KUALA LUMPUR, 24 September 2025 — ASEAN must undertake fundamental reforms to enforce trade rules and deepen capital markets if the bloc is to maintain competitiveness in an increasingly contested global landscape, Tan Sri Nazir Razak, chairman of the ASEAN Business Advisory Council (ASEAN-BAC), said today.
Speaking on the sidelines of the 57th ASEAN Economic Ministers’ Meeting (AEM), Nazir warned that while ASEAN has made progress in reducing tariffs, non-tariff barriers (NTBs) continue to hamper trade, and enforcement mechanisms remain weak. “There’s no shortcut. It has to be enforcement, but the problem now is that ASEAN has no teeth,” he told Bernama.
Trade Rules and Non-Tariff Barriers: ASEAN’s Persistent Friction
Nazir pointed to tools such as the ASEAN Assist portal—designed to address unfair trade practices—as falling short of expectations, with many businesses reluctant to lodge formal complaints out of concern for retaliation.
He urged ASEAN to reform its institutional architecture so that complaints over NTBs can be escalated and resolved meaningfully, rather than languishing in procedural limbo. Without credible enforcement, agreements risk becoming symbolic rather than binding.
Reinventing ASEAN Capital Markets
On the capital markets front, Nazir highlighted a joint ASEAN-BAC and McKinsey study showing that ASEAN’s private capital markets currently amount to only 0.5% of GDP, compared with a global average of 1.5%.
To address this gap, he proposed reforms such as relaxing ownership rules, improving exit options, and introducing an ASEAN-wide IPO prospectus framework to ease cross-border listings. Such changes, he argued, would boost investment efficiency, raise fund management standards, and attract more capital into the region.
Nazir, who also heads the ASEAN Private Market Council (an ASEAN-BAC initiative), warned that institutional investors like Malaysia’s EPF and Singapore’s Temasek have historically deployed capital abroad rather than within ASEAN. He urged regional efforts to channel savings back into local opportunities.
Balancing Growth Momentum and Competitiveness
While ASEAN saw US$226 billion in FDI last year—a 9% jump over 2023—Nazir said the challenge lies not in growth per se but in maintaining relative attractiveness compared with peer regions.
He stressed that Malaysia’s chairmanship this year has demonstrated leadership in trade, dispute handling, and the convening of regional dialogues. Nazir said the October ASEAN Business and Investment Summit would serve as a capstone to this term.
Investor Angle & Regional Stakes
For investors in ASEAN, Nazir’s remarks underscore two critical leverage points: clear enforcement of trade rules and deeper capital markets. Together, these could reduce fragmentation, boost cross-border investment, and improve allocative efficiency.
However, realizing this vision will require political will, harmonized legislation across diverse national systems, and credible supranational mechanisms—no small feat in a region built on consensus and sensitivity to sovereignty. ASEAN’s next steps will be tested not in declarations but in institutional follow-through.
Source: Bernama
