MALAYSIAN businesses have never had better access to international markets and consumers with the recent establishment of the Asean Economic Community (AEC).
It’s an enormous achievement by Malaysia and the other member nations of Asean, which will do much to support economic development, growth and jobs within the region for many years to come.
Not only are the opportunities there, but CPA Australia’s latest research shows that Malaysian small businesses are well-placed to make the most of the opportunities the AEC will create, and use the scale of the AEC as a springboard to other markets.
At this time of economic challenge — low commodity prices, slowing growth in China and weak recoveries in the United States, Japan and the euro area — an enhanced contribution from the broader business community in Malaysia is more important than ever to sustaining economic growth.
Asean has a population of around 600 million, and the world’s seventh largest economy that is growing at over five per cent per annum. The AEC will stimulate trade between member nations by reducing and removing barriers to intra-Asean trade — an important boost to the Malaysian economy at a time when global markets are volatile, China’s growth is slowing and economies of the United States, Europe and Japan remain weak.
These facts alone make Malaysia and Asean more broadly an attractive destination for business and investment, something our business understands — we have five offices in Asean, including Kuala Lumpur, and a presence stretching back over 60 years.
Adding to these advantages are the strong economic and cultural linkages Asean has with China. These linkages are only going to expand as China’s “Belt and Road” initiative and the Master Plan for Asean Connectivity improve transport and trade connections between and within the two economies.
Further, the proposed Trans-Pacific Partnership agreement will open up yet more markets and additional opportunities for Malaysian small businesses to grow. There’s much more that makes Malaysia and Asean a very attractive place to do business and invest. As I have often seen for myself, there is a fire in the belly of the businesses I come across in Malaysia and elsewhere in the Asean region that is lacking in many Australian businesses.
They are in a hurry to grow and become the next major success story. As our annual survey of small businesses in the Asia Pacific shows many small businesses in Malaysia and across Asean are taking the action they need to achieve that objective — focusing on innovation, e-commerce, exporting and improving business management processes in order to boost their competitiveness.
Our survey shows that the advantages of the AEC to business are well understood with over half of Malaysia’s small businesses believing that the creation of the AEC will have a positive impact on their business.
I expect this number will grow over the coming years as the advantages of intra-Asean trade become more apparent.
The survey also shows that Malaysia’s small business community is more likely than the small business outside of Asean (Australia, China, Hong Kong and New Zealand) to be focusing on innovation through the definite introduction of new goods, services or processes (29 per cent compared with 17 per cent).
Malaysian small businesses are also more likely to expect to be focusing on other drivers of growth, including e-commerce (35 per cent of small businesses from Malaysia expect to grow their e-commerce presence strongly in the next 12 months compared with 24 per cent of non-Asean businesses), exporting (19 per cent of Malaysian small businesses expect revenue from exports to grow strongly compared with 12 per cent of non-Asean businesses) and using social media for business purposes (88 per cent of Malaysian small businesses compared with 66 per cent of non-Asean small businesses).
We all know that oil prices are low and that there will be a budget adjustment later in the week. Yet our survey paints a picture of a dynamic and outward-focused small business community in Malaysia.
It is tech-savvy, innovative and nimble and very well-placed to seize the opportunities created by the trade policies of the government. This will enhance the prosperity of the business sector, build the capacities of individual businesses to compete — and win — on the world stage, and sustain economic growth for the country.