ASEAN Vision
Vision statement can be a great asset to just about any type of organization. The vision statement takes into account the status of the organization and serves to point the direction of where the direction of where the organization wishes to go. The vision statement helps provide mission of the corporation business or non- profit entity. There are six vision of ASEAN, which is A Concert of Southeast Asian Nations – envision the ASEAN region to be, in 2020, in fully reality, a zone of peace, freedom and neutrality, as envisaged in the Kuala Lumpur Declaration of 1971., A Partnership in Dynamic Development – will forge closer economic integration within ASEAN. A Community of Caring Societies - an ASEAN community conscious of its ties of history, aware of its cultural heritage and bound by a common regional identity, and lastly is An Outward-Looking ASEAN – playing a pivotal role in the international forum, and advancing ASEAN’s common interests. We envision ASEAN having an intensified relationship with its Dialogue Partners and other regional organization based on equal partnership and mutual respect.
The challenges and purpose solutions
There are four challenges that appear to the ASEAN Vision. The four challenges to the ASEAN vision is that some business people will lose out. This is will touch on the failure to achieve the failure to achieve the production efficiency. Second challenge of the ASEAN is lies in convincing the relevant agencies of each country to change their rules to facilitate capital flow. On this challenge, we will define the element that deal with the challenge, there are withholding tax and exchange control. The third challenge is the improving the professional standards across ASEAN. This is involve the accounting, auditing, valuation of real estate, standard of rating agencies, and other activities that support the financial transaction in the ASEAN states. The fourth or the last one is the issue of cross border litigation, both enforcement and the resolution of commercial disputes between the private sectors. These all challenge will be discuss deeply on this assignment.

Losses in business
One of the identified challenges to the vision of a pan-ASEAN is business losses in the domestic country. Failure to achieve the production efficiency will cause losses in a business. There are lots of foreign firm trade in domestic country. In addition, there are also have some country are imported more foreign commodities which are much cheaper than local product. In this situation, people are preferred to buy imported goods. That is the reason why local firm are experienced losses in business. One of the factor cause losses in business for the domestic country because of the ASEAN Free Trade Area (AFTA). Basically, AFTA provide better access to markets which encourage the members in local production. Thus, it is also expected to promote greater economic efficiency. (Linda L., 2004) When the AFTA was officially signed in year 1992, ASEAN had six member countries which are Brunei, Indonesia, Malaysia, Philippines, Singapore and Thailand. Vietnam was joined in 1995 while two years letter followed by Laos, Myanmar and Cambodia. Nowadays, AFTA was consisting of ten countries. All the members are required to sign the AFTA agreement to join ASEAN. AFTA agreement has been made to improve ASEAN competitiveness a base producer in the world market through the elimination tariff and non tariff barriers within ASEAN. On 31st January 2003, AFTA has been amended that involved the elimination of the import duties of product among several ASEAN countries which are Malaysia, Indonesia, Singapore and Philippine and Thailand. The impact of the elimination of the import duties lead to falling in imported price. It is indirectly causing looses to the domestic firms in the country.
AFTA has also opened a wider market for ASEAN to promote the production of export goods with the higher quality and more competitive for the world market. Most of the firm saw establishment of the AFTA has opened up lots of opportunities for them to expend their business in certain countries among the ASEAN members. However, the inclusion of the free trade among ASEAN members has posed challenges to the domestic market to compete with the foreign goods market in a country. Although domestic firm in the country suffered losses, while other competitor to wins, the country did not mind because it is still will be profitable over the country. This is because, all traded commodities into the country will be subject to tariffs. Tariff itself will give benefits to the country. Here, we can see that there is an inflow of foreign exchange that helped the development of national economy.
