ASEAN Businesses Need ASEAN Strategy, Says M'sia's Central Bank Governor

KUALA LUMPUR, May 27 (Bernama) -- While the future for ASEAN looks promising, ASEAN businesses, including small and medium enterprises (SMEs), need to consider and explore an ASEAN strategy, said Malaysia's Central Bank Governor Dr Zeti Akhtar Aziz Wednesday. She said ASEAN businesses should also view ASEAN as an increasingly integrated market and having such regional or international perspectives may prove to be a game changer for SMEs, paving a path towards sustained growth, increased job creation and higher innovation capacity. "The next frontier for SMEs is to emerge as regional players that are not constrained by the domestic consumer base," said Zeti at her luncheon address during the ASEAN SME Showcase and Conference 2015 here Wednesday. She added that SMEs possess the potential to participate in global production networks by riding on ASEAN's intrinsic strengths and prospects, multiple SME-focused policy initiatives as well as the continued wave of regional financial integration. "This will allow for the transition for SMEs to benefit immensely from the ongoing regional economic and financial integration and thus contribute towards a balanced and sustainable growth of our region," said Zeti. Meanwhile, the standardisation of trade procedures, the removal of tariff and non-tariff barriers and the improvement of regulatory frameworks across the region has also been an additional enabling factor for the SMEs, she added. The governor said ASEAN has enabled SMEs in the region to gain access to a larger and more extensive marketplace. Amid the strengthening of cross-border supply chains in the region, intra-ASEAN trade and investment activity have increased significantly over the recent 15 years, she added. "Intra-regional trade now accounts for almost a quarter of the region’s total trade while intra-regional investment activity has quadrupled to 17 per cent of total investment since 2000," said Zeti. She added that given the large consumer base in ASEAN, SMEs can also utilise ASEAN as a platform to strengthen competitiveness before entering the global market. Zeti said by 2020, ASEAN is expected to account for more than US$2 trillion of additional consumption, reinforced by rising incomes in the region, with per capita income almost trebling in the recent decade. SMEs in the region will also benefit from ASEAN’s strategic economic linkages with greater Asia and with other parts of the world, including the advanced economies and other emerging regions, said the governor. She noted that several countries have entered into bilateral agreements, including trade agreements, with ASEAN to enhance economic cooperation. "These multilateral and bilateral engagements have the potential to create many new business opportunities for ASEAN SMEs," said Zeti. With a projected annual gross domestic product growth of 5.4 per cent over the next six years, the region is poised to reach an economic size of US$3.7 trillion by 2020, four times the size it was a decade ago. -- BERNAMA