flow

governed by regional rules subject to domestic or national laws and regulations.

Discussion

A successful and more united ASEAN has concrete effects on us and our lives. Ten

Southeast Asian countries – the Philippines, Indonesia, Malaysia, Brunei, Singapore, Myanmar,

Cambodia, Laos, Thailand and Vietnam – want to improve the lives of their citizens. ASEAN

integration makes it quicker to achieve these goals by working together, rather than individually.
Here are some of these benefits in joining ASEAN Integration:

1. Lower cost of living

The ASEAN Economic Community aims to minimize or negate taxes incurred between

countries, which will allow the prices of goods to go down. If we open up our borders to trade,

this is a possibility for us to lower some of the costs that we are faced with, and in a way, what

we’re doing here is increasing the purchasing power of the population. This free flow of goods

and services means your salary will get you much farther as products become cheaper. You will

be able to afford more food or goods.

2. Better jobs and quality of life

ASEAN will also allow you to access products or food or goods not previously available

in the country. We can bring in products that don't even grow in the country, which again will

elevate the standard of living in the Philippines. Food our population wasn't able to eat before, or

was only able to consume at a very high price, now we are able to bring in and it is something

that is underestimated, in as far as lifting the standard of living of our countrymen.

Additionally, ASEAN is working on allowing service providers across the region – like

air transport and healthcare – to establish companies across borders. For citizens, this means

easier access to travel or medical care, which would increase the standard of living. Another goal

of ASEAN is to increase foreign investments by removing restrictions and adopting international

best practices. This means enhanced job opportunities for ASEAN citizens as well, and a better

quality of life. We will have more options, we have more choices.

3. Working and studying abroad

Another goal of ASEAN is to facilitate the free flow of skilled labor, which would allow

nationals from ASEAN countries to work abroad. It is aiming to facilitate the visas and
employment passes for professionals and skilled labor, which aside from increasing productivity,

will benefit individuals with new job opportunities. As for the current OFWs, this policy will

also ensure more protection for Filipinos already working abroad.

The opportunities to live overseas are not just limited for workers. Even students may

have the chance to study abroad. ASEAN universities are enhancing their cooperation which will

allow increased mobility for students in the region.

Why is this important? “Our young people are able to experience going to ancient sites in

Myanmar and Cambodia, and going to school in places like Singapore and Indonesia, making

friends not just with Filipinos but those of many other nationalities with many other religions,

that will hopefully make the next generation a lot more open minded and stronger than this one.

“They will be much more capable than ours will ever be because of the limitations of what we

grew up with. So this I think is what we’re building here. “When you open up to something like

this, and you have a vision of what that can do especially to your young people, it’s going to

make them a lot stronger. That’s really what we aspire for.”

4. Easier travel

One of ASEAN’s policies is to make it easier for service providers to cross borders.

Some of the priorities are improving air travel and tourism, which means it, will continue to be

cheaper and easier for citizens in the region to fly not just to neighbouring countries, but other

countries as well.

5. A better Philippines

Finally, with the free flow of goods, services, investment, capital and skilled labor, this

could only mean a better region – and a better Philippines. The Philippines, and the other
Southeast Asian nations, will be able to achieve their goals quicker, and enjoy more success,

through cooperation.

The export of product and services, trade, tourism, the benefits if you visit other countries

and you make friends with people you meet there, if young people study in each other’s

countries and move across borders – they will form ties that will last maybe their professional

careers and in the future.

There is a need for citizens of ASEAN countries to understand the value of working

towards a common regional good and not just a national good, of caring about what is happening

politically, economically, and socially to our neighbours – because it too, will affect us. It’s

important to see that national good is intertwined with regional good, that we cannot go at this

alone. If we do, we will probably not extract the same benefits and success that we would if we

were to go for these goals together, cooperating in maritime economy, national security,

international trade, promoting poverty reduction, and international competitiveness.

However, according to Rodolfo C. Severino, the greatest criticism expressed by the

Filipino businessmen about the impacts of the planned integration to the Philippines would be

the wiping out or death of companies or even entire industries that due to the influx of cheap

foreign goods coming from other ASEAN countries. Some “conservative” politicians who have

expressed fears about the ability and readiness of Filipino firms to compete in an integrated

regional market are reviving protectionist policies that will protect Filipino firms from

competition with international companies. In addition, there are many unidentified Filipino firms

that explicitly appeal for government protection from regional competition.

