TEMPO.CO, Jakarta - Economist from the Gadjah Mada University (UGM) Yogyakarta predicted that there will be an increasing number of unemployment as the ASEAN Economic Community (AEC) comes in to effect by the end of December 2015. The AEC will open access for Southeast Asian countries to trade their goods in other countries in the region, increasing competition.
Tri Widodo, Head of the Economic Science Major at the UGM Economic and Business Faculty said that the AEC will not only promote the flow of goods and services among Southeast Asian countries, but also professional laborers, including doctors, nurses, lawyers, accountants, and architects. Competition in the labor market will continue to intensify. In Yogyakarta, according to Tri, one of the most affected sectors will be the tourism sector.
Tri said that hotels and restaurants will be easily owned by foreign investors, such as from Singapore or Thailand. The investors will then determine their business policy including on the labor aspect. Laborers that are considered to be lacking in education and skills will likely be replaced. "As a result, unemployment will increase," Tri said on Tuesday, December 29, 2015.
Tri added that the AEC will also affect the informal sector, such as small-medium enterprises (SME). Indonesian SMEs, according to Tri, will have to compete with SMEs from other Asian countries. Tri added that Indonesia was late in preparing for the AEC compared to other countries such as Thailand. Thailand, as Tri explained is better prepared because the country has constructed infrastructures to accommodate incoming foreign capital.
In addition to increasing unemployment, Tri said that another effect of the AEC will be increasing number of smuggled goods, such as electronic goods and textile products.
Prasetyo Atmosutidjo, Chief of the Yogyakarta SME Community said that most SMEs in Yogyakarta are concerned about the goods coming in from Thailand, the Philippines, Vietnam, Malaysia, and Singapore. "If the domestic market is not protected, it will be overrun [by foreign goods]," Prasetyo said.
SHINTA MAHARANI
