This report is published by Asian Institute of Finance (AIF). AIF cannot accept responsibility for any errors or omissions or any liability resulting from the use or misuse of any such information. The views and opinions in this report may be used for information purposes only. © 2016 Asian Institute of Finance. All rights reserved. No part of this publication may be reproduced, stored in a retrieval system or transmitted in whole or in part, in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, without the prior written permission of the AIF. For more information, please contact: Asian Institute of Finance Unit 1B-5, Level 5, Block 1B Plaza Sentral Jalan Stesen Sentral 5 KL Sentral 50470 Kuala Lumpur Malaysia Phone: +603 2787 1999 Fax: +603 2787 1900 Email: research@aif.org.my Web: www.AIF.org.my GEN Y: ASPIRATIONS FOR THE ASEAN ECONOMIC COMMUNITY (AEC) TABLE OF CONTENTS 3 1.0 Foreword 5 2.0 Executive Summary 6 3.0 Introduction 7 4.0 Generation Y’s Awareness of the AEC 8 5.0 Reaching out to Generation Y 13 6.0 Generation Y’s Perceptions of the AEC 16 7.0 Perceived Preparedness for the AEC 21 8.0 Aspirations Beyond 2015 26 9.0 Conclusions 29 10.0 Recommendations 33 11.0 Proile of Respondents 37 GEN Y: ASPIRATIONS FOR THE ASEAN ECONOMIC COMMUNITY (AEC) LAOS ASEAN Member States Population 7.0 million GDP per capita $1,693 FDI inflows $0.7 billion VIETNAM Ease of doing business index 134/189 Population 51.0 million GDP per capita $1,221 Population 90.6 million GDP per capita $2,053 FDI inflows $9.2 billion Ease of doing business index 90/189 Banking penetration 31% FDI inflows $0.9 billion Ease of doing business index 167/189 Population 68.7 million Population 15.0 million GDP per capita $1,081 FDI inflows $1.7 billion Ease of doing business index 127/189 Banking penetration 22% GDP per capita $5,445 FDI inflows $12.6 billion PHILIPPINES Ease of doing business index 49/189 Banking penetration 78% Population 30.3 million GDP per capita $10,804 FDI inflows $10.8 billion Ease of doing business index 18/189 INDONESIA Banking 81% penetration Population 99.4 million GDP per capita $2,865 FDI inflows $6.2 billion Ease of doing business index 103/189 Banking penetration 31% Population 5.5 million GDP per capita $56,319 FDI inflows $67.5 billion Ease of doing business index 1/189 Banking penetration 96% BRUNEI SINGAPORE MALAYSIA CAMBODIA Banking penetration 23% THAILAND MYANMAR Banking penetration 27% Population 0.417 million GDP per capita $38,563 FDI inflows $0.9 billion Ease of doing business index 84/189 Banking penetration NA Population 251.5 million GDP per capita $3,534 FDI inflows $22.6 billion Ease of doing business index 109/189 Banking penetration 36% Source: ASEAN Regional Entrepreneurship Report 2014/15 4 4 GEN Y: ASPIRATIONS FOR THE ASEAN ECONOMIC COMMUNITY (AEC) Foreword As a result of the unprecedented economic growth in ASEAN in the last few decades and with the formal establishment of the ASEAN Economic Community (AEC), the region is emerging as one of the world’s leading economies. Taken together, the population of the ten member countries of ASEAN is greater than the European Union or North America, and the region has a combined workforce of more than 400 million. In the past ive years the GDP of ASEAN has increased faster than the global average rate and currently stands at USD 3,600 billion. ASEAN overtook China in terms of annual inward foreign direct investment in 2013, having overtaken Brazil, India, Russia and South Africa in 2009. Despite the uncertainties in the global economy, AEC economies are expected to remain very competitive, supported by ASEAN’s position as a global production hub and strong and growing domestic consumption across the region. Providing it successfully implements the AEC, ASEAN is likely to continue to grow and be an engine of future growth across Asia. The AEC is the most advanced pillar of the ASEAN community with its aspirations of achieving greater regional product, consumer and human capital integration through enhanced connectivity and the removal of trade barriers. Low public awareness of ASEAN across the region has been highlighted as a potential challenge to the successful implementation of the AEC. This report presents the indings of a survey of Gen Y1 professionals conducted in 2015 in three ASEAN member states, namely Malaysia, Indonesia and Vietnam. The study sets out to investigate awareness, attitudes and participation levels of young professionals in relation to the AEC. We hope that this report will provide useful insights for policy-makers in terms of perceptions of the AEC among young professionals in the region, especially in the absence of previous in-depth studies on this important demographic group. Dr Raymond Madden Chief Executive Oficer Asian Institute of