Further, among the anticipated outcomes of ASEAN Integration is intra-regional mobility

among professionals. ASEAN professionals may soon be able to practice anywhere within the
region. What does the current discourse say on who would stand to gain or lose from this

eventuality? This question is one of those that can also be answered after the actual integration

has happened. That is so because we all would like to see the real movement first before we can

identify the strengths and weaknesses of the intra-ASEAN mobility of professionals. Many

things can happen and what we thought of as winners may become the losers due to the source of

unpredictable events or vice versa.

WIN. The countries with stronger economies; reasonable visa policies; balanced welfare-

benefits-cost-of-living; more stable political and national security; better education

system and government support; who are more open and accepting to multi-cultural

individuals; and who are quick to respond to the impending needs of the current issues

have an edge already.

Currently, skilled laborers such as engineers, architects, and nurses flock to

countries like Singapore and Malaysia for employment. Although countries that are

traditionally “receivers” of these skilled laborers will continue to benefit from the free

flow, they will see emerging competitors for these individuals in the future. It is also

predicted that countries such as Vietnam, Indonesia, Thailand, Laos, the Philippines, and

Cambodia would gain more jobs in agriculture, trade, transportation, and construction

On the other hand, the Philippines, for instance, can be a winner due to its years

of experience in sending migrant workers abroad. It has established different government

agencies to deal with the processes that a migrant worker goes through before his or her

departure, during the employment period, and after returning to his or her home country.

Setting aside the flaws of each agency and the process itself, it can be a model for other

ASEAN member countries in handling labor mobility and migration.

LOSE. ASEAN members with high tax rates; unfavorable working conditions; complicated visa

policies; no standard language; poor education system; who are not willing to adjust to

and accept other cultures; and who are slow to respond to the impending needs of the

current issues.

One of the reasons why an individual migrates or works in another country is to

find greener pastures - may it be in wages, welfare, job security, satisfaction, professional

training, among others. Therefore, why would an individual’s work for another country

when they can earn the same amount of salary, enjoy the same employment benefits, and

be with their family in their hometown?

Countries with restrictive foreign labor policies will not benefit. In the article on

The Brunei Times, the author emphasized that the Philippines has accessible

professionals. On the other note, Indonesia needs skilled workers to fill in positions.

However, these two countries do not maximize what they can benefit from each other due

to the policies and constitutional laws binding them. Therefore, creating a single market

and “regionalization” is an utmost problem.

Not only will the skilled workers be discouraged to work for these countries, but

the local skilled individuals will be driven away also by these negative characteristics.

These countries will lose their most talented members, otherwise known as brain drain, to

countries that have more attractive employment and social packages.

Meanwhile, Philippines’ Senator Angara argues that high tax rates in the

Philippines may drive away Filipino workers, as well as possible foreign skilled laborers.

Changing national regulations and laws for the advantage of the people and not just the

business sector must be deliberated to cope with this nearing integration.

WIN. The small percentage of the total employment in member countries stated in the MRA

which are engineering, architecture, nursing, accountancy, surveying services, medicine,

and dentistry may be winners. Although they are the favored professions, there are still

barriers such as language, culture, visa policies, and social acceptance that can discourage

skilled workers to migrate; and force those who are already in their host land to go back

to their home country

LOSE. Unskilled or semi-skilled workers will lose since they are not included in the blueprint

for the free mobility. It seems that the MRA is very limiting to the upper business sectors

and intra-company employees.

WIN. On this level, those who can adjust to the culture and learn the host country’s language

may be winners. Living in another country is difficult especially if the culture and

language are different from what one knows. Adjustment must come from both parties.

Receiving countries must be ready socially to accept, or at least adjust to, the foreign

workers.

LOSE. Individuals with impossible expectations of what their life is going to be once they have

migrated will not be successful. Moreover, those who cannot adjust with their new

environment, culture, and language will have a hard time.

WIN-LOSE. In contrast to the traditional reasoning why or how brain drain will happen, Harris

and Schmitt (2011) argue that it can be beneficial. People who cannot adjust to or are not

successful in their host country will either go back to their home country or go to another.

