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The enactment of the ASEAN Economic Community is an opportunity as well as a major challenge for Indonesia, especially in improving the economy
Since December 31, 2015, the ASEAN region is united by a community that aspires to create a free market in Southeast Asia to attract foreign investment. The entry of foreign capital into the region is expected to create jobs, encourage economic integration, and improve the welfare of the population in the region. The ASEAN Economic Community (MEA) supports the development of human resources and the recognition of professional qualifications particularly in certain areas of work such as doctors, nurses, A key feature of the MEA is the presence of a single market and production base and equitable economic development throughout the region. This concept is applied on the basis of the EU example that reforms economic policy in the region, although ASEAN does not fully apply the concept of the EU and leaves independence in some respects such as the monetary policy of each member country.
How is the impact of the implementation of the ASEAN Economic Community on improving Indonesia's economy? With the free market, Indonesia must be prepared to face the competition among member countries whose frontier movements are fading. In order to face this, the government must create strong regulation to create a healthy business competition space and also ensure the preservation of our national interests. The policies taken by the government will be the key to our victory in the midst of increasingly fierce competition.
At the HSBC Economic Outlook 2016 event entitled "ASEAN Economic Community: Indonesia to Punch Above Its Weight", Thomas Lembong, Head of the Investment Coordinating Board (BKPM), described our current economic situation and its hopes and challenges. Indonesia's economic condition is predicted to improve in 2016 despite its moderate growth rate. This growth is marked by a decline in poverty rate of 9-10%, an open unemployment rate of 5.2-5.5%, stable inflation at 4.7%, and a 5.3% growth forecast next year. Meanwhile, investment realization rose 17.8% to 545 trillion rupiah in 2015, and the first quarter of 2016 which rose 17.6% by 146.5 trillion rupiah.
Government Support for Domestic Businesses to Compete at MEA
The relatively encouraging growth figures amid the world economic slowdown trend are spurred by a series of infrastructure policies and regulatory packages. In the era of President Joko Widodo, the government continues to mobilize the development of regional infrastructure in order to develop the regional economic potential that is still very open with the economic centers that are and will be developed in various islands and economic sectors such as industry, tourism, maritime, and others.
The government also realizes that we have missed some steps from Vietnam, the Philippines and Malaysia in ensuring a conducive business climate for foreign investment. This makes Indonesia relatively less competitive than those countries. Vietnam, for example, has deployed a red carpet for foreign investors like Samsung and adjusts regulations to ensure Samsung can continue to increase its investment in Vietnam. The result: Samsung is now exporting products out of Vietnam for 40 billion US dollars. Vietnam also entered into Free Trade Agreements (FTA) either bilaterally or collectively such as the Comprehensive Economic Partnership Agreement ("CEPA") with the European Union. This indirectly disadvantages us because Indonesian products entering the market and not supported by CEPA will be subject to a rate of 12-17%.
With regard to the comprehensive partnership agreement with the European Union, the Indonesian government has now completed scoping agreements that will serve as a reference in mapping trade activities between Indonesia and the European Union. Scoping, completed in April, is expected to be the basis of the CEPA agreement, which the target will be completed within 2 years. Meanwhile, Indonesia has also started discussions of free trade agreements on bilateral / Free Trade Agreements (FTA),, for example with Australia, which is expected to be completed next year. All this is to guarantee the opening of Indonesian products into the international market without any barriers in terms of tariffs.
Packages of Regulation Offered by the Government of Indonesia
In order to catch up with Indonesia from other ASEAN countries and also attract more incoming foreign investment, a series of policy reform packages have been launched since September 2015. To ensure ease of effort, the government has cut minimum procedures and requirements in opening a business in terms of capital and time. If previously there were 13 procedures that took 47 days, then the current procedure to be taken only 7 pieces that take 10 days. Type of business before there are 5 pieces is now summarized into 3 pieces only. Then other packages offered focused on wage formulation, reduced production costs, tax cuts, simplification of procedures and export costs, credit access, and investment protection.
Expectations for Industry in the MEA Era
In order to continue the momentum of good economic growth, business actors are expected to respond with a pro-active attitude in welcoming investment and business world demand to ensure the investment goes well in Indonesia. The 'Mental Revolution' in the economic field is absolutely necessary. If we can still stand by while strangers come to us to find the things they need and we just sell them, we now have to proactively seek new opportunities in business and attract investment.
Ultimately, the government's role in issuing regulations to safeguard national interests will not work without the support of the business world that moves daily in the midst of global competition. Given the synergy between government and business actors, we can turn the challenge of the MEA into an opportunity to gain profit for the betterment of Indonesia's higher economy in the future.
DAFTAR PUSTAKA
http://www.business.hsbc.co.id/id-id/article/indonesias-economic-growth-in-asean.Retrieved on October 18th , 2017
