Entering ASEAN Economic Community (AEC) 2015, regional economy has yet to register stable growth. In fact, some economies in the region are showing signs of increasing vulnerability arising from weak economic structure. The economic situation in ASEAN region in the quarter II-2014 is a portrayal of an economic that has mixed bag of optimism interspersed with some dose of pessimism. Some key countries in the region such as Malaysia, Philippines, Thailand, Singapore and Vietnam, despite continuing to fluctuate over time, have succeeded in registering economic growth that exceeds the expectations. Meanwhile, Indonesia as the major engine of regional economy shows signs of weakening growth as are Brunei Darussalam, Laos, Cambodia and Myanmar.  They are still bedeviled by issues that relate to economic fundamentals such as the structure of the economy that suffers from sufficient diversification and rising disequilibrium that characterizes government revenue and expenditure. Consequently, economic growth which has been achieved has been short on quality which has contributed to economic contraction. Such a situation is reflected in the continuing economic vulnerability of the regional economy in the lead up to AEC 2015 amidst conditions in the world economy that has yet to achieve strong and sustainable economic growth.
Various challenges continue to bedevil regional economy in the lead up to AEC 2015. The challenges are attributable to among other factors international phenomena as well as regional factors such as the impending plan by United States Central Bank to raise interest rate by about 100-115 basis points which poses the danger to reverse the flow of capital which had flooded emerging markets back to United States in 2015, global economic situation which continues to be anaemic as reflected in the current account positions of many countries that are still in deficit, and deficit on government revenues and expenditures (budget) that exceeds 3 % in some countries in the region. Besides, a number of challenges that relate to domestic policy such as impeding plan by the government to rationalize prices of subsidized fuels in Indonesia and Malaysia, the impending plan by Malaysia to implement a new Goods and Service Tax (GST) policy in 2015, proposal of raising Value Added Tax (VAT) by 10% and salaries of civil servants by 8% in Thailand in 2015, and domestic political instability that continues to afflict Cambodia and Thailand. The above issues have the potential to derail efforts of countries in the region to achieve economic growth targets in the lead up to AEC 2015 which will come into force late 2015. read more

As the incoming of ASEAN Economic Community (AEC) 2015, a pressure emanating from the global economy is still overshadowing economies in the region. Since The Fed considers the US economy already gain their momentum of stability, it then decided to implement the tapering off policy which constitutes a restrictive monetary policy. Consequently, the policy ‘dries up’ capital flow from the US to ASEAN economies, which in turn has led to deeper depreciation of local currencies that has been experienced over recently (Indonesian Rupiah exchange rate is expected to hover around a new equilibrium level). Meanwhile, European Union which has to a certain extent been able to overcome the worst part of the crisis is still accompanied by the variation of economy performance among economies in the region. Economic growth in European Union has yet in turn support domestic consumer demand growth for global goods, including ASEAN products. While China, as the prominent trading partner for ASEAN economies is currently undergoing ‘cooling’ phase of growth, impacting on the performance of international trade of ASEAN economies.
National Instability is becoming formidable challenge in affecting economic performance in ASEAN economies. Instability that happened in ASEAN economies takes into various forms such as political challenges, economic challenges and security challenges. The impact of natural disaster that struck the Philippines in 2013, the removal of various subsidy schemes and adoption of various social security policies in region economies, political transitions that is underway in Indonesia, political crisis that occur in Thailand, implementation of sharia law in Brunei Darussalam, open military conflicts between Viet Nam and China, disputes over Islands in South China Sea between China and six member nations of ASEAN and the slow pace of infrastructure development are some of the examples. Some of the examples cited above attest to the fact that the region’s uncertainty will be a future serious challenge that ASEAN economies will face if they are seriously aiming to maintain the economic momentum that is currently underway. National stability is an essential aspect for ASEAN economies to keep global investor interest in investing into the national manufacturing sector. Nurturing political stability, economic stability and global public confidence is an important paperworks for ASEAN economies amidst various challenges that are rooted in the increasingly intensive national instability.
Maintaining competitiveness amidst global uncertainty and domestic instability is crucial for the region toward AEC 2015. Competitiveness is vital to ensure that economies in the region have requisite readiness to enter AEC 2015. Amidst various challenges, both external and internal,  the government must have the ability to enhance and even building their economies competitiveness so that when the AEC 2015 take into force, every parts of the society have the ability and capacity to reap the attendant benefits. read more

In general, as the year 2013, came to an end, economies in ASEAN (Association of South East Asian Nations) economic region were able to register slower economic growth hence have not yet to reach their full potential. Sub optimal regional economy, was largely attributable to the performance of Indonesia and Thailand in 2013, which are key players in the region, which fell below the level achieved in 2012. Based on year on year growth, in 2013, Indonesia and Indonesia registered economic growth of 5.8% and 2.9%, respectively, which was lower than 6.2% and 6.4%, in 2012, respectively. Such a situation is cause for concern considering the fact that one of the engines of growth in Asia, ASEAN only registered anaemic growth of 5% over the last decade, which falls far short of economic potential amidst formidable economic challenges associated with the formation of ASEAN Economic Community 2015. read more