Asean Economic Community AEC – 2015 FORUM “ Selangor the Gateway to AEC” An Overview of...

Asean Economic CommunityAEC – 2015 FORUM

“Selangor the Gateway to AEC”

An Overview of Opportunities and Challenges

3rd December 2013

KKSB ASI -1 FMM SELANGOR

2010 2011 2012F 2013F

Brunei Darussalam 2.6 2.2 2.6 1.6

Cambodia 6.0 6.4 6.5 6.4

Indonesia 6.3 6.5 6.5 6.6

Lao PDR 8.1 8.2 8.3 7.1

Malaysia 7.2 5.1 4.0 4.7

Myanmar 10.6 10.4 6.0 5.9

Philippines 7.6 3.7 5.0 4.7

Singapore 14.9 4.9 1.5 4.2

Thailand 7.8 0.1 5.5 7.5

Vietnam 6.8 6.0 5.6 6.3

ASEAN 7.8 4.7 5.2 6.0

KKSB ASI-2

GDP GROWTH RATE (%)

FMM SELANGOR

*

*

Malaysia’s Standing

• 24th Trading Nation in the World• 18th Most Competitive Country (WEF)• 6th In Ease of Doing Business• Strong Banking Institution• Ease of Credit Facility (WB)• GDP Growth 4% +.

KKSB ASI-3 FMM SELANGOR

Malaysia’s Restrictions

• Limitation of Labour• Cost of Labour• Cost of Infrastructure• Cost of Production• Limitation of Specific Raw Materials.


Business Communities Dilemma

Between 2013-2015, Businesses need to deal with:

• Minimum wage• New retirement age• GSP removal• GST Implementation• TPPA• MEUFTA• AEC• Removal of Subsidies.


Opportunities Under AEC

Market Statistics

Malaysia Asean

Population 30M 600M

GDP US$490B US$2300B

Per Capita Income US$10,300 US$3,700

Growth 4% >6%.


Opportunities under AEC

• Huge market of over 600M• Business opportunities:

–Growing Market–Rising Middle Class–Higher Per Capita Income–Affluent Lifestyle–Education– Increasing Tourism/Medical Tourism.


Opportunities under AEC

• Outsource/shift production to low cost Areas• Shifting operations to Raw Materials Source• Specialization of production for MNC’s• JV for economies of scale.


SME’s Concerns under AEC

• Influx of cheap items-through Asean countries• Dumping directly or indirectly through Asean• Competition from low cost manufactures and

service providers.



Selangor Towards a Developed

State

High End Industry/ Services Sector

Education/ Tourism/Medical Tourism

Halal Sector

Marginal Industry/ Services Sector

•Opportunities to supporting

industry• Competition

to existing industry

Supporting industry

• Improve efficiency,

productivity or move on

•Complement high end sector

• J.V –similar, downstream,

upstream

• Huge opportunity

• Branding.

Selangor Gateway to Asean

Asean as a Community

•Nationalistic sentiments•Political stability and policy•Legal procedures•Language/culture/customs•NTB to prevent entry-e.g. quality standard, buy local…


Asean as a Single Market

• Command better bargaining power• Efficient use of capacity/resources• Higher per capita Income• Eradicate poverty within Asean• Equal opportunity within Asean• Balanced growth• Ready for open market.


Business Enhancement

• Capacity Building for Local SME’s• R&D assistance center• Quality enhancement to assist SME• 3rd Country Financial Assistance• Specific Agency to guide SME’s going

abroad.


Business Enhancement

Asean•Bureucratic Requirement’s to be simplified

•Harmonization of Legal, Taxation, Immigration, Customs, Standards…


How Selangor State can Prepare for AECSet up more Industrial Parks, for example,

a Halal hubEnsure all infrastructure & utilities such as

water, electricity, high speed broadband are readily available

Are the Ports able to handle the expected higher volume of trade after the implementation of AEC?

Can the State provide investment incentives to both FDI & DDI?


Final Preparation for a Broader Perspective

Implementation should be phased out and implemented at

a comfortable phase for all.

AEC is broad based and not just a G to G initiative

it involves the whole asean community

If AEC is successful then we should be ready for the broader perspective.


Thank YouAbdul Samad Ibrahim

Vice Chairman and Chairman of the Strategic Policies and Economic Affairs

Working Sub-Committee

FMM - Selangor


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