By the end of this year, the 10 member states of the Association of Southeast Asian Nations (Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam) aim to create an ASEAN Economic Community – a single market and production base that would brings together the bloc’s 10 economies, becoming the world’s ninth largest economy, at $1.8 trillion.
A new report by Baker & McKenzie on this ASEAN integration found that multinationals are increasingly approaching the ASEAN region with a single business strategy, and 97 percent believe the ASEAN Economic Community will eventually be formed.
The new report, “Re-drawing the ASEAN Map,” highlights how more companies are expanding their investment and footprint across the ASEAN region as a result of the significant opportunities the region offers international investors, such as the rising middle class, a deeper talent pool and access to new markets.
“Although challenges remain, there is no doubt that ASEAN will take center stage in 2015 as the world awaits with anticipation to see how far the region is able to move toward integration by year end. Businesses are clearly already taking advantage of the synergies that already exist in markets across the region,” said Bruce Hambrett, Baker & McKenzie’s Asia Pacific Regional Chairman. “What businesses are concerned with now is not whether ASEAN will succeed in creating an economic community, but how they can develop strategies, and what they need to do to mitigate the risks and capitalize on the opportunities that come with integration.”
Some key takeaways from the report and ASEAN broadly:
- Of the 171 companies surveyed in the report, 76 percent of survey respondents have a strategy around the ASEAN
- ASEAN’s economy could exceed $4 trillion by 2020
- ASEAN is home to 10 percent of the world’s population and by 2018, it will be the world’s 5th largest economy
- Disparate laws and business regulations were cited by survey respondents as the main barriers to companies adopting a consistent approach to sales and marketing.
Baker & McKenzie was among the three international firms highlighted in The Lawyer’s first Southeast Asia Elite report, released in January. The report focuses on the ASEAN region’s economic growth and the firms that are best positioned to take advantage of the ASEAN integration. “Of the international firms operating in the region, Baker & McKenzie has far and away the greatest coverage,” the report said.
Learn more about our Firm’s presence in the ASEAN region.