Nazir: Transform or risk Middle East-style upheaval

The time for opaque deals and unflinching public support is over for Asian governments, and failing to realize this could lead the region down the path of the Middle East.

Saying this at the Malaysia-China Trade Investment International Conference 2011 in Serdang today, CIMB chief executive Nazir Abdul Razak said this is because today the world demands transparency from governments.

"Faced with such an awesome game-changer, governments, especially in the East find that they can no longer operate under the hierarchal paradigms of the past, where decisions are made behind closed doors and executed with unquestioning public support.

"Governments here will have to adopt greater openness, more debate and increased transparency," he said.

Nazir, who Prime Minister Najib Abdul Razak's (right) brother, added that failing to do so would not only threaten a government's hold on power, but a Middle-east style upheaval could also bring Asian economies to their knees.

"Such transitions will have to be managed carefully to avoid the kind of upheavals that bring at least massive temporary, if not permanent, economic hardships.

"At the extreme, political upheavals could derail the Asian century," he said.

Conversely, he said, Western government are finding that the systems placed to provide checks and balance are stopping them from being "quickfooted" in the face of the economic crisis.

Additionally, political opponents in the West have become "more Machiavellian", proving that they would prefer their country fail than support an leader from an opposing political party.

"East is meeting West as it were, and I hope that where they meet, politicians place country ahead of self, long-term ahead of short-term interest," he said.

Nationalism exploited for political interest
One of the areas, which the top CEO believes could fall prey to political self-interest is Asean cooperation.

"Nationalism is such an easy sentiment to exploit, and increasingly as Asean Economic Cooperation gets closer, it will become more pronounced.

"Indeed, across Asia I fear that politicians will put self versus national and regional interests in the very ways that are undermining efforts to revive economies in the West," he said.

For instance, he said, Indonesia's Capital Investment-Coordinating Board yesterday suggested that products of foreign investors exported to Indonesia from Asean countries be taxed.

The suggestion came over disappointment that Blackberry smart phone maker RIM chose to set up its factory in Penang , not Indonesia.

"To me, this is a sign that Asean leaders have not agreed on AEC in substance. It is easy for prime ministers to hold hands and talk about a great future.

"But down the line will people believe it? Will government agencies allow it?" he said drawing thunderous applause from the audience of over 1,000 people.

He added that failing to realise the need to cooperate as a region will only mean that Asean will be "ignored and marginalised" despite representing a collective market of 600 million people.