Sharath Martin, Senior Policy & Insights Consultant at ACCA Asia Pacific, emphasizes the critical need for ASEAN to bolster its internal capital. Strengthening domestic investments and financial resilience are key strategies for the region to assert its influence on the global stage, ensuring sustainable growth and economic stability amidst global uncertainties.
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00:00Thanks for joining us. This is The Economy. My name is Ibrahim Sani. In my office right
00:13now is a longtime friend of the show, an ACCA member, and of course an ACCA senior policy
00:20maker of Asia Pacific, Syarat Martin. Syarat, thanks for taking the time to come over to
00:25the office to have a chat with us today. The idea here is that I want to talk more about
00:32ASEAN policy making, in fact, Asia Pacific policy making at large considering that the
00:38ASEAN Summit is going to take place very soon. But before we go all into that, maybe you can
00:45share with us some of the other works that you do at ACCA as well as outside of ACCA.
00:51Sure. Well, firstly, thank you, Ibrahim, for having me. And to some extent, the kind of
00:57organizations that I'm part of as well to perhaps provide some perspectives around some contemporary
01:03issues. So, yeah, I am a senior policy consultant with ACCA covering the Asia Pacific remit. And
01:11I'm also on the board of trustees for two organizations. One is WWF in Malaysia, as well as Shift. Now,
01:19Shift is perhaps lesser known in these parts of the world, but they were the people who led the
01:25development of the UN guiding principles on business and human rights, which, as you know,
01:30is really a critical part of the S in ESG, as they say. But also, as you can imagine, there's
01:37interlinked dimensions of all of these aspects from climate, nature and people.
01:41The idea here is, of course, trying to unravel the new world order, considering that US President
01:49Trump is redefining what it takes for them to, I guess, stake that place in the world and
01:56how the countries around the world, especially those specifically in Southeast Asia, is reacting
02:01towards it. And the operative word is, of course, reacting. Seems like many of these ASEAN nations,
02:08as well as Asian nations, for that matter, do not have a cohesive story and a cohesive plan
02:14to work in unison to address the new world order. How do you view policymaking from the
02:23global south, so to speak, when it comes to dealing with countries and presidents like
02:28Trump and America?
02:29Well, Ibrahim, you know, I actually might have a slightly different view about the strength
02:36of the global voice, the global south's voice, because I had the privilege of being at the
02:41ASEAN finance ministers and central bank governors meeting recently. And I think, firstly, they
02:47had a very matured response to the whole, you know, sort of Trump dilemma, if I can call
02:53it that, because it was choosing not to just react, but rather to recognize that this is
03:00going to impact us significantly, and that we would go to the negotiating table, but we
03:05would not just simply react by levying tariffs upon tariffs, right? So, on top of that, I think,
03:12you kind of go back in time, and ASEAN has been a construct now in existence for 57 years.
03:18Initially, it came into existence to establish something that we now take for granted, but
03:25we actually shouldn't, which is peace. And I sometimes say to my friends, peace should
03:32be an active policy, but not sort of an indirect consequence of whatever else that we do.
03:37But, I mean, yes, all in all, but on balance, but there's still Ukraine and Gaza right now,
03:44but I understand where you're trying to get at.
03:46So, I think in ASEAN, we must be very careful about what we want to happen in our region.
