ASEAN ECONOMIC COMMUNITY (MEA)

Supporting lecturer :

Indah Mulyasari, SE.,Akt.,M.Ak

Arranged by :

ALDA LIDYA SANI

GORAJODI ERLING SURYANGGALA

STEPHANIE

STATE UNIVERSITY OF JAKARTA

FACULTY OF ECONOMY

ACCOUNTING A

2016

FOREWORD

Praise Allah SWT who has given the grace and guidance of His mainly primarily favors

the healthy and the chance that the authors were able to complete the paper entitled "Asean

Economic Community (MEA)", the sholawat and greetings hopefully devoted to our lord His

Majesty the great prophet Muhammad SAW who made the model for people throughout the

universe.

This paper was made to fulfill the tasks subjects English. Furthermore, the authors would

like to thank profusely to lecturers Indah Mulyasari, SE.,Akt.,M.Ak.

Finally, the author realizes that many shortcomings in the writing of this paper, to the

authors expect criticism and constructive suggestions for the manufacture of paper-making to

come.

II

TABLE OF CONTENTS

Title ………………………………………………………………………………………………. I

Foreword ………………………………………………………………………………………... II

Table of Contents ………………………………………………………………………………. III

CHAPTER I INTRODUCTION

1.1. Background Issues ……………………………………………………………………... 1

1.2. Problem Formulation …………………………………………………………………. 2

1.3. Purpose Papers ………………………………………………………………………… 2

CHAPTER II DISCUSSION (The existence of the Asean Economic Community for

Indonesia)

2.1. Basic Theory …………………………………………………………………………… 3

2.2. Indonesia Opportunities And Challenges in MEA …………………………………….. 3

2.3. The Risks That Confront Indonesia When MEA ……………………………………… 4

2.4. How Confront Asean Economic Community …………………………………………. 6

CHAPTER III CLOSING

3.1. Conclusion …………………………………………………………………………….. 8

3.2. Suggestions ……………………………………………………………………………. 8

BIBLIOGRAPHY  

III

PART I

INTRODUCTION

1.1 Background Issues

Are you ready to confront the competition in 2016? We should be prepared to face the

competition in 2016? Indonesia and industry-state in Southeast Asia region will construct an

integrated neighborhood known as the ASEAN Economic Community (MEA). MEA is a form of

realization of the ultimate goal industry economies in Southeast Asia.

There are four things that will be industry MEA in 2015 which can be used as a good

momentum for Indonesia, namely:

First, industry in Southeast Asia will be used as a unified region market and production base.

With the creation of the unity of the market and production base will make the flow of goods,

services, investments, large amounts of capital, and skilled labor becomes no barrier from one

industry to another in Southeast Asian region.

Second, the MEA will be established as an economic region with a high level of competition,

which requires a policy that includes competition policy, consumer protection, Intellectual

Property Rights (IPR), taxation, and E-Commerce. Therefore, it can create a climate of fair

competition; there is protection in the form of network industry of consumer protection agencies;

prevent copyright infringement; creating an efficient transport network, secure, and integrated;

eliminating Double Taxation industry, and; increase trade with online-based electronic media.

Third, the MEA will serve as the region has equitable economic development, with priority on

Small and Medium Enterprises (SMEs). Competitiveness and dynamism of SMEs will be

improved by facilitating their access to the latest information, market conditions, the

development of human resources in terms of capacity building, finance, and technology.

Fourth, the MEA will be fully integrated to the global economy. By building an industry to

improve the coordination of member states. In addition, there will be increased participation

countries in Southeast Asia in the global supply chain through development package of technical

assistance to countries less developed ASEAN members. The first thing to do to improve the

capabilities and productivity of the industry so that not only enhancing their participation in a regional

scale, but also bring out the initiative to globally integrated.

1

From the above, it is in this paper the author will discuss "Opportunities, challenges and

risks for Indonesia with the Asean Economic Community (MEA)".

1.2 Problem Formulation

As for the issues to be discussed in this paper are the opportunities, challenges and risks

for Indonesia with the ASEAN Economic Community. This issue is taken for their ASEAN free

market in Indonesia. In this paper, the authors formulate the problem as follows:

1. What are the opportunities and challenges that could we take the MEA program?

2. What are the risk will be borne Indonesia in the face of MEA?

1.3 Purpose Papers

From the formulation of the above problems, the general purpose of this paper is to

explain the opportunities, challenges, and risks in confront the ASEAN Economic Community

that the community is able to face the global market competition. The purpose of this paper is to

be clear about:

1. Opportunities and challenges that can be used by communities in MEA.

2. Risks that confront by Indonesia in MEA.

2

CHAPTER II

DISCUSSION

(The existence of the Asean Economic Community for Indonesia)

2.1 Basis Theory

ASEAN Economic Community is a form of economic integration of ASEAN in terms of

the system of free trade among ASEAN countries. Indonesia and nine other ASEAN member

countries have agreed agreement ASEAN Economic Community (MEA).

