KUALA LUMPUR, April 23 — The proposed Asean common time (ACT) will ease cross-border businesses and make the region more vibrant with key economic sectors like banking and stock markets running simultaneously, making it more attractive to investors.
Prime Minister Datuk Seri Najib Razak has revived proposals for a common time zone across the Southeast Asian region, which is home to some 600 million people.
CIMB Group chairman Datuk Seri Nazir Razak said that ACT is a good proposition, but the member countries are still not united on the issue.
“The Asean leaders discussed the common time zone at the recent World Economic Forum, and it was well received, except for the hesitation by some Asean member states,” Nazir said.
He said it would have a positive effect on the banking sector in terms of enhanced communications among the banking institutions in the region, dissipating fears that it might not be good for banks to have a single time zone in the Asean region.
Minister of Foreign Affairs Datuk Seri Anifah Aman this week said Malaysia believes having a common time zone for Asean capitals will further boost the sense of togetherness among the people.
The difference in time zones is of huge concern to investors, who stated it is a major inconvenience for cross-border business.
Asean-Eu Business Summit executive director Chris Humphrey agrees with the idea, saying it would undoubtedly enhance cross-border business.
When asked whether the time was ripe for its implementation this year, Humphrey said much of it will depend on the political will of the Asean leadership.
“Whether they see it as an imperative or not, its implementation should not, in theory, be all that difficult, though of course the change will be worse for some countries,” he said in an email interview.
He also said ACT would simplify cross-border dealings as businesses would no longer need to be concerned about whether an office is open, or still open, in one country given the current time differences. It will make things easier when dealing with partners across borders.
A common time zone would solve this issue, said Inter-Pacific Securities head of research Pong Teng Siew.
“It would be useful for business, especially cross-border businesses, as they would have common opening and closing hours. Banks across the region would open at the same time, thus easing cross-border payments,” said Pong.
He also said it would not affect local businesses or cross-border import and export trade.
Singapore-based international trade lawyer Edmund Sim said ACT would help forge a common Asean identity but would need support through initiatives.
“ACT is a great concept and will help forge a common Asean identity by promoting interconnectivity within the region, both symbolically and substantively.
“However, ACT needs to be supported by initiatives to improve the governance and authority of Asean institutions such as the Asean Secretariat,” he said.
Sim said ACT could improve interactions between Asean countries and help regions that have been left behind, particularly remote areas and less developed ones.
He believes consumer-focused sectors would benefit from ACT as it promotes a single Asean market. He cited finance, media and other sectors focused on consumers that will benefit due to the Asean Economic Community’s single market policy.
But agriculture and related industries could be negatively affected by the operating time shifts, he said.
He said he was skeptical that the project will be implemented this year, but it is likely to be adopted next year.
It will need adjustments on the social side, to prevent people from losing out on their social activities which might then fall into night time due to varying time zones.
Pong also said the single time zone would create some practical difficulties in countries with different time zones, such as Indonesia, and this could disrupt their social activities.
On the timing of the ACT implementation, Pong foresees no issues for the Asean to adopt it this year, or the next.
Humphrey concurred with analysts that the financial sector is likely to be a beneficiary, and ultimately any business that deals with operations or transactions across Asean’s different time zones at the moment is likely to benefit.