Welcome Speech by Dato’ Sri Nazir Razak at the launch of Lifting-The-Barriers Reports

Dato' Sri Nazir Razak

Welcoming Remarks
Dato’ Sri Nazir Razak
Co-chair of ASEAN Business Club Malaysia
Group Chief Executive of CIMB Group
Lifting-The-Barriers Report Launch
29 November 2013


Your Excellency Le Loung Minh, Secretary-General of ASEAN,

Tan Sri Dato’ Dr. Mohd Munir Majid, Advisor to the Lifting-The-Barriers Initiative,

Members of the media,

Partners and friends,

Ladies and Gentlemen,

  1. Good morning and welcome to the Launch of the Lifting-The-Barriers Reports. Let me begin by saying a few words about the ASEAN Business Club (ABC) and how this initiative came about before sharing some thoughts on AEC itself. The ABC is an association of CEO’s from ASEAN’s leading business enterprises. We provide a platform for ASEAN business leaders to network, collaborate and most importantly, play a leading role in the process of ASEAN economic integration.
  2. In August this year, the ABC organised the inaugural Network ASEAN Forum with the support of the CIMB ASEAN Research Institute (CARI). The Network ASEAN Forum convened the region’s top industry leaders to discuss pertinent issues inhibiting ASEAN integration. The forum oversaw six sector based Lifting-The-Barriers roundtables in which participants focused on identifying bottlenecks and barriers hindering free trade in ASEAN. The key discussion points were then combined with sector research into the final reports before you today.The LTB reports (which Tan Sri Munir will touch on shortly) contain an overview of the six sectors, specific challenges and also recommendations for the best ways forwardLadies and Gentlemen,
  3. ASEAN policy makers have often called on the private sector to be more involved in the region’s integration efforts. The LTB Initiative is a great example of the private sector taking on a more active role and is reflective of the ABC’s commitment to community-building initiatives in ASEAN.
  4. I must add that for the LTB roundtables and reports, business leaders worked with world renowned partners who they lent their expertise in the following areas: Infrastructure, power and utilities – McKinsey & Company; financial services – the Boston Consulting Group; connectivity – Bain & Co.; healthcare services – Accenture; capital markets – Oliver Wyman, and lastly the aviation industry – Centre for International Law of the National University of Singapore. I would like to express my gratitude to our partners and we certainly look forward to working together with them again in the future.Ladies and Gentlemen,
  5. The 2015 ASEAN Economic Community is a great idea and much has been achieved since only 2007 when our leaders formally embraced the notion of economic integration. A joint statement by the ASEAN Economic Ministers earlier this year indicated that the AEC blueprint was in its final stages and had a completion rate of 79.4%.
  6. On closer inspection however, although we have made good progress in eliminating most tariff lines (99.65% to be specific), non-tariff barriers (NTB) between ASEAN countries remain high. The AEC Blueprint does not clearly define what an NTB is so many trade-distorting measures persist despite specific deadlines. Also, there remain substantial exclusions to free trade even among the ASEAN 6, as states have made use of an extensive “exclusion system” for products and services.
  7. Economic nationalism is the greatest challenge to AEC 2015. Right now, the concept of national identity far outweighs any ASEAN or regional identity. Our government leaders like to talk regional but as politicians at home they nearly always act national. And as we get closer and closer to 31st December 2015, I sense a rise in sentiment against AEC but do not sense any conscious effort to combat it.
  8. And as we stand just two years and one month before AEC comes into being, I do not think that we have a realistic set of achievables which makes it tough for business planners, but more worrying is the high risk of disorderly implementation and disappointment. I urge ASEAN leaders to review progress to-date, implementation prospects and with precision, specify what will and what will not be in place on 31st Dec 2015. These should also be backed by binding commitments by governments so businesses can prepare themselves with certainty.
  9. On the broader context, in light of the emerging new world order of the Asian century, I have on a separate occasion argued for “ASEAN 2.0”, a set of initiatives to help spur economic integration. Here, I would like to repeat 3 key elements:-
  • More power and funding to the ASEAN Secretariat.
  • An ASEAN minister in each government to promote ASEAN domestically.
  • Iconic projects such as the development of an ASEAN exchange, ASEAN ratings agency and even an ASEAN World Cup to capture the ASEAN public’s imagination and sense of common identity.

Ladies and Gentlemen,

10. Having declared myself as a skeptic about AEC 2015 when measured against existing targets, I remain bullish on ASEAN and the upside from ASEAN economic integration. If you reflect on the geopolitics of the region 45 years ago or the level of economic activity 15 years ago, ASEAN’s progress has been remarkable. The rapid proliferation of ASEAN multinationals is irreversible and the growth prospects for the region with a relative young and hardworking 600 million population are excellent.

11. The direction of ASEAN lies in the hands of its people. We cannot solely depend on governments to push forward the ASEAN agenda. The business community must step up and take the lead in pushing forward the ASEAN agenda – in the long run we all stand to win from a truly integrated ASEAN.

12. With this in mind, the ASEAN Business Club and our partners are proud to launch the LTB reports and play our part in realising an integrated ASEAN. Now I would like to invite Tan Sri Munir Majid, in his capacity as Advisor to the Lifting-The-Barriers Initiative to provide an overview of these reports.

Thank you.

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