. Formation of MEA is based on four pillars. First, make ASEAN as a single market and

production center. Second, being a competitive economic region. Third, create a balanced

economic growth, and the last pillar is economic integration into global. Unification is intended

to improve the competitiveness of the ASEAN region, encourage economic growth, reduce

poverty and to improve the living standards of ASEAN. This integration is expected to build the

ASEAN economies as well as directing the ASEAN as the backbone of the Asian economy.

With the start of MEA, each ASEAN member states should merge territorial limit in a free

market. MEA will consolidate the market every country in the region into a single market. As the

single market, the flow of goods and services that are free is a necessity. In addition to the

countries of the region are also required to free up the flow of investment, capital and skilled

labor.

MEA is a deal that has a tremendous goal but some parties are also concerned about this

deal. Free flow of goods, services, investment, capital and labor are inevitably brings its own

concerns for some parties. In this case the potential domestic market and jobs are at stake. Just

food for thought, the index of global competitiveness of Indonesia in 2013-2014 (rank 38), which

is far below Singapore (2), Malaysia (24), Brunei Darussalam (26) and one rank below Thailand

(37). On the other hand, let's see Indonesia's population of nearly 40% of the population of

ASEAN. A large market but not supported maximum competitiveness. Indonesia not to repeat

the impact of the ASEAN-China free trade. Expect an increase in the economy instead flooded

with Chinese products.

2.2. Indonesia Opportunities And Challenges in MEA

3

1.     On the trade side

According to Santoso in 2008. For Indonesia alone, MEA will be a good opportunity

for trade barriers will tend to diminish even be non-existent. This will impact on increasing

exports, which in turn will increase the GDP of Indonesia. On the other hand, emerging new

challenges for Indonesia in the form of homogeneity problems commodity bought and sold,

for example, for agricultural commodities, rubber, wood products, textiles, and electronics.

2.     On the side of Investments

This condition can create a climate that supports entry of Foreign Direct Investment

(FDI), which can stimulate economic growth through technology development, job creation,

human resource development (human capital) and easier access to the world market.

3. Aspects Employment

There is a tremendous opportunity for job seekers because it can be a lot of jobs

available with the various needs of a diverse membership. In addition, access to go abroad in

search of jobs easier and even could be without any particular obstacles. MEA also be a

good opportunity for entrepreneurs to find the best workers in accordance with the desired

criteria.

Recent research from the World Labor Organization, or ILO mentions the opening of

labor markets to bring great benefits. Besides being able to create millions of new jobs, this

scheme can also improve the welfare of 600 million people living in Southeast Asia. In

2015, the ILO specifies that the demand for professional workforce will increase by 41% or

about 14 million. While the demand for middle-class workers will rise 22% or 38 million,

while the lower level of labor increased by 24% or 12 million. But the report predicts that

many companies will find their employees are less skilled or even incorrect placement due

to a lack of training and professional education. Therefore, the authors concluded that the

opportunities and challenges of Indonesia in the ASEAN Economic Citizens are enormous.

Indonesia can obtain several advantages including increased economic growth. However, it

should be followed by improvement in the quality of human resources, and utilization of

natural resources as much as possible.

2.3. The Risks That Confront Indonesia When MEA

4

1. The competition risk will appear with the number of imported goods will flow in large

quantities to Indonesia, which will threaten the local industry in competing with foreign

products of much higher quality. This in turn will increase the trade deficit for the State

Indonesia alone.

2. Large-scale exploitation risk with the availability of natural resources by foreign companies

into Indonesia as the country with the abundant natural resources compared to other

countries. There is a possibility also exploitation of foreign companies could damage the

ecosystem in Indonesia, while the regulation of investment in Indonesia has not been strong

enough to keep the natural conditions, including the availability of natural resources

contained.

3. The employment of risk in terms of education and productivity of Indonesia is still unable to

compete with workers coming from Malaysia, Singapore, and Thailand as well as the

industrial foundation for Indonesia alone makes Indonesia is ranked fourth in ASEAN.

According to Media Indonesia, Thursday, March 27, 2014, with the market for goods and

services freely would result in foreign workers to easily enter and work in Indonesia resulting

labor competition increasingly fierce in the field of employment.

When MEA applies, in the field of employment there are 8 (eight) professions who have

agreed to be opened, ie engineers, architects, nurses, surveyors, energy tourism, medical

practitioners, dentists, and accountants This is what will be a new test for the world's problems

employment in Indonesia because each country must have been prepared in ketanagakerjaannya

in the face of the MEA. How about Indonesia? In order for national security by keeping in view

the opportunities and face the challenges of the Indonesian nation in the era of the MEA will be,

particularly on the readiness of the Indonesian labor indispensable concrete steps in order to

compete against the foreign worker.

On the other hand, with the MEA, it will spur the growth of investment from both outside

and inside the country so that it will create new job opportunities. In addition, Indonesia will be

able to looking for jobs in other ASEAN countries with relative rules will be easier with the

MEA is because with the delay in the national economy at this time and based on data from the

Central Statistics Agency (BPS), the number of unemployed per February 2014 compared to

February 2013 only decreased by 50,000 people. In fact, when you see the number

5

unemployment last three years, by February 2013, unemployment 440,000 people, while in

February 2012 decreased 510,000 people, and by February 2011 decreased by 410,000 persons

(Koran Sindo, Tuesday, May 6, 2014). Therefore, the presence of MEA is expected to reduce

unemployment because it will create new jobs and absorb the existing labor force at this time to

enter into the job market.

