Malaysia Remains Important Player In Southeast Asian Trade
KUALA LUMPUR, Dec 17 (Bernama) -- Malaysia continues to give prominence to expanding trade with other Southeast Asian nations as it sees regional growth as being pivotal to its own well-being.
The approach this year is no different from before, as ASEAN investors have readily joined hands with Malaysia for mutual trade and investment gains.
Malaysia’s trade with ASEAN grew 6.2 per cent to RM637.94 billion (US$1=RM4.44) in the first 10 months of 2024 compared with the same period last year.
Effective strategies in expanding markets and diversifying partners through unilateral trade agreements were mainly responsible for the higher regional trade.
Kudos should go to Prime Minister Anwar Ibrahim who, during missions to the various parts of the region, persevered in wooing investments and opening ASEAN markets further for Malaysian exports.
Exports to Southeast Asia rose 4.1 per cent to RM365.39 billion, aided by petroleum products, machinery, equipment and parts as well as manufactures of metal.
Imports from ASEAN countries, meanwhile, increased 9.2 per cent to RM272.55 billion.
According to the HSBC Insights report, Malaysia, as a founding member of ASEAN, is pivotal to the continued development of regional trade and economic cooperation in the region, with many characteristics making it a highly attractive hub.
“The ASEAN region is Malaysia’s biggest trading partner, accounting for 30 per cent of exports and 24 per cent of imports in January-July 2024. Exports to ASEAN rose 16 per cent in July and imports were up 18 per cent,” the report said.
HSBC Malaysia head of commercial banking Karel Doshi said that Malaysia continues to make strong progress in moving its economy up the value chain.
“The growth of higher-value manufacturing and consumer spending is creating a range of opportunities for local and international businesses with an eye on expansion,” he said.
Economy To Grow Better Than Regional Peers
Malaysia University of Science and Technology (MUST) economist Prof Dr Barjoyai Bardai said overall, the economy has been developing more rapidly this year compared to last year, with expectation that the gross domestic product (GDP) will expand by up to 5.5 per cent.
“Compared to neighbouring countries such as Indonesia and Thailand, we will see better trade and GDP growth this year and when compared with Singapore, we are better off in terms of GDP,” he said.
“In terms of export competitiveness, we have grown and our strong point is our ability to attract foreign investors in certain sectors such as electrical and electronics (E&E) and chips manufacturing,” he told Bernama.
He said the MADANI government’s success in attracting foreign investments represents a long-term endorsement of the country’s investment climate.
The semiconductor industry has emerged as Malaysia’s flagship hallmark which would inevitably attract more global E&E giants. Besides this, E&E exports continue to escalate, and we are seen as a major exporter in Asia,” he said.
However, Barjoyai said Malaysia still imports a significant amount of its food requirements with an import bill of RM81 billion, which is why the government should see this as a constraint on the economy and look at prioritising import substitution especially for food.”
Influential Role At Regional Level
Among Malaysia’s many attractions for domestic and regional businesses are its strategic location; modern, efficient and well-functioning infrastructure; and its manufacturing capabilities.
According to HSBC, Malaysia’s own strong economic performance means that it plays an increasingly influential role at the regional level too.
It has signed up for important trade agreements, including the Regional Comprehensive Economic Partnership (RCEP), which, with its 15 member countries accounting for 30 per cent of global growth, offers immense benefits for Malaysia. The RCEP was ratified by Malaysia in 2022.
Emerging sectors like e-commerce, renewable energy and digital services present new opportunities for Malaysian businesses as the country deepens its trade and economic links with ASEAN.
E-commerce in Malaysia has grown substantially in recent years, with total income in the sector hitting RM1.15 trillion in 2023, an increase of about 5.0 per cent from 2022, 11 per cent compared to 2021 and nearly 30 per cent from 2020.
Driving that growth is an increasing preference for online shopping across Southeast Asia with government initiatives also lending a helping hand to give the sector a lift.
Leveraging on ASEAN Chairmanship
With Malaysia assuming the ASEAN chairmanship in 2025, Anwar stressed that it is his mission to enhance ASEAN trade and investment, which he believes are currently insufficient.
To this end, the Prime Minister said he would dedicate his efforts to empowering the ASEAN Power Grid and push for a more comprehensive digitalisation among regional economies.
Besides this, ASEAN would bolster ties with its traditional allies comprising economic giants China, Japan and South Korea.
These initiatives would be his prime focus to make Southeast Asia a more vibrant economic region, more so since ASEAN happens to be a peaceful and dynamic economic region.
As such, its economic potential should be fully realised.
Putra Business School's Master of Business Administration programme director and associate professor Ahmed Razman Abdul Latiff said Malaysia is well prepared to be the ASEAN chair next year due to several factors, foremost of which is its political stability.
“Malaysia can pull through challenges by continue the current strategies of expanding markets and diversifying trading partners through unilateral trade agreements such as the RCEP, the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and BRICS as well as developing new markets in the digital sector,” he said.
-- BERNAMA
