Kuala lumpur: ASEAN must push structural reforms to strengthen private capital markets and enforce rules against non-tariff barriers (NTBs) if it is to remain competitive, said ASEAN-Business Advisory Council (ASEAN-BAC) chairman Tan Sri Nazir Razak.

According to BERNAMA News Agency, existing mechanisms, such as the ASEAN Assist portal, have not effectively addressed unfair trade practices or barriers to trade, as businesses remain cautious about raising complaints for fear of victimisation. Nazir emphasized that enforcement is crucial, but currently, ASEAN lacks the means to enforce these rules effectively.

Nazir called for structural reforms to ensure complaints about NTBs could be acted upon. On capital markets, he noted that a joint study by ASEAN-BAC and McKinsey highlighted that ASEAN’s private markets were underdeveloped at 0.5 percent of gross domestic product, compared with the global average of 1.5 percent. He advocated for reforms to review ownership rules, improve the exit environment, and support initiatives such as an ASEAN Initial Public Offering prospectus.

Nazir, who chairs the ASEAN Private Market Council, stated these reforms would make investments more efficient, improve fund managers’ performance, and ultimately attract more capital from around the region. The ASEAN Private Market Council was established under an initiative led by ASEAN-BAC to address structural barriers in private capital development.

He also highlighted that funds such as Malaysia’s Employees Provident Fund and Singapore’s Temasek often deploy capital abroad rather than within ASEAN, urging greater efforts to channel regional savings into local growth. Additionally, he stressed the importance of retaining and attracting talent while supporting the ASEAN Business Entity framework to allow accredited firms to move staff and operations freely across the region.

While ASEAN attracted US$226 billion in foreign direct investment last year, up 9.0 percent from 2023, Nazir stated that the real challenge is competitiveness. He questioned whether ASEAN is as attractive as it can be compared with other regions.

On Malaysia’s ASEAN chairmanship, he noted the country’s leadership on tariffs, disputes, and convening world leaders, and mentioned that October’s ASEAN Business and Investment Summit would be the pinnacle of its term.