Finance 1 5 Elma Berisha General Manager, Strategy, Policy Development and Research Asian Institute of Finance For the purpose of this study, AIF has deined Gen Ys as professionals aged between 18 and 30 years of age. GEN Y: ASPIRATIONS FOR THE ASEAN ECONOMIC COMMUNITY (AEC) Executive Summary There is room for improvement in awareness and understanding of the AEC among Gen Y professionals in ASEAN. In fact Gen Ys participating in the survey cite “lack of peoples’ understanding of the AEC” as one of the top perceived challenges in successfully implementing the AEC. Young professionals in Vietnam have the highest support for the AEC, followed closely by Indonesian professionals. The latter perceive the AEC as being twice as relevant to their career as Malaysians who are less likely to evaluate the AEC enthusiastically. This less enthusiastic perception of the AEC by Malaysian young professionals is also relected in other studies. Compared to Indonesian and Vietnamese respondents, they expect the beneits from AEC participation to be lower, view the potential impacts of the AEC to be less, and perceive a lower preparedness for the AEC. They also have lower aspirations for the AEC beyond 2015. This is despite the survey results showing that Malaysian young professionals are more knowledgeable about the AEC, as well as being more exposed to other ASEAN member states, than Vietnamese and Indonesian professionals. Overall young professionals’ sentiments and attitudes towards the AEC are generally positive and supportive. The greatest perceived beneit is making ASEAN a more compelling region to invest in. This beneit is expected to be delivered mainly as a result of the impact of greater entrepreneurship and increased innovation in goods and services. However, the study suggests that there is still some concern with the free movement of labour, especially among Malaysian professionals. Likewise, there is lower support across all groups of respondents for allowing businesses to ‘freely establish companies’ throughout the region. Given such concerns and the low levels of understanding of the AEC, potential misunderstandings may pose a challenge to the full engagement of Gen Y professionals in this economic integration process. Further research is required and this report should serve as a useful starting point. Such inclusive research will also help to ensure the needs and wants of young professionals are addressed and boost the public sense of ownership towards the AEC. 6 GEN Y: ASPIRATIONS FOR THE ASEAN ECONOMIC COMMUNITY (AEC) Introduction ASEAN member-states originally envisioned the creation of the AEC by 2020. However, during the 12th ASEAN Summit in 2007, and in the face of global and regional economic pressure, it was decided to accelerate the establishment of the AEC. As a result, the AEC was launched in Kuala Lumpur in November 2015 and this has heightened interest in and expectations for the AEC across ASEAN. The future of the AEC is now the subject of intense discussions by ASEAN governments, as well as other public and private institutions throughout the region. A crucial question remains, though, as to what extent this landmark event has caught the attention of the general public? In particular, to what degree is the next generation of young professionals and entrepreneurs across ASEAN aware of the AEC? This also raises a number of other questions. How relevant is the AEC to Gen Y professionals? What are their levels of support towards further economic integration within ASEAN? What do Gen Y professionals perceive as some of the key challenges facing the AEC and what are their future aspirations within the AEC? Finding answers to these questions is important as by 2030 over half of the 650 million people living in ASEAN will be Generation Y2. With a fast-expanding and rising middle-class and with the huge potential of a large youthful workforce, the attitudes and commitment towards the AEC of young professionals is important. This AIF study is based on a 2015 survey of Gen Y professionals in Malaysia, Indonesia and Vietnam. The research sets out to investigate awareness, attitudes and participation levels of young professionals in relation to the AEC. ASEAN’s theme for 2015 was “One People, One Community, One Vision”. However, the ASEAN integration processes have been criticised for lacking public involvement. In addition, given the current plurality of political systems in the region, it will be dificult to gauge public opinion using a direct voting mechanism as, for example, in Europe. This, therefore, highlights the importance of ‘public opinion surveys’ as a method for collecting information and grassroots’ views on regional integration. It is worth noting that this study is intended to serve as a baseline for future