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The Readiness of Indonesia to Face ASEAN Economy

The Association of South East Nations (ASEAN) was an Asia
south east nations organization that founded on Bangkok, 8 th August
1967 by their founding fathers: Indonesia, Malaysia, Philipines,
Singapore, and Thailand. After some decades, they have a positive
growth and development in various sector in each country, for
example Thailand known as the largest rice exporter country in the
world, Singapore known as small city that attracted so many foreign
investor because of their innovation, etc.
After economic crisis that occurs in ASEAN member, they
gather on Bali 9th ASEAN KTT (October 2003) that discuss about
problem solver of economic crisis. From thats meeting, they agreed
to form a ASEAN Community in politic, social-cultural, economy that
known as Declaration of ASEAN Concord II or Bali Concord II that has
mission to actualize ASEAN 2020 Vision that declared by ASEAN
member on Kuala Lumpur, 1997. In 12th ASEAN KTT that held on
Philipine, January 2007. They decide to accelerated AEC 2020 into
AEC 2015 by signature of Cebu Declaration on the Acceleration of the
Establishment of an ASEAN Community by 2015. Then, the progress
of Bali Concord II amd Cebu Declaration directed into ASEAN
Community that focus on economic activity in ASEAN region based on
AEC Blue Print.
AEC Blueprint was a guide for ASEAN member to hold AEC
2015, there was 4 principle of AEC Blue print, 1) ASEAN as a single
market and single production-based, supported by elements of the
free flow of goods, services, investment, and educated labor, 2)
ASEAN as a region with high economic competitiveness, with
elements of competition rules, consumer protection, intellectual








commerse, 3) ASEAN as a region of equitable economic development

with elements of the development of small and medium enterprises,
especially CMLV nations (Cambodia, Myanmar, Laos, and Vietnam), 4)
ASEAN as a integrated region into the global economy with a coherent
approach in the external economic relations in the region and
increase participation in global production networks.
Based on the explanation about AEC purposes and also
principle of AEC Blue print, we can assume that the readiness of
Indonesia to Face AEC 2015 has 2 aspects, they are deficiency and
strategic steps to support Indonesia in AEC era.
In deficiency aspect, we should pay attention about 3 main
problem of Indonesia to face AEC 2015. First, lack of educated labor
(low level of human resources). BPS (Badan Pusat Statistik) showed
the composition of Indonesian labors dominated by people who only
had elementary school education or 46.95% from all of labor. Causes
of this phenomenon, according Kamar Dagang dan Industri data, in
2013 each 1% of growth population was only able to absorb 180,000
labor or only about 45% of the ideal projection, it means the rate of
Indonesian unemployement still high, this fact also supported by BPS
Data (Badan Pusat Statistik) with the rate of unemployement increase
from 5.92% in February 2013 into 6.25% in August 2013. In AEC era
that allows free flow of educated labor, Indonesians labors should
increase their competency to compete with foreign labor.
Second, low level of Infrastructure, include use of technology in
activity. Nowadays, we can see different range of good prices
between Java, Sulawesi, and also Papua island. For example, the price
of Premium in Java was normal about Rp 6,600.00, but the price of
Premium in eastern Indonesia region like Sulawesi and Papua reach
high level until Rp 70,000.00 that caused by low level of infrastructure

