• In 1967 some Asian nations formed a regional organization called the Association of South East Asian Nations(ASEAN) • The primary objective of this was to promote intergovernmental cooperation and facilitate economic integration among its member nations • As an organization it has immensely helped its member nations to achieve impressive economic growth as well as regional stability by working together • After five decades of successful promotion of economic & intergovernmental cooperation under ASEAN ,the member nations realized that they could achieve more if they operate together as one economy • Aim of moving closer to create a single free trade area for the region, the member nations agreed on consolidating, integrating and transforming ASEAN into a community called ASEAN Economic Community(AEC) CREATION OF AEC • Established on December 2015 with the aim of opening up opportunities for members to capitalize on their diverse resources, factors of production and advantages of their geography • The four pillars of AEC are as follows Single Production and market base Competitive Economic region Equitable economic development Integration with the global economy • Along with this objectives ,measures such as elimination of intra- ASEAN import tariffs and restrictions in the goods and services, simplification of cross-border trading processes have created immense trading opportunities • Free labor mobility within the member nations offer the community a myriad opportunities to develop itself into an international business hub CHALLENGES AHEAD • The four pillars which are key to AEC requires specific and committed actions by ASEAN member nations both collectively and individually • Development divide- the existing gap in the degree of economic development among the member nations • Level of protectionism is not uniform • Differences between member countries with respect to issues ranging from tax codes to foreign ownership restrictions • Unlike European Union, the AEC lacks a proper framework that institutionalizes the structure of a community THE WAY FORWARD • ASEAN nations need to undergo structural reforms within and take bold measures to deepen the economic integration which is a key to achieve objectives of AEC • There is a need for proper coordination of regulations and synchronization of national policies across member nations ,businesses • Requires changes in domestic laws and may even need amendments in the constitutions of the member nations to accommodate AEC accords • The establishment of AEC is not the end goal, but a long-term dynamic process that will require true commitment from every member • Blueprint 2025 has been adopted which provides guidelines through strategic measures for the AEC from 2016 to 2025