Entrepreneurship as the Solution to Face ASEAN Economic Community 2015.

Geneva Round in 1947 that was held in Jenewa, Swiss is the first step where General Agreements on Tariffs and Trade (GATT). GATT is the agreement that was initiated by 23 developed countries after World War II in order to rebuild the world economy. After GATT had its long ways with several rounds in several countries, now GATT has become the organization which called World Trade Organization (WTO). 1994 is the year when WTO officially invented.

Besides WTO, there are still bunch of trade organization such as North American Free Trade Association (NAFTA) and The European Single Market Act as two of the trade organizations. These organizations are the tools for communicating, setting the rules and facilitating the country member in order to face the globalization that firstly declared in 1944 in New Hampshire (Woods). One of the globalization pillars is the multinational corporations (MNCs) where this pillar supports the individual freedom as the main pillar and generator in the economy market. It means that everyone has the same right and same chance to take part in economy market. Along with the globalization idea and the free trade, there are also problems that should be faced, where the unready country will not be able to compete in the free market. This essay will talk more about Indonesia as one of the countries which also takes part in the free trade. This essay also will see whether Indonesia ready or not to face ASEAN Economic Community (AEC) in 2015 and what the solution or idea to make Indonesia ready to face AFTA.

            Indonesia is the member of WTO which joined WTO on the 1st January 1995 (www.wto.org ). As the member of WTO Indonesia has actively involved in the world trade. In the smaller scope, Indonesia is also the member of Association of Southeast Asian Nations (ASEAN) that also has opened border among its nations firstly in 1992. Reduction and elimination of taxes is the main aim of the 1992 AFTA, where in 2010 its aim was to achieve zero tax for 6 countries (Indonesia, Malaysia, Philippines, Thailand, Brunei and Singapore). As the continuity of AFTA, ASEAN Economic Community (AEC) is about to come in 2015. The aim of AEC is to “transform ASEAN into a single market and production base, a highly competitive economic region, a region of equitable economic development, and a region fully integrated into the global economy” (Declaration on the ASEAN Economic Community Blueprint, 20 November 2007). Dr. Prasarn Trairatvorakul as Governor of the Bank of Thailand said that AEC will not only touch about the taxes pillar, but will also touch 5 pillars. The pillars are free trade in goods, free trade in services, free flow of skilled labor, free flow of investment, and a free flow of capital. The question that might rise now “is Indonesia ready to face AEC 2015?”

            The first pillar in AEC will not only let achieve zero tariff and tax barriers, but the subsidy and restrictions will also be removed in order to make a fair competition among nations. The second pillar demands the nations to be efficiently, liberally and rapidly provide the service in order to achieve the blueprint of AEC. The service can be various; it can be the financial service, investment service, etc. The third pillar will be talked further in this essay which is about the free flow of skilled labor. It means that the border to work in any companies will be vanished, and skill will become the most important that everyone should have in order to be able to compete. The fourth and fifth pillar will make the investment will be liberalized and the flow of investment will be so rapid among nations. It means that in 2015 the foreign investor can invest their money easier in Indonesia and in other ASEAN countries.

            Regarding to the third pillar then a problem comes up. If the skilled labor will be open liberally means the tough competition cannot be avoided, because later the foreigner labor can easily work in any companies in Indonesia as long as they are skillful and can accomplish the criteria. Indonesia has the problem with number of unemployment which in February 2013 has reached 7,17 million people (National Statistic Institute). This number is not a small number where the government needs to solve soon. Muhaimin Iskandar as the Minister of Labor claimed that the low number of job vacancy that cannot cover all unemployment in Indonesia is one of the reasons behind the high number of unemployment. However besides that reason, the skill also becomes the problem, where many of unemployment do not have the skill that is needed in the market. What make condition worse is there are many educated unemployment as Mitha Filandari found her research. One of the reasons why there are many uneducated unemployment because of the skills that not match with the market demand and need. Thus, the educated unemployment cannot be competed in the market, because the skills that they need are not match with the market condition.

            If the conditions of high number of unemployment still happen, it will make Indonesia’s condition worse in facing the AEC 2015. Government needs to find the solution to solve this problem and make people in Indonesia ready and skillful to compete in free trade. The author thinks that the best way offer is to grow the entrepreneurship in Indonesia to boost the Indonesia economic. As the higher number of entrepreneurship in a country, the job vacancy will be also higher. It means that the number of unemployment can reduce significantly. Entrepreneur will also grow the competitive mentality of people in Indonesia. As the people familiar with competition, it will make people more ready to face AEC 2015. In this competition, the skill will also grow, because the entrepreneur will train many skills. Management skill, financial skill, leadership skill, and communicating skill are several skills that needed in the market and can be achieved through the entrepreneur. In a research conducted by London School of Business and the Kauffman Foundation found that the countries which have high number of entrepreneur have a better economic condition. Better economic condition can be achieved if the government has the sincere intention and attention toward the entrepreneur in Indonesia.

            The author sees that youth has the high potential to develop and boost economy in Indonesia through the entrepreneurship. As cited from Soekarno “Give me 10 youths, than I will change the world”. Youth as the next generator who will Indonesia and will take the important role in future economy should prepare them start from now. The government can start to pay more attention and support the young entrepreneur. There are several steps that already done by the government, such as the material support that given to the young entrepreneur who needs the capital to start the business. Government also has been working with the training for the young entrepreneur. These steps are the good steps to start to enhance the young entrepreneur in Indonesia. However, there is also one more thing that the government needs to pay attention. Government needs to pay more attention on how to make young entrepreneur braver to take the risk in the entrepreneurship field. One of the solutions is by giving the protection to the young entrepreneur’s business. Government can give the insurance and supervise the young entrepreneur with their business. If it is necessary, government can ask the expert to help young entrepreneur to pass the critical condition in the beginning of the business. The author feels sure that with this guide from the government the youth can feel safer to save the business and be brave to take the risk, and finally it can enhance the entrepreneurship and economy in Indonesia.

            In conclusion, the globalization has opened the border among nations and countries in the world. It has made the liberalization in the market and economy of the world. As one of the countries that involved in the globalization, Indonesia should be ready to face the reality. AEC that will start in 2015 will open wider chance for the free trade which means there are only 2 years left where Indonesia needs to prepare. The author thinks that the best way to make Indonesia ready to face AEC 2015 is by enhancing the entrepreneurship, especially the young entrepreneur in order to boost the Indonesia economy.

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