Malaysia is
ready
to
provide support for companies to
capitalise on the ASEAN
Economic Community (AEC)
as it is already the preferred
hub for
many
global companies
planning
to expand
into Southeast Asia, said Minister of International Trade and Industry, Dato’ Sri
Mustapa
Mohamed.
“As Southeast Asia's
economic growth
flourishes, attention on
ASEAN
as a
competitive and lucrative
marketplace, providing
access to over 630 million consumers, is rising. We have recently introduced the
Principal Hub Scheme to facilitate and incentivise international companies who want a business-friendly launchpad to expand into
ASEAN.
In addition, our
advanced integration
levels in the AEC are an important bridge
to
strengthen trade links and economic ties with our ASEAN neighbours so that we can leverage on the rising
demand for
seamless
interconnectivity
that is vital for
doing business
successfully
today,” he said.
"Malaysia adopts an ecosystem approach whereby concerted efforts have
been put in place to promote the entire value chain of industry clusters and enhance delivery enablers to
support the value chain. A strong and comprehensive ecosystem improves production and
logistical
efficiency;
reduces the cost of doing business and supports greater flow of trade and investment. The
importance of the ecosystem approach is further entrenched in the 11th Malaysia Plan (11MP). Under the
11MP, we will continue to ensure that there is a significant leap in investment activities. This ultimately
contributes to enhancing the competitiveness of the country and improving the country’s attractiveness for
FDI.”
The minister noted that ASEAN has a part to play. “As the region seeks to deepen
a
nd widen trade
ties
under the AEC to capture
a
greater share of global trade, it
is essential for ASEAN to work on strengthening and aligning structural reforms
related to
ease
and certainty
of
doing business, regulatory and
legal
frameworks, as well as
financing
and investment facilitation measures
across the region,” he added.
“The private sector will continue to be a key driver for the
AEC’s realisation and we must now look to
implementing long-term strategies, plans and projects, with the due consideration and involvement of industry,
government and civil society in the planning
and decision-making process," commented Dato' Sri Abdul Wahid Omar, Minister in the Prime Minister's Department.
Showing posts with label AEC. Show all posts
Showing posts with label AEC. Show all posts
18 June 2015
ASEAN Economic Community could be a bonanza for B2C businesses
Market research company Euromonitor International has released a white paper providing a strategic approach on marketing to the ASEAN consumer.
The creation of the ASEAN Economic Community (AEC) in December 2015 will unite the ten members of the ASEAN into a single market and production base. This will thrust Southeast Asia into the spotlight, attracting greater attention from multinationals which have so far been drawn mainly to China and India. Poised to become a global economic powerhouse thanks to its expected strong future economic performance, the AEC also has real potential of becoming a vast market with predominantly young, dynamic and increasingly affluent consumers, in contrast to ageing China and Japan, the company said.
“If the ASEAN was a single economy, it would be the 7th largest in the world with total GDP of US$2.5 trillion in 2014, and Euromonitor International forecasts that by 2030 it could become the third largest economy behind only the USA and China,”observed An Hodgson, Income and Expenditure Manager at Euromonitor International.
The creation of the ASEAN Economic Community (AEC) in December 2015 will unite the ten members of the ASEAN into a single market and production base. This will thrust Southeast Asia into the spotlight, attracting greater attention from multinationals which have so far been drawn mainly to China and India. Poised to become a global economic powerhouse thanks to its expected strong future economic performance, the AEC also has real potential of becoming a vast market with predominantly young, dynamic and increasingly affluent consumers, in contrast to ageing China and Japan, the company said.
“If the ASEAN was a single economy, it would be the 7th largest in the world with total GDP of US$2.5 trillion in 2014, and Euromonitor International forecasts that by 2030 it could become the third largest economy behind only the USA and China,”observed An Hodgson, Income and Expenditure Manager at Euromonitor International.
“Currently, the ASEAN market holds more than 622 million consumers and a total consumer expenditure of US$ 1.5 trillion in 2014, which offers unique opportunities across the region and by country.”
The ASEAN consumer market is expected to expand rapidly, with total consumer expenditure forecast to grow by 105% in real terms between 2015 and 2030 – equivalent to an average annual real growth of 4.9% in real terms. By 2030, the ASEAN will be a market worth US$3.1 trillion in constant 2014 prices.
The ASEAN consumer market is expected to expand rapidly, with total consumer expenditure forecast to grow by 105% in real terms between 2015 and 2030 – equivalent to an average annual real growth of 4.9% in real terms. By 2030, the ASEAN will be a market worth US$3.1 trillion in constant 2014 prices.
In 2014, an average Singaporean household spent US$72,421, compared to only US$3,398 in Myanmar. However, those ASEAN countries with lower average household spending such as Vietnam, Laos and Cambodia are expected to record some of the strongest growth in total consumer expenditure through to 2030 due to rapid economic growth, increasing trade and investment and rising disposable incomes, Euromonitor believes.