Free trade has been done since the efficiency of firm can be controlled by the competitiveness between the domestic and foreign firms. The domestic firm will strive to improve the production efficiency to compete with the foreign firms. In addition, firms in the domestic country will try to expend their market of its products while also will contribute to the increasing in national income through export of the products. That is the reason to prove why there are certain government let the domestic operator lose since the trading will still give benefits to the country. Each country will practise the concept of giving pleasure to the other country where finally would gain benefits due to the foreign business opportunities. These enable the country to maintain and enhance the comparative advantages and also to compete effectively with other ASEAN countries. For example, Indonesia, Malaysia and Philippines have comparative advantage in the production of animal and vegetables oils. While comparative advantage also exists in mineral fuel export between Brunei, Malaysia and Indonesia.
While there are certain firm or private business losses in some country, government face one of the challenges which is to ensure a balance of social welfare among the community. As we can see, when there is a country that cannot produce a sufficient goods or product to their citizen, they will see that intra ASEAN trade will beneficially to ensure that people can enjoy the goods as well. Besides, poor in technology in particular country will lead the country get help from other countries in producing the higher technology product. As the impact, low-tech firms will suffer losses. However, the citizen indirectly enjoyed the technology comparable with other countries. This will improve the welfare of the community in which to enjoy the high tech product in their own country. As a country that encourages competition among business firms, government must also ensure the welfare of the community can be achieved at the same time.
One of the solutions that address the challenges identified in the failure of business is, each government of the country members should maintain the protection of domestic industries. As mention before, even the implementation of AFTA will give advantages to the economic cooperation between ASEAN countries which is the government of each country should maintain the protection of domestic industry. Next, to ensure that ASEAN member countries continuously develop, the policy that block tariff should be not fully implemented. It means that, government still need to impose tariff on imported goods by other ASEAN countries. It is because, without the tariff, it definitely will affect in reducing government revenue and also gain trade for all ASEAN. Falling in government revenue will influence few macroeconomic fundamentals such as decreasing in government expenditure, then will lead to increasing unemployment. Thus, the decreasing in government revenue will also reduce the per capita income of the country, and will reflect a low level in welfare. Thus, the negative economic indicators reflect the weakness in the economy performance. As a result, the investors will not attracted to invest in the country because they will think about the lower require rate of return and prevent them from continuously invest in ASEAN country. The same situation will occurred among member countries.
In addition, although the benefits of competitive advantage from the entry of foreign firm, domestic industries protection should also be noted especially the country with manufacturing industry. Most of the member countries are from developing countries, so it is important in order to protect local manufacturing industries to ensure it was not compete with the well established foreign manufacturing industries from the other ASEAN countries. In other words, government should support domestic firms and industries until have strongly enough to meet with the international competitor.

Withholding tax and Exchange control
The second challenge is lies in convincing the relevant government agencies of each country to change their rules to make easier in capital flow. There are two elements identified that must be deal with challenges which are withholding tax and exchange control. Withholding tax can be defined as tax reduction from wages or salary paid directly to the government by employers. It also involves the reduction of some other income such as pension, bonuses, commission and so on. Thus, exchange control is a type of control from the government in terms to limit the currencies trading . It also includes the prohibition of the use of foreign currencies and limits the amount of domestic currency that can be exchanged in the country.
Some countries with fiscal problem will not doing the withholding tax since it can be reduce the revenue for the government. However, withholding tax is actually beneficial to the economic for the country. When government take action or change their rule by reduce taxes, it will lead to increase in aggregate demand while it will increase national income and general price level. When there is increasing in price level, most of firms gain profit from their business. Profitable business in a country will attract investors and enhance the flow of capital into the country which will increase in investment. This proves how to convince them that decreasing in tax revenue today is actually would encourage lost of economic activities in the future for instance the increasing in capital flow into the country. Here, we clearly can see that the challenge faced in the vision is after identified withholding tax able to generate economic growth, but in the same time, it will reduce the revenue for all ASEAN members.
As for exchange control, we will examine how the changes in its rule will facilitate capital flow. In the administration of exchange controls, each central bank will adopt the principle that the initiative taken will complement the efforts to ensure the stability of the domestic financial market. Hence, stability of the domestic financial market will bring strong economic growth in a country. Thus, the regulations of exchange controls have been reviewed from time to time to ensure that regulations will not prevent the increasing of the efficiency for both financial system and business operation. This have been proved by previous study that mention the change of the rule of exchange control for example the liberalization the currency will facilitate to capital flow such as investment, capital spending, trade, business production and so on.
