Bangkok: 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.

According to BERNAMA News Agency, 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). Abdul Rasheed highlighted the significant trade in intermediate goods, reflecting complementarity and mutual production within ASEAN countries. He shared these insights during a panel session at the Asia 2050 Conference in Bangkok, Thailand, organized by the International Monetary Fund (IMF).

During the session entitled 'ASEAN: Challenges and Opportunities,' which included Former Bank of Thailand Governor Sethaput Suthiwartnarueput, Visiting Scholar Chatib Basri from the Harvard Center for International Development, and AMRO's chief economist Dong He, Abdul Rasheed noted that intra-ASEAN trade remains low, at about 20 per cent of the region's total trade, compared to roughly 60 per cent within the European Union (EU). Despite being small, this trade provides a stable and sizable market for ASEAN's population.

He pointed out that the ASEAN Free Trade Area (AFTA) and Regional Comprehensive Economic Partnership (RCEP) have lowered trade costs and improved export diversification across member economies. Malaysia has benefitted from ASEAN's rise as an investment destination, with foreign direct investment (FDI) inflows to the region increasing by about eight per cent in 2024, even as global FDIs declined by approximately 11 per cent.

Looking ahead, Abdul Rasheed emphasized the importance of strengthening digital and financial connectivity to support deeper economic integration within ASEAN, including expanding cross-border payment linkages. He noted the success of QR payment connectivity across several ASEAN countries, which enables tourists and businesses to conduct cross-border transactions using existing banking applications, thus facilitating greater participation of micro, small, and medium enterprises (MSMEs) in regional trade.

Abdul Rasheed advocated for deepening and scaling up regional payment connectivity by transitioning from bilateral payment arrangements to multilateral arrangements through initiatives like Project Nexus.