longitudinal research to monitor and analyse the trends, opinions and engagement of Gen Y professionals towards the AEC. 2 7 ASEAN, the Next Horizon, ANZ Research In-Depth, April, 2015 GEN Y: ASPIRATIONS FOR THE ASEAN ECONOMIC COMMUNITY (AEC) GEN Y’s AWARENESS OF THE AEC 8 GEN Y: ASPIRATIONS FOR THE ASEAN ECONOMIC COMMUNITY (AEC) How much does Gen Y know about the AEC? Although Gen Y professionals claim that they understand the intentions and aspirations of the AEC, the study reveals that their objective knowledge of the AEC is lagging. Among the three countries surveyed, Malaysia recorded the highest level of objective awareness (42%) followed by Indonesia (31%) and Vietnam (29%). Objective awareness was gauged by the respondents’ answers to four factual open ended questions, as listed in Table 1. An open ended question is typically designed to encourage answers using respondents’ own knowledge rather than providing pre-selected responses. The results indicated that only 7% of young professionals surveyed were able to answer all four questions correctly (Fig.1). Figure 1: Accuracy of knowledge about ASEAN None correct 34% 1 answer correct 24% 2 answers correct 19% 3 answers correct 15% 4 answers correct 7% The highest awareness was around the number of the countries making up AEC, with almost half (49%) of Malaysians being aware, followed by Indonesians (42%) and Vietnamese respondents (36%). A much lower awareness was reported for the other questions in the survey. Exceptions to this were that, as to be expected, Malaysians (61%) were largely aware of Malaysia being the chair for ASEAN in 2015; and Indonesian respondents (41%) were signiicantly more aware of the location of ASEAN’s Secretariat compared to other respondents. 9 GEN Y: ASPIRATIONS FOR THE ASEAN ECONOMIC COMMUNITY (AEC) Table 1: Objective Awareness 10 Vietnam Malaysia Indonesia Average Awareness Average Awareness Average Awareness 42% 31% 29% Awareness of the effective date of the AEC establishment 31% 29% 33% Awareness of country chairing ASEAN in 2015 61% 11% 26% Awareness of the number of countries making up the AEC 49% 42% 36% Awareness of the location of ASEAN secretariat 28% 41% 21% GEN Y: ASPIRATIONS FOR THE ASEAN ECONOMIC COMMUNITY (AEC) How much Gen Y thinks they know about the AEC? The intention of measuring subjective awareness is to investigate the degree to which young professionals think they know about the AEC, as opposed to their actual factual knowledge, measured through objective awareness. The results suggest that the extent to which Gen Y professionals think they know about the AEC is higher than their factual levels of knowledge and understanding. This particularly holds true for Indonesian professionals who are the most conident about their knowledge of the AEC. This group scored signiicantly higher in all 6 Likert-scale subjective awareness statements shown to them, with 55% of them ‘agreeing’ or ‘strongly agreeing’ that they ‘have knowledge about the AEC’, as compared to less than a third of Vietnamese (28%) and Malaysian (27%) respondents (Fig. 2). Figure 2: ‘I have knowledge about the AEC’ Indonesia 55% Vietnam 28% Malaysia 27% 11 GEN Y: ASPIRATIONS FOR THE ASEAN ECONOMIC COMMUNITY (AEC) Although awareness of Malaysian young professionals is the highest, they seem less likely to identify with the AEC. It is interesting to note that only with young Malaysian professionals does their extent of factual knowledge and exposure to ASEAN closely relect their subjective awareness of the AEC. This awareness gap, the difference between what a respondent thinks he/she knows (subjective awareness) and what one actually knows (objective awareness), is the lowest among Malaysians (6%). Conidence in their knowledge of the AEC is largely inlated among Indonesian (64%) and Vietnamese respondents (55%), a inding which may suggest a tendency for a more idealistic identiication with ASEAN among Gen Y professionals in Indonesia and Vietnam. Figure 3: Awareness Gaps 42% 31% 29% 48% 64% 55% 6% 33% 26% Malaysia Indonesia Objective Awareness 12 Vietnam Subjective Awareness Gap GEN Y: ASPIRATIONS FOR THE ASEAN ECONOMIC COMMUNITY (AEC) REACHING OUT TO GEN Y 13 GEN Y: ASPIRATIONS FOR THE ASEAN ECONOMIC COMMUNITY (AEC) How Gen Y knows about the AEC? Perhaps the most striking result across all three countries is that traditional media still plays a signiicant role as a source of information about the AEC compared to social media. Given that ASEAN citizens under the age of 35 are some of the heaviest social media users in the world3, this shows a potential mismatch between the target audience and sources of information about the AEC, which in turn may partly explain the current low awareness levels. The top two sources of information identiied across the three countries