Capital flight gives a review where investors move their securities out of several ASEAN countries because of a fear to country’s specific risk and unstable economic condition. It is such another element involve that may prevent the vision to be archive. Generally, 1997 Asian financial crisis have spread across nations, especially among the ASEAN countries which are Thailand, Malaysia and also Philippines. Since most of the investors are lost their confident in continuously involve in ASEAN countries capital market, they are decided to shift their securities from domestic to another foreign institution. That is how to explain the capital flight. Next, during the financial crisis, most of member country’s currencies significantly depreciated. Due to the problem, several countries decided to liberalize their exchange rate while certain countries were still control their currencies. The challenge exists here when a country should reduce the amount of fund or in other words, reduce lending. The limited amount of available fund means that a country is experience lack of capital. It will reduce ability in providing fund to the local entities. As a result, it would prevent firm from develop new product since they are only have limited resources. Here, we clearly can see that the capital flight were actually one of the challenge which may prevent one of the vision to be archive.
As overcoming for these challenge, government need to ensure suitable policies implement to solve depreciation value and to ensure the stabilization of the currency. The policies are involved either to liberalize or control the exchange rate. When government decided to practise between one of the policy, it is hope that the currency were not continuously depreciate. Both policies have its own advantages and disadvantages in controlling the currency. For example, fixed exchange rate system offer much greater stability for international trade while liberalize provide flexibility and the possibility for the country’s economy to be quickly adjusted in terms to change market condition. However, both policies also contain the disadvantages when government implement one of the policies. The disadvantage of fixed exchange rate is high vulnerability of the economical system to speculative attacks. Thus, liberalize may leads to instability on the market. A stabile currency will increase capital inflow. In order to archive the ASEAN vision, each member should have strong currency to attract investors among other economic co-operation to involve in ASEAN economic activities. It will result positive growth for each ASEAN countries. Therefore, members must apply the policies wisely which can be use to increase capital inflow that directly lead to economic growth.
During the Asian financial crisis, most of ASEAN country currencies depreciated, then causing a shift of bank deposits from domestic banks to the foreign bank which is also can be define as capital outflow or capital flight. As to solve the capital flight from continuously happen, we found that financial institution play an important role. We purpose that financial institution should encourage shift or capital movement in short term lending to longer term period. It means that, short term borrowing must be avoided. As all know, borrowing in short term period will expose investors to higher risk. Investors will aspect that the return they will get is higher in short term, however, they should also concern that higher return will always followed by higher risk. It is one of the ways identified to avoid capital flight. An outflow of capital will result bigger declining in international reserve. Improving professional standard
While facing many challenges, this third challenge is another one of the essential that must be taken to strengthen the vision which in improving the professional standard across ASEAN. Firstly, one of the identified problems involved is the difference in national income accounting. Some countries consider prostitution and illegal gambling as an activity and do not reflect the values of the activities in the national income accounting. As for Malaysia for instance, both activities were not be count, while countries that did not prohibit such activities do account it as details in their national income. Since the value of national income in the countries that account the illegal activities is higher, it is hard to compare the differences of national income among countries.
Next, we will explain further about the professional standard that includes accounting and auditing. The principle source of accounting standard among ASEAN countries is different. Difference in the financial reporting which involves accounting standard is also a challenge that has been determined to archive the vision of ASEAN. After lots of reading, we found significant differences in financial reporting regulations adopted by each member countries. One of the causes of this difference in practise is that each country should fulfil the company’s law requirement and accounting standard. Even though we emphasized more to the financial reporting, we are actually try to explain that how ASEAN vision will be archived since all the member countries used different principles and policies for the professional standard in each country.
