AEC 2015 THE AWARENESS OF

QUANTITY SURVEYORS IN
MALAYSIA

Ainul Ashiqin Ahmad Shuhaimi, Sharina Farihah Hasan and Khairuddin

Abdul Rashid
International Islamic University Malaysia

AGENDA

ASEAN
ASEAN Economic Community (AEC)
Service Liberalisation
AEC and the Construction Industry
Results
Conclusion

Association of Southeast Asian

Nations (ASEAN)
Background of ASEAN
1)
)
)

ASEAN Formation
Formed on 8 August 1967 in Bangkok, Thailand
The member countries;
- Indonesia
- Malaysia
- Philippines
- Singapore
- Thailand
Then expanded to;
- Brunei Darussalam (7 January 1984)
- Viet Nam (28 July 1995)
- Lao PDR and Myanmar (23 July 1997)
- Cambodia (30 April 1999)

Association of Southeast Asian

Nations (ASEAN)
Background of ASEAN
2) Aims

and Purpose

the acceleration of economic growth, social progress, cultural

development
the protection of regional peace and stability,
the promotion of active collaboration and mutual assistance in
common interest fields
collaboration for greater utilization of the agriculture and
industries
the expansion of the trade and maintaining close
beneficial cooperation with the existing international and
regional organization.

Association of Southeast Asian

Nations (ASEAN)
Background of ASEAN
3) The main cities in the ASEAN and the distribution of the
population and land area according to the countries
Country

Capital City

Brunei Darussalam

Bandar Seri Begawan

Cambodia

Phnom Penh

Indonesia

Jakarta

Lao PDR

Total Land Area Total Population

(km2)

(thousand)
5,765

406.2

181,035

14,957.8

1,860,360

231,369.5

Vientiane

236,800

5,922.1

Malaysia

Kuala Lumpur

330,252

28,306.0

Myanmar

Nay Pyi Taw

676,577

59,534.3

Philippines

Manila

300,000

92,226.6

Singapore

Singapore

710

4,987.6

Thailand

Bangkok

513,120

66,903.0

Viet Nam

Ha Noi

331,212

87,228.4

4,435,830

591,841.0

Total

ASEAN Economic Community (AEC)

Background of AEC

In 2003, the ASEAN Economic Community (AEC) was initially

planned to be fully realised by 2020, but later, in 2007 the
Leaders made a decision to speed up the establishment to
2015(AEC Fact Book, 2011).
The wide economic gaps between the ASEAN countries have
slowed down the building pace of the regions economic
integration and liberalisation (Chia, 2011).
Despite the slow pace, ASEAN members have been showing
progress and maintaining their commitments towards
realising this mission.

ASEAN Economic Community (AEC)

ASEAN Vision 2020 envisioned that the regional economic

integration shall be built by strengthening the foundation of
the existing collaboration efforts, expanding ASEANs joint
efforts and enhancing mutual aid (ASEAN Secretariat,1997).
To create a region in which goods, services, capital and
skilled labour would flow freely
Agreed on ASEAN Economic Community (AEC) by 2015
The end goal of AEC is the creation of single market and
production base where there is;

free flow of goods

free flow of services

free flow of investments

free flow of capital

free flow of skilled labour

ASEAN Economic Community (AEC)

ASEAN Framework of Agreement in Services (AFAS)
AFAS was signed and agreed in 1995 by ASEAN. AFAS
seeks to encourage the movement of labour for services
within the region.
It was formed towards realizing the liberalisation of trades
in services, as well as to improve the efficiency and
competitiveness of ASEAN service providers, (Chia, 2011).
In 2001, AFAS was extended in order to include services to
be delivered under Mode 4, Movement of Natural Persons.
Then in 2004 agreed to facilitate the movement of skilled
labours, business people and talents within the ASEAN
region and have started exploring Mutual Recognition
Agreement (MRA) of professional qualifications (Lloyd,
2007).

