BEEC 2014 ASEAN Integration
Economics Essay Competition
Page 1
Joshua Kui To Mo"
Bangkok Patana School"
Bangkok Economics Essay Competition"
Thursday, 30 October 2014"
"
Economic Integration: The Double-Edged Sword!
"
Thailand would benefit from deeper economic integration with ASEAN member states. Discuss.!
"
Economic integration has its share of benefits, as well as drawbacks. Thailand has fulfilled the AEC (ASEAN Economic Community) measure of economic integration well above the
ASEAN average, scoring at 86%1 with the average at 80%. However, major Thai firms have yet to integrate and embrace ASEAN, a move the Thai government is attempting to encourage.
"
Economies of scale can benefit companies greatly - these include financial, technological, marketing and purchasing - this principle states if a company grows to a sufficiently large size it can enjoy all of these factors at a reduced cost per unit. The overseas market would be more than sufficient for some of Thailand’s largest corporations; for example Kasikorn Bank is already predicting a 600-million consumer market as a result of the 10-nation merge from the AEC. However, some may argue that international trade could result in domestic firms being wiped out by superior foreign firms. In Thailand, this is not the case - far from it. International trade could en-
1
Kavi Chongkittavorn. (2014). Is Thailand Ready for the AEC?. Available: http://www.nationmultimedia.com/opinion/Is-Thailand-ready-for-Asean-Economic-Community-30224073.html. Last accessed 3rd
Nov 2014.
Economics Essay Competition
Page 2
courage firms to become more efficient and competitive, and perhaps even expose producers to newer technologies and result in greater production.
"
The theory of “absolute advantage” proffered by Adam Smith states that a country may not have to trade with others if it can produce everything it needs itself. After all, why should it trade? However, David Ricardo, a Classical economist, had a differing perspective. His idea of
Page 1
Joshua Kui To Mo"
Bangkok Patana School"
Bangkok Economics Essay Competition"
Thursday, 30 October 2014"
"
Economic Integration: The Double-Edged Sword!
"
Thailand would benefit from deeper economic integration with ASEAN member states. Discuss.!
"
Economic integration has its share of benefits, as well as drawbacks. Thailand has fulfilled the AEC (ASEAN Economic Community) measure of economic integration well above the
ASEAN average, scoring at 86%1 with the average at 80%. However, major Thai firms have yet to integrate and embrace ASEAN, a move the Thai government is attempting to encourage.
"
Economies of scale can benefit companies greatly - these include financial, technological, marketing and purchasing - this principle states if a company grows to a sufficiently large size it can enjoy all of these factors at a reduced cost per unit. The overseas market would be more than sufficient for some of Thailand’s largest corporations; for example Kasikorn Bank is already predicting a 600-million consumer market as a result of the 10-nation merge from the AEC. However, some may argue that international trade could result in domestic firms being wiped out by superior foreign firms. In Thailand, this is not the case - far from it. International trade could en-
1
Kavi Chongkittavorn. (2014). Is Thailand Ready for the AEC?. Available: http://www.nationmultimedia.com/opinion/Is-Thailand-ready-for-Asean-Economic-Community-30224073.html. Last accessed 3rd
Nov 2014.
Economics Essay Competition
Page 2
courage firms to become more efficient and competitive, and perhaps even expose producers to newer technologies and result in greater production.
"
The theory of “absolute advantage” proffered by Adam Smith states that a country may not have to trade with others if it can produce everything it needs itself. After all, why should it trade? However, David Ricardo, a Classical economist, had a differing perspective. His idea of