03:53But going back to your point, I think about, you know, how is it that ASEAN can and should
03:58respond? This is where I think there needs to be more that ASEAN should start doing in
04:04terms of, shall I call it, a seat at the table of global policymaking. So, just to give you
04:11some context, right? I mean, if you look at some of the major sort of global bodies around,
04:16like World Bank and IMF, you know, they have 20 over executive directors in each of these
04:22organizations. And we only have about one person from ASEAN. That's one person. Now, again,
04:29what's the context of ASEAN? 670 million people. We've got 3.8 trillion in GDP. Trade about the
04:36same number, 3.5 trillion. So, and then, to top it off, we're going to have, possibly,
04:44a lot of people affected by climate and nature-related risks, right? As warming continues in its current
04:51trend. Now, on that basis, if we continue not to have a seat at the table, a stronger seat
04:58at the table, then how do we ensure that our interests are going to be, not just protected,
05:04but in a sense, elevated? Because that's what we need to do now. If I could go on, closer to home,
05:12in the accounting profession as well, we see some of this as well. Because if you take IFAC,
05:18which has got 180 professional accountancy organizations throughout the world, we, again,
05:25only have one person who comes from ASEAN. Now, the whole world's abuzz about sustainability
05:32reporting. Are you a member of IFAC? Professional accountancy organizations, right? And these,
05:40through the 180 professional accountancy organizations, there are millions of accountants,
05:45professional accountants, right? So, let's remember that. Now, we talk about something that
05:50everyone's talking about, which is sustainability reporting now. And we have this construct called
05:55the International Sustainability Standards Board, which at this point has got no one from ASEAN,
06:02right? So, I think, again, it comes back to the point why and what should we start doing about some
06:09of these things. I also want to be very clear that, you know, we're not trying to point criticisms
06:16against some of these bodies because they have done some good work in the past and they continue
06:20to do so. But the continued relevance is the question I'm asking. The continued relevance
06:26of these organizations, can ASEAN not be there? Shouldn't we have a stronger voice at the table?
06:33So, that's where I think some of the perspectives I just wanted to put out.
06:37You know, when you talk about some of these international bodies, like, for instance,
06:39the International Sustainability Standards Board and the absence of ASEAN voice at that body,
06:50you know, they owe us no favor on being there. They don't. It is actually more of ASEAN trying
06:59to impose our stand, our presence at these international bodies in order for us to better shape policies
07:08with regard to global impact. I don't hold it against them. I'm more of are we doing enough ASEAN
07:19members in imposing ourselves at the global stage? Why is now the time to step, step onto the global stage
07:28and impose our values, our cultures, and our viewpoints to these international bodies?
07:34Okay. So, I want to address that point about values a bit later. But I just want to go back to now
07:40your sustainability standards. Now, in ASEAN, we've got 10 markets. Now, if we count them in terms of GDP,
07:4985% of ASEAN economies in terms of GDP have already or are planning to introduce
07:57these International Sustainability Standards Board's standards into their legal and regulatory framework.
08:03Now, I don't know of many other regional blocks which have got this strong push and advocating for
08:10this. But again, I would say at the AFMGM meeting that I referenced earlier, we made a number of points.
08:19One is if you compare sustainability standards in reporting with financial reporting. In financial
08:26reporting, we only have one standard, one global standard, Ibrahim. But in sustainability standard,
08:32an ASEAN business would conceivably have to report twice. One on ISSB and another one on Europe
08:40if we are going to be part of a European supply chain. Now, that's quite an onerous obligation.
08:46Yeah. In the same way, Europe is also kind of backpedaling because now in the ESRS, as they call
08:52it, there's this omnibus directive which they're looking to simplify the burden of reporting and a
08:59whole bunch of other things on SMEs. So, again, we are kind of asking for the same thing. And what we
09:07are saying is, why don't we just have one global standard? And until such time as we have one global
09:13standard, like we do with financial reporting, there needs to be some transition relief, right? So, I think
09:19that's the reason why we need to start speaking up, Ibrahim, because otherwise our businesses are going to be
09:25impacted. Yeah.
09:28No, you're right. That much I agree. And but then there is a question of over-dependence towards external
09:35capital infrastructure as well. Do you feel that that over-dependence and over-reliance is going to
09:41exacerbate in the years to come if we don't do anything today?
