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The Readiness of West Sumatra Government in Facing Asean Economic Community

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The Readiness of West Sumatra Government in Facing Asean Economic Community JOURNAL OF CRITICAL REVIEWS ISSN- 2394-5125 VOL 7, ISSUE 16, 2020 THE READINESS OF WEST SUMATRA GOVERNMENT IN FACING ASEAN ECONOMIC COMMUNITY Deswita Rosra1, An An Chandrawulan2 1Student of Law Doctor, Padjadjaran University, Bandung, West Java, 45363, Indonesia 2Lecturer Faculty of Law, Padjadjaran University, Bandung, West Java, 45363, Indonesia. [email protected], [email protected] Received: 16 March 2020 Revised and Accepted: 19 June 2020 ABSTRACT: The purpose of this paper is to find out the readiness of West Sumatra Government in facing ASEAN Economic Community, the leading sectors or potentials from West Sumatra are the proponent factors for their readiness. This research is using normative law method, with secondary data which consist of primary law, secondary law, and tertiary law materials along with data collecting by studying documents and then analyzing the data qualitatively. The research’s result shows that the main target of the purpose of ASEAN Economic Community is to push the efficiency and economic competitiveness in the region. In order to achieve these two targets, it is important to spot on the competitiveness of each country or region, moreover in Indonesia and particularly in West Sumatra, to have the leading sectors and potentials for free market in ASEAN Economic Community. City or Regency Governments have to put high interests and set the priority for the leading sectors in order to be able to compete, because the success of Indonesia in taking the opportunity of ASEAN Economic Community is determined by the ability and the competitiveness of each region. KEYWORDS: Readiness; Government; Facing; AEC I. INTRODUCTION It is the new beginning of step for the countries in ASEAN when the free-trade was starting conducted on January 1, 2010 and China joined later in AC-AFTA (ASEAN China Free Trade Agreement). This is one of the ways to encourage the economy of trade member countries, especially the economy of developed countries such as Indonesia. The free trade is one possibility that can be grabbed by Indonesia to exploit some of their industrial products to other free trade member countries. To exploit the industrial products, the quantity and quality of the products must be equal. If not so, the Indonesian products will be lost in the competition from other member countries. The least is Indonesian products must be on a par with other member countries’. Beside facing AC-FTA which has been agreed in ASEAN cooperation expected to be beneficial for both sides, Indonesia is now facing ASEAN Economic Community (AEC) free trade which was enforced by the end of December 2015 and became the new era in sensationalizing and integrating ASEAN economy. ASEAN has formed cooperation with the countries and international organizations in the world, also opened the diplomatic relation with ASEAN countries, which has 10 member countries in the community. There are three pondations (3 ASEAN communities). One of the ASEAN communities is Economy Community. In the blueprint of ASEAN community, it is giving an encouragement to reach the ASEAN economic society. To face this, Indonesian government has released Presidential Instruction No. 11 of 2011 on The Implementation of Blueprint Commitment ASEAN Economic Community[1]. Through ASEAN Economic Community, it is expected that ASEAN becomes the basic for production and shared market and also to make ASEAN become a competitive and stronger area which is able to compete to face the strength of regional economy of other regions, able to cut the gaps in economy and bring the integration of ASEAN countries to global economy [2]. 685 JOURNAL OF CRITICAL REVIEWS ISSN- 2394-5125 VOL 7, ISSUE 16, 2020 Indonesia, as one of the member of ASEAN, keeps the commitment to realizing ASEAN community through AEC, which are needed to economy growth among ASEAN countries and push the efficiency and competitiveness in ASEAN regions. Indonesia will not be a passive side in AEC and will not let to be only a market target. Indonesia has to be an important part in the regional and global production chain. The success of Indonesia in facing the opportunity of AEC is determined by the accumulation of ability and competitiveness from each regency. It is applied vice versa that the success of the regencies to get the benefit from ASEAN economy integration will be determined from their competitiveness. West Sumatra may take this as a big opportunity with good preparation and enhancement because it has many potentials, natural and non- natural. West Sumatra has the leading sectors which are able to increase the economy and welfare of its societies. Some of the sectors which are liberated trough AEC are the sectors prioritized to be developed and implemented, primarily in the current of goods, services, investment, stocks, and skilled workforce. In skilled workforce current, some of the priority sectors are doctors, expert