Marina Bay, Singapore (Source:telegraph.co.uk)
Singapore (VNA) – The formation of the ASEAN Economic Community (AEC) at the end of this year could create massive motivation for the Singaporean economy, experts say.

HSBC Singapore’s Chief Executive Guy Harvey-Samuel said if the AEC is implemented well, Singapore’s GDP would be 9.5 percent higher by 2030, compared to if there was no such community.

However, the impact of the AEC on Singapore businesses is likely to be gradual.

Glenn Maguire, ANZ Research’s Chief Economist for the South Asia, ASEAN and Pacific region explained ASEAN leaders aimed the AEC would become fully operational by 2025.

He acknowledged that in the short term, the AEC would spur more Singapore businesses to move production of lower-value goods to countries where labour is cheaper. Hence, the AEC’s creation brings about more awareness of the opportunity to expand abroad, and will create more standardization of customs procedures, making it easier to ship goods and encouraging outsourcing of production processes to other countries.

Besides, Harvey-Samuel said the formation of the AEC will also result in more cross-border movement of services and investment, leading to the expansion of financial products and services in the region. It could also further consolidate Singapore’s position as a financial hub.


The pace at which Singaporean companies move abroad would increase slightly in the next two years, and accelerate more in 2018 and 2020.-VNA