09:45One hundred percent, I think. The question is, and this is a question I get quite a bit is, then where do we
09:51find the money that we need, right? And I can take this from a number of angles. For example, we in Asia
10:01Pacific, now let me just pivot from ASEAN to Asia Pacific, more than half of the economic value add
10:08in Asia Pacific is either moderately or highly dependent on nature, right? But the question
10:15should be asked, then what do we do to invest back in nature? And who should do it? But the prevailing
10:22notion is nature is free and we have not really invested in it. Neither we nor the advanced nations
10:30that rely on value chains coming out of Asia. So coming back to your point, now who's going to invest
10:35in it? And my view is, well, if we don't, because this is our home, then who will? And nature is so
10:45intrinsically linked with warming temperatures, right? So you imagine we've got the third largest labor
10:53force in ASEAN, around the world in ASEAN. The heat stress that is going on, the real question
11:00businesses should be asking is now, how are my people impacted by this? What loss of productivity
11:06am I already facing and am I likely to face going forward? This is so real that I think this is
11:14possibly going to become a healthcare issue that we need to have a handle on in time to come.
11:21So, you know, I think there are so many aspects to this. Do you feel that there are concrete steps
11:24or at least clear steps to take for Asia to unlock human capital access or financial access to fund
11:34sustainable inclusive growth in order for us to, I guess, negate the over-dependence element here?
11:41That's the real challenge. Because if you think about the cumulative investments that are needed
11:45to keep, say, warming... Private wealth, I guess, maybe. Not just institutions.
11:49I think there almost is a need to rethink the whole financial model and the infrastructure.
11:55Because bear in mind, we've lived with some of this infrastructure, financial infrastructure,
12:01for such a long time. Now, the dollar exchange rate, the floating exchange rate as we know it,
12:07was conceptualized in the year that I was born. Right?
12:11And so... Which is what? How old are you?
12:13Which is 1971. 1998, 1994 maybe, no?
12:16No. 1971. And so we only have an institutional memory which tells us this is all we know.
12:23But I'd like to think that, look, if we go back longer in history, we should be able to uncover
12:28ideas which also tell us that we can develop other models. This model is not permanent and perhaps
12:36there needs to be a newer model. Now, again, some of my colleagues asked me the question,
12:40then what is the alternative model? And I'll be very honest with you, Ibrahim. I'm not the smartest
12:46kid on the block. There will be other people who come in who need to address this issue.
12:50We're accountants. We're not the smartest kid. Yeah. But I think we see the flow. Yeah.
12:56And from the flow, we can identify that we're going to have a problem here. Yeah.
13:02Do you think that there are some practical steps that policy makers or at least people who work with
13:11these policy makers can take to implement these kind of corrective measures if they are listening in
13:18or if they are watching us right now? What is ACCA doing right now or thinking about when it comes to
13:25making the situation a little bit better than it currently is?
13:30I think one is simply the act of speaking up on some of these issues. And we do it on the back of
13:36research, you know, not just some, you know, back of an envelope type of thing. We do it on the back of
13:43surveys, on the back of round tables, on the back of interviews with experts, and then we share. And
13:49our research is, you know, it's out there in the public domain. But then the important bit is not
13:55to let those reports stay on some website and no one talks about it. The important bit is then to bring
14:02out these issues again and again and again into the public domain. And I think it was, you know,
14:10to some extent, it was nothing better than the opportunity to speak at that ASEAN forum and to
14:15address those points. Again, one, why don't we now speak as one collective voice? It is so important
14:23that ASEAN needs to learn how to speak as a collective voice and to use, you know, what I think our
14:31children would call flex. We need to flex. Why is it that we can flex? Because we are such a major
14:38contributor to the global value chain. Of course, then there is a risk of flexing in an echo chamber.
14:46Not to say that, you know, forums like the upcoming Malaysian Institute of Accountants conference or
14:52similar conferences at the ASEAN, if not the Asia Pacific stages. It's also important for us to talk
14:58about these items outside of our comfort zone and outside of the the remit that we normally have.
15:05Do you feel that that is not just a necessity, but an urgency for us to do so?