doctors, midwifes, nurses, architects, accountants, tourism and survey staffs. One thing to be paid attention to in the implementation of ASEAN Economic Community free trade is the readiness of Indonesian government in general and West Sumatra government in specific to anticipate the positive and negative impact to industrial and trading field. The positive impact is the creation of boarder international market, meanwhile the negative impact can bee observed through the emergence of international market with more competitive, the competition between domestic and foreign entrepreneurs. There will be more impacts to be anticipated by West Sumatra government, so that it can avoid the harm to national and regional economic of the country. Based on the description above, the problem in this paper is limited to how is the readiness of the government of West Sumatra in dealing with the ASEAN Economic Community (AEC)? II. LITERATURE REVIEW The initiative to form ASEAN integration has actually emerged since 1997 at the time of the ASEAN Summit in Kuala Lumpur. The leaders of the countries participating in the Summit agreed to transform a stable ASEAN region for economic equality and high competitiveness. In the 2003 ASEAN Summit which took place in Bali, the leaders of the countries declared the so-called ASEAN Concord II for 2020. ASEAN Concord, of better know as Bali Concord II, contained an agreement on the existence of the ASEAN Economic Community (AEC) signed by 19 member countries refers to the ASEAN vision in 2020. The vision set forth in Bali Concord II contains rules for all regional organizations to maintain regional security and political, economic, and social cooperation [3]. Implementation of Bali Concord II was originally due to be implemented in 2020. In August 2006, at the 38th meeting of ASEAN Economic Ministers in Kuala Lumpur, Malaysia, participants agreed to draft the rules of implementation. The Blue print is accelerating the formation of AEC and identifying its characteristics and elements in 2015. In January 207 during the 12th ASEAN Summit, participants agreed to accelerate AEC in 2015. by transforming the ASEAN region into an area where there is a free flow goods, services, investment, and skilled labor and freer flow of capital. As a legal basis for ASEAN countries, the ASEAN Charter was drafted, for Indonesia to ratify the crater with Law No. 38 of 2008. So, in 2016 ASEAN Economic Community would be formally and effectively applied to all ASEAN countries that have agreed to the ASEAN Charter [4]. ASEAN countries proclaim the formation of the ASEAN Community. The ASEAN Community consist of three pillars [5]: ASEAN Security Community (ASC) This pillar aims to strengthen regional security and stability for development, advance political development through strengthening democratic principles, increase mutual understanding and trust between ASEAN member countries and as an instrument for Indonesia to project ideas and initiative internationally. ASEAN Economic Community (AEC) This pillar aims to improve the competitiveness and prosperity of ASEAN through the integration of the ASEAN economy. 686 JOURNAL OF CRITICAL REVIEWS ISSN- 2394-5125 VOL 7, ISSUE 16, 2020 ASEAN Sociocultural Community (ASCC) This pillar aims to promote a society-oriented ASEAN, through the participation of all components of society in the process of ASEAN integration and the development of the ASEAN community, fostering ASEAN people who care for and share one another to strengthen justice, solidarity, partnerships, and a sense of community together with ASEAN. These three pillars support the ASEAN community into a new paradigm that will move ASEAN cooperation towards a new community and identity that is more remembering. In the scheme of the ASEAN Economic Community (AEC), it has officially been in force starting December 31, 2015 or early 2016. Indonesia in general and West Sumatra in particular must move quickly to optimize the AEC, because this is not a free battle arena or the competition between ASEAN countries, but it is a collaboration of ASEAN countries as stated in the main mission of AEC. One of the main points in AEC scheme is the agreement towards a single market and production bases with core elements underlying the AEC to be developed and implemented in member countries. However, there is another important point that has been overlooked is the ASEAN road-map to work together to strengthen regional competitiveness [6]. Competitiveness is the main key to win the competition in the global market, not only in the ASEAN Economic Community. For Indonesia, especially West Sumatra, competitiveness is also a major problem where Indonesia must improve itself to face AEC and must prepare regional competitiveness from various aspects. The competition requires qualified skills to be able to compete, because the competition is not only among fellow Indonesian citizens, but we have to compete freely with other Citizen in the ASEAN region. To improve this, what is really needed is the role of the government to improve domestic human resources which are located in the world of education, both formal and non-formal.
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