PETALING JAYA: The United Kingdom’s (UK) decision to quit the European Union demonstrates that the slow pace of regional integration of Asean is correct and top-down integration is not sustainable, according to CIMB Group Holdings Bhd chairman Datuk Seri Nazir Razak.
In a recent interview with Asia House, Nazir said Brexit would be sobering for those championing Asean integration and a great reminder that Asean should move at a pace that worked for the majority of the people in the region.
He said the vision of the Asean Community as detailed in the 2007 Asean Charter was to create an integrated and cohesive economy for the region with a free flow of trade, goods and services and skilled labour, and investments.
But when the Asean Economic Community (AEC) was set up at the end of 2015, not all of the measures had been implemented.
The new AEC Blueprint 2025, agreed in 2015 in Malaysia, aimed to achieve the vision of having an AEC by 2025 in which all 10 Asean member states are both economically integrated and fully integrated in the global economy. But it stops short of advocating a single currency.
“Brexit demonstrates that ‘top-down’ integration is not sustainable.
“It (Brexit) is also a vindication of Asean’s steadfast focus on trade and investment and avoidance of single currency and other steps that have political implications,” he said.
Nazir said while Brexit had taken Malaysia by surprise, it was a decision of the British electorate and the country wanted to make the best of it.
“Those of us already invested in the UK will obviously have to bear some pain from the immediate drop in the sterling and valuation of assets generally.
“Hopefully, it is temporary and holding on for the long-term will prove the right decision,” he said.
The lack of clarity on the likely outcome of Brexit negotiations meant it was difficult to make any forecasts, he pointed out.
Those already invested would hold on, he said, while those who have not would wait for more clarity or a huge discount to compensate for the uncertainties.
“While the UK as the hub for Europe no longer looks sensible, one would still want to wait for details before acting on it.
“I can’t even discount the possibility of a reformed Europe with Britain as a final outcome at this stage,” he told Asia House, which is a UK-based centre of expertise on Asia.
He is optimistic that Brexit would lead to a strenthening of trade and investment ties with Asia and expects the UK to quickly demonstrate greater eagerness for closer ties with the rest of the world.
This could bring opportunities for Asia, especially for countries like Malaysia that have maintained strong socio-economic ties,” he added.