2015 has been a year of high expectations and of disappointment in Southeast Asia. Rarely has the economic and strategic importance of the region been as apparent. As China’s economy is transitioning towards ‘a new normal’ marked by lower growth, investors have looked to ASEAN as both an alternative and a complementary market to China.

Hopes have centred on the ASEAN Economic Community (AEC), which is being inaugurated in late 2015. The bold language of ‘a single market and production base’ and of the launch of an economic community implies a change in the way business will be done in Southeast Asia. The reality is slow and incremental progress.

There is already a free trade regime for most goods. Progress has been slower on the more difficult issues of non-trade barriers, trade in services, financial services integration, customs harmonisation and the movement of labour. The AEC will not be raising the curtain on any radical change.

… John Pang is a Senior Fellow with the S. Rajaratnam School of International Studies (RSIS), Nanyang Technological University, Singapore.