CIMB chief calls on private sector to move forward regional integration

After a slow start to implementing regional integration, the private sector in Southeast Asia under the leadership of Indonesia, should push harder to achieve a single economic market, said CIMB Group Holdings Chairman Nazir Razak.

In an interview with the Nikkei Asian Review, the 49-year-old banker, whose financial group has a strong presence in the region, said a lack of political will and public acceptance is hampering planned regional economic integration.

"Political resistance is about sovereignty, but it is also about the lack of mass appeal.

"ASEAN has never done enough to sell the importance of the concept as a trade-off to the masses," Nazir was quoted as saying in the interview, shared by the bank in a statement here today.

The 10-member Association of Southeast Asian Nations established the ASEAN Economic Community (AEC) at the end of 2015, to lay the foundation for a single production base through the elimination of tariffs and other liberalisation initiatives.

Nazir, who is the co-chairman of the ASEAN Business Club said the AEC is also falling short of expectations against the backdrop of territorial disputes in the South China Sea involving China.

He proposed that businesses should form independent bodies among themselves to implement, monitor and push forward projects under the economic integration plan.

Despite having a significant presence in Malaysia, Indonesia, Thailand and Singapore, CIMB still cannot set up a centralised back-office operation due to the differences in national laws, he said.

"When I think of that, there is very little focus and leadership to drive economic integration," he noted.

As a start to tackling more demanding liberalisation measures later, he suggested that regional banks, for example, should be allowed to move senior staff freely "at very little cost to everyone."

Due to the development gap among ASEAN members, many in the less developed economies are defensive, due to fears that their more advanced peers will be the only ones to benefit once markets are opened.

"One solution is to encourage companies with regional operations to take their corporate and social responsibility roles more seriously and show that the AEC actually benefits everyone, Nazir said.

"We should also spend time helping companies there to raise capital in more developed markets, rather than having to wait for the formation of their own stock markets," he added.