The Asean Economic Community, after ten years of hiatus, materialised on Sunday at the Kuala Lumpur summit, where the 10-member Association of Southeast Asian Nations (Asean) signed a historic declaration.
Myanmar, Philippines, Singapore, Thailand, Indonesia, Malaysia and Vietnam, Brunei, Cambodia, and Laos have come together to form a strong socio-economic community that will further connect its 625 million people as well as individual economies, which generate a combined output of $2.6 trillion.
Before the AEC comes into full effect by the end of the year, here is a basic breakdown of the main advantages and the challenges the new bloc may face.
Free Trade Area can be a reality for ASEAN nations:
"Asean countries are highly integrated, even more than the SAARC nations," Srikanth Kondapalli, professor, Centre for East Asian Studies at the School of International Studies of the Jawaharlal Nehru University told IBTimes India.
The new bloc will further help in simplifying trade, removing tariffs on goods and services to create free movement across borders, and will also help in expanding investments.
"In practice, we have virtually eliminated tariff barriers between us. Now we have to assure freer movements and removal of barriers that hinder growth and investment," Malaysia's prime minister Najib Razak said while signing the 2015 Kuala Lumpur Declaration on Establishment of the Asean Economic Community.
Infrastructure development and GDP growth:
One of the biggest advantages of the AEC to the member nations will be the development and implementation of infrastructure projects, especially in setting up energy pipelines and fibre-optics across the region, professor Kondapalli pointed out.
The member nations' transport infrastructure is also likely to be connected.
The economic community will also help nearly double Asean's combined GDP from US$2.6 trillion to US$4.7 trillion by 2020, the Malaysian PM said, according to Reuters.
By 2030, the Asean bloc may also well become the fourth-largest economy in the world.
Collaboration on Security
As global terrorism has become a reality in the light of recent events, including the Paris attacks and the downing of a Russian passenger plane, a collective response to security issues will help Asean nations thwart such attacks in the region.
While there is no pan-regional terror group threatening security, there have been instances of isolated terrorism in the south east Asian countries in the recent past, especially with the Abu Sayyaf group still working actively in Philippines and the recent bombing in Bangkok.
"The ASEAN nations have taken measures to address non-traditional security challenges, such as piracy, drug trafficiking and illegal immigration. They have to implement strong measures to combat terrorism as well," the professor said.
South China Sea dispute: One of the the most sticky points for the Asean countries is the ongoing South China Sea dispute.
While Malaysia, Vietnam and Phillipines have contested China's claims over islands in the region, other Asean nations such as Singapore and Myanmar have taken a different stand, professor Kondapalli pointed out.
"While China will welcome the AEC, if the dispute becomes extremely heated in the future, it may be a cause of concern for the Asean countries," he added.
Economic Divide: Another stumbling blcok could be the glaring economic divide between the lesser developed Vietnam, Cambodia, Laos and Myanmar and the richer Singapore, Malaysia, Indonesia, Brunei, Thailand and the Philippines.
The lopsided growth of infrastructure in these countries could be a challenge in implementing projects, and corruption may also play spoilsport.
No Asean identity: Singapore's Prime Minister Lee Hsien Loong correctly pointed out that one of the constraints was that the nations do not have a collective identity needed to take the AEC forward.
"One of the constraints on the governments, and one of the reasons Asean finds it difficult to make progress together is because there is not a very strong sense of Asean identity. It's really a Singaporean identity, or Malaysian or Indonesian. So that's the first priority," Lee was quoted saying by local media.
Will the AEC be similar to the European Union?
The community of Asean nations will be bigger than the European Union in terms of population, but it still has a long way to go to catch up to the economic output of the latter.
Even intra-regional trade among member countries stands at 24 per cent of Asean's total global trade over the last decade, compared to 60 per cent in the European Union, according to The Associated Press.
Borderless travel may also not be a near reality for Asean.
"While the EU has the Schenghen visa that allows for paper-less travel across borders, Asean has not gone that far yet. While it may want to ease travel across nations, it may not be at the same level as the EU's," the professor said.