Tengku Zafrul said that Asean is the new China and is set to become not just the world’s factory but also a significant consumer base. — Bernama
KUALA LUMPUR: Support for the small and medium enterprises (SMEs) is vital as the global supply chains are shifting to Asean countries, says Investment, Trade And Industry Minister Tengku Datuk Seri Zafrul Abdul Aziz.
He said that Asean is the new China and is set to become not just the world’s factory but also a significant consumer base.
The 10 nations of Asean are home to more than 678 million people, with a combined gross domestic product of about US$3.7 trillion in 2022.
As a bloc, Tengku Zafrul noted that Asean is the fifth-largest economy in the world, with a middle class of roughly 350 million, representing US$300bil of disposable income.
The minister said this in his speech at the memorandum of understanding exchange event between Malaysian Industrial Development Finance Bhd (MIDF) and Agensi Kaunseling dan Pengurusan Kredit (AKPK) to provide financial assistance through MIDF’s Second Chance Financing scheme.
In 2022, Tengku Zafrul said that when the global foreign direct investment (FDI) fell by 12%, FDI into Asean went up by 5%, and its share of global FDI rose to an all-time high of 17%.
“In short, our own SMEs’ survival in local supply chains could help them to capitalise on not only Asean’s growing middle class but also shifting supply chains to and FDI flowing into this region.
“This regional economic integration is also a goal that is also espoused by the Madani Economy framework,” Bernama reported.
Tengku Zafrul added that the government acknowledged the significant influence of external factors on businesses and recognised that even well-managed companies could suffer setbacks from circumstances beyond their control, especially in the ever-evolving economic landscape.
“Sudden shifts in market conditions, unforeseen disruptions, or internal struggles can push promising companies to the brink of failure and have far-reaching consequences for a production’s entire supply chain, encompassing suppliers, customers, employees and possibly the surrounding communities,” he said.
Tengku Zafrul said that providing these companies with a financial lifeline which supports their business recovery is crucial in ensuring that supply chains remain intact, which, in turn, is crucial to the nation’s socio-economic development.
“To that end, the MIDF-AKPK collaboration is an important, holistic recovery ecosystem in terms of supporting troubled companies, particularly the SMEs,” he added.
