ASEAN nations should grow together

Growth of one ASEAN nation should not be at the expense of another, said Investment, Trade and Industry Minister Datuk Seri Tengku Zafrul Abdul Aziz.

“So one growth of one ASEAN nation should not be at the expense of another and how do we do this?

“I mean IMF recently just talked about the growth in global trade, this year trade is expected to grow stronger than last year if I’m not mistaken for 3.3% this year,” he said in a video shared on the X platform.

Yesterday he shared a video where he participated at the World Economic Forum in Riyadh, Saudi Arabia on X platform.

“So for ASEAN just to give you a perspective of ASEAN and Malaysia of course is one of them, growth has been around 4% to 5% and is expected to continue and that is really the fastest growing block.

“We are the fifth largest economic block population of 680 million people.
GDP of USD3.7 trillion and we as members of ASEAN also recognize the importance of the growth to be inclusive.

“Last year was around 0.3% in fact the lowest in 50 years and ASEAN as a group of nations, if you look at their trade to GDP is all above 100% Malaysia is of course an open economy, Singapore etc,” he also said in the same video.

“So for the region, for Southeast Asia, if you look at Southeast Asia it has been a net beneficiary in the last couple of years in fact the last four years you’ve seen FDI doubling because of the flows.

“I mean why, perhaps it started with COVID, there was concern about supply chain resiliency, supply chain security and then there’s the issue, where you just mentioned about China, the strategy of companies, strategies of industries where there’s China+1 and we’ve seen that as well, and ASEAN being very neutral in many of its positions, you know has been attractive for many institutions and companies to relook at
strengthening their supply chain.

China+1 is a strategy that aims to diversify the supply chain away from China.

Malaysia, Indonesia, Thailand, Vietnam, and India emerge as prime candidates for companies adopting the China Plus One strategy.

Tengku Zafrul said Malaysia is in the right position to leverage and be opportunistic in a way, due to that policy.

“China is ASEAN’s largest trading partner. In fact, it is Malaysia’s largest trading partner for the last 15 years, just to give you the figure of Malaysia-China total trade of Malaysia-China, China is about 17% of Malaysia’s total trade.

“It’s an important part of ASEAN as well and if you look at intra-ASEAN which is again important because as economies within ASEAN integrate better deepen further, that will bring stability as well,” he said.

Tengku Zafrul anticipates Malaysia will experience a substantial 8% to 10% surge in approved investments for 2024. This projection, currently being finalized, is in line with Bank Negara’s GDP growth forecast of 4% to 5%.

“So we need to settle that one, the other one I think, you mentioned about technology innovation that’s gonna be key for the region as well because to ensure that from the perspective of Minister of Trade not only physical infrastructure is important but also digital infrastructure.

“Again some countries are in a stronger fiscal position and as you mentioned we were also affected by COVID given the fiscal space at that time was utilized quite fully, in fact by some nations you see the debt to GDP on many countries has gone up quite considerably.

“But growth is going to be key to mitigate that impact, so to me, we need to ensure economies continue to grow that the growth definitely must be more even, sustainable and finally like it or not the region also needs to ensure that, to achieve sustainability you need to also embrace the green economy,” he said.

He also highlighted ASEAN’s substantial investments in collaboration with China and Europe, comprising about half of the world’s GDP and emphasised that ASEAN must closely engage with both powers, as well as Europe and the broader global community.

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