Asean united: (From ninth right) Liew, Asean Economic Community deputy secretary-general Satvinder Singh, Chan and Bernama chairman Datuk Seri Wong Chun Wai. Also present were (from tenth left) the Philippines’ Undersecretary for Industry Development and Trade Policy Dr Ceferino S. Rodolfo, Nurlin Salleh from BCG Consulting and Ng at the Asean Economic Opinion Leaders Conference: Outlook for 2025. — AZHAR MAHFOF/The Star
KUALA LUMPUR: Asian economies have to move away from a heavy reliance on the United States as an export market for their products, says Deputy Investment, Trade and Industry Minister Liew Chin Tong
He advocates that these economies create their own consumer markets, especially within Asean, instead of depending on the United States as their export destination of first and last resort.
“Business as usual won’t cut it. Asean needs to be bold to face the challenges while taking advantage of the opportunities presented,” he said in his opening remarks at the Asean Economic Opinion Leaders Conference: Outlook for 2025 at Menara Miti here yesterday.
The world, Liew noted, is facing a polycrisis since Covid-19, with a “perfect storm” of a pandemic and various health crises; geopolitical competitions and the worst wars in decades in Europe and the Middle East; and financial volatilities that hurt both developed and developing countries, which include high inflation, high interest rate and a debt crisis, as well as a permanent and worsening climate crisis.
Therefore, he said, the world is experiencing shifts and new realities including the pursuit of cheap outsourcing in the name of “efficiency”.
“Gone are the days when many thought the world was constituted by a single global supply chain.
“Increasingly, supply chains will be divided along geopolitical lines or formed according to regional proximity to avoid the risks associated with too long a supply chain such as those experienced during the pandemic or the Red Sea crisis,” he said.
Liew pointed out that economics will intertwine with politics and security even more from now.
“Nation-states and national elections or politics have huge consequences on the economy, as we learnt in 2024, especially the election of the second Trump administration,” he said.
Liew added that there is a limit to export-oriented industrialisation, although in the last seven decades, Asia’s Dragons and Tigers – South Korea, Taiwan, Hong Kong, Singapore – as well as Tiger Cub Malaysia, Thailand, Indonesia, the Philippines, Vietnam and China since its ascension to the World Trade Organisation in 2001, have grown rich by exporting to the United States, and Europe to a lesser extent.
“On the one hand, these markets are seeing the shrinking of their middle classes as well as the population, on the other hand, Asian industrialisation has generated massive productive capacity.
“The two don’t add up. Something will break somewhere,” he said.
Liew said three key elements important for Asean in 2025 are making Asean a regional supply chain, a middle power and a prosperous middle-class society, which is an important market.
“If we leave it to the major powers, the supply chain will probably eventually bifurcate as the United States and China extricate themselves from each other.
“It is not in the interest of the rest of the world to see the supply chain bifurcates, and therefore, Asean, together with the European Union, the Global South and the rest, need to do the heavy lifting to ensure that the middle ground or the common ground is big enough to resist bifurcation,” he said.
“And this is also the time that Asean member states should see each other not as competitors but complement each other to form a resilient regional supply chain.
“In this context, the Johor-Singapore Special Economic Zone has the potential of creating an exciting future and a role model.
“More Asean-wide joint investment projects or sub-regional cooperation will help to make the Asean supply chain stronger.”
Liew foresees that in the next two decades, Asean will emerge as a middle-class society and a sizeable consumer market, not just production sites as in the old formulation of export-led industrialisation.
“To do so, we must ensure that Asean member states do not enter into a race to the bottom in terms of wages, tax cuts or tax holidays.
“Instead, Asean must uphold environmental standards.
“It is used to the old export-led industrialisation model in which we help multinationals to suppress wages to make us a cheap destination to produce.
“It is also used to give tax cuts or tax holidays to multinationals,” he said.
As countries begin to adopt the Global Minimum Tax (GMT), there is an urgent need for Asean member states to work towards an agreement not to circumvent the GMT, he said.
“Also, we need to ensure that when we develop our economy, we are protecting the climate and the environment together.
“Asean members should not be racing towards the bottom but the top,” he added.
Star Media Group Bhd (SMG) is an exclusive media partner of the conference.
Also present were SMG group chief executive officer Chan Seng Fatt, SMG chief business officer Lydia Wang and SMG chief content officer Datin Paduka Esther Ng.
Along with sponsors, Liew also thanked Chan and Wang for making the conference possible.