ASEAN Economic Community (AEC)

MRA was introduced in order to minimize transaction

costs that cover several sectors (Chia, 2011). MRA
enables qualified professional services suppliers to be
recognised by the respective ASEAN countries local
authorities.
As of 2009, several MRA were signed by ASEAN
Economic Ministers:
MRA on Engineering Services (2005)
MRA on Nursing Services (2006)
MRA on Architectural Services and Framework Arrangement
for the Mutual Recognition of Surveying Qualifications (2007)
MRA Framework on Accountancy Services, MRA on Medical
Practitioners, and MRA on Dental Practitioners (2009)
Source: (AEC Fact Book, 2011)

Service Liberalisation

Involvement of foreign professionals in

Malaysias construction industry does make
positive changes towards the local industry.
There are large positive gains through the
elimination of barriers in trades in services
(Deardoff, 2001).
There are several potential benefits and
effects of service liberalisation to
professionals in the Malaysian construction
industry.

Service Liberalisation

Summary of potential benefits of service

liberalisation towards the construction
Potential Benefits
Author
professionals
in Malaysia.
Construction works become more efficient

Mattoo & Stern (2008)

Construction Firms become more competitive

Plummer & Chia (2009).

Construction industry is opened to domestic and Ray (2013)

foreign markets
Higher quality of service
WTO (2001) Zakariah et al (2009)
Easier to venture into foreign construction CIE (2010)
industry
Larger target market
Hermann (2011) Plummer & Chia (2009)
Greater transfer of technology

Rajan & Sen, (2002) WTO (2001)

Faster physical development

Rajan & Sen, (2002) WTO (2001)

Greater job opportunities

Mattoo, Rathindran, & Subramaniam (2001)

Zakariah et al (2009)

Service Liberalisation

Summary of potential effects of service

liberalisation towards the construction
Potential Effects
Author
professionals
in Malaysia.
Increase in job opportunities

Plummer and Chia (2009),

Increase competition of employment

Mattoo and Stern (2008)

More diverse services

Mattoo and Stern (2008) WTO (2001)

Increase in quality of service

Plummer & Chia (2009)

Better job qualities

Plummer & Chia (2009)

Change of employment form

Hermann (2011) Mattoo et al (2001)

Greater competition between domestic and Hermann (2011) Indira & MacLaren (2012)
foreign professionals
Less opportunity for local firms
Hermann (2011) Indira & MacLaren (2012)
Loss of talents/ brain drain

Hermann (2011) Ray (2013) Jumaimah and

Yusliza (2011) Zakariah et al (2009)

Results

The respondents were asked with the following

questions:

Question 1: Do you know that AEC is to be fully

implemented by 2015?
Question 2: Do you know that AEC aims for regional
economic liberalisation?
Question 3: Do you know that AEC also aims towards
service liberalisation?
Question 4: Do you know that the free flow of services
and skilled labours are parts of the AECs policies?
YES
NO
PERCENTAGE
PERCENTAGE
Question 5: Do
you know
that the
movement
of
NUMBER
NUMBER
(%)
(%)
professionals
including
QS
would be
less restricted
Q1
27
87
4
13
Q2
29
94
2
6
under
the
implementation
of
AEC
in
2015
and
beyond?
Q3
26
84
5
16
Q4
Q5

22
26

71
84

9
5

29
16

Conclusion

The implementation of AECs policies, particularly its

agenda on service liberalisation is predicted to bring
benefits and effects to professionals in all economic
sectors including construction.
The key findings suggested that they are aware of the
policies. Besides, they also expressed their concerns on
the potential effects which would include greater
competition between domestic and foreign Quantity
Surveyors, less opportunity for local firms, and etc.
The Government should take initiatives in providing more
information to improve awareness among people. It
would simultaneously help the member countries to
successfully achieve the aim of AEC particularly on
matters related to service liberalization in the
construction industry.