Malaysia - Regional players must take concerted efforts to grow to increase intra-Asean activity – Nazir

KUCHING: Collaborative efforts and measures must be taken to boost economic activity within the Asean region in the midst of a challenging global economic environment, according to CIMB group chief executive Datuk Seri Nazir Razak.

In his opening remarks at the 2nd CIMB Asean Conference yesterday, he pointed out the need to drill a little deeper into what was missing from the Asean equation and what the region would need to do to elevate itself as a distinct asset class in the eyes of global investors.

“On the CIMB front, we have taken advantage of the global situation and made two significant purchases; the acquisition of the Asia Pacific IB and equities operations of Royal Bank of Scotland (RBS) and the purchase of a majority share in the Philippines Bank of Commerce (subject to regulatory approval).

“With the RBS acquisition, we have transformed CIMB Investment Bank into the largest Asia Pacific based investment bank. Our new or enlarged units in India, Australia, Greater China, the US and the UK will enable us to assist investors and businesses who want to move in and out of Asean or across Asia Pacific as a whole.

“After our second purchase, Bank of Commerce, we will have full universal banking capabilities in all five of the large Asean economies, namely Malaysia, Indonesia, Thailand, Singapore and the Philippines.”

Nazir added that CIMB had taken advantage of the global crisis to complete the platform it needed to achieve its Vision 2015.

In doing so, the group had strengthened its ability to leverage on the ‘Asian Century’, placing it alongside many Asean companies which had made similar tactical moves recently.

“We are in the midst of a simultaneous global banking, financial markets and economic crisis that, in the last few months, has taken on dangerous socio-political dimensions in Europe with high unemployment, rapid changes in governments and growing diplomatic tensions at the international level.

“Even closer to home, there are concerns over the two Asian giants of China and India, with growth slowing in China and a potential foreign exchange crisis bubbling in India.

“Against this bleak backdrop, the Asean region shines brightly. But can our region find new levers for growth in the face of stalling external demand? Yes we can, but we need to make concerted efforts to increase intra-Asean activity,” Nazir emphasised, pointing out that three major areas must be worked on.

First, trade must be vigorously grown by pursuing free trade agreements, whether individually or as Asean, and by bringing down barriers, especially non-trade barriers within the region.

Second, on capitalising on the demographic dividend, the key bottleneck in tapping this was infrastructure, particularly in logistics and connectivity.

The connectivity infrastructure must be made up to the task, and Asean cities must be capable of absorbing and channelling the productive energies of millions of new entrants every year into the global workforce.

Citing an Asian Development Bank estimate, Nazir said Asean countries would need to invest approximately US$60 billion per year in roads, railways, ports, energy, water and sanitation and other infrastructure.

On the third point, he said, “We must work to unblock the key bottleneck to building this infrastructure, which is not the availability of financing but financial intermediation.

“We lack the finance infrastructure to optimise our region’s high savings levels. Our financial markets are not deep enough or integrated enough to fund these large infrastructure projects, even though we have large reserves.”

In addressing the challenges ahead, he noted that Asean countries had already applied the hard lessons learned from the 1997 Asian financial crisis to ensure relative stability in its individual economies in the midst of the volatile global economy.

“The challenge now is to start acting as one region, to evolve policy coordination into a common framework for managing and growing a regional economy.

“In particular, I would like to see agreement on an Asean banking framework, the creation of a single Asean stock exchange and greater regional collaboration to strengthen domestic currency bond markets,” he highlighted.

http://www.theborneopost.com/

Business & Investment Opportunities 
YourVietnamExpert is a division of Saigon Business Corporation Pte Ltd, Incorporated in Singapore since 1994. As Your Business Companion, we propose a range of services in Strategy, Investment and Management, focusing Healthcare and Life Science with expertise in ASEAN. We also propose Higher Education, as a bridge between educational structures and industries, by supporting international programmes. Many thanks for visiting www.yourvietnamexpert.com and/or contacting us at contact@yourvietnamexpert.com