At the ASEAN Leaders’ Summit in Kuala Lumpur in November 2015, ASEAN declared the inauguration of the ASEAN Economic Community, heralding a key development in the much anticipated and welcomed ASEAN integration project.
The EU-ASEAN Business Council is a strong supporter of this ambitious project and as such, we have regular dialogues and consultations with ASEAN and its Member States, including Indonesia, as part of an ongoing process of assisting with the development of the AEC. Once fully implemented, the AEC will be a signi cant game-changer in the economic, social and industrial development of the region.
For many from Europe, ASEAN is seen as it should be: a hot bed of innovation, opportunities and possibilities. This is a very dynamic and growing region; a region that has the potential to be the key driver for growth, not just in Asia but also for the global economy. GDP growth across the region as a whole is still predicted to be above 5% for the next few years, surpassing anything that the more developed world is presently seeing; in ation rates are generally low and the governments stable. With 625 million people, and rising, there is a considerable consumer market, with, by some estimates, around 250 million people joining the consuming class by 2030. And when that population dynamic is coupled with exceptionally high rates of urbanisation, good and improving education levels, and the relative youthfulness of much of the region, the attractions for business are obvious.
Add on to these factors both the exceptional geographical location of ASEAN, slowing growth rates in China, and the forward looking trade policies of many of ASEAN’s Member States, then it is clear that ASEAN remains a very attractive place for businesses to invest and grow.
Indonesia sits at the heart of ASEAN: its biggest economy (at 40% of ASEAN GDP), biggest population (over 255 million people) and potentially a key driver for growth in the region.
It is, therefore, very welcome that the European Commission believes there is su cient momentum within Indonesia for opening up for more international trade and investment for formal negotiations on the Comprehensive Economic Partnership Agreement to have been launched. We will be watching the rst round of negotiations in early 2017 with close interest.
Europe and European business continue to signal their support and belief in ASEAN. The second annual EU-ASEAN Business Sentiment Survey, released in September 2016, rea rmed the ASEAN region’s position as a bright spot in the global economy and a focus for European investment in the year ahead. At a time when surveys in some other Asian markets show companies taking a more cautious approach, European businesses in ASEAN overwhelmingly expect their pro ts to grow and their operations to expand over the medium term. Nearly two- thirds expect their ASEAN revenues to grow
in importance relative to worldwide revenues over the next ve years. More than two-thirds of respondent companies are planning to expand operations and increase employment in ASEAN over the next ve years, good news for jobs and investment.
Europe remains the prime external source of Foreign Direct Investment funds for ASEAN and the region’s second largest trading partner. There is a clear, mutually bene cial trading and diplomatic relationship between Europe and ASEAN, and between Europe and Indonesia; a relationship that the EU-ASEAN Business Council fully expects to continue to develop and grow as the AEC is implemented, as the importance of ASEAN to the world economy continues to be recognised. We hope that for next year, with the 50th Anniversary of ASEAN and the 40th Anniversary of EU-ASEAN relations, further strides can be taken to deepen and enhance the relationship.