Company law requirement explain about each ASEAN country adopted different approach for example Brunei, Malaysia and Singapore use a British approach, while Indonesia, Philippines and Thailand used different approach such as Dutch, U.S and so on. As for Brunei, Malaysia and Singapore have adopted all former British colonies. For instance, UK Company Act 1984 that require the keeping of accounting records which explain company’s financial position sufficiently and accurately. All the accounting report must be enable true and fair financial statement to be prepared and allow to be audited. The act also requires the balance sheet, a profit and loss account and assessment of charges in financial position. It is what that contains in the financial report of the British group. While for non British group such Indonesia, Philippine and Thailand, the financial reporting provisions in the company’s law are less detail rather than British group. Another situation explains each Indonesian business is required to prepare a balance sheet within six month of the fiscal year end. However, there is no law requirement to file the balance sheet. Here, we saw different the accounting standard among ASEAN countries that some of them adopt the British requirement law, while some of the countries does not apply it. As conclusion, companies law is ASEAN are affected strongly by each country’s former colonial link. For example Malaysia, Brunei and Singapore are adopt British approach in fulfil the accounting standard. Since both groups are contrast, it is hard to harmonize the professional standard across all ASEAN countries especially in the company’s law requirement.
Another challenge contain under the different in financial reporting among ASEAN countries is accounting standard setting mechanisms. As all knows, professional accounting bodies play an important role in determining accounting standard in all ASEAN countries. For instance, accounting standard setting in Brunei was at original stage. It means that there are not formulated any mechanism to renew their local accounting standard. While in Indonesia, Malaysia, Singapore and Thailand, accounting standard are determine by professional accounting bodies in consultation with government agencies and other private sector. All accounting standard will get approval by the executive councils or board of director of the bodies. Generally, government agencies and outside partners such as private sector are limited in providing any comments on the exposure draft of purposed accounting standard. However, in Indonesia and Malaysia, government agencies and private sector group are involved also in drafting some standard. For example, the preparation of general accounting standard in Indonesia was supported by Indonesian Central Bank. Then, once it has been approved by the national council, or board of directors, the accounting standard become compulsory for members of the professional accounting bodies.
Accounting standard that has been designed is to ensure the investor have better access to high quality financial information. As mentioned before, each country may have own accounting standard. However, we also found another challenge to archive the ASEAN vision which is lack of effective and efficient enforcement mechanism may result in low quality of financial reporting. It is caused by the by accounting manipulation. For example, the company will hide poor financial performance, lack of profitability and worse asset quality. As a result, it will affect the investment activities among ASEAN countries or with other regional countries. All should know that misleading information in financial statement adversely affect investment decision making. Investor is in strong position to demand high quality financial reporting from corporate entities. Investor will have confidence in the information produced in the financial statement if they trust that the applicable accounting standards are fully compiled together with the auditing. As one of the solution in terms to solve the inequity of accounting standard used in providing financial reporting, all the standard should be harmonize. It is involve the law requirement, accounting standard setting mechanisms. As for law requirement, different approach that has been used should also need to harmonize either it is adopt by British or non British standard. This is because. The different approach was resulting in different financial reporting. Thus, it is hard to compare each other since the measurement standard was not same between each country. The effect of the problem also may cause difficulties for the evaluating process not only for the economy of a country, but also for business entities among ASEAN countries. Next, harmonize also essential to accounting standard setting mechanism. It is because, the in providing financial accounting, we are actually should produce a complete details about the entire item in the financial report. All the information contains must clearly explain the achievement so it will fulfil the investors demand in ability to access the financial information and performance. In addition, financial reporting was influence investors decision. Harmonize in accounting standard will improve the function of financial reporting and will encourage activities which support the financial transaction. The harmonized accounting standard among all ASEAN will provide better access in financial reporting and indirectly will increase in capital inflow besides improve economic performance for this economic co-operation.
Cross border litigation
The last challenge is issue of cross border litigation. In global time, particularly during an economic crisis, authority issues are increasingly common and important in the commercial world. Through the mastery of legal action in criminal and commercial dispute resolution, legal action will imposed on individuals that brought trade goods into a foreign country without going through the right process. This is because there are some private businessmen that want to reduce the cost of expenditure with gives bribe to the officer on duty at the port of entrance for imported goods did not necessary to pay import taxes that higher than the bribes given to the officer on duty. For example, the private businessperson brought in imported cigarettes and liquor that have the high import duty.
