PREFACE

Praises be to Allah glory to Him. Because of His grace, I can complete a paper entitled
the future of manufacturing industries in indonesia for facing asean economic communty.
This paper was submitted in order to fulfill the task of the course Introduction to Vocational
Education.

I would like to thank all those who have helped me so this paper can be completed on
time. The paper is still far from perfect, therefore, criticism and constructive suggestions we
do hope for the sake of this paper perfect.

Hopefully, this paper provides useful information for the public and for knowledge
development and enhancement of science for all of us.

Malang, October 26, 2015

Author
 Tabe of contents

Preface iii
Table of contents iv

CHAPTER I INTRODUCTION
A. Background 3
B. Purposes 3

CHAPTER II DISCUSSION
A. Asian Economic Community 4
B. Impact AEC 5
C. Government Policies And Government 6-7

Strategy For Facing Asean Economic

Community

CHAPTER III CLOSING

A. Conclusion 8
B. Reference 8
 CHAPTER I
INTRODUCTION

A. Background
Asean Economic Community (AEC) in 2015 was the realization of a free market in
Southeast Asia that has been done gradually began ASEAN Summit in Singapore in 1992.
The purpose of the establishment of the ASEAN Economic Community (AEC) to enhance
economic stability in the ASEAN region, and is expected to address the problems in the
economic field between ASEAN countries. AEC consequences of the agreement in the form
of free flow of goods to the ASEAN countries, the impact of the free flow of services, the
impact of the free flow of investment, the impact of the flow of skilled labor, and the impact
of the free flow of capital. These things can certainly result in positive or negative for the
Indonesian economy. Therefore, from the government side also performed the strategies and
measures that Indonesia is ready and able to take advantage of the momentum of the MEA.

B. Purposes
Know how the manufacturing industry to face Asian Economic Community
 CHAPTER II
DISCUSSION

A.Asian Economic Community

Indonesia is one country in the ASEAN Economic Community (AEC) or the ASEAN
Economic Community (AEC), which will unfold starting in late 2015. MEA is the realization
of a free market in Southeast Asia that has previously been referred to in the Framework
Agreement on Enhancing ASEAN Economic Cooperation in 1992. At the meeting of the
Heads of State of ASEAN (ASEAN Summit) 5th in Singapore in 1992, is the Head of State
announced the establishment of an area free trade in the ASEAN (AFTA) within a period of
15 years. Later in development, accelerated to 2003, and accelerated again last into 2002.

AEC formation originated from an agreement ASEAN leaders in the Summit (Summit) in
December 1997 in Kuala Lumpur, Malaysia. This agreement aims to improve the
competitiveness of ASEAN as well as China and India could compete to attract foreign
investment. Foreign capital needed to boost employment and welfare of the citizens of
ASEAN. At that time, ASEAN launched the initiative of the establishment of regional
integration of ASEAN or the ASEAN community through ASEAN Vision 2020 during the
Second ASEAN Informal Summit. This initiative was later embodied in the form of long-
term roadmap called the Hanoi Plan of Action that was agreed in 1998.

At the next summit Indonesia is one of the initiators of the establishment of the AEC is in
the Declaration of ASEAN Concord II in Bali on October 7, 2003 by which the ASEAN
officials declared that the establishment of the AEC in 2015.The establishment of the
ASEAN Community is part of ASEAN's efforts to further strengthen ASEAN integration.
There was also an attempt evolutif ASEAN to adjust perspective in order to be more open in
discussing domestic problems that affect the region without leaving the main principles of
ASEAN, namely: mutual respect (Mutual Respect), no interference in domestic affairs (Non-
interfence) , consensus, dialog lists and consultation. ASEAN Community consists of three
pillars, including cooperation in the economic field, namely: security community ASEAN
(ASEAN Security Comunity / ASC), the ASEAN Economic Community (ASEAN Economic
Community / AEC) and the Socio-Cultural Community ASEAN (ASEAN Socio-Cultural
Community / ASCC).

Purpose of establishing the MEA to increase economic stability in the ASEAN region,
and is expected to overcome the problems in the economy among ASEAN countries. For
nearly two decades, ASEAN consists of only five countries - Indonesia, Malaysia,
Philippines, Singapore and Thailand - whose establishment in 1967. The countries of
Southeast Asia are incorporated in different times, namely Brunei Darussalam (1984),
Vietnam ( 1995), Laos and Myanmar (1997), and Cambodia (1999).
B.Impact AEC

The main characteristic feature of MEA is a single market and production base; economic
regions with high competitiveness; region with equitable economic development; and a
region fully integrated into the global economy. The impact of the creation of MEA is the
creation of a free market in the field of capital, goods and services, and labor. The
consequences of the agreement MEA that impact the free flow of goods to the ASEAN
countries, the impact of the free flow of services, the impact of the free flow of investment,
the impact of the flow of skilled labor, and the impact of the free flow of capital.

of The character and impact of AEC mentioned above is actually no chance of

momentum that can be achieved AEC Indonesia. With the AEC Indonesia's economy is
expected to be better. One of them is the marketing of goods and services from Indonesia can
expand its reach to other ASEAN countries. Market share in Indonesia is 250 million people.
In the MEA, the ASEAN market share of some 625 million people could be targeted by
Indonesia. Thus, Indonesia has a greater opportunity to tap into a wider market. Exports and
imports can also be done with a cheaper cost. Labor from other countries in ASEAN can be
free to work in Indonesia. In contrast, Indonesian workers also can be free to work in other
countries in the ASEAN.

Other positive impacts that can expand the investor Indonesia investment without any
limitation of space among ASEAN member countries. Similarly, we can attract investment
from ASEAN investors-investors. The entrepreneurs will be more creative because of the
intense competition and the professionals will further increase the level of skill, and
professionalism owned.