15:10Absolutely. Again, because again, the context is always so relevant. We've got 670 million people,
15:19you know, our biodiversity contribution to the world in terms of aquaculture, in terms of marine life,
15:25is so critical that we are the ones who'd be disproportionately affected. And to go back to
15:31your earlier question, with what investment? Not a lot. We need one and a half trillion. We only have
15:37about 5.2 billion invested in some of these projects. That's a huge gap. Now, the question is,
15:43now what do we do about these things? And what is the collective efforts that we need to raise around
15:49this? And I think part of this is now ASEAN needs to learn that while we have worked quite well in
15:57the ASEAN construct, to some extent, we've always also been quite individual market-based.
16:03Yeah. And to some extent, I also feel, Ibrahim, long may it be so that we do not go down an European
16:09union type of model, where there's monetary and economy, because then it becomes very difficult to
16:15untangle issues. I think what we... I'm sorry, I'm for a single market economy,
16:22I feel that there are a lot more gains for economies and markets like South Asia to work together
16:28collectively and not untangle each other. Because I think getting closer to each other makes us
16:33this is wrapped up in our own fate. And I think that would force, you know, markets that are slower
16:41than us and markets that are faster than us to walk together in a common denominator notion.
16:48You know, Singapore can't run any more than they can right now. They've saturated their market.
16:55The country is so expensive. The democracy is, as we know, is like that. And then, of course,
17:01you have, you know, burgeoning democracies like Indonesia and Vietnam that we don't know what
17:06they're going to end up with. And then you have markets like Myanmar. I would not disagree entirely
17:13in the sense that I think we need a more market-based approach, but I would stop from all these notions of
17:21an ASEAN parliament, for example, right? Okay. Or even the need for a common currency. Actually,
17:27that much I agree. Yeah. So, I think we need to be careful about copy. Yeah. What kind of model,
17:32right? This is the point also, Ibrahim. Do we always need to copy someone else's model?
17:38Why can't ASEAN come up with his own model? Yeah. And to some extent, I would say this. I think
17:43our ministers and prime ministers and leaders have actually done a fairly good job in taking us to a
17:49a certain stage today. But we also need to recognize that now, and this goes back, why now?
17:55Because now we've got 770 million, 670 million people on our back. And we've got a large youth
18:03segment. We've got technology, which is like a tailwind. Amazing adoption in ASEAN relative to many
18:10other markets. But at the same time, you know, we also have issues about our currency. We also have
18:16issues about the whole climate and nature thing that I spoke about. For the viewers,
18:22they might not be familiar with Sherrod's work. Sherrod, you're into public policy. You're into
18:27finance. You're into sustainability. But one element that I want to explore moving forward for the next,
18:34you know, the 5, 10 minutes of this interview is on human capital development and talent management.
18:41ACCA is perhaps the world's most recognized brand when it comes to professional accounting.
18:48Here at the S&P Raju, as well as Kementerian Economy or the Ministry of Economy, we take pride in the work
18:53that we do in trying to bring up the best in terms of youth talent development and making them
18:59professionally certified accountants at an early age through our fast-track program. That's one element.
