ASEAN Must Mobilise Its Own Investible Funds, Create Global Corporate Champions – BNM Governor
By Karina Imran
KUALA LUMPUR, March 6 (Bernama) -- ASEAN should mobilise its immense pool of regional funds to meet the bloc’s investment needs and in the process create corporate champions, Bank Negara Malaysia Governor Datuk Seri Abdul Rasheed Ghaffour said.
He said ASEAN has significant financial resources from pension funds to the tune of US$4.4 trillion (US$1 = RM3.94) and insurance institutions of US$5.1 trillion that could be utilised to support regional development.
“But why can't this be channelled to be used within ASEAN, in terms of creating corporate champions, regional champions (and) addressing the investment needs of ASEAN itself,” he said.
“This is one area where I believe we need to look into. That's where initiatives such as the Capital Market Master Plan for the region is important, in terms of how we can harmonise the regulatory and production frameworks and how we can enhance the capital market connectivity within ASEAN itself,” he said.
He made these remarks at a panel session entitled “ASEAN: Challenges and Opportunities at the Asia 2050 Conference in Bangkok today organised by the International Monetary Fund (IMF).
Among other notable participants at the conference were former Bank of Thailand Governor, Sethaput Suthiwartnarueput, Visiting Scholar, Harvard Center for International Development, Chatib Basri and AMRO’s chief economist Dong He.
Abdul Rasheed also said that non-tariff barriers (NTBs) remain a major obstacle to intra-regional trade, with their price equivalent impact estimated at five to seven per cent on ASEAN products, compared with only 0.2 per cent from tariffs.
“There's a big impact there, there's an obstacle to the growth of the ASEAN reintegration,” he said.
Echoing Abdul Rasheed’s point, AMRO’s chief economist Dong said ASEAN needs stronger financial integration to support the growth of regional companies and advance deeper economic integration
He said strengthening the financial side of the economy is essential if ASEAN firms are to expand and compete more effectively across the region.
“(At present) each country has these pockets of liquidity that may not be integrated across the region. It's also harder for international investors to understand the markets much better,” he said.
He said a well-aligned standard across the region could help address these challenges, which includes developing more integrated rules and potentially moving towards more uniform listing requirements across ASEAN markets.
Dong He also spoke of the crucial importance of the role of digitalisation in strengthening regional financial integration.
Elaborating, he said digital financial platforms could provide new ways to connect markets and expand investment opportunities, especially emerging technologies, including tokenisation of assets, which could create new avenues for trading and investment across the region.
A common trading platform for such assets could increase the scale of trading activity and deepen liquidity in ASEAN capital markets, he said.
“That would also make capital markets in this region much more resilient and liquidity deeper and that would help firms grow on the real side.”
“Then, we also would have a lot more integration,” he said.
-- BERNAMA