were TV programmes (64%) and newspapers (50%). Following traditional media, Facebook is the third most important source of information in Malaysia (40%) and Vietnam (33%), while it is signiicantly less important in Indonesia (19%), where blogs (40%) and Twitter (27%) play a more important role. Indonesia’s media landscape in relation to information about the AEC also appears to be different in another aspect. In Indonesia government websites barely play any role (4%), while close to a quarter of respondents interviewed in Malaysia (23%) and Vietnam (24%) cites this as a useful source of information about the AEC. The ASEAN website is most popular with Malaysian young professionals with as many as 37% of Gen Y professionals in Malaysia referring to it for information on the AEC. Traditional media still plays a signiicant role as a source of information about the AEC compared to social media. 3 14 What does the average ASEAN consumer look like? (http://aseaninsight.economist.com), Feb 19, 2015 GEN Y: ASPIRATIONS FOR THE ASEAN ECONOMIC COMMUNITY (AEC) Table 2: Top Sources of Information about the AEC Malaysia Indonesia Vietnam Ranking of Sources TV 1 TV TV AEC 61% AEC 64% AEC 68% Newspaper Newspaper Newspaper 54% 44% 52% 2 Facebook Blogs Facebook 3 40% 33% ASEAN website Twitter Radio 37% 27% 26% 5 Google+ Magazines ASEAN website 23% 26% 25% 6 Government website Facebook Magazines 19% 24% Magazines Forums 16% 14% Government website 4 23% 7 15 40% 24% GEN Y: ASPIRATIONS FOR THE ASEAN ECONOMIC COMMUNITY (AEC) GEN Y’S PERCEPTIONS OF THE AEC 16 GEN Y: ASPIRATIONS FOR THE ASEAN ECONOMIC COMMUNITY (AEC) Does Gen Y support the AEC? AEC is more relevant to Gen Y professionals in Vietnam and Indonesia. Overall Gen Y professionals display positive attitudes towards economic integration. This is in line with other studies conducted previously in the region among both the public and business4. The highest perceived beneit of the AEC among young professionals across all three countries is its potential role in making ASEAN a more compelling investment destination (Table 3). This positive attitude is particularly felt among Gen Ys in Vietnam who are the most optimistic about the beneits of the AEC, particularly in terms of its contribution to Vietnam’s competitiveness and economic growth. This is also relected in the higher perceived relevance of the AEC in Vietnam, with as many as 70% agreeing with the statement that “The AEC is important for my country” (Fig 4). The current stage of economic development in Vietnam and the fact that it joined ASEAN as a member-state in 1995, signiicantly later than others, could account for this. A larger proportion of the young population in Vietnam appear to see a better potential future in the AEC. Figure 4: Relevancy of the AEC 100% AEC Relevance for the Country 90% 80% Vietnam 70% 60% Indonesia 50% Malaysia 40% 30% 20% 10% 0% 0% 10% 20% 30% 40% 50% 60% 70% 80% AEC Relevance for Professional Career 4 17 Domigo, R. W (2013), Low awareness of 2015 ASEAN integration, Philippine Daily Inquirer 90% 100% GEN Y: ASPIRATIONS FOR THE ASEAN ECONOMIC COMMUNITY (AEC) Young professionals in Indonesia tend to view the AEC as being more relevant to their professional careers compared to those in Malaysia and Vietnam (Fig 4). Therefore, although Indonesian professionals expect more beneits from the AEC in the future, they report less observed beneits in terms of recent developments in their country (45%) (Table 3). This suggests that Indonesians’ positive attitude towards the AEC is driven more by expected long-term beneits. Being the largest country in ASEAN, Indonesia is expected to beneit signiicantly from the AEC. Young Indonesian professionals are strongly inclined to agree that the AEC will result in higher economic growth in Indonesia (64%) (Table 3). Table 3: Beneits of the AEC 18 Malaysia Indonesia Vietnam Average Agreement Average Agreement Average Agreement 57% 60% 69% I can see the beneits of the AEC in the recent development of my country 50% 45% 63% The AEC will contribute to higher economic growth in my country 57% 64% 74% The AEC will enhance business competitiveness in my country 57% 61% 77% The AEC will make ASEAN a more compelling investment destination 61% 70% 72% GEN Y: ASPIRATIONS FOR THE ASEAN ECONOMIC COMMUNITY (AEC) Greater entrepreneurship and innovation in goods and services is expected. The greatest perceived impact of AEC across the countries is greater entrepreneurship and innovation in goods and services. At least half of the respondents in Malaysia ‘strongly agreed’ or ‘agreed’ to this statement, while an even larger number (around two-thirds) did so among Indonesian and Vietnamese respondents. The perceived impact of the AEC in the near future among Malaysia’s young professionals is in line