KUALA LUMPUR, March 6 — Asean integration has strengthened Malaysia’s economic resilience, deepened supply chain connectivity and enhanced the region’s investments, said Bank Negara Malaysia (BNM) Governor Datuk Seri Abdul Rasheed Ghaffour.
He said Asean’s integration helped reinforce Malaysia’s role in regional manufacturing and supply chains with more than half of the country’s exports linked to global value chains (GVCs).
“We saw significant intermediate goods trade reflect the complementarity and also mutual production in Asia, within the Asean countries. So, this is where Malaysia and Asean economies support and provide input to each other,” he said during a panel session at the Asia 2050 Conference in Bangkok, Thailand today, which is organised by the International Monetary Fund (IMF).
He was speaking at the session entitled: “Asean: Challenges and Opportunities.” Others in the session 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 noted that intra-Asean trade remains low, at about 20 per cent of the region’s total trade, compared with roughly 60 per cent within the European Union (EU).
“Although it’s small, but at least it does provide some kind of stable and sizable market for us. Given the size of the population in the Asean region itself, that provides a good market for us,” he said, adding that there are prospects and areas where the region could push forward.
He said the Asean Free Trade Area (AFTA) and Regional Comprehensive Economic Partnership (RCEP) provide benefits to lowering the trade costs and improved export diversification across member economies.
He said Malaysia benefitted from Asean’s rise as an investment destination, particularly as a global production hub, as foreign direct investment (FDI) inflows to the region rose by about eight per cent in 2024, even as global FDIs declined by around 11 per cent.
Looking ahead, Abdul Rasheed said Asean should continue strengthening digital and financial connectivity to support deeper economic integration, including expanding cross-border payment linkages.
He noted that QR payment connectivity across several Asean countries has enabled tourists and businesses to make cross-border transactions using existing banking applications, while also allowing micro, small and medium enterprises (MSMEs) to participate more easily in regional trade.
Abdul Rasheed said Asean needs to deepen and scale up the regional payment connectivity by moving from bilateral payment arrangements towards multilateral arrangements through initiatives like Project Nexus. — Bernama
