MALAYSIA is primed to become a major beneficiary of European and UK investment, but to convert this potential into reality, greater adaption and adoption of trade, sustainability, technology and digital trends and reform are required.
According to HSBC Malaysia CEO Stuart Milne, Southeast Asia’s medium-term prospects, opportunities, and global relevance remain intact for multinational corporations (MNCs).
“Southeast Asia’s large demographic dividend comprising of young and relatively lower cost labour make it a very attractive destination for international companies. But it’s not without its challenges, including some lagging in productivity, digital and sustainable practices.”
The key for Southeast Asia, opined Milne, is to regain its traditional growth drivers of trade and investment, coupled with capturing the opportunities emerging in the green and digital space. This will require the ASEAN markets to pull several policy reform levers, especially if it’s to attract overseas investment.
Some policy actions can include the ratification of free trade agreements including the Regional Comprehensive Economic Partnership (which will help to drive export growth as it seeks to eliminate many of these barriers while opening ASEAN countries to more trade activity) and improving investment conditions including tax.
In Malaysia specifically, one of the key focus areas under the Government’s PENJANA programme includes stimulating foreign business investment by offering tax incentives.
Meanwhile, businesses can also take a more strategic approach to digital adoption by creating stronger sector ecosystems; elevating an industry’s digital standards and practices; and improving the way industries respond and adapt to changing payment systems.
Another viable action is for the country to develop levers to more strongly encourage adoption of green and sustainability practices, including linking Southeast Asia’s future infrastructure projects with green and sustainable principles.
“As a strategic hub in ASEAN with strong economic fundamentals, Malaysia provides a range of investment opportunities to organisations from the EU and the UK,” Milne explained.
“In turn, these organisations can be a significant source of investment across the green and technology sectors for the country. But success will require building resilience and transforming how we do things in Malaysia now and in the future.” – July 5, 2021