with their lukewarm response to other attitude measures. Indonesians are far more optimistic about the AEC’s role in narrowing the gap between the rich and poor with 61% of them either ‘strongly agreeing’ or ‘agreeing’ to the statement, as opposed to only about onethird of Malaysians (36%) and two-ifths (42%) of Vietnamese. Table 4: Impact of the AEC in the Near Future 19 Malaysia Indonesia Vietnam Average Agreement Average Agreement Average Agreement 44% 58% 58% Competition for highly skilled talent will intensify 51% 66% 65% Greater entrepreneurship and innovation in goods and services 50% 68% 66% More competitive pricing of goods and services 40% 49% 66% Lower production costs due to larger economies of scale for businesses 43% 47% 52% Greater social stability as the gap between the rich and poor narrows 36% 61% 42% GEN Y: ASPIRATIONS FOR THE ASEAN ECONOMIC COMMUNITY (AEC) Gen Y professionals display strong support for the AEC particularly in Vietnam. Gen Y professionals display strong support for the AEC, particularly in Vietnam. Almost threequarters (74%) of all respondents in Vietnam ‘strongly agree’ or ‘agree’ to the statements provided. However, despite strong levels of support for ‘the establishment of the AEC’, there is still reservations about the freedom to establish companies across the region. Fewer respondents agree, particularly in Indonesia and Malaysia, to the statement “ASEAN businesses should be allowed to freely establish companies anywhere in the region”. Table 5: Support for the AEC Malaysia Indonesia Vietnam Average Agreement Average Agreement Average Agreement 50% 57% 74% I am for the establishment of the AEC 59% 69% 81% I am for the free flow of goods and services in the region 53% 63% 77% 48% 64% 76% 42% 37% 62% I am for the free flow of skilled/professional ASEAN workers ASEAN businesses should be allowed to freely establish companies anywhere in the region 20 GEN Y: ASPIRATIONS FOR THE ASEAN ECONOMIC COMMUNITY (AEC) PERCEIVED PREPAREDNESS FOR THE AEC 21 GEN Y: ASPIRATIONS FOR THE ASEAN ECONOMIC COMMUNITY (AEC) Is Gen Y prepared for the AEC? Malaysian young professionals report better regional connectedness. They are signiicantly more likely to report having friends from other ASEAN countries (69%), having travelled for business in other ASEAN countries (44%) and having experience of working for more than a year with someone from another ASEAN country (39%). Table 6: Personal Connectedness to the AEC 22 Malaysia Indonesia Vietnam Average Connectedness Average Connectedness Average Connectedness 57% 27% 22% Have friends from other ASEAN countries 69% 51% 36% Had visits/travels for business purposes to other ASEAN countries 44% 18% 33% Have working experience of more than a year with someone from other ASEAN countries 39% 33% 13% Has resided/worked/ studied in other ASEAN countries 11% 13% 15% GEN Y: ASPIRATIONS FOR THE ASEAN ECONOMIC COMMUNITY (AEC) Malaysian Gen Y professionals are more realistic in self-assessed preparedness to expand business networks across borders. Travel to other ASEAN countries for either residing, working or studying, has the lowest scores among respondents surveyed across the three countries. In summary, there is plenty of room for improvement in terms of young professionals’ networking across ASEAN. Hamidah Naziadin, Group Chief People Oficer, CIMB Group said, “ASEAN is an economic bloc that offers generous opportunities for wealth creation. Leveraging our CIMB footprint and network, we created the CIMB ASEAN Stock Challenge to give university students an invaluable opportunity to hone their competitive skills in stock trading. CIMB as a leading ASEAN banking group is proud to mirror this year’s ASEAN theme of ‘Our People, Our Community, Our Vision’ through the CIMB ASEAN Stock Challenge.”5 In Malaysia young professionals make a distinction between ‘having suficient skills to work’ versus ‘having suficient skills for doing business’ in other ASEAN countries. Similarly they make a distinction between being ‘prepared to expand my business network’ versus ‘face more competition’ from other ASEAN countries. They report more preparedness to work in other ASEAN countries (43%) than do business (28%); and more preparedness to face competition (37%) rather than expand their business network (29%) in other ASEAN countries (Table 7). About half of Indonesian young professionals (49%) think that they have got suficient skills and knowledge to work and do business in other ASEAN countries, which is also relected in their readiness to face competition (47%) and expand their business networks (51%). The response is less consistent among Vietnamese young professionals. About one third of them feel conident of having the skills to work (36%) and do business (32%) in other ASEAN countries, while more respondents see the potential of expanding their business networks (46%) and feel prepared to face more competition (54%). 