Boost Savings to Fuel Asean Growth
July 21, 2015 9:24 pm
by MAYVELIN U CARABALLO, REPORTER
(Click The Manila Times for original post)
BAC head urges strengthening of financial markets
Member economies of the Association of Southeast Asian Nations (Asean) must strengthen their financial markets for the region to tap its own savings and fuel its own growth, the chairman of the Asean Business Advisory Council (BAC) Malaysia said in Manila on Tuesday.
Asean-BAC Malaysia Chairman Tan Sri Dr. Mohd Munir bin Abdul Majid said in an exclusive interview with The Manila Times the financial and capital markets are the lifeblood of the real economy, which must be developed to support the economic bloc’s investment requirements.
“If we develop our own markets and let them grow, then we can tap our own sources of savings for our own investment needs,” he said in an interview at the venue of a business forum set for today (Wednesday) on the regulatory environment of an integrated Asean Economic Community (AEC).
The AEC has been set for launch by end-December this year, but implementation of the actual integration is expected to take years from then.
For infrastructure development alone, the Asean region is estimated to require about $60 billion each year until 2022.
“We must understand that finance is the lifeblood of the real economy. You must emphasize finance and capital markets to drive the growth of Asean,” the BAC chairman said.
According to the group’s projections, if the Asean continues to grow at its current pace of above 5 percent on average, the regional bloc will be the fourth largest economy in the world, next to the European Union, China and the United States by 2050.
While developing its financial markets, the region must not neglect the needs of its “backbone” —the micro, small and medium enterprises (MSMEs) sector, Munir stressed.
“If finance is the lifeblood of the Asean economy, the MSMEs are its backbone. You make sure that the backbone and the needs of the backbone are met and not broken,” he said.
Emphasizing their importance, Munir warned that without the MSMEs, there would be massive unemployment in the region, and governments would start putting up barriers to protect their economies and industries.
“The consequence of that is that there will be a rollback of the Asean integration process,” he said.
To prevent this from happening, Munir said the AEC should support their MSMEs in terms of financing, access to technology and enhancement of management capabilities.
The AEC should also consider setting up a regionwide institution tasked with supporting the MSME’s financing needs.
“I have recommended to the Asean Bank and the Council that supports me that we should try and set up an Asean-wide institution that would provide finances to the MSMEs on a cross-Asean basis,” he said.
Munir warned that without adequate financial flows coming into the region’s real economy, it would be hard for the Asean Economic Community to realize all its prospects and full potential.
Munir, who has the second highest civilian title “Tan Sri” granted a Malaysian by the King on the recommendation of the federal government, is the keynote speaker at The Manila Times’ 2nd Business Forum to be held the whole day today, Wednesday.
Dubbed “The New Regulatory Environment of an Integrated Asean: Seizing the Opportunities and Managing the Risks,” the forum also highlights other top Asean speakers who will tackle the details of the theme. (See speakers’ profiles and topics in the D section of today’s issue of The Manila Times.)