However, besides the opportunity to look at the front of the eye, there are obstacles facing
the AEC that need our attention. Among the obstacles: first, the quality of education remains
low labor, in which up to February 2014 the number of workers junior high school education
or below, there were 76.4 million people or about 64 percent of the total 118 million workers
in Indonesia. Second, the availability and quality of infrastructure is still lacking thus
affecting the smooth flow of goods and services. According to the Global Competitiveness
Index (GCI) in 2014, the quality of our infrastructure is still lagging behind compared to
countries of Singapore, Malaysia, Brunei Darussalam and Thailand. These three, the
industrial sector which is vulnerable because of dependence on imported raw materials and
semi-finished. Fourth, the limited supply of energy. Fifth, the weakness of Indonesia facing
import surges, and now imported Chinese products have flooded Indonesia. If the barriers
had not addressed the MEA feared it would be a threat to Indonesia.
C. Government Policies And Government Strategy For Facing Asean Economic Community

Towards the AEC which is in sight, the Indonesian government is expected to prepare a
strategic step in the labor sector, infrastructure sector, and industrial sectors. In the face of the
MEA, the Indonesian government prepared a policy response that is associated with the
National Industrial Development, Infrastructure Development, Logistics Development,
Investment Development and Trade Development .In addition to the respective Ministry and
the Institute strives to anticipate the AEC with strategic measures.

Indonesia with the potential of natural resources and great human resources in ASEAN
still needs to be strengthened in the face of the ASEAN free market. Given the other ASEAN
countries such as Thailand and Malaysia have been very aggressive to prepare themselves to
take advantage of the ASEAN Economic Community (AEC) in 2015.

The manufacturing company is the main pillar of industrial development in a country.

The development of manufacturing industry in a country can also be used to see the
development of national industry in the country. This development can be seen both from the
aspect of product quality and performance of the resulting overall industry.
A research conducted in 2006 by an international institution on the prospects of
manufacturing industries in various countries show quite alarming results. Of the 60 countries
which are the object of research, the position of Indonesia's manufacturing industry are
bottom along with some Asian countries, such as Vietnam. Research that examines aspects of
the competitiveness of Indonesian products manufacturing industry in the global market,
putting it in a very low position.
In the field of Industry, the Minister of Industry Saleh Husin also explained the strategy
that the Ministry of Industry facing AEC with offensive and defensive strategies. Offensive
strategy which shall include the preparation of superior products. From mapping the Ministry
of Industry, superior product in question is the agro industry such as cocoa, rubber, palm oil,
textiles and textile products, leather footwear, furniture, food and minimum, fertilizers and
petrochemicals, automotive, machinery and equipment, as well as metal products, iron, and
steel. The defensive strategy is done through the preparation of Indonesian National Standard
for manufacturing products.
Explained the Minister of Industry, Saleh Husin, offensive strategy by building a center of
education and training industry.
"Implementation is done with regard to the strengthening of Small and Medium Industries
sector include incentives for SMEs through restructuring program, machinery and
equipment," said saleh in Jakarta, Monday (06/07/2015).
besides,he said, the company is also focusing on developing industrial entrepreneurship
through training new entrepreneurs and help start-up capital. As for the defensive strategy,
carried out with a concentration in the preparation of Indonesian National Standard for
manufacturing products. There is now composed of 50 National Competence Indonesia (NCI)
and the industrial sector 25 Professional Certification Institute (PCI) and A Competency Test
(ACT).
Progressively pursued additions 15 10 NCI PCI and industrial sectors each year, preferably in
the field of industrial priority.
The minister also stressed the development of small and medium industries which are
included in the program offensive. Which was commissioned by access to give facility capital
for SMEs through business credit, Community Development Partnership Program.Venture
Capital and Corporate Service of Responsibility (CSR).
"According to BPS data, until 2013 year, the number of business units reaching 3,4juta HPI
unit and absorbing 9.7 million workers. That number will be increased again through the
acceleration of the growth of entrepreneurship, "said Saleh.
The government also approached the industry that has the potential to contribute to increased
exports, for example the automotive industry. In mind, the auto industry plans to export 50
thousand motor cycle to the Philippines. The Ministry of Trade also encourages shape further
boost the export sector. In addition, the fisheries sector is also providing optimism for
increased exports of Indonesia.

From the aspect of employment, there is a tremendous opportunity for job seekers as it can be
a lot of available jobs with the various needs of its diverse membership. In addition, access to
go abroad in order to find the job easier even could be without any particular obstacles. AEC
also be a good opportunity for entrepreneurs to find the best workers in accordance with the
desired criteria. In this case may bring the risk of employment for Indonesia. In terms of
education and productivity Indonesia is still unable to compete with workers from Malaysia,
Singapore, and Thailand as well as the industrial foundation for Indonesia alone makes
Indonesia ranks fourth in ASEAN.
 CHAPTER II
CLOSING
A. Conclusion

The government should prepare a strategy for the manufacturing industri in

indonesia may face asian economic community,and indonesia people also have prepare a
good skill and competence to compete with foreign community.

B. Reference:

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http://www.fiskal.depkeu.go.id/2010/edef-konten-view.asp?id=20150121190607015674933

Plummer, M, G., &Yue, C, S. (2009). Realizing the ASEAN Economic Community: A

Comprehensive Assessment. Singapore: Institute of Southeast Asian Studies.

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http://www.tarif.depkeu.go.id/Others/?hi=AFTA

http://www.kemenperin.go.id/artikel/10920/Strategi-Kementerian-Perindustrian-Hadapi-
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