In 2024, the International Monetary Fund and many other global institutions projected a moderate global economic growth of just over 3%. The world is increasingly polarised and businesses are burdened by crisis after crisis.
Exposed vulnerabilities from the pandemic, exacerbated by prolonged geopolitical situations, have rippled across industries, causing production delays, critical component shortages and unprecedented disruptions of global supply chains.
This leads to the rapid surge in the costs of goods and logistics and thus poses a significant concern, affecting profit margins and hindering business competitiveness, especially for Micro, Small, and Medium Enterprises (MSMEs).
Minister of Investment, Trade and Industry (MITI) Tengku Zafrul Abdul Aziz said this in his address at the inaugural APEC Business Advisory Council (ABAC) Malaysia Gala Dinner in Kuala Lumpur today (Feb 15) adding, in response, central banks globally have adopted policies on tightening monetary conditions, which have impacted investment decisions and overall business health.
Additionally, prolonged geopolitical tensions cast a sombre reality which not only threatens affected regions but also cast a long shadow over global stability.
Tengku Zafrul said one of the key ways to weather this storm is by going at it together. As such, multilateral initiatives such as the APEC is crucial to allow collective and continuous efforts are taken.
“From this context, the roles of APEC and ABAC are crucial, to serve as beacons of stability and foster an environment that supports sustainable economic growth,”
Regional Economic Integration During Times Of Rising Global Economic Fragmentation
“As we navigate these turbulent waters, our response must be comprehensive and forward-looking. Therefore, I am pleased to hear that ABAC Peru will focus this year’s workplan on Regional Economic Integration, Human Development, and Sustainability.
“These pillars hold the key to steering the Asia-Pacific region by fostering economic resilience through integration, empowering a skilled and inclusive workforce, and promoting sustainable practices ensuring long-term viability and global competitiveness.”
He said APEC must not falter from advocating open markets and economic cooperation as we mitigate further global economic fragmentation. “We must amplify the benefits of multilateral trade agreements, exemplified by AFTA, RCEP, CPTPP, and FTAAP.
These arrangements indeed offer frameworks for collaboration and avenues to collectively address challenges and foster regional economic integration.
Sustainability In Achieving Long-Term Economic Growth
Navigating the complexity of the present economic landscape, it is also crucial to underscore the pivotal role of ‘sustainability’ in ensuring long-term economic growth. Concerns about food security, highlight the need for resilient and sustainable agricultural practices, given the vulnerabilities exposed by recent global events. The increasing frequency of extreme weather events further underscores the importance of robust natural disaster preparedness measures for mitigating economic impacts, he said.
Addressing these concerns require proactive measures, spanning infrastructural investments to community-level resilience programs. A commitment to sustainability must go beyond rhetoric and actively acknowledge the complex link between environmental health and economic wellbeing. Hence, it is good to know that ABAC through the Sustainability Working Group is staying the cause in global trends, through their focus on climate change, food security and carbon neutrality.
Human Development And Capacity Building To Promote Greater Economic Inclusivity
“In our pursuit of a sustainable economic growth and economic inclusivity for the Asia-Pacific region, recognising the pivotal role of human development and capacity building is also a must. For Malaysia, this means ensuring all economic actors, regardless of levels and sizes are also being given the attention as highlighted in Mission 4 of our New Industrial Master Plan 2030, which is safeguarding economic security and inclusivity.
“This is in view that MSMEs constitutes over 97% of businesses and employs more than half of the regional workforce, serving as key growth drivers for many of our economies,” he added.
Empowering MSMEs requires ensuring improved access to financing mechanisms, enabling them to weather uncertainties, contribute to job creation, and drive innovation. Equally critical is enhancing their digital capabilities, preparing them for success in the era of digital transformation. As we navigate rapid technological advancement, a skilled workforce becomes paramount, necessitating initiatives in capacity building, skilling, and digital literacy.
With priority placed on facilitating financial inclusion, developing digital transformation and strengthening pensions and health systems, “I believe that MSMEs are not left behind in our work as ABAC has laid the inclusive groundwork for a more resilient, innovative, and prosperous Asia-Pacific.
“We must ensure that inclusivity is not just lip service, but must include all segments including women,
and marginalized communities in alignment with our Madani and SDG principles. And I am looking forward to see businesses represented in ABAC leading by example on these fronts.
Malaysia’s Initiatives In Alignment With Apec Principles
APEC holds a distinctive significance for Malaysia. It serves as a fundamental pillar of our economic strategy, guiding the formulation of national policies aligned with the region’s collective aspirations.
Malaysia’s initiatives, spanning the cultivation of a dynamic digital landscape to the preservation of our shared environment, resonate deeply with the core principles of APEC. Combined with the return to political stability post-2022 General Elections, Malaysia has its clearest economic direction now as outlined by the MADANI Economy agenda, underpinned by policies announced last year notably the New Industrial Masterplan (NIMP) 2030 and the National Energy Transition Roadmap (NETR).
In addition to NIMP 2030, the Ministry of Investment, Trade and Industry also launched the Chemical Industry Roadmap (CIR) and the National Industry ESG Framework (i-ESG) last year.
At the core of these policy frameworks, Malaysia remains focused on the benefits and long-returns to the country in terms of high local R&D (technology transfer), nurturing a strong industrial ecosystem with innovation intensity, and improving inclusivity across areas and communities by creating opportunities to participate in the global supply chain, echoing much of the objectives and goals of APEC, Tengku Zafrul added.
Similar to APEC’s core principles, Malaysia remains committed to being open and receptive to opportunities and investments, particularly from our long-standing partner economies. Notably, in 2022, APEC economies made substantial contributions, constituting an impressive 76.5% of Malaysia’s net FDI inflows. This underscores Malaysia’s steadfast dedication to fostering robust economic partnerships within APEC.
Asia-Pacific Economic Cooperation (APEC) Business Advisory Council (ABAC) Malaysia hosted its first ABAC (ABAC 1) Meeting of 2024 from 14-16 February which featured an opportunity for Malaysia’s private sector to engage with business leaders from the 20 APEC economies.
Established in November 1995 by APEC Economic Leaders, ABAC serves as a pivotal platform, offering a business perspective to governments regarding the implementation of the APEC agenda, to enhance trade in the region. Each APEC Economy is represented by a maximum of three permanent members from the private sector, appointed by their respective APEC Economic Leader.
At present, ABAC Malaysia is represented by three permanent ABAC members,namely, Dato’ Rohana Tan Sri Mahmood, Chairman of RM Capital Partners; Datuk Ruben Emir Gnanalingam Abdullah, Executive Chairman & Group Managing Director of Westports Holdings Berhad; and YM Tan Sri Tengku Muhammad Taufik Tengku Kamadjaja Aziz, President & Group Chief Executive Officer of Petroliam Nasional Berhad (PETRONAS). ABAC Malaysia is also represented by Alternate ABAC member, Keong Hann Yeoh, Executive Director of YTL Power.
Peru is the Chair for APEC 2024, and ABAC Peru member, Julia Torreblanca, Vice President of Corporate Affairs, Sociedad Minera Cerro Verde, is the Chair for ABAC 2024. ABAC Malaysia had been invited to host ABAC 1 to mark the commencement of ABAC’s workplan for the year. ABAC 1 saw some 150-200 business leaders and senior officials from across all 21 APEC economies.
