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As China’s economy slows and Indian growth remains uncertain, global attention has switched to the end-year creation of a tariff-free 10-nation Southeast Asian “single market” as the newest and most exciting facet of rising Asia.

The excitement is justified. Taken together, members of the Association of Southeast Asian Nations (Asean) have a population of 620 million, a growth rate of five per cent and a combined gross domestic product of almost $2.5 trillion. A growing middle class across the region has emerged as an avid consumer of foreign and domestic goods and services. Not surprisingly, global business is enthusiastic. Trade is booming and foreign investments into the region are rising.

Significantly, even as they strive to get elements of the Asean Economic Community (AEC) in place by year-end, countries in the region are already crafting an even more ambitious “post-2015 vision” for further integration. The ambition is to move beyond trade and economics to focus on still largely incomplete plans for building a political and security community and preparing the groundwork for stronger social and cultural integration. One visionary goal is to create a common Asean time zone — as opposed to the current three spanning the Asean region — to facilitate cross-border business and finance.

The AEC roadmap includes four pillars: a single market and production base (including the free flow of goods, services, skilled labour, capital and investment), a competitive economic region, equitable economic development and integration into the global economy.

But challenges remain. First, don’t expect the AEC to enter into force with a “big bang” on Jan 1, 2016. Not all elements of the single market will or can be in place on schedule and while progress is being made to reduce trade barriers and ease investment, as well as ensure the free flow of goods, services, investment and skilled labour, the devil is in the detail — and in enforcement and implementation. An Asean Scorecard which keeps countries up to date on progress on the AEC says about 80pc of the work on completing the AEC has been done. But Asean experts acknowledge that the remaining 20pc covers “the most difficult” tasks.

Malaysian Trade Minister Mustapa Mohamed, whose country holds the rotating presidency of the Southeast Asian bloc this year, has said the full impact of integration may not be felt until perhaps 2020, recognising that there are border issues, customs, immigration and different regulations, which still need to be tackled. Businesses must still navigate a complex landscape of different product standards and regulations that make it hard to sell across the region and hamper the ability of new companies to enter the market.

Surprisingly, many Asean businesses appear to know little of the AEC’s pros and cons. Vietnamese officials said recently that 60pc of their country’s business community “had no idea what the AEC is”. A survey by the Singapore Business Federation in January found two out of five firms were completely unaware of it. Yet establishing the AEC will impact positively on many industries, including electronics, car parts and components, as well as chemicals, textiles, and clothing. Once completed, the hope is that the AEC will boost intra-Asean trade which currently stands at a modest 24pc of the region’s overall trade flows.

Second, Asean still has much to do to connect with citizens. Increasingly vocal civil society representatives are adamant that Asean must live up to its goal of becoming “people-centred” and less elitist. In contrast to earlier years and outdated conventional wisdom, Asean civil society is proactive and striving to become deeply involved in efforts to ensure stronger human rights protection and promotion across the region. In a recent statement, the Asean People’s Forum (APF) — Asean’s largest civil society group — listed a number of problems in the region, among them grave human rights violations, corruption and poor governance. Intimidation of human rights defenders was also raised.

There are signs that governments are paying heed. As current Asean chair Malaysia has indicated that one of its main priorities will be to engage Asean citizens and to promote greater understanding of Asean initiatives and projects. “We also hope to steer Asean closer to the people of Southeast Asia: to make this institution part of people’s daily lives, by creating a truly people-centred Asean,” says Malaysian Prime Minister Najib Razak. The rhetoric has to be turned into action, however.

Third, for all the hype, Asean still has to deal with obstacles created by economic nationalism, protectionism and resistance to foreign-owned industries which persists in many member countries. Malaysia’s trade minister Mohamed has said he will not avoid the politically sensitive task of tackling protectionism in Asean such as local content requirements, mandatory product standards and import restrictions.

More generally, maritime disputes in the South China Sea as well as incidents of religious sectarianism, rising intolerance, human trafficking and corruption are further challenges to surmount as are differences in levels of development and political and economic models among Asean states. Additionally, there is concern that Indonesia under President Jokowi may be too focused on the country’s domestic questions to play its traditional leadership role in Asean. Meanwhile Indonesian business continues to be wary of opening up the country’s markets to Asean competitors.

Looking ahead

The Nay Pi Taw declaration on Asean’s post-2015 vision adopted last November sets out an impressive agenda for the region’s future. While deepening economic integration and connectivity remains on the agenda, Asean leaders have identified external relations and the building of political/security and socio-cultural communities as a priority.

There is no shortage of interesting ideas: leaders of Indonesia and Malaysia in recent weeks have been pushing for a common time zone arguing that this would help businesses and allow for coordinated opening times for banks and stock markets. An Asean Open Skies Agreement is designed to create a single aviation market and allow for more flights, which will increase trade, investment and tourism. There are suggestions to set up an Asean regional infrastructure fund. Plans for strengthening the Asean Secretariat and improving coordination among member governments are being studied by a high-level task force. East Timor’s Asean membership is under internal discussion.

Asean is a business opportunity for the West but also for other Asian countries — a fact that India, China and Japan are more than aware of.