This article first appeared in The Edge Financial Daily on July 12, 2017

Kuala Lumpur: CIMB Group Holdings Bhd chairman Datuk Seri Nazir Razak has expressed doubt over the Asean Economic Community’s (AEC) ability to achieve its targeted regional economic integration by 2025.

This is because the “so-called Asean way of doing things” is hindering the progress of achieving it, he told the audience at the three-day International Corporate Governance Network (ICGN) annual conference yesterday.

Thus, he said there must be a change in the way things are done for the “serious business of economic integration to proceed or it will be hard to see the next blueprint [in the near future]”.

“Asean needs to focus on substance, [and] not the frills that thrill the political masters. There is so much more the AEC can do for the regional economy and its companies. I think [these] two words hold the key to the regional grouping’s future: leadership and substance,” Nazir added.

While Nazir noted there has been commendable progress in many areas, he highlighted the AEC still fell well short of the single market and production base that they had promised.

He said intra-Asean trade remains around 24% of Asean’s total trade compared with 70% in the European Union, while many other AEC initiatives are still work in progress.

“Ironically, as we diversified across Asean, perhaps the biggest challenge has been diversity itself. Asean is complex for businesses because it is so diverse with [different] ethnicities, cultures, religion, legal framework, economic attainment and so on.”

For instance, in the banking sector, Nazir said the AEC should be about easing the movement of skilled labour, the flow of customer information and outsourcing operations, so that regional banks can be more efficient and better at supporting cross-border flows of investments and trade.