INDONESIA READINESS TO PARTICIPATE IN ASEAN ECONOMIC COMMUNITY (AEC) 2015

Indonesia challenges and obstacles in implementing the principles of the AEC 2015

Through the establishment of AEC, a major bargaining position of ASEAN in the global economy becomes more robust. Through the free flow of investment (Single Market), the issue of funding imbalances in ASEAN countries are expected to overcome, by strengthening the bargaining position of ASEAN as an integrated economic community expected foreign direct investment (FDI) will be channeled into ASEAN in which all members can feel the benefits and is not only part of the country only if each move itself on behalf of their respective countries.

In the case of seize the incoming FDI to ASEAN as an integrated economic community of the future, Indonesia must be willing and able to fix the system laws and regulations related to foreign investment and other factors into consideration for investors. For example national security factors, will guarantee the business climate, and protection for fund investors who enter. The problem that still appears in the planting of FDI into ASEAN countries is due to a number of factors constrained the more national law protecting local investors. Indonesia faces a dilemma about this, where domestic demand over domestic investors given the opportunity on behalf of nationalism while the need for FDI and the commitment of the AEC will also need to be run. Foreign investment law in Indonesia is still considered to have "invited" to foreign investors in the country while the Act is considered to be detrimental to national business and ignore the role of government in protecting the nation's assets.
The challenge for Indonesia in the unpreparedness of the AEC include economic policies that support, legislation and labor and business actors are not yet ready for ground water in quality in grabbing the opportunities that exist and compete head-to-head competition with other countries with better economic conditions stronger than Indonesia. Not only that, Indonesia next challenge is how to prepare businesses to compete in the ASEAN single market. The problem is, business people, especially entrepreneurs of small and medium scale enterprises (SMEs), to be quite difficult to make efficiency, improve quality, while differentiating the product if you are still using obsolete production machinery. Disbursement of additional capital is more likely to increase the scale of production is necessary in order to produce products with production costs are getting cheaper. Here, the role of government is needed to stimulate the domestic industry

Concerns had feared from the AEC is the future of Indonesia will be attacked by a lot of labor, foreign workers are more qualified, excessive foreign capital contribution to the economy or the entry of foreign products are cheaper with better quality conditions in the country while our workforce many of the uneducated and untrained, weak local businesses in the capital and the quality of business management and domestic products less competitive, so consequently we will not be able to realize the dream become" masters in their own country." the problems that also emerged from the AEC is the possibility the national interest that are preferred in this unification process, so there will be a preliminary interests of each country compared to an agreed common interests for the betterment of the community.

Indonesia's strategic move to support the optimism that is expected to be done, especially in the era of the AEC that begins in the AFTA in 2015, then coordination between the institutions and bodies concerned should be getting better, effective and efficient, something that is currently trying embodied Indonesia as one of its preparation. Regulatory reform, strengthening of macro and micro industries, improving the quality of human resources, strengthening of capital, and reform the existing bureaucracy is a government task that must be resolved before 2015. The task is not easy but it can provide answers to the optimism that convinced the government of Indonesia will be able to play a major role in the AEC. Indonesia's position is quite strategic in ASEAN, and is one important pillar of ASEAN's a good reason to boost the performance of government in the face of AFTA.

AEC which will certainly strengthen the regional economy is expected to increase Indonesia's competitiveness in international markets, other than that it would give Indonesia a good economy targets to be achieved as soon as the growing world economy. Competitive regional economy will be a proof for Indonesia, whose economies are to date still proved quite resilient to face the economic storm that could hit the Indonesian economy.

Indeed if you look further, the Indonesian economy is likely to be able to face the AEC in 2015, but it all remains a matter that deserves serious scrutiny for Indonesia if they do not want this to be a boomerang for the Indonesian economy will be. Because of Indonesia's economy stable despite experiencing good growth and still has weaknesses that gap is still wide open, especially regarding the issue with the economic bureaucracy that tends to complex and difficult. It has long been the bottleneck of the Indonesian economy, which until now could not overcome the government of Indonesia.

If it is declared ready, Indonesia's actually ready, but did some fairly fundamental changes are still needed to strengthen the readiness of Indonesia, because it's an impossible deadline postponed again as well as the participation of Indonesia which was agreed upon, then the current government must focus on revamping a few things that can interfere if confidence and optimism of Indonesia in its readiness to follow the AEC in the form of AFTA in 2015 was.
In closing, the AEC can indeed be said to be a discourse potential for uniting the economies of nations in the ASEAN region. But in terms of readiness of the application, the AEC also still invite a lot of doubts, especially if we look at empirical data in this field during the trading activity in this area. Unlike the EU, trade between ASEAN countries is relatively low. Economic integration among ASEAN members was running slow. Statistics of trade and intra-ASEAN investment has not shown significant development. Export and import to other ASEAN countries in 2006 only about 25%. Indonesia is much lower, approximately 23.4% of total exports to ASEAN countries. The low intra-ASEAN trade show economic dependency among the ASEAN countries is not large.

Trade mechanisms that existed during this refers more to the provisions of liberalization of the ASEAN-5 is the MFN ( Most Favored Nation ), which contained the WTO. Without the complicated bureaucracy, MFN would be favored by the pillars of the ASEAN AFTA like this than the AEC. Finally, the willingness and readiness to develop the potential of regional economies in order to pursue the gap with other regions may be keys to the successful implementation of this AEC. Indonesia itself as a part of the community and an important pillar of ASEAN should try to prepare ourselves for the quality can take advantage of it and compete with neighboring countries in ASEAN so that fear will "compete" in their own country due to the formation of the AEC did not happen.