Bangkok: ASEAN should mobilize its immense pool of regional funds to meet the bloc's investment needs and in the process create corporate champions, Bank Negara Malaysia Governor Datuk Seri Abdul Rasheed Ghaffour said. He emphasized the significant financial resources available in the region, mentioning that pension funds amount to US$4.4 trillion and insurance institutions hold US$5.1 trillion, which could be utilized to support regional development.
According to BERNAMA News Agency, Abdul Rasheed questioned why these resources are not being channeled to create corporate and regional champions within ASEAN and meet its investment needs. He highlighted the importance of initiatives like the Capital Market Master Plan for the region, which focuses on harmonizing regulatory and production frameworks and enhancing capital market connectivity within ASEAN.
The remarks were made during a panel session titled 'ASEAN: Challenges and Opportunities' at the Asia 2050 Conference in Bangkok, organized by the International Monetary Fund (IMF). Other notable participants included former Bank of Thailand Governor Sethaput Suthiwartnarueput, Visiting Scholar at Harvard Center for International Development Chatib Basri, and AMRO's chief economist Dong He.
Abdul Rasheed also pointed out that non-tariff barriers (NTBs) continue to be a significant obstacle to intra-regional trade, with their price equivalent impact estimated at five to seven percent on ASEAN products, compared to only 0.2 percent from tariffs. He noted that these barriers hinder the growth of ASEAN reintegration.
Echoing Abdul Rasheed's views, Dong He emphasized the need for stronger financial integration to support the growth of regional companies and advance deeper economic integration. He stated that strengthening the financial side of the economy is crucial for ASEAN firms to expand and compete effectively across the region.
Dong He further mentioned that each country has pockets of liquidity that are not integrated across the region, making it challenging for international investors to understand the markets better. He suggested that a well-aligned standard across ASEAN could help address these challenges, which includes developing more integrated rules and moving towards uniform listing requirements in ASEAN markets.
He also stressed the importance of digitalization in strengthening regional financial integration. Digital financial platforms could provide new ways to connect markets and expand investment opportunities, especially through emerging technologies like tokenization of assets, which could create new avenues for trading and investment across the region. A common trading platform for such assets could increase the scale of trading activity and deepen liquidity in ASEAN capital markets, making the markets more resilient and aiding firm growth.