Bernardo M. Villegas
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Rebalancing Strategy
published: Mar 31, 2017



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Preparing CEOs for the AEC

           Whether early or late in 2015, the ASEAN Economic Community (AEC) will be born.  First the six leading ASEAN countries (Vietnam, Indonesia, the Philippines, Thailand, Malaysia and Singapore) and then later the rest of the ten-member free trade area, protective tariffs on all manufactured goods will drop to zero to three percent.  As happened in the last century to the European Economic Community (EEC), the hundreds of millions of consumers in these ten countries will constitute one large common market for any business enterprise operating in the region.  The AEC will have more than 600 consumers as contrasted with less than 300 when the EEC first began.  Also in contrast with the EEC, countries like Indonesia, the Philippines, Vietnam and Myanmar—the largest in populations--are still enjoying their demographic dividends.  This means these countries, that constitute 80 percent of the population of ASEAN, will continue to enjoy a growing and young population for decades to come.  EEC started when Western Europe was already entering the beginning of the demographic winter from which the whole EU is now suffering.  This means that the AEC will have a much longer period to enjoy the consumer boom that was seen in the EEC in the last century.

          The AEC will without doubt have the economic dynamism needed for the entire region to compete with and to complement the economic giants of Asia, China and India.  The AEC will see countries transitioning from low per capita incomes of $1,000 to 2,000 (such as Vietnam, the Philippines and Indonesia today) to about $10,000 in the next decade or so.  This means a rapid rise of the number of households belonging to the middle class with the subsequent explosion of demand for consumer products and services of all types, e.g.  higher value food products (both fresh and processed); fashion goods; furnishings for a housing boom; consumer durables (e.g. appliances, computers and smart phones); bicycles, motorcycles and cars; and such consumer-oriented services as education, health care, tourism, entertainment and financial services.  The AEC will see the rise of hundreds of thousands of large, medium and small enterprises that will result in a demand for qualified management manpower in numbers that defy the imagination. 

           It is in the light of this scenario that will quickly descend upon all of us that the University of Asia and the Pacific (UA&P) has asked some of the leading business professors of the IESE Business School in Barcelona to help launch an Advanced Management Program that will accelerate the development of top management personnel for the ASEAN Economic Community.  I spent two academic years recently as a Visiting Professor at IESE, ranked in 2011 by the Financial Times as No. 1 in the whole world for Executive Education for Open Programs and No. 2 in the world for the same category by Bloomberg Businessweek also in 2011.  IESE has fifty four years of experience in conducting Advanced Management Programs for CEOs, owners of business, and senior executives from all over the world.  It has also helped put up similar programs as well as business schools in Latin America and Africa. It was very instrumental in establishing the leading business school in China, the China Europe International Business School (CEIBS) in Shanghai. Its competitive advantage is its very global faculty and its deep and extensive research which has produced business cases and other teaching materials that are relevant to a very wide range of countries, cultures and industries. I was very impressed with the more than 100 full time professors who all hold Ph.D.s from the best universities from all over the world.  These professors devote a great deal of their time to conducting research in their areas of specialization.  Especially noteworthy are their research activities on topics related to leadership and the management of people. It is not a coincidence that the mission of IESE is to develop global leaders that will make a positive contribution to society.

          The AMP that the University of Asia and the Pacific will launch in January 2013 with the assistance of IESE professors is addressed to produce top management personnel for countries that are or will be operating in the ASEAN Economic Community, especially in Vietnam, Indonesia, the Philippines, and Myanmar.  The enterprises that should consider sending their senior executives to the AMP should be either those that are owned and managed by nationals of any of the AEC countries or a global company (e.g., from North America, Europe or Japan) intending to intensify regional operations and enlarge share of the AEC market.  Participants will be either senior executives with at least ten years of experience or extensive knowledge of a business; or owners of businesses that are undergoing expansion or internationalization; or are in the midst of an executive career change; or are board members or senior executives being groomed for succession or promotion.

          The AMP aims to accomplish the following:  a) provide a forum for discussion, which will enable owners and senior executives to take a step back and reassess their views and roles in the current business environment;  b) expand the participants' business mindset through analysis of the best practices of companies coming from a wide range of sectors, countries, and cultures.  This will help widen the management focus of the participants, allowing them to obtain a more global perspective of their businesses; c) challenge old concepts and assumptions in order to align business practices with the demand of current trends and conditions; present the latest concepts and ideas for developing strategies that create value for all stakeholders; and help participants identify and analyze the roles senior executives and business owners must play today in leading their companies more effectively.