00:00Now, as global supply chains shift, can ASEAN stay competitive or is it losing ground?
00:06We explore that question with Ugandran Kanu Siva Kumarin, a research analyst at Baitawamana.
00:13It's not that we're not doing enough, but more can be done.
00:17Like we see recently, Trump wants us to allow more ownership in certain industries for foreign companies.
00:26That is something we can definitely look at.
00:28But we have seen ASEAN take huge steps in the past couple of years to try to redirect foreign investment, especially from South Asia.
00:38Malaysia, especially with NIMP and Thailand itself has their own IR4 framework to try to boost their manufacturing capabilities to increase this amount of foreign direct investment.
00:52So we are doing quite a bit already.
00:55But when we're looking at countries that we may be afraid of that may redirect foreign direct investments, such as South Asia,
01:05I don't think we'll see a much shift from ASEAN to there because of our unique geographical framework.
01:12You see, you know, we, ASEAN, we have so many unique countries which have unique specializations and we are in close proximity with each other.
01:23And this is advantageous for many foreign companies to set up here.
01:27If you want skilled, cheap labor, you come to Malaysia.
01:31You want banking, you've got Singapore.
01:34You want cheap labor, you go to Vietnam or Thailand.
01:38So we are so well interconnected and it's so close to each other.
01:43It is not only very cost effective for them, but it's also a strategic position ASEAN has against South Asia.
01:53Yes, South Asia has the low end and now coming high end value added manufacturing.
02:00But again, due to the geographical location and the political climate in South Asia, ASEAN is much more unique in that aspect.
02:08Hugh Gendron also emphasized that ASEAN's current reliance on low-cost manufacturing and raw exports is no longer sustainable moving forward.
02:18Many ASEAN countries itself know it's not stable and that's why they are pushing to make rapid changes.
02:25You know, we are like Malaysia, we have NIMP and we are pushing for IR4 manufacturing.
02:31The same with Thailand, the same with Vietnam.
02:33We are all pushing away from low-cost manufacturing to more high-tech manufacturing.
02:39And of course, it will take time, but slowly we are shifting there.
02:44Malaysia, I would say we're shifting at a very good pace itself.
02:48Because again, it is not sustainable to only depend on low-cost manufacturing.
02:55China saw that.
02:56China used to be a global hub for low-cost manufacturing.
02:58But now we are seeing a lot of the factories shift to Vietnam.
03:01And then Vietnam, we will make that shift and slowly it just transitions, you know.
03:09Yeah, over time we'll become less reliant on this.
03:12Because let's be honest, the real money is from downstream activities.
03:17And we will surely shift to the downstream activities because that's where the money is at.
03:22And that is where we'll see, you know, high-value added production that we will see our technology start to transform.
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