Encourage private sector: Business leaders
Co-chair of ASEAN Business Club Malaysia Nazir Razak said that local firms and small- and medium-sized enterprises (SMEs) should take advantage of capital market integration among ASEAN member countries.
“When competition becomes more intense, we can use the ASEAN platform to compete with the rest of the world,” he said during the launch of the “Lifting-The-Barriers” reports on Friday.
Nazir, who is also a group chief executive of CIMB Group, added that governments could back local businessmen by providing a realistic set of goals, which could make it easier for companies to know how to benefit from the 2015 AEC.
The reports, which were published by the ASEAN Business Club under the Network ASEAN Forum, pinpoint six sectors — namely connectivity, health care, capital markets, financial services, aviation and infrastructure and power and utilities — and identify bottlenecks and barriers within them that hinder free trade in ASEAN.
To produce the reports, business leaders from the Network ASEAN Forum worked with research partners such as McKinsey & Company, the Boston Consulting Group, Bain & Co., Accenture, Oliver Wyman and the Centre for International Law at the National University of Singapore.
Advisor to the Lifting-the-Barriers Initiative Munir Majid said that the reports were made to enhance the integration process for ASEAN industries ahead of the ASEAN single market by providing a strategy and barriers roadmap within those six sectors.
One of the reports focusing on the aviation sector, for example, conveys that the growth of low-cost carriers (LCC) had provided ASEAN countries with regional travel opportunities. The highest LCC penetration was in Indonesia, the Philippines and Malaysia, based on the report.
The report said that despite the growth of LCC operations within ASEAN countries, resistance against the opening market still occurred.
“An innovative proposal here was an ASEAN Community carrier, which finds the middle ground on the issue of the national ownership,” Munir said.
Munir said the reports also had identified other main obstacles that could hamper the advance of the integration process ahead of the 2015 AEC, including economic nationalism, human resource constraints, regulatory congestion and under-developed infrastructure.
The 2015 AEC envisions the ASEAN region as a single market and a production base that is highly competitive and integrated with the global economy.
Indonesia is expected to lead the competition in the 2015 AEC despite public concerns due to the failure of the country to compete in the ASEAN-China Free Trade Agreement (AFCTA) in 2010.
However, businessmen were more optimistic about Indonesia’s competitiveness in the forthcoming 2015 ASEAN single market.
Patrick Walujo, cofounder of Indonesian private-equity firm Northstar Pacific Partners, said that the nuances of competition in the 2015 AEC would be different than in the AFCTA.
“The cost structure in ASEAN countries is lower and more competitive. I am sure our businessmen can take in more profits, successfully tap into the ASEAN market and expand their businesses,” he said. (tam)