by DASHVEEENJIT KAUR/ pic by TMR FILE

ASEAN countries should increase its integration efforts in order to combat the economic effects caused by the Covid-19 pandemic, HSBC Bank Malaysia Bhd said.

HSBC Malaysia CEO Stuart Milne said the banking group particularly supports the specific focus on trade and digital openness, as well as linking the region’s immediate fiscal stimulus efforts to global sustainable development goals.

“HSBC supports the Asean member states’ joint agreement to increase reform cooperation and integration in order to stem the immediate health and longer-term economic impacts to South-East Asia as a result of the Covid-19 pandemic,” he said in a statement yesterday.

The agreement came after the Association of South-East Asian Nations leaders’ 36th annual summit which concluded on June 26, 2020.

“As South-East Asia begins to reopen, member countries should not approach economic recovery in isolation. The reason is simple: South-East Asia is always stronger when it acts in a tightly coordinated manner,” Milne added.

He believes the region’s deeply interwoven supply chains — spanning electronics, automobiles, textiles and garments — have developed because of Asean’s ability to reduce trade and investment tariffs between the association’s 10 member states.

In terms of reopening of trade and investment through multilateralism, HSBC advocates for the continued dismantling of non-tariff barriers that have proliferated South-East Asia and to adopt trade mechanisms and trade agreements that will enable a freer flow of trade.

“These include removal of non-tariff barriers such as increasing the minimum threshold for goods that require a certificate of origin (reducing red-tape for businesses already under pressure); and automating customs clearance processes.

“Another would be the adoption of the Asean Single Window and that involves formally signing and ratifying the already-agreed Regional Comprehensive Economic Partnership which covers 30% of the world’s population and 29% of its world’s GDP (including all of Asean states),” Milne added.

As for building a stronger digital connectivity, HSBC said unless the region can agree a common set of standards for cross-border data management and digital commerce, the potential for a thriving Asean-wide digital economy diminishes.

For growth to happen, Milne said already-agreed frameworks like the “Asean Digital Integration Framework Action Plan” and the “Asean Framework on Digital Data Governance” need to be fully implemented in order to integrate the currently disconnected rules and regulations of nations.

To deal with the imminent challenges coming from the pandemic, the region’s member states have agreed to install an Asean Pandemic Recovery Fund which will involve national-building projects aimed at increasing economic activity.

“HSBC recommends that the fund’s design and the selected projects be consistent with globally agreed climate targets, and sustainable goals and commitments.

“We all know that South-East Asia needs to improve its infrastructure to meet its economic potential. We also know that it needs to be carried out in a way that is sustainable,” he said.