Hornbill Unleashed

September 2, 2016

Nazir Razak wants speedier regional economic integration

Filed under: Politics — Hornbill Unleashed @ 9:01 PM

Nazir-Razak_ekonomi_600Asean Business Club Co-Chairman Nazir Razak said strong regional leadership is needed to realise a single economic market.

Nazir, who is also chairman of CIMB Group Holdings, wants the private sector to push harder to achieve this.

In an interview with the Nikkei Asian Review, he said a lack of political will and public acceptance was hampering planned regional economic integration.

The 10 member countries of the Association of Southeast Asian Nations established the Asean Economic Community at the end of 2015 to lay the foundation for a single production base through the elimination of tariffs and other liberalisation initiatives.

“Political resistance is about sovereignty, but it is also about lack of mass appeal,” Nazir told NAR, adding that Asean had never done enough to sell the importance of the concept as a trade-off to the masses.

Nazir said Asean needed strong, charismatic leaders in the mould of previous leaders such as former president Suharto of Indonesia, former prime minister Lee Kuan Yew of Singapore and former prime minister Mahathir Mohamad of Malaysia to steer the region.

“Asean recognises that Indonesia is the big brother, and we would like it to step forward and take on leadership for the region,” he said, adding that current President Joko Widodo has all the ingredients needed provided he could convince his people about the advantages of the AEC.

Nazir proposed that businesses form independent bodies among themselves to implement, monitor and push forward projects under the economic integration plan.

Despite having a significant presence in Malaysia, Indonesia, Thailand and Singapore, CIMB is still unable to set up a centralised back-office operation due to the differences in national laws.

“When I think of that, there is very little focus and leadership to drive economic integration,” Nazir said.

For a start, he suggested, regional banks should be allowed to move senior staff freely “at very little cost to everyone”.

Due to the development gap among Asean members, many in the less developed economies are defensive due to fears that more advanced economies will be the only ones to benefit once their markets are opened.

One solution, Nazir said, was to encourage companies with regional operations to take their corporate and social responsibility roles more seriously and show that the AEC actually benefited everyone.

Nazir said Asean should learn from the experience of the UK’s vote to leave the European Union by emphasising more mutual benefits and focusing less on sovereignty issues.

“Brexit has vindicated Asean, as the pact has been very focused on trade and investment. It has been careful not to talk about any political integration and clearly left the single currency off the table,” Nazir told NAR.

FMT Reporters Online

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