Smuggling is a brought in goods across the customs border or customs port illegally to avoid customs control. This is might occur because the goods not allowable for the imported or exported. In addition, the goods can be imported or exported but with the high customs duties. This is an illegal action which is one of the crime that would cause the offender is sentenced to serious courts that is sentenced either to death or life imprisonment depending on the weight content of the drug and the harmful to the addict is. For instance, the high court has to impose a prison sentence for smuggling drugs from Australia that is the well of life imprisonment. In Malaysia, there are legal action related to smuggling and the drug trafficking that is, if convicted of the offense, the law will be hanging to death.
The Tax Information Exchange Agreement is a tool to limit the taxation (tax treaties). Many countries have agreed with other countries in treaties to limit taxation. Tax treaties may cover income taxes, heritage taxes, value added taxes, and other taxes. Tax treaties tend to reduce taxes of one treaty country for resident of the other treaty country in order to reduce double taxation of the same income. The stated goals for entering into a treaty often include reduction of double taxation, eliminating tax evasion and encouraging cross-border trade efficiency. It is generally accept that tax treaties important certainty for taxpayer and tax authorities in their international dealing.

The government also works on ways for individual investor to take legal action across border at low cost without having a shuttle back and forth between the two countries by having or provide the visa document. Visa document is a certificate stamp issued or signed by the immigration of a country to show that the belief of the applicant has approved and he or she given permission to enter a country and stay for a while in a given period. However, permission is temporary and subject of an immigration officer in the entry point. There are seven types of visas include singe entry visa, multiple entry visa, business visa, tourist visa, residence visa, work visa and electronic visa. To make the individual investor easily to take legal action across border at low cost is typically using the business visa . In order to make the business people easier is using the online business. It is easier to do but the problem is by using the online business the protection of the business is not enough. The hacker can hack the business and can get the benefit from the business.

So, from the cross border litigation we can prove that the stock market will be linked up electronically by having an online business. In addition, the market will also be more open to each other which means by having a cross border the other country can enter the other country with a permission to expand their business and it is also will give a benefit for the home country. When the market will open to each other the competition and more common rules will drive efficiency to make sure the vision of ASEAN will be achieve.

How to facilitate the settlement of trade disputes with the private sector is further tightening the laws relating to conflicts of trade by imposing serious actions to receiving bribe from the private sector. Solution to offenses that are related to cross border litigation is organization should have rules to exist and be relevant. For instance the bribe recipient will be punished more than existing penalties such as dismissal country that one of the emphasis that should be recipient of the bribe. It is depend on the receipt of bribe. If the bribe he or she received is too high then the offender can be prosecuted and thrown from that country. This case should be take serious if the individual or the government officer that accept bribe to allow the private sector to enter the country without imposing the port of import duty. The result is government import duty will decrease and thus cause national income has falls.

Conclusion

As a conclusion, challenges that exist in achieving the vision of ASEAN, the ASEAN will strengthen the administration. This is because by knowing the challenges that arise in the establishment of ASEAN will be stronger. In addition, ASEAN is also to enhance and strengthen relations between ASEAN countries as an example for the economy of some goods such as salt, vinegar and rattan repealed among the ASEAN countries. For the political field, the ASEAN members to enhance friendship with the declared Kuala Lumpur as ZOPFAN (Zone Of Peace and Neutrality) which guarantee peace of Southeast Asia without the intervention of the big power. Social field has divided into two types, which is culture and education. Cultural benefits obtained from the ASEAN countries to learn and understand the customs and cultures of other ASEAN countries. ASEAN members should provide a place for students to improve the standard of education in ASEAN countries and thus to compete with developed countries in Europe.
Lastly, we hope after we elaborate the challenge that identified, which is business people will lose out, convincing the relevant government agencies of each country to change their rule to facilitate capital flow, the third challenge is improving the professional standard across ASEAN and the final issues is the cross border litigation the vision of ASEAN will achieved. We also hope that his is will make ASEAN lead of the world economics for the future.