“The ASEAN has excited consumer goods businesses not only with its exceptionally fast pace of economic development over the past decades, but also and more importantly because of its long-term potential as a collectively youthful and dynamic consumer market,” concludes Hodgson. “Southeast Asia is entering a new era and the commencement of the AEC at the end of 2015 will be the start of an exciting journey ahead.”
Interested?
Download the white paper
“The ASEAN has excited consumer goods businesses not only with its exceptionally fast pace of economic development over the past decades, but also and more importantly because of its long-term potential as a collectively youthful and dynamic consumer market,” concludes Hodgson. “Southeast Asia is entering a new era and the commencement of the AEC at the end of 2015 will be the start of an exciting journey ahead.”
Interested?
Download the white paper
2 June 2015
EU-ASEAN Business Council elects new executive board
The EU-ASEAN Business Council, the primary voice for European business within the ASEAN region, has elected its Executive Board for the next two years at its annual general meeting in Hanoi, Vietnam, on 1 June.
The new board members are:
Activities for the rest of 2015 and beyond were discussed, including the publication of two position papers on market access and the automotive industry, a business delegation to Brussels in the autumn to engage directly with the European Commission and European Parliament on ASEAN-EU trade relations, and the culmination of a new survey on European business sentiment in ASEAN.
The EU-ABC’s flagship conference, the ASEAN-EU Business Summit, will be taking place in Kuala Lumpur on 23 August. Confirmed speakers include Malaysian Minister of Trade and Industry HE Dato’ Sri Mustapa Bin Mohamed and ASEAN Business Advisory Council Chairman Tan Sri Dato’ Dr Mohd Munir Bin Abdul Majid.
The new board members are:
- François Guibert, Executive Vice-President, President, Greater China and South Asia Region, STMicroelectronics (Chairman)
- Donald Kanak, Chairman, Prudential Corporation Asia (MNC Representative & Vice Chairman)
- Theodoor Bakker, Partner, ABNR Law, Indonesia; Executive Board Member, European Chamber of Commerce, Indonesia (Chamber Representative & Vice Chairman)
- Martin Hayes, President, Robert Bosch SEA (MNC Representative & Treasurer), and
- Jan B. Djerf, Senior Vice President & General Manager, Handelsbanken; Head of South Asia Pacific, President, European Chamber of Commerce (Singapore) (Chamber Representative & Secretary)
Activities for the rest of 2015 and beyond were discussed, including the publication of two position papers on market access and the automotive industry, a business delegation to Brussels in the autumn to engage directly with the European Commission and European Parliament on ASEAN-EU trade relations, and the culmination of a new survey on European business sentiment in ASEAN.
The EU-ABC’s flagship conference, the ASEAN-EU Business Summit, will be taking place in Kuala Lumpur on 23 August. Confirmed speakers include Malaysian Minister of Trade and Industry HE Dato’ Sri Mustapa Bin Mohamed and ASEAN Business Advisory Council Chairman Tan Sri Dato’ Dr Mohd Munir Bin Abdul Majid.
16 January 2015
CIMB shares regional strategies for joining the ASEAN Economic Community
 |
| Source: CIMB. Chairman of CIMB Group YBhg Dato' Sri Nazir Razak (right) and Director, Southeast Asia of The Economist Intelligence Unit Justin Wood showcasing the special report Re-drawing the ASEAN Map: How companies are crafting new strategies in Southeast Asia. |
Justin Wood, Chief Economist and Director for South-East Asia at the Economist Corporate Network, part of the EIU, said, “We surveyed 170 business leaders running companies in ASEAN for this report. Of those companies, 76% now have a strategy in the region that is specifically oriented around the ASEAN bloc. Most companies in our survey are clearly taking steps to organise themselves around the unfolding economic liberalisation and integration in South-east Asia.
"Interestingly, though, non-ASEAN companies are much more likely to have an ASEAN-oriented strategy (81%) than local companies (only 55%). The big global multinationals are further along in recognising the significance of the ASEAN story and are positioning themselves to benefit from ideas like achieving scale in the region, consolidating operations and manufacturing, and exploring how product and service strategies, as well as sales and marketing strategies can be harmonised and regionalised.”
Dato' Sri Nazir Razak, Chairman of CIMB Group said, "The independent findings of the report further reinforces the importance of ASEAN as an economic region, and validates our decision as a bank to fully-embed ourselves in and across ASEAN. Foreign multinationals are very much aware of the potential that the region represents and local companies really need to step up their game. Generally speaking, local companies in ASEAN countries have an incumbent advantage but need to clearly define their strategy to both realise the opportunities and face the challenges of ASEAN liberalisation and the increased competition that this brings to the table.”
