KUALA LUMPUR, Malaysia, April 8, 2015 /PRNewswire/ -- The ASEAN Economic Community (AEC) could push local companies to become regional powerhouses, says Frost & Sullivan.
Mr. Nitin Bhat, Partner & Head of Consulting at Frost & Sullivan said that to increase the competitiveness of Malaysian companies and prepare them better for further economic integration, local companies need to move away from low-labor cost production operations.
"The Government also should invest heavily in upgrading technical and vocational training through closer collaboration with private sector," he said ahead of his presentation ASEAN Economic Community: Opportunity or Threat? What should you know and what should you do? at Frost & Sullivan Growth, Innovation and Leadership (GIL) Malaysia summit.
Frost & Sullivan's GIL summit is focused on sharing, engaging and inspiring a continuous flow of new ideas and fresh perspectives which leverage innovation as a resource to help address global challenges.
The Malaysia edition of GIL will be held on April 14, 2015 at the Mandarin Oriental Kuala Lumpur.
Mr. Bhat also said that better access to capital to finance acquisitions for mid-sized companies and the organization of business-to-business matchmaking exercises would also help raise the competitiveness of Malaysian companies ahead of AEC implementation.
He said that CIMB's pioneering overseas expansion work will become a business sustainability necessity, instead of the exception.
He added that further liberalization of sectors will result in cross-border investments in the financial, infrastructure and logistics, energy, utilities, food, retail and healthcare sector.
He said that countries that take the lead in consumer protection will be hosting the next generation of innovators.
Mr. Bhat said that there are various challenges faced in making AEC a reality. "The free flow of skilled workers is more lip-service than actual reality as individual economies have yet to align and coordinate their domestic rules and regulations to the regional initiative," he added.
He also said that creating a single market will be a long battle in which domestic interests are likely to prevail for the coming 10-20 years.
He noted that the ASEAN Way has been a viable strategy in conflict resolution and kick-starting the concept of AEC. However, its way of working inherently inhibits bolder steps towards achieving the 2015 AEC and 2020 Vision, he said, adding that a shift from consensus and cordiality towards commitment, accountability (sanctions), monitoring and transparency is needed for AEC to be a success.
Mr. Bhat also said that there is also a need for ASEAN countries to shift towards a more long-term vision in which giving up protection of "industry a" is compensated by either increased opportunities in "industry b" or benefits for the consumers.
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SOURCE Frost & Sullivan