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ASEAN co-operation and its benefits for the Indonesian economy
Published on 7 Sep 2023
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ASEAN co-operation and its benefits for the Indonesian economy
In a complex and diverse geopolitical scene such as we see today, cooperation between countries is becoming increasingly important. Countries have close international relations through various types of cooperation, including in the field of Economics. ASEAN is one form of cooperation between countries of which Indonesia is a member. What are the goals of ASEAN and how does Indonesia benefit from joining ASEAN, especially in the economic field? Find out more here.
What is ASEAN?
Before reviewing further, it would be nice to first explore what ASEAN is. ASEAN (Association of Southeast Asian Nations) is a Southeast Asian regional organization made up of ten member countries in the region. The organization was established on 8 August 1967 through the Bangkok Declaration.
The current member states of ASEAN are:
Brunei Darussalam
Cambodia
Indonesia
Laos
Malaysia
Myanmar
Philippines
Singapore
Thailand
Vietnam
ASEAN's main objective is to promote economic, political, social, and cultural cooperation and integration among its member states. The organization strives to create stability and peace in the Southeast Asian region and improve the welfare of its people. One of the most active ASEAN member states is Indonesia, and this cooperation has brought many benefits to the Indonesian economy.
Some of the key characteristics and foci of ASEAN
Political and Security Pillar: ASEAN seeks to maintain peace and stability in the region through dialogue, preventive diplomacy, and peaceful resolution of conflicts. These principles are reflected in "non-interference" in the internal affairs of member states.
Economic Pillar: One of ASEAN's major achievements is the establishment of the ASEAN Economic Community (AEC). It aims to create a single market and larger production base in the ASEAN region, increasing trade and investment among member states.
Social and Cultural Pillar: ASEAN also cooperates in education, culture, and social welfare to improve relations between communities in the region.
Environment and Sustainability Pillar: ASEAN is committed to safeguarding the environment and addressing issues such as climate change and the sustainability of natural resources.
ASEAN Economic Cooperation
One important aspect of ASEAN cooperation is the establishment of the ASEAN Economic Community (AEC). The AEC aims to create a single market and a larger production base in the ASEAN region. Some of the benefits for the Indonesian economy in this context are:
Increased Trade
The AEC opens up greater trade opportunities between ASEAN countries. This helps Indonesia to increase exports and imports of goods and services. In the long run, this can result in stronger economic growth.
Foreign Investment
ASEAN is also becoming more attractive to foreign investors due to the larger market. Indonesia has attracted significant foreign investment in sectors such as manufacturing, technology, and energy, which benefits economic growth.
Infrastructure Development
Through ASEAN cooperation, Indonesia has received support and investment in regional infrastructure development, such as better transport and logistics networks. This helps improve connectivity and economic efficiency.
Increased Business Opportunities
ASEAN has more than 600 million people, making it a huge market. This cooperation provides opportunities for Indonesian companies to expand their business to neighboring countries more easily. It also opens the door for local business growth and increased competitiveness at the regional level.
Improving Access to Resources
Indonesia is a country rich in natural resources, such as oil, natural gas, and other commodities. Through ASEAN cooperation, Indonesia can more easily access regional markets and secure partnerships in the development and exploitation of natural resources. This provides additional revenue for the country and enhances economic sustainability.
In addition to the main objectives that lead to economic benefits, ASEAN Cooperation also has other objectives such as Security, Education, and Culture:
Social and Cultural Cooperation
ASEAN also facilitates cooperation in social and cultural areas, such as education, culture, and tourism. This can enhance understanding between people in ASEAN member states.
Environmental and Sustainability Issues
Indonesia can participate in joint initiatives to safeguard the environment and address sustainability issues in the region, including climate change and rainforest conservation.
Enhancing Security and Stability
Through ASEAN, Indonesia and neighboring countries work together to address security issues and conflicts in the region. This helps to create stability and peace which is vital for Indonesia's economic growth and national security.
Conclusion
ASEAN cooperation has brought many benefits to the Indonesian economy. By forming the ASEAN Economic Community, Indonesia has increased trade, investment, and economic growth. In addition, greater business opportunities, access to resources, and economic stability and security are some of the other benefits. Indonesia must remain committed to making the most of this cooperation to achieve sustainable economic growth and the welfare of its people.
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