5 23 CIMB promotes trading literacy amongst ASEAN youth for the sixth year running, http://www.cimb.com, Nov 19, 2015 GEN Y: ASPIRATIONS FOR THE ASEAN ECONOMIC COMMUNITY (AEC) Table 7: Subjective Preparedness for the AEC Indonesia Vietnam Average Agreement Average Agreement Average Agreement 34% 49% 42% I have suficient skills to work in other ASEAN countries 43% 49% 36% I have suficient skills and knowledge to do business in other ASEAN countries 28% 49% 32% I think I am prepared to face more competition from other ASEAN countries 37% 47% 54% 29% 51% 46% In view of the AEC, I can see the potential of expanding my business networks in other ASEAN countries 24 Malaysia GEN Y: ASPIRATIONS FOR THE ASEAN ECONOMIC COMMUNITY (AEC) Key challenges perceived for the AEC are along the lines of political, legal and socioeconomic disparities between member states. Differences in legal and political systems, socioeconomic disparity among ASEAN member countries, and a lack of a proper understanding and preparation among people for regional economic integration, are some of the key challenges ahead for the AEC. While many Indonesian young professionals emphasise unequal educational opportunities in ASEAN as a major challenge, a majority of Malaysians feel that there is a lack of innovation culture in science and technology in most ASEAN member states. Table 8: Top Challenges for the AEC Vietnam Malaysia Indonesia Socioeconomic disparity amongst ASEAN member countries (64%) Differences in legal and political systems amongst ASEAN member countries (73%) Socioeconomic disparity amongst ASEAN member countries (67%) Differences in legal and political systems amongst ASEAN member countries (62%) Lack of proper understanding and preparation among people for regional economic integration (73%) Differences in legal and political systems amongst ASEAN member countries (65%) Lack of innovation culture in science and technology in most ASEAN member countries (60%) Unequal educational opportunities in ASEAN (72%) Lack of proper understanding and preparation among people for regional economic integration (58%) Ranking of Challenges 1 2 3 25 GEN Y: ASPIRATIONS FOR THE ASEAN ECONOMIC COMMUNITY (AEC) ASPIRATIONS BEYOND 2015 26 GEN Y: ASPIRATIONS FOR THE ASEAN ECONOMIC COMMUNITY (AEC) What are Gen Y’s aspirations for the AEC? Tony Fernandes, the founder and CEO of AirAsia, said: “…we have connected ASEAN. Sixty percent of our destinations are destinations that were never done before within ASEAN. We built an ASEAN tourism market…. For AirAsia, I’m hoping that an economic community will help reduce costs by having commons standards: one air-trafic-control system, one engineering system, one (set of) standards. An obviously (we need) open skies – true open skies – and common ownership”. 6 6 27 Although a signiicant majority of young professionals across the three countries aspire for greater integration of ASEAN, as in the European Union, the aspiration for the establishment of a single currency and consolidation of monetary and iscal policies is relatively low. The aspiration for the ASEAN secretariat to be empowered to make decisions on certain urgent issues is relatively high across the countries, along with establishment of an ASEAN Court of Justice to settle legal disputes within ASEAN. Malaysian young professionals, in general, have lower aspirations for the AEC compared to those surveyed in Vietnam and Indonesia. Findings suggest that they have particularly low enthusiasm for the liberalisation of free labour movement in terms of abolishing passport requirements and enabling ASEAN citizens to work within ASEAN without a working pass or permit. Currently less than a quarter of Malaysian respondents (24%) surveyed aspire to enabling the free movement of labour compared to a large number of Indonesians (64%) and Vietnamese (53%). Tony Fernandes on driving ASEAN entrepreneurship, http://www.mckinsey.com, Aug 2014 GEN Y: ASPIRATIONS FOR THE ASEAN ECONOMIC COMMUNITY (AEC) Table 9: Aspirations Beyond 2015 28 Malaysia Indonesia Vietnam Average Agreement Average Agreement Average Agreement 41% 59% 58% The AEC should be directed at stronger integration as in the European Union 53% 63% 63% The establishment of a single currency 39% 44% 42% The coordination of monetary and iscal policy 40% 49% 66% ASEAN Secretariat should be empowered to make decisions on certain urgent issues 56% 64% 59% The establishment of the ASEAN Court of Justice to solve legal disputes in ASEAN 42% 65% 68% The abolition of passport requirements when visiting other ASEAN countries 37% 73% 68% Freedom for ASEAN citizens to work within ASEAN without a working