PENANG KICKED OFF 2025 with a bang, hosting the launch of the Association of Southeast Asian Nations (ASEAN)—Business Advisory Council (BAC) here, in tandem with Malaysia assuming the chairmanship of ASEAN.

The ASEAN-BAC chairman is Nazir Razak, whose late father Abdul Razak Hussein, the country’s second prime minister, was a founder-member of the group. At the launch, Nazir called for greater economic integration of the ASEAN member states in light of the global economic uncertainty brought on by US threats of punitive tariffs, technology imbalances, sustained inflation and the developmental divide.

Nazir introduced the Asean Business Entity (ABE) as a pioneering concept to ease the movement of people, trade and capital. Staffers of companies with an ASEAN status and with ABE would be able to work seamlessly throughout the region in their branches or in associate firms without work visas. It would allow easier immigration clearance, easier inflow of capital and seamless ways to outsource work. The objective remains the achieving of a fully-integrated Asean Economic Community (AEC).

According to Penang Chief Minister Chow Kon Yeow, who also spoke at the launch, ASEAN is a vital trading partner globally, contributing 7% to world trade. With a population of over 600 million people, it stands as the world’s fourth-largest economy with a 2023 GDP of USD4.1tril, a remarkable ascent from USD24bil in 1967.

Chow has offered Penang as a financial hub for ASEAN, owing to its strengths in logistics, trade, manufacturing, services and its strategic location off the Indian Ocean. Penang also offers great geographic connectivity and online link ups.

Malaysia’s trade relations with ASEAN in 2023 showed that the region remained a key trading partner with a trade value amounting to USD160bil, or 27.3% of the nation’s total trade in the year, with an export value of USD93bil.

Penang’s trade with ASEAN has also surged significantly, with trade values more than tripling over the past decade to reach USD14.7bil in 2023, Chow revealed. The growth is particularly evident in electrical and electronic exports, which have multiplied by over seven-fold, with a significant increase in exports to Vietnam. Singapore and Vietnam now stand as its major trading partners within ASEAN.

On top of that, 7% of global semiconductor trade flows through Malaysia, making the country the sixth largest exporter of semiconductors in the world. It is due to these reasons that Chow now espouses Penang as an ideal gateway to ASEAN markets, and with it, the status of regional financial hub.

Moving Forward with ABE

A successful year chairing ASEAN by Malaysia should see the realisation of ABE. In this project, Nazir is supported by 25 Malaysian companies who are part of the BAC network, including corporate captains such as AirAsia’s founder Tony Fernandez, and Lim Chern Yuan, the young chief executive officer of Yinson Holdings Bhd, a global energy infrastructure and technology company based in KL.

With the ongoing animosity between China and the US, ASEAN has no choice but to come together to fortify its standing as a global economic bloc.

“The tools must be in place to integrate the economies, and the economies of scale are an invaluable tool in global trade,” said Nazir. With the ABE, each ASEAN country must certify and recognise their respective local companies as ABE-status and worthy to expand as well as invest regionally.

While large public-listed companies are common recipients of ABE status, eligible SMEs are also encouraged to apply. He also called for greater recognition of ASEAN’s potential to raise substantial private capital to boost investments and accelerate growth. Nazir also wants to see the realisation of a regional Initial Public Offering (IPO) Prospectus to help tap the huge financial resources that the region offers.

The 12 initiatives highlighted for the year by ASEAN-BAC are the ABE, ASEAN private capital markets, IPO Prospectus, talent development and mobility, common carbon framework with the ability to trade for carbon credits, digital exchange platform, business-to-business connect, identity (tourism) initiative, common corporate philanthropy framework, diversity, equity and inclusion framework, sustainability reporting, and regional Artificial Intelligence (AI) platforms.

MoUs have been signed with Sime Darby Property Malaysia and YCH Group Singapore to focus on integrated logistics hubs and real estate solutions, with Bornion Green Sdn Bhd (Malaysia) and Yovel East Research and Development Inc (Philippines) to cultivate Musang King durian plantations, and to explore collaborative prospects between the Canadian and ASEAN business councils.

Hosted by a Penangite

Jukhee Hong is a woman going places after she was handpicked to manage ASEAN-BAC. Despite her active schedule running ASEAN-BAC programmes, she consented to an interview with Penang Monthly.

A proud Penangite, she studied at SRJK (C) Union before furthering her studies at Chung Ling High School and Universiti Sains Malaysia. She is also a former media practitioner and trilingual newscaster, having served as a news anchor on the NTV7 news segment before heading the CIMB regional think tank where she specialises on policy matters and fine-tuning the ecosystem for economic integration. Before that, Hong also served as the executive director of the Asia-Pacific Economic Cooperation (APEC)-BAC.

Hong represents the realism ASEAN needs to navigate the current uncertain global economic environment. She said that with threats of de-globalisation and protectionism taking root, it is more important than ever for ASEAN to embrace the “prosper thy neighbour” principle.

Hong wants to champion ABE, and realises that there is much global diplomacy and negotiations to navigate. For example, the World Trade Organisation does not allow for special exceptions to be accorded to select countries.

“But there are ways to circumnavigate this; ASEAN has several existing economic and trade charters which can be rewritten to allow for ABE principles to be applied.

“Covid-19 taught ASEAN a lesson; the global supply chain bogged down each nation, and drove up inflation globally. If ASEAN can develop an alternative regional supply chain across the spectrums of skills and goods, it would make the grouping more competitive,” Hong echoed.

She added that Penang’s offer to be a regional financial hub has merits because the state is a top-notch producer in the global semiconductor field. “But more data needs to be shared, and Penang’s ecosystem for finance, trade and investments besides manufacturing needs to be scrutinised to see to what extent the state can qualify to become a financial hub.”

She said that currently, Singapore is an ideal destination as a financial hub due to its diversified economic strengths. Hong is hoping that Malaysia’s chairmanship of ASEAN can see the region accepting the need for better levels of economic integration.