in every place in Indonesia that only focus in Java. This fact supported
by the World Economic Survey that put Indonesia in rank 78 of 100
country based on their level and competitiveness of infrastructure,
there was 5 country in ASEAN that have a level of infrastructure
better than Indonesia, they are Singapore, Malaysia, Thailand,
Philipine, and Vietnam. If our goverment not concern about this
problem, this condition will weaken the competitiveness to attract
foreign investment and also make good price at high level.
Third, low level of UMKM (Usaha Mikro, Kecil, dan Menengah)
competitiveness. Almost of Indonesian enterpreneurship was only
micro scale that only have little capital and human resources. In
globalization era, we can find the foreign product in some modern
market easily than local product that produced by traditional UMKM.
Bappenas (Badan Perencanaan Pembangunan Nasional) suggests, the
competitiveness of UMKM in Indonesia was very low, only 3.5 of the
score 1-10 compared to other ASEAN countries. One cause this
condition was the lack of innovation as one of the indicators of
competitiveness assessment and lack of government support. The
lack of innovation can be seen from the record World Intellectual
Property Organization (WIPO), a global innovation index of Indonesia
ranks only 100 (out of 141 countries), previously was ranked 99 (out
of 125 countries), under the other ASEAN countries, such as Thailand
(57) , Brunei (53), and Malaysia (32). This condition must be solved if
our country want to survive in AEC era.
Based on 3 main problem that causes deficiency for Indonesia
facing AEC era, we can formulate 3 strategic steps must be completed
by our government. First, solve education problem to increase
educated labor because one way to improve the quality of human
resources is through education. In order to support this problem,
government through Wajib Belajar 9 Tahun increased the unit cost
of BOS (Bantuan Operasional Sekolah) at the level SD / MI from Rp

397,000.00 (district) and Rp 400,000.00 (the city) in the period 20092011 to Rp 580,000.00 / student / year in 2012, which covers 31.32
million students. As for the SMP / MTs unit costs increased Rp









710,000.00 / student / year, which includes 13.38 million students. In

addition, in order to provide better education, government also built
education infrastructure in several region in Indonesia, especially
Eastern Indonesia. Our new government with Mr. Jokowi as president
will starting a new program Wajib Belajar 12 Tahun for every
student in June 2015.
Second, increase economic competitiveness through MP3EI






Indonesia). On May 2011, government launched MP3EI program that

embodies transformation of national economy based on strong
economy, an inclusive, quality, and sustainable of growth ecomonic
orientation. Since MP3EI launched until the end of December 2011
has been implemented 94 projects of the real sector investment and
development infrastructure with a total investment value of Rp 499.5
trillion, which consists of the value of the investment Rp 357.8 trillion
in real sector (56 projects) and infrastructure Rp 141.7 trillion (38
project), which will be financed by the Government of Rp 71.6 trillion
(24 projects) worth Rp 131.0 trillion (24 projects), worth Rp 168.6
trillion private (38 projects) and through the Public Private Partnership
/ PPP worth Rp 128.3 trillion (8 projects). In the result, in 2011 the
Indonesian economy grew by 6.5%, higher than previous year (6.2%)
with investment and industrial processing as driving.
And the last, development of UMKM based on information and
communication technology. For example, through Aku Cinta Indonesia
program, was one of the movement 'Nation Branding' which is part of
the creative economic development that included in the Presiden
Instruction No. 6 of 2009. Government held this program to increase

the competitiveness local product which is competitiveness of UMKM

in Indonesia was very low, only 3.5 of the score 1-10 compared to
other ASEAN countries, actually Indonesia local product tend to be
good, but their promotion tend to be bad. So UMKM also should
improve the use of ICT, for example internet. The use of internet allow
UMKM to do integrated marketing with the goal of global markets, so
they can compete with the other contries product and very possible to
Indeed, AEC that will be held on December 31, 2015 will
certainly be an advantage for our country but also to make Indonesia
as one of the main actor in the AEC era if the government and all the
people in Indonesia are able to fix the problems as those mentioned
above or we will only be a complement in AEC era. Government as
the main actor to fix nation problems in the AEC should pause all of
the political game which is actually concerned with certain groups, do
not let affairs of the complex sacrificed only to satisfy the desires of
the political elite. Regardless of whether or not the government off
from the political game, the author invites all elements of society to
participate fix all the problems of the nation, especially in the moment
of the AEC that will happen soon in accordance with our respective
expertise. Let us make AEC moments later as a means of increasing
the contribution and usefulness spread, not as a burden moreover