pass or permit 24% 64% 53% The establishment of a ASEAN Common Time Zone 38% 49% 48% GEN Y: ASPIRATIONS FOR THE ASEAN ECONOMIC COMMUNITY (AEC) CONCLUSIONS 29 GEN Y: ASPIRATIONS FOR THE ASEAN ECONOMIC COMMUNITY (AEC) Vietnamese young professionals report the highest support for the AEC. Our survey suggests that the highest support for the AEC is among Vietnamese young professionals, in line with their perceived beneits of the AEC. Vietnam was integrated into ASEAN at a later date (1995) than most other ASEAN countries. Over 70% of Vietnamese respondents are strongly predisposed to support the AEC due to the greater expected beneits perceived for their country, as well as future expectations of economic progress and for a smooth integration into the regional economy. Unlike respondents from the other two countries surveyed, the Vietnamese are more likely to report recent observed beneits from AEC membership in terms of the economic development of their country. Figure 5: Support versus Beneits of the AEC 100% 90% Vietnam 80% Support for the AEC 70% Indonesia 60% Malaysia 50% 40% 30% 20% 10% 0% 0% 10% 20% 30% 40% 50% 60% Benefits of the AEC 30 70% 80% 90% 100% GEN Y: ASPIRATIONS FOR THE ASEAN ECONOMIC COMMUNITY (AEC) Malaysian young professionals are more reserved in terms of the perceived impact of the AEC in their country as well as the relevance of the AEC for the careers of young professionals. The survey results suggest that Malaysia is lagging in terms of the perceived impact of the AEC as well as the relevance of the AEC for the careers of young professionals. The higher ratings in Vietnam and Indonesia for these factors perhaps relect their long-term expectations for their countries, while Malaysian young professionals seem more focused on the short-term as well as perhaps being more reserved in estimating the potential beneits of the AEC, and in their selfassessed preparedness as professionals for the AEC. Figure 6: Impact versus Relevance of the AEC 100% 90% Indonesia Impact of the AEC 80% 70% 60% Vietnam 50% 40% Malaysia 30% 20% 10% 0% 0% 10% 20% 30% 40% 50% 60% Relevance of the AEC 31 70% 80% 90% 100% GEN Y: ASPIRATIONS FOR THE ASEAN ECONOMIC COMMUNITY (AEC) Malaysian young professionals have more moderate aspirations for the AEC beyond 2015 which reflects their reserved attitudes towards the AEC in general. Young professionals in Malaysia have more moderate aspirations for the AEC beyond 2015 which perhaps relects their more reserved attitude in terms of perceived preparedness for the AEC as well as its lower perceived impacts. Survey results suggest that although they have shown a better understanding of the AEC and are the most well-connected as well as being more exposed to ASEAN, they tend to have a more realistic view in regards to their future aspirations. This could also relect the fact that Malaysian professionals are more proicient in English and therefore may be better connected and mobile in other parts of the world, while AEC may be less relevant to them. Figure 7: Aspirations versus Preparedness of the AEC 100% 90% Aspirations for the AEC 80% 70% Vietnam 60% Indonesia 50% Malaysia 40% 30% 20% 10% 0% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Preparedness of the AEC Being a cross-sectional study, it is noteworthy to mention the limits of this study and it is intended to serve as a baseline for future longitudinal research to ascertain the trends and monitor the opinions and engagement of Gen Y professionals towards the AEC. 32 GEN Y: ASPIRATIONS FOR THE ASEAN ECONOMIC COMMUNITY (AEC) RECOMMENDATIONS 33 GEN Y: ASPIRATIONS FOR THE ASEAN ECONOMIC COMMUNITY (AEC) 1. Promotion of awareness and understanding of the AEC There is a need for increased awareness and better understanding of the AEC among the public, businesses and academia and particularly among young professionals in the ASEAN members states. The lack of understanding of the AEC is also likely due to a failure to stimulate interest among a wider spectrum of the population and the ineffective use of the right communication channels. Online communications channels need to be used more, given that ASEAN is about to reach its ‘mobile moment’, with the internet forecast to reach half the population in the next few years. Facebook is very popular in ASEAN with a larger user base than in Western Europe and equal with North America. Therefore, it should be used more by policy makers to communicate to the younger population, given that it is already playing an important role in some member states as a source of information on the AEC. 2. Improving the English proiciency and local language capabilities As language is another potential barrier to awareness and understanding of the AEC, information about AEC should be provided in local ASEAN languages