For that, the authors concluded that the risks that will arise in the AEC is the competition of

local industry with foreign industries, exploitation of natural resources by foreign countries, as

well as local labor competition with foreign workers are more qualified.

2.4. How to confront the ASEAN Economic Community

Many ways at once in preparation for the ASEAN Economic Community (AEC) in 2015.

It is also a challenge for the true mindset and spirit of the government and economic actors

Indonesia is still as usual.

1. According to the economist of the Indonesian Islamic University (UII) in Yogyakarta Edy

Suandi Hamid, “Governments and economic actors should be more offensive the ASEAN

Economic Community in 2015 by expanding the market for goods, services, capital,

investment, and labor markets. The presence of MEA should be seen as an increase in the

Indonesian market to more than double, from 250 million to 600 million," he said. With the

mindset and spirit as it was, he hoped Indonesia could reap optimum benefit from MEA. The

economy must be driven faster growing , expansive, and competitive, not vice versa.

2. According to the senior diplomat Makarin Wibisono also reminded that in the face of AEC

2015, Indonesia needs to pay attention to the growth and development of the services sector.

"The liberalization of the services market would be beneficial for Indonesia in the dynamics

of MEA," said Makarim seminar Indonesia-China Friendship Association in Jakarta, some

time ago. According to him, the liberalization of services market the benefit of enhancing the

quality and determine the cost of fairness for workers so that later increase the

competitiveness in the industrial sector. Efficient services market, according to Makarim,

will increase consumer choice, productivity, competition, and the opportunities for

development of new services sectors. "If there is inefficiency, the negative impact on

productivity, innovation, technology distribution, and hinder the achievement of optimal

growth," said Indonesian Ambassador to the United Nations (2004--2007) this.

6

3. According to the rector of the University of March (Solo) Ravik Karsidi one UNS

preparation is to prepare human resources (HR) with the hard skills and soft skills. In terms

of hard skills, UNS prepare the curriculum so that students are able to compete with

graduates of foreign universities , Meanwhile, in terms of soft skills, UNS equip its students

with spiritual and mental preparation through training spiritual quotient (SQ). The program is

followed by soft skills training at the faculty level. Among the training it is about leadership,

communication and language skills. So can the authors conclude, to address the challenges

and risks that might occur in the AEC can be done to equip themselves with knowledge,

instill a love of the product in the country, as well as sharpen soft skills and hard skills

society.

There are 6 Ways Confront the Asean Economic Community (MEA):

1.     Human Resources (HR)

HR required to be more creative, innovative, fast and able to compete. Indonesia's human resources

are challenged to be more competent in the face of free market MEA.

2.    The Infrastructurer

These points need to be prepared to support the competent human resources. Without good

infrastructure and memadahi, HR performance will be hampered.

3. Language

Tools for conveying information is the language. Therefore, we are required to bias a foreign

language, at least in English.

4.     Product Quality

No doubt, a quality product will become widely coveted. Without a good product, it seems to

be difficult to compete. In the MEA, the competition has been ascertained very tight.

5.     Product Quantity

If the quality of the product are met, lived thinking about the quantity of the product. How

many products are produced bias, it should also be prepared in facing a free market MEA.

6.     Sustainable Products

If the product quality and quantity requirements are met, the next task is how the product or

continue an ongoing bias. Why? Because of the absence of continuity, we're going out of

business because consumers immediately switch to another trader.

7

CHAPTER III

CLOSING

3.1. Conclusion

With the presence of this MEA event, Indonesia has the opportunity to take advantage of

economies of scale in the country as a base gain. However, Indonesia still has many challenges

and risks that would arise if the MEA has been implemented. Therefore, the professional risk is

expected to be more sensitive to the fluctuations which will occur in order to anticipate emerging

risks appropriately. In addition, the right collaboration between the state authorities and

businesses is needed, both physical infrastructure and social (laws and policies) needs to be

addressed, as well as the need to increase the capability and competitiveness of the workforce

and companies in Indonesia. Do not let Indonesia just be spectators in their own country in 2015.

3.2. Suggestion

In accordance with the above conclusions, the authors formulate suggestions in this paper

as follows:

1. Should the government to disseminate to the public about the program of the ASEAN

Economic Community.

2. Governments pay more attention to SMEs in order to compete with the international market.

8

BIBLIOGRAPHY

1. http://www.crmsindonesia.org/node/624 downloaded on 29 September 2016

2. http://ekonomi.kabo.biz/2014/08/masyarakat-ekonomi-asean-mea.html downloaded on 29

September 2016

3. http://www.pikiran-rakyat.com/node/303163 downloaded on 29 September 2016

4. http://news.okezone.com/read/2014/09/26/373/1044892/cara-uns-bersiap-hadapi-mea-2015

downloaded on 29 September 2016

5. https://ragilmujiono.blogspot.co.id/2016/03/makalah-mea-masyarakat-ekonomi-asean.html

downloaded on 29 September 2016

9