SINGAPORE (May 9): Against the backdrop of a fragmented global environment, countries around the world have started sliding into new regional arrangements, especially in Asia, said Malayan Banking Bhd group president and CEO Datuk Abdul Farid Alias.
Farid said there are signs the transition from globalisation to regionalisation is fast underway, with many of the world’s future trends expected to converge in Asia.
“The region’s rapid progress has surprised even the most critical sceptics, with the regional economy projected to grow bigger than North America and Europe combined by 2030,” he said when delivering his keynote address entitled “Doing Right in a Period of Uncertainty” at the Invest Asia 2019 coonference.
Farid highlighted that the share of intra-Asian trade to total trade accelerated to 61% in 2018, up from 57.3% in 2016.
Intra-regional foreign direct investment (FDI) also increased to 50.2% in 2017, up from 48% in 2015. Besides, about half of all jobs created from greenfield investments in Asia originated from within the region.
Farid acknowledged that the markets, across asset classes, remain on edge, as the global economy is weakening, in no small measure because of a widespread sense of uncertainty, a great source of which is the ongoing trade war.
“We don’t have to look beyond the events of this week to get a sense of the shared challenges we face. We saw another one of Trump’s market-breaking tweets this week — threatening to hike tariffs on Chinese imports from 10% to 25%, just after the end of what initially appeared to be friendly trade negotiations last week,” he said.
He, however, added that the real problem is not merely the risks that tariffs pose to the present economic order.
“The conflict as a whole has cast serious doubts on the future of global economic connectivity, with world trade volumes plunging at the fastest rate since the depths of the financial crisis in May 2009,” said Farid.
Nevertheless, he believes the current period of global uncertainty is a profound opportunity for Asian economies to emerge as leaders in sustainability, without compromising on the Asean strong values to make sustainable returns or profits.
“Investors should be convinced that the freer and more accessible the capital markets, the higher, and more sustainable, the level of environmental protection,” said Farid.
He noted that everyone stands to benefit from the new markets, and new forms of financial products, environmental and social improvements that sustainable finance is bound to achieve in the coming years in Asean.
“While financial institutions have started embracing the importance of incorporating sustainability considerations, more concerted dialogue is needed to drive a humanised agenda that aligns the interests of capital markets with the developmental needs of underserved communities,” he added.
Organised by Maybank, Invest Asia 2019 hosted over 240 local and regional fund managers from Singapore, Malaysia, China, Hong Kong, the Philippines, Thailand, the UK, and the US with a total estimated asset under management of US$11 trillion.
Over 1,000 delegates attended the regional investment conference, which was first started in 2014. This year, it showcased 51 large to mid-cap public-listed companies in the region with market capitalisation totalling US$413 billion.