besides English which is the language for business in AEC. There is a need for greater language capabilities for AEC professionals to communicate more effectively with each other either in English or in local languages. It is advisable to provide opportunities for internships in neighbouring ASEAN countries for young professionals as a practical way to improve oral communication skills. An example of such an initiative worth mentioning is that of the Thai Ministry of Labour which has recently focused on developing foreign-language skills and providing logistics training for Thai workers to prepare them for the AEC. 34 GEN Y: ASPIRATIONS FOR THE ASEAN ECONOMIC COMMUNITY (AEC) 3. Promotion of networking between ASEAN young professionals Enhance networking and connectedness among young professionals, academia, civil society organisations, SME’s and governmental organisations across ASEAN. To promote higher awareness of the AEC and build a stronger sense of community, more people-to-people contact is encouraged through making travel easier via visa-free arrangements, educational exchange programmes, internships and incorporating ASEAN studies into education curricula. 4. Promotion of the achievements and beneits of AEC Communicate more effectively to the public the achievements of ASEAN to date both in economic terms and other beneits, for example, peace-building, economic cooperation, cultural exchange, prospects of equality, inclusiveness and sustainability. In particular, young professionals should be made aware of the ASEAN Strategic Action Plan for SME Development (2016-2025) and its objectives of promoting technology, productivity and innovation; increasing access to inance; increasing market access and internationalisation; developing the policy and regulatory environment; and promoting entrepreneurship and human capital development. 5. Clariication of challenges and misconceptions about the AEC The short and long term challenges facing the AEC and the potential solutions need to be clearly communicated to all stakeholders both in the public and private sector. This will help to avoid any misunderstandings arising. For example, there are concerns around the free movement of labour which in some countries is viewed as a possible threat in terms of a brain drain, while in others it is seen as potentially encouraging migrants which will affect the local job market. 35 GEN Y: ASPIRATIONS FOR THE ASEAN ECONOMIC COMMUNITY (AEC) 6. Investment in human resources and talent development The survey indings show that Gen Y professionals view intensiied competition for highly skilled talent as the greatest perceived impact of the AEC on member-states. The inancial services industry needs to invest in human resources and the skills needed to develop a regional inancial framework which can support economic integration and is underpinned by sound labour market institutions. 7. Integration of inancial services and products ASEAN has yet to establish a inancial and banking structure that is integrated across the region. While regional initiatives have been developed by Singaporean and Malaysian banking and inancial services organisations, the structures are only available in capital cities or metropolitan regions. These initiatives have not yet reached middle or smaller-sized cities – therefore limiting the potential for region-wide inancial services. Another feature of the AEC is the increased free low of professional skilled workers and this will lead to a higher number of employees working abroad. Banks may need to simplify crossborder arrangements to facilitate transactions between countries within ASEAN, an area where Malaysia has already been sucessuful. 36 GEN Y: ASPIRATIONS FOR THE ASEAN ECONOMIC COMMUNITY (AEC) PROFILE OF RESPONDENTS 37 GEN Y: ASPIRATIONS FOR THE ASEAN ECONOMIC COMMUNITY (AEC) Total number of respondents N=575 (Malaysia N=192, Indonesia N=193, Vietnam N=190) Figure 8: Gender OVERALL 51% 49% MALAYSIA 46% 54% INDONESIA 51% 49% VIETNAM 47% 53% Male Female Figure 9: Age OVERALL 54% MALAYSIA 46% 44% 18-25 56% 26-30 INDONESIA 54% VIETNAM 46% 41% 59% Figure 10: Occupational Background OVERALL 34% MALAYSIA 45% 46% 12% 40% 9% Public Sector 14% Private Sector INDONESIA 23% 62% VIETNAM 45% 13% 2% 46% 5% 4% Self Employed Others Figure 11: Area of Study OVERALL MALAYSIA 38 29% 28% 37% 21% INDONESIA 40% VIETNAM 25% 40% 18% 36% 7% 32% 10% 34% 8% Business, Banking, Economics Social Sciences Engineering & Sciences Others 28% 43% 4% Contributors: Elma Berisha Dr Raymond Madden Neil John Smith ISBN 978-967-0822-09-9 ASIAN INSTITUTE OF FINANCE (838740P) Unit 1B-05, Level 5 Block 1B, Plaza Sentral, Jalan Stesen Sentral 5, 50470 Kuala Lumpur. Tel: +603 2787 1999 Fax: +603 2787 1900 Email: research@aif.org.my www.AIF.org.my 9 789670 822099