19:05At the same time, under the same breath, we tell them, don't be an accountant for the rest of your
19:11life. This is the, this is, I don't know whether this is countermeasure or oxymoron, but that's
19:17exactly what we tell them. Be chartered, work three years in your firm and, you know, after 24, 25 years old,
19:25now if you want to be an accountant for the rest of your life, by all means, go for it. But now that you
19:30are equipped with the status of, of a chartered membership in the ACCA or ICAW or for those young
19:37graduate and, and go for CPA Australia or SEMA or whatever you have, MIKPA Cairns, use that to build
19:45something for the nation, to build something for yourself. Now, we all know that with the advent of
19:51disruption in the form of AI and other digital transformation disruption, it doesn't take away
19:58the jobs that is needed for the future. It just needs redefining into what kind of jobs that we need
20:03for the future. You know, horse carriage drivers are now obsolete, but we have cab drivers. Now, cab drivers
20:10are, they might be obsolete what we have next. You know, people still need work and with the advent of
20:15technology, people still need to redefine what they need to build for the future. Considering this is the
20:21situation that we have right now. And with partners like ACCAW or SM Keraju, and of course, working
20:27together with how the global stage is needed, what we've been discussing for the past 20 minutes,
20:34how do you see talent management and human capital development is going to be shaped forward
20:40to address these very problems that we've been discussing? You know, Ibrahim, you said five,
20:46ten minutes. This is something I could go on for. Five, ten minutes. One and a half days. But look,
20:52I think let's address a few things. Firstly, what you just talked about, which is an account beginning
21:01to take up an accountancy qualification really sets you up for the diversity of career ranges
21:08that one can have. You know, I myself am, I happen to be an ACCA member myself. And I've gone through
21:15a career ranging from being an auditor, to being head of risk, to being in the regulator space,
21:21and I'm in research. And like you, you're also now... Yeah, it's strange, right? I was a radio,
21:28I was an investment banker, I was a radio broadcaster, I was a TV presenter, and now I'm running an agency.
21:33You know, and we are not alone to some extent. There are many of us like this who have got a whole
21:38different range of experiences, which I think is something interesting that I don't think is
21:45just a coincidence that accountancy sets you up for this. It's not. The training, the competencies that
21:51it teaches you, the sort of technical depth, and then that business sort of breadth that it gives you.
21:58Yeah. I mean, I might be sounding like I'm preaching to the converter here, but I think that's a distinct
22:05advantage. Having said that, having said that, once you're in the door, then you just got to perform,
22:13right? And that's where you have the shaft separated from the wheat. Yeah. But look, I mean,
22:18that should be the case for anything else. Now, coming back to this ecosystem that we are part of,
22:25I'm absolutely proud of the fact that in Malaysia, we produce world prize winners in an examination as
22:35tough as ACCA, time after time, quarter after quarter. And I don't say this with, oh, I'm gloating here.
22:42I'm talking about Malaysian talent. But I also feel for them, right? Because then they come out,
22:50they get paid in ringgit, what is the equivalent of maybe 800 US dollars, right? And this is, you just
22:58said, charge of accountancy, qualification, wow, amazing thing. And all the pain and suffering and
23:02emotional turmoil that one has to go through. Right? 800 US. Yeah. Betul lah tu?
23:08And so, of course, this also gives rise to global business services. Current market prevailing, yes.
23:12Right? Which is another business opportunity that our friends like. But, okay, let's, let's...
23:17But then there's a perennial problem of brain drain and the like. Yeah.
23:21You see? So, can we fix this without fixing the currency issue? No.
23:27I don't think so. Right? But I think it's too early to talk about what will be the alternatives
23:34to the dollar. But I think there are enough, you know, sort of stakeholders affected by this,
23:40the better minds, the smarter minds phrase that we talked about, who need to start looking into this
23:45issue. But it really affects us as ASEAN because despite the talent that we produce, which is,
23:55shall we call it, world class, we then get paid, shall I call the word, depressed incomes. Yeah.
24:04Wages. And it's not a phenomenon just unique to Malaysia. Yeah. How is it like in the countries
24:11that you're looking at? Well, I think throughout ASEAN, it's pretty much the same scenario. Now,
24:18you talked about values earlier, which is why I want to kind of... Yeah, yeah. Yeah, that's right.
24:22So, in the work that I do also on the subject of human rights, I have kind of taken pains to mention
24:29that, you know, there's a lot of, shall we call it, criticism levied against Asia and parts of Asia
24:37for the way we treat our labor, forced labor, child labor, all kinds of instances and often allegations.
24:45But I want to ask the question, do we have different values in how we treat humans in Asia
24:54compared to advance of the global north? And my answer is, I don't think we do. You know,
25:00we both love our children the same, you know, we both love our children. The way we love them will be
25:06different from how someone else loves them. That doesn't mean that at a fundamental value,
25:11we are different. We are the same. But it does also mean that one is imposing their values upon
25:17another. Where I'm coming from is this. So, if then we ask ourselves, why is it that we pay our
25:23people so low? I'll give you an example, right? When the government wanted to introduce this 2%
25:30EPF contribution for foreign workers, people were going up in arms. Not people, MEF.