Therefore, “human capital may increase in the source country even in the presence of

Brain Drain” (Harris and Schmitt, 2001). Furthermore, the two authors explain that

skilled workers who immigrated to another country can provide the means for foreign
 direct investments since they know their home country better than the foreign workers

there. In their paper, the authors introduced the phrase “Brain Circulation” in lieu of

Brain Drain (Harris and Schmitt, 2001).

Reaction and Recommendation

At this point in time, I cannot say that we are ready for the ASEAN Economic

Community. Whether ready or not, the Philippine business community has no choice but to face

tougher competition from its regional counterparts.

The AEC aims to create a single market and production base with free movement of

goods, services, investment, labor and capital among the 10 member nations, namely, the

Philippines, Thailand, Malaysia, Indonesia, Cambodia, Singapore, Vietnam, Myanmar, Laos and

Brunei

The Philippines currently exports rice, corn, coconut, banana, pineapple, sugarcane and

some vegetable crops. But there is growing fear that Philippine raw materials and products will

not be able to compete with the products of our Southeast Asian neighbors which benefit from

advanced farming technology and generous government support. Opening up the economy may

only put Filipino farmers at a disadvantage, forced to compete against products with lower

prices.

For instance, the cost of production for one kilo of unmilled rice or palay in Thailand is

only P8 compared to the cost of production in the Philippines–around P11 per kilo. Thailand's

low cost of production allows farmers to sell their rice at competitively low prices. There are two

reasons for Thailand's low production cost. First, they have basic infrastructure and facilities in

place for irrigation and drying of unmilled rice. Second, their fertilizer is cheap because they
have their own production of fertilizer. Aside from that, the intervention of their government is

very big in terms of subsidies.

But Philippine rice has a chance. Based on a DA assessment, the cost of production for

rice in areas where there are complete infrastructure matches or beats Thai figures. The biggest

challenge for DA in beating down the cost of producing rice is Mindanao where cost of

production is still around P11. Cultivated rice is extremely sensitive to water shortages,

according to the International Rice Research Institute. Irrigation is essential for proper water

management, ensuring good quality of rice and a bountiful harvest. Aside from providing more

infrastructure and facilities for agriculture, preparations for AEC should include matching the

country's agricultural practices with international standards and this is the only way we can

protect our farmers and our production.

Furthermore, the local government units (LGUs) plays important role as the Philippines

joins neighboring countries in the ASEAN Economic Community. The integration is a chance

for LGUs to promote themselves and improve their competitiveness. Taking advantage of the

opportunities in the ASEAN integration lies on the local executives. The integration provides a

good venue for LGUs to share their good practices with other areas.

Local officials have to ensure that their localities are competitive enough to fully enjoy

the economic integration. Therefore, investing on our local products is one way LGUs can keep

up with the economic integration. Most LGUs mainly depend on agriculture as its primary

livelihood, so maximizing this sector will enable for LGUs to become competitive. LGU should

identify their indigenous products that we can bring to the international market.

Moreover, we should maximize the proliferation of small and medium enterprises

(SMEs) in various parts of the country. Based on 2015 statistical data provided by the Philippine
Statistics Authority (PSA) our SMEs consist of 99.6% of all companies in the Philippines. If they

won't be assisted, it's a loss for our country. These SMEs should cluster together, and local

officials should be instrumental in banking businesses together. SMEs are indeed the key to the

economic integration.

In addition, the LGUs should work with national agencies to address the needs of other

sectors like infrastructure and education. National agencies have their branches in local areas. A

great part of work will be done by the national level but local officials should assist.

Empowering the LGUs through decentralization is seen as a more effective step in addressing the

problems on various sectors in the local level. Under the Local Government Code of 1991, the

national government is supposed to devolve certain functions and powers to LGUs to enable

them to address specific needs in their areas. The government should first address problems on

various sectors to fully prepare the country for the integration. This devolution "recognizes

leadership of local officials and strength of the administrative capability of local governments.

Effectivity of services is clearly observed as we move to give more power to local level.

Decentralization is, no doubt, powerful enough to support to meet needs.

Local officials have to be well-educated with how the ASEAN integration will work and

how it will affect LGUs. We have to make sure that bureaucrats in the local level have a sense of

urgency in what they're doing. But local officials claim they would need more beyond simple

information dissemination and they need a road map that will guide them in commonality of

direction to where LGUs will be best.

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