El soft law y los tratados internacionales

The ASEAN Economic Community (AEC) project is an economic integration scheme among ASEAN (Association of South East Asian Nations) countries; and it aims to bring members to be one community. There have generally been concerns for many years about the likely effects of this scheme — for example, how this scheme will affect member nations (e.g. opportunities, threats, etc). In this section, we will discuss about the AEC scheme such as what it is and why it is important; and will also examine the potential threat that will be posed by the emergence of this economic block. We will also be more interested in how this project might influence the management of talent. It is also worth noting that this potential threat of AEC will form the basis and background to why the researcher is particularly interested in investigating the application of the concept talent in this area, and how they manage talented individuals in the Thai hotel sector.

In this section we therefore study why talent is needed in the hotel sector in light of the introduction of AEC, and how they are managed so as to be able to maintain and contribute to the international standard of service quality.

2.6.1.1.What is the (ASEAN Economic Community) AEC?

The idea of formulating AEC was initially conceived in an ASEAN summit held in Kuala Lumpur (Malaysia) in 1997. The aim was to create a single community comprising of three pillars: ASEAN Political-Security Community; ASEAN Economic Community (AEC) and ASEAN Socio-Cultural Community. The focus of this thesis is the impact of the introduction of AEC in Thailand.

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The main goal of AEC was to transform the ASEAN region into a stable, prosperous, and highly competitive region with equitable economic development; and thus reduce poverty and socio-economic disparities (Association of Southeast Asian Nations, 2008; International Monetary Fund, 2015). Further deliberations followed in October 2003 during the Bali summit; and during that summit ASEAN leaders declared that AEC would be successful along with two other pillars — ASEAN Political-Security Community and ASEAN Socio- Cultural Community; and these are expected to be completed by 2020 but to be in an advanced stage by 2015 (Siow, 2011). In 2006, the ASEAN ministers’ meeting in Kuala Lumpur agreed to identify the characteristics, elements, and timeline of various measures; with an agreement on ASEAN member countries set to be confirmed by 2015. The plan of AEC was also affirmed by all leaders; and there was also commitment to accelerate the establishment of AEC by 2015 (Association of Southeast Asian Nations, 2008).

The main aim of AEC is to help the ASEAN community countries to become globally competitive. The stated objective 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” (Association of Southeast Asian Nations, 2008). Through this program, it is envisaged that the 10 AEC member nations will benefit for the removal of trade and investment barriers; and this should in principle lead to increased intra-ASEAN trade. The establishment of a single marketing and production zone would in principle include the: freer flow of goods, freer flow of services, freer flow of investment, freer flow of capital, and freer flow of skilled labour (Association of Southeast Asian Nations, 2008).

The roadmaps for the implementation of AEC have been accelerated to 2015, heralding a new era of enhanced trade relations within the region. Within the 10 nations, their combined population is over 600 million people; which exceed the North American Free Trade Agreement (NAFTA) and the European Union (EU) in populations. The ASEAN countries are namely: Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand, and Vietnam. Their combined economies account for nearly 5 per cent of the world GDP (Geiger, 2012). Comparisons have been made between AEC and the EU

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but observers have argued that it is inappropriate to compare AEC with EU. This reason is that unlike the EU; “the objective (of AEC) is neither a customs union (with common external commercial policy) nor a full common market (with free mobility of capital and labour and some policy harmonisation)” (Siow, 2013, p. 11). Despite the fact that the objectives of AEC are to introduce free movement of goods, services, etc. there is however insufficient cross border freedoms. Therefore, more relevant laws about the equitable movement of labour need to be introduced and harmonised. While discussing ideas about the harmonisation of standards and technical regulations, Siow (2013, pp. 13-14) notes that a working group has been set-up to consider these things. The initial focus of this working group was to harmonise standards in priority sectors; which were accountancy, engineering, surveying, architecture, nursing, medical services, dental services, and tourism.