25:35Right? Right now, the ex-governor of Bank Negara governor saying that, you know,
25:43fresh grass should be paying $8,000. MEF responded by saying anything more than $5,000 is detrimental
25:50to businesses. Yeah. So, I'll tell you something. So, because we did a piece of research on living wage,
25:55right? Living wage is not a commonly understood term. So, I'll just explain it as the wage level that you
26:01need to have to have a decent standard of living. Not a super duper flying everywhere, a decent standard
26:07of living. Yeah. But coming back to this, you know, in Asia or ASEAN, we kind of grew our economies to
26:16some extent by being the offshore centers of manufacturing, production and all kinds of other
26:22things. Your global business services as well. Now, we took that business really on the basis of our cost
26:30model. Our resources were cheap and our people were cheap. Can that be our value proposition going
26:36forward? Are we going to stand, let's say, we are policy makers on some of these governments. Can we stand
26:41there and say, well, our economic growth is going to be predicated and premise on one thing. Yeah. That our
26:46people are cheap. No. No. Right? So, we need to start weaning ourselves. But anyone who's in a low cost model will know it's very hard to wean yourself off this.
26:56Why do I raise this? I'll give you an anecdotal example. Because garment manufacturing in Bangladesh
27:04is a big thing. Yeah, of course. So, the CFO of a company we spoke to wanted to raise wages. Oh. And so,
27:10they had conversations with the fashion house brands in the global north about the need to improve
27:15wages to their people. Pushback. And what was the pushback though, Ibrahim? The pushback is our consumers
27:23could not afford it. Yeah. Their domestic market in the global north. Imagine that. But so, because of that,
27:32wages will be kept depressed. And for the foreseeable future. In working in conditions which are, you know,
27:39really questionable. So, we, I think as ASEAN governments on behalf of our peoples have to start
27:45taking a different view of how our economies are going to be brought up to the next stage of
27:53development and how our people are going to be part of that value chain. Basically, we need to have a unified
28:01voice in the global south on how to restructure our economy and stand on our own two feet.
28:08Yep. And it can be extended to maybe Asia Pacific, right? Yeah, of course. Because if you take China,
28:12when China tried to lift it, then it was other markets which started to try and source that work
28:19on a cheaper basis. Of course. I won't name them, right? But you probably know who they are.
28:24I think the same could happen also here because we have so many countries at different levels of
28:28maturity. So, we need a stronger framework than just intent. We have to start thinking, okay,
28:36now understand that if you go through this model, eventually your people are going to suffer.
28:41Yeah. We just need, don't need to go far. Just look at our EPF statistics. Yeah. And it will tell
28:46you what the median wage is of what, we got 16 million workers, half of them are active. Out of that
28:53eight million. This is it in the year 2025. And then the number gets more dire if you look at LHDN
28:59numbers or inland revenue numbers, right? How many percentage of the workers are actually paying taxes?
29:04Yeah. So I just paid my tax last week. Yeah. And you know, it is actually horrible that people are in
29:14the top 10 quartile or whatever you want to call it, even though the incomes are so low. You know,
29:20it is sort of saying something about the societies in which we are basing our livelihoods in. So I think,
29:27you know, we can't unpack any of what we have talked about without looking at human capital.
29:33Thank you very much. Sharad. That was Sharad Martin, the senior policy consultant at ACCA Asia Pacific.
29:40I would highly recommend you to look at ACCA's research on public policy, on public finance as well,
29:48as well as talent development. And of course, if you want to watch more of these kind of interviews,
29:53just head on to Astro Awani and search for the economy or search my name, Ibrahim Sani. There's plenty of
29:59discussions like this there. Catch you in the next one.