“CIMB has prepared for ASEAN. We have more research analysts on-the-ground in every country, a diverse staff force of over 41,000 individuals in every market across the region and the most extensive network of branches and ATMs. I would say that in terms of advisory, investment banking, trade finance, treasury and markets capabilities, we are best placed to advise any company located in an ASEAN country on how best to strategically leverage the potential of the region."
Dato' Sri Nazir Razak, Chairman of CIMB Group said, "The independent findings of the report further reinforces the importance of ASEAN as an economic region, and validates our decision as a bank to fully-embed ourselves in and across ASEAN. Foreign multinationals are very much aware of the potential that the region represents and local companies really need to step up their game. Generally speaking, local companies in ASEAN countries have an incumbent advantage but need to clearly define their strategy to both realise the opportunities and face the challenges of ASEAN liberalisation and the increased competition that this brings to the table.”
“CIMB has prepared for ASEAN. We have more research analysts on-the-ground in every country, a diverse staff force of over 41,000 individuals in every market across the region and the most extensive network of branches and ATMs. I would say that in terms of advisory, investment banking, trade finance, treasury and markets capabilities, we are best placed to advise any company located in an ASEAN country on how best to strategically leverage the potential of the region."
20 May 2014
EY outlines challenges hindering an effective AEC
Political, legal and organisational complexities and regulatory burden, as well as the lack of uniform and harmonised trading rules among the ASEAN nations, are hampering the progress of the 2007 ASEAN Economic Community (AEC) Blueprint, which seeks to achieve regional economic integration by 2015, says EY.
A new EY report, Trade Secrets: ASEAN economic community and inward investment, explores the progress of the AEC through the eyes of business, in particular, at the impediments to doing business in ASEAN. According to the “ASEAN Economic Community Scorecard 2012”, only two-thirds (67.5%) of the targets for an integrated economic region by 2015 have been met.
Mildred Tan, EY’s Asean Government & Public Sector Leader says: “This is perhaps unsurprising, given the economic diversity and varying growth maturity in each of the member countries. At the same time, we often see that national and local priorities supersede regional initiatives, obscuring wider goals. While macro problems persist, on the micro level, there are many areas where solutions can be applied.”
On the other hand, the business community has also been lukewarm towards the overall progress of the AEC. The reasons are three-fold: first, business require greater clarity on inter-government collaboration; second, the business community prefers to deal directly with each other; third, a need for stronger focus from governments on prioritizing and solving the problems, particularly those directly relating to investment and business operations.
“Businesses can be both the beneficiary and the facilitator of the AEC. Often, public-private consultation holds the key to unlock the value of any transformation. By examining the impediments to doing business in ASEAN from the business’ perspective, we hope to offer pragmatic policy and implementation recommendations to governments,” said Tan.
One of the biggest challenges that investors face in setting up businesses in ASEAN is the need for clarity and certainty in local laws, government policies and legal environment. Examples of such uncertainty are amendments to important legislations with little notice, arbitrary interpretation of laws or policies, and outdated rules and regulations.
Other issues that plague businesses and investors in ASEAN include complicated procedures and long delays in starting up businesses, multilayered approvals for licenses, legalisation of documents, regulatory requirements, foreign ownership restrictions, politics and bilateral relations.
Sophia Lim, Director of Corporate Secretarial Services – Global Compliance & Reporting at EY shares that the most logical and effective solution is to amend policies for ease of starting business. “Simplification and clarity are key. A three-pronged approach at the regional, national and local government is needed. ASEAN countries could look into the standardization of regulatory processes and information requirement, and having a one-stop registry exchange and an ASEAN business portal. There also needs to be continual dialogue between business and policy-makers, and among jurisdictions within the same country and across countries.”
Two of the important issues affecting intra-regional trade in ASEAN are the various entry barriers and the need for certainty in obtaining and retaining preferential tariff concessions under the ASEAN Trade in Goods Agreement (ATIGA).
Tariffs on imported goods are generally a barrier for businesses. In line with the ATIGA schedule, six ASEAN member states – Brunei, Indonesia, Malaysia, Philippines, Singapore and Thailand – have eliminated tariffs on almost all goods that are produced in the region, while newer members such as Cambodia, Laos, Myanmar and Vietnam are committed to eliminate tariffs on such goods by 2015, with some flexibility to extend the deadline to 2018.
However, the free flow of goods in ASEAN has yet to become a reality, given existing non-tariff barriers to cross-border trade. For example, while ASEAN has established a common eight-digit tariff classification system, in practice, it is still common for importing customs authorities to adopt differing product classifications and deny benefit of ATIGA preferential duties. This is on top of other gaps, including the disparity in the time taken for goods to clear customs checkpoints, which can range between four days and 26 days across ASEAN countries, resulting in unnecessary costs and inefficient and unpredictable supply chains.