2.6.1.2.The ASEAN Economic Community (AEC) Challenges and Threats

While it is anticipated that the introduction of AEC will lead to increased opportunities and markets, there will also be unavoidable challenges and problems. Thus, for example, the creation of a single market will lead to higher competition within the domestic market, among the ASEAN nations, and across the world. Another example of a challenge that might arise due to the introduction of AEC is language barriers. For example, there are countries such as Indonesia, Malaysia, and Singapore who share a common language and these countries will likely enjoy more benefits than others will. In addition, despite English language being the formal language of communicating within ASEAN countries, there are countries like Singapore and the Philippines who already use English as their formal language, and would thus get a head-start compared to other countries such as Thailand. Not only is there a diversity of language there are also differences in terms of culture, religion, and beliefs. Therefore, countries such as Thailand and both domestic and international organisations will need to think and act globally to curb the potential threats from AEC. Therefore, this section will discuss some of challenges and threats that arise due to the introduction of AEC as follows:

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 Demographic changes: The world and ASEAN nation’s population is forecast to decline within the next 30 years; and in fact the working population of Thailand is projected to rank bottom among the ASEAN countries by 2030 (International Monetary Fund, 2015).

 Knowledge based society: Knowledge based economies are expected to become extremely important. Therefore, organisations have to prepare for this change.

 International mobility of labour: Generally, there is increased mobility of labour. This is expected to increase with the free flow of labour within the ASEAN. This trend will create opportunities and threats. For example, the wealthier countries will get more benefit from this scheme. Meanwhile, there might be a brain drain (drainage of educated and skilled personnel) from less developed countries (e.g. Thailand) to more developed countries (such as Singapore and Malaysia). This view is supported by Tung (2007) and Tung and Lazarova (2006), who note that labour will be more willing to work outside their country of origin compared to their home countries if the conditions are better. Consequently, home countries like Thailand might face a brain drain to the more developed and higher income countries like Singapore and Malaysia (Hudoyo, 2014; Poldech & Pimolsangsuriya, 2012b; Siow, 2013). The brain drain will likely be one of the most serious negative impact of the creation of AEC among the less developed countries. Thus, hotels might need to decide where they want to be located and if they will modify their human resource strategies accordingly to attract, motivate, and retain their talent.

In addition, the factors that are fuelling skilled labour mobility among the ASEAN countries include:

 Large disparities in wages and employment opportunities;

 Geographic proximity and socio-cultural-linguistic environment;

 Disparities in educational developments.

As more ASEAN countries move up the technological ladder, liberalising trade in goods and services and in Foreign Direct Investment (FDI) is creating more demand for a larger pool of professional and skilled labour. Until such a time that, the domestic educational and training institutions are able to supply the necessary highly skilled manpower, countries will still continue to depend on foreign talent or export talent (Siow, 2013; Siow Yue, 2011). The Mutual Recognition Arrangements (MRAs) is one of the major instruments for

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facilitating skilled labour mobility in ASEAN countries. It plays the role of a professional body of skills and qualifications accreditation. MRAs help ASEAN countries to recognise the education or experience obtained in foreign countries; acting as a licensing or certification body.

The introduction of the AEC agreement superseded the Free Trade Area (FTA). It is noted that the FTA, like any other trade agreement, resulted in winners (such as businesses, investors, workers, and consumers that gain directly from liberalisation and integration) and losers (businesses and workers that face intensified competition from foreign suppliers, investors, and professionals) within the member countries. For example, Siam Cement, one of Thailand's largest conglomerates, is geared-up to spend 75 per cent of its $5-billion (£3.3 billion) investment budget for 2012-2016 to acquire assets in many ASEAN countries. Similarly, Runckel & Associates, an International Business Consulting company, and other large companies such as CP or BGH are doing the same (Runckel, 2012). Thus, AEC will create more equitability of economic development through liberalisation of the goods sector, services sector, investment, etc., and the mobility of skilled labour across ASEAN countries.

Finally, the other factor that organisations have to be aware of is cultural diversity. The single market will have a population of over 600 million people covering 10 countries. While the label of ASEAN countries sounds as if there is uniformity, however, the reality is that there are many cultural differences and language differences as well.

Therefore, the next section will give the background of the study through focusing on Thailand, its culture and the important role that the hospitality industry (and hotel sector) plays in Thai economic development.