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Latest News
Huge Opportunities Available In Asean
News From : DagangHalal.com (12/13/2010)

But there is also need for greater integration and government reforms

KUALA LUMPUR: Asean needs to work towards greater integration and reforms of their governments to really become a force to be reckoned with in the global economy.

At the Second Annual Young Corporate Malaysians Summit 2010 held over the weekend, panelists, who comprised industry leaders from the region, agreed that there were huge opportunities available in Asean for investors to tap.

But at the same time, there were also huge challenges that governments need to address. We're in a truly landscape-changing environment. There are huge opportunities here, as the region has become the centre of gravity for the global economy, CIMB Asean Research Institute chief executive officer John Pang said.

Among the various opportunities in the region that panelists highlighted include those focused on natural resources, infrastructure and Islamic banking sectors.

Of the countries in Asean, Indonesia was largely seen as the next big thing in the region. Driven by its huge domestic market, Indonesia's economy, which is also the largest in the region, was among the very few in the world that still registered positive growth during the onslaught of the global financial crisis.

Last year, it posted a gross domestic product (GDP) growth of 4.5%. This year, Indonesia is expected to chart a 6% growth rate.

Next year, the country's GDP growth is expected to exceed 6%. This makes Indonesia among the fastest-growing economies in Asia after China and India.

Indonesia is definitely a country to watch, and it is definitely attracting a lot of foreign direct investments (FDIs), PT Macquarie Capital Securities of Indonesia research head Ferry Wong said during his session.

He said that the present political stability in the country, with President Dr Susilo Bambang Yudhoyono's party enjoying strong parliamentary support, meant that the Government had ensured capacity to push through various reforms that would make Indonesia more attractive.

Reforms are necessary, not only in Indonesia, but in all other countries in Asean, including Malaysia, if the region were to be in a much stronger position globally, Rothschild Investment Bank Singapore managing director Dr Peter Bird pointed out in his session.

Unfortunately, foreign investors in general tend to perceive that governments in Asean, safe for Singapore, were incapable of putting their ideas into practice.

You can rule Singapore out of this. The country has been run very efficiently and effectively and it is generally perceived to be clean' and transparent', Bird said.

But for others, he said earnest desire for reforms had to be demonstrated through quick execution of plans to change investors' poor perception of their economies.

Over the years, the lack of governments' will power to execute plans had been one of the main complaints among foreign businesses wanting to invest in the region.

Other grouses included the undue political influence in business dealings, the direct involvement of governments in business, poor infrastructure, corruption and corporate governance. Investors don't like these because they create uncertainties, Bird said.

She urged economic stakeholders to take the initiative to exercise proper governance in their companies to change corporate Malaysia and corporate Asean. She said independent directors were important as a system of check and balance in companies.

At the end of the day, integrity is something that no one can take away from you, she emphasised, as she encouraged young participants at the summit to instill good values when they become leaders of tomorrow.

According to Bird, Asean's main selling point was its people. CIMB's Pang concurred, but he said, the key challenge that Asean faces at the moment is the lack of managerial talent among its people.

We, therefore, need to create a new class of corporate talent with a different mindset, who sees themselves as professionals based not merely in their own country, but in the region as a whole, Pang added.

Panellists at the summit agreed that countries in the region should strive to break down barriers and bridge cultural divides so that the region can be more integrated with one another.

The summit was organised by a locally established group called the Young Corporate Malaysians.

The main sponsors included StarBiz, PriceWaterhouseCoopers, Brunsfield, CIMB Group, Danga Bay, Weida, 1MDB and Insitute of Chartered Accountants in England and Wales.

- The Star Online

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