Tapping Into AEC's Free Flow Of Resources
What would be the impact of an Asean Economic Community in 2015 on your industry? How is your organization gearing up to ride the market opportunities?
The impending Asean Economic Community is an exciting time for the 10 nations involved. Not only does it allow us to work as a single market and become more competitive, but it will enable the region to act together with the global economy combining 600 million people divided by various languages, religions, political agendas and economic standings.
Since the global economic crisis, investors have looked to Asia - which remained relatively unscathed - as an investment haven. For both international and local investors there will be rewards as the anticipated economic growth and integration of capital markets will help generate higher yields and increased capital appreciation on real estate investments.
The Asean Economic Community will most certainly give businesses a number of advantages to drive forward with future development plans. For instance, for Castlewood Group as a property developer we should see a considerable reduction in the price of construction equipment, and transportation, labour and transaction costs. At the same time, there will be an increase in overseas investment into the region as investors try to capitalise on the rise of South-east Asia. Increased competition across the market will drive productivity, which should also help to drive down costs.
The newly formed community will also present us with more opportunities to further expand our operations into neighbouring countries. While there will be a number of development opportunities for us, we must also take note that the free market will allow skilled labour to move freely across markets. This means that while we will have access to a larger pool of labour, we might also lose some of the skilled workers we have come to rely on.
It is vital that all potential impacts, both positive and negative, are assessed and contingency plans put in place prior to the launch of the community. It is not only the respective governments' responsibility to identify the impact but also for each individual firm to assess the potential implications on their business. The introduction of the community has long-term benefits but its implementation will not be without teething problems; we have to remember that there are 10 different countries, representing different cultures and attitudes. Resolving internal conflicts or difficult issues will challenge the unity of the community, but we must remain vigilant and open-minded to ensure that we tackle them in the best way we can.
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