Shubhendu Misra, Partner, Indirect Tax – Global Trade at EY in Singapore comments: “Having uniform and harmonised trading rules, as well as eliminating varying and often opaque administrative practices and protectionism, is important. This, combined with the inherent lack of trust in the trading community by pockets of customs administration, is curtailing the full benefits of free trade.”
Misra adds that the recent WTO Agreement on Trade Facilitation will provide an excellent reference for ASEAN to embrace and implement as part of the run-up to the AEC. “Many of the trade facilitation measures forming part of the WTO Agreement are in areas where ASEAN currently lacks. Early adoption by ASEAN on a unilateral basis would send a strong signal to the world that ASEAN is open for business,” he said.
A new EY report, Trade Secrets: ASEAN economic community and inward investment, explores the progress of the AEC through the eyes of business, in particular, at the impediments to doing business in ASEAN. According to the “ASEAN Economic Community Scorecard 2012”, only two-thirds (67.5%) of the targets for an integrated economic region by 2015 have been met.
Mildred Tan, EY’s Asean Government & Public Sector Leader says: “This is perhaps unsurprising, given the economic diversity and varying growth maturity in each of the member countries. At the same time, we often see that national and local priorities supersede regional initiatives, obscuring wider goals. While macro problems persist, on the micro level, there are many areas where solutions can be applied.”
On the other hand, the business community has also been lukewarm towards the overall progress of the AEC. The reasons are three-fold: first, business require greater clarity on inter-government collaboration; second, the business community prefers to deal directly with each other; third, a need for stronger focus from governments on prioritizing and solving the problems, particularly those directly relating to investment and business operations.
“Businesses can be both the beneficiary and the facilitator of the AEC. Often, public-private consultation holds the key to unlock the value of any transformation. By examining the impediments to doing business in ASEAN from the business’ perspective, we hope to offer pragmatic policy and implementation recommendations to governments,” said Tan.
One of the biggest challenges that investors face in setting up businesses in ASEAN is the need for clarity and certainty in local laws, government policies and legal environment. Examples of such uncertainty are amendments to important legislations with little notice, arbitrary interpretation of laws or policies, and outdated rules and regulations.
Other issues that plague businesses and investors in ASEAN include complicated procedures and long delays in starting up businesses, multilayered approvals for licenses, legalisation of documents, regulatory requirements, foreign ownership restrictions, politics and bilateral relations.
Sophia Lim, Director of Corporate Secretarial Services – Global Compliance & Reporting at EY shares that the most logical and effective solution is to amend policies for ease of starting business. “Simplification and clarity are key. A three-pronged approach at the regional, national and local government is needed. ASEAN countries could look into the standardization of regulatory processes and information requirement, and having a one-stop registry exchange and an ASEAN business portal. There also needs to be continual dialogue between business and policy-makers, and among jurisdictions within the same country and across countries.”
Two of the important issues affecting intra-regional trade in ASEAN are the various entry barriers and the need for certainty in obtaining and retaining preferential tariff concessions under the ASEAN Trade in Goods Agreement (ATIGA).
Tariffs on imported goods are generally a barrier for businesses. In line with the ATIGA schedule, six ASEAN member states – Brunei, Indonesia, Malaysia, Philippines, Singapore and Thailand – have eliminated tariffs on almost all goods that are produced in the region, while newer members such as Cambodia, Laos, Myanmar and Vietnam are committed to eliminate tariffs on such goods by 2015, with some flexibility to extend the deadline to 2018.
However, the free flow of goods in ASEAN has yet to become a reality, given existing non-tariff barriers to cross-border trade. For example, while ASEAN has established a common eight-digit tariff classification system, in practice, it is still common for importing customs authorities to adopt differing product classifications and deny benefit of ATIGA preferential duties. This is on top of other gaps, including the disparity in the time taken for goods to clear customs checkpoints, which can range between four days and 26 days across ASEAN countries, resulting in unnecessary costs and inefficient and unpredictable supply chains.
Shubhendu Misra, Partner, Indirect Tax – Global Trade at EY in Singapore comments: “Having uniform and harmonised trading rules, as well as eliminating varying and often opaque administrative practices and protectionism, is important. This, combined with the inherent lack of trust in the trading community by pockets of customs administration, is curtailing the full benefits of free trade.”
Misra adds that the recent WTO Agreement on Trade Facilitation will provide an excellent reference for ASEAN to embrace and implement as part of the run-up to the AEC. “Many of the trade facilitation measures forming part of the WTO Agreement are in areas where ASEAN currently lacks. Early adoption by ASEAN on a unilateral basis would send a strong signal to the world that ASEAN is open for business,” he said.
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