PETALING JAYA: Economists are calling for Asean countries to address long-standing barriers that hinder economic integration among member states.
Despite close and strong cooperation, the situation can be improved by addressing key regulatory hurdles and inconsistent financial systems.
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Economist Geoffrey Williams said there are still many trade barriers among Asean countries, especially for small and medium businesses (SMEs).
"Asean needs to establish a framework to identify regulatory barriers across all areas and begin a process to systematically remove them or to harmonise regulations at the lowest cost," he said, when contacted yesterday.
Malaysia, as Asean Chair is the host of 46th Asean Summit and Related Summits.
Wisma Putra is taking the lead in organising these summits under Malaysia’s Asean chairmanship this year with the theme “Inclusivity and Sustainability”.
Two other high-level meetings – the 2nd Asean-Gulf Cooperation Council (GCC) Summit and the Asean-GCC-China Economic Summit – will also be held.
Williams said there are still many constraints on simple issues such as setting up businesses, bank accounts and even payment transfers.
"So harmonising regulations on payment transfers, reducing transaction costs and building common platforms for e-payments is essential.
"Even issues related to the free movement of workers are underdeveloped as Asean members protect their own labour markets," added Williams
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Asean countries, said Williams, are still very different in terms of economic development, political systems and the economic self-interests of each country and this holds back closer integration.
"Tourism provides a good model because private sector driven business models make travel, accommodation and currency exchange easy.
"So integration is not impossible if it is market driven but it is proving difficult if it is government driven," he explained.
He said Asean cannot follow the integration model of the EU for example because that is government driven but it can follow a market driven integration model using technology platforms and e-commerce which avoid brick-and-mortar business models and move online.
"An Asean-wide digital nomad visa would be a good idea and would be attractive for the region as a whole while reducing competition between countries.
"Another Asean-wide entrepreneur visa would also be helpful in reducing costs, especially for the non-Asean business community allowing foreign investors to move easily around the 10-member states," he argued.
Centre for Market Education chief executive officer Carmelo Ferlito said forcing cashless can become a burden if a person needs to have an app in each country, but instead such initiative can be linked with a local bank account.
"I travel often to Indonesia and I struggled with their cashless system, which must be linked to a local bank.
"Some places do not accept any other form of payment.
"So I think having more integration is good but in reality it is better to increase options rather than reducing them," said the economist.
He also said that abolishing barriers to entry was much more effective rather than thinking about cashless.
"Good infrastructure and fast procedures, this is what travellers want. Cashless is an option but not a game changer. More tourism or travel affects the generality of the economy," said Ferlito.
At a special media briefing on May 21, Prime Minister Datuk Seri Anwar Ibrahim outlined a bold strategic vision for Asean's next phase of growth, emphasising stronger economic integration, trade expansion and cross-border energy connectivity as key pillars under Malaysia's Asean chairmanship this year.
Responding to questions on the direction of the regional bloc amid growing global geopolitical competition, Anwar said Malaysia is determined to drive Asean beyond its traditional role as a neutral platform towards becoming a more cohesive, values-driven force in the Indo-Pacific.
"As part of our thrust this year, we are focusing on strengthening Asean's cohesiveness, increasing economic interest and trade, and boosting investments among member countries," he said.
