(Kuala Lumpur, 8th) Investment analysis experts believe that sub-regional initiatives such as the Indonesia-Malaysia-Thailand Growth Triangle (IMT-GT) and the Brunei-Indonesia-Malaysia-Philippines East ASEAN Growth Area (BIMP-EAGA) have not only achieved significant results but also proven to be important complements to the ASEAN Economic Community (AEC), playing a critical role in promoting trade, investment, and regional connectivity.
Mohd Sedi, Director of Investment Research at UOB Kay Hian Wealth Advisory, pointed out that while the ASEAN Economic Community has formulated a macroeconomic framework, prioritizing the development of sub-regions also helps address regional development disparities, particularly by focusing on marginalized and underdeveloped areas and implementing the ASEAN inclusive growth agenda.
"The IMT-GT is closely linked to the Strait of Malacca, one of the world's busiest trade routes, while the BIMP-EAGA is located at the Sulu Sea and Celebes Sea, serving as the gateway for maritime connectivity. Therefore, they become natural nodes for promoting trade, investment, and connectivity within ASEAN and the broader region."
"Their advantage lies in implementing what economists refer to as 'spatial economics,' applying tailored interventions to underdeveloped areas."
He told Bernama that these sub-regions are not random geographic blocks but strategically distributed along key maritime corridors.
He mentioned that the IMT-GT focuses on agro-processing and tourism, taking advantage of the complementary strengths between southern Thailand, the northern Malaysian Peninsula, and Sumatra; while the BIMP-EAGA has advantages in fisheries, renewable energy, and eco-tourism.
"This is not a one-size-fits-all approach but leverages local strengths, integrating into regional and global value chains."
Both sub-regional initiatives will establish economic zones to attract foreign investment, drive industrial growth, and create jobs by providing incentives and streamlining regulations, becoming boosters of economic development.
In the IMT-GT, regions like Malaysia's Bukit Kayu Hitam, Indonesia's Medan, and Semanggi have already shown economic vitality; BIMP-EAGA also boasts more than 60 economic zones, widely distributed from Indonesia's Bitung to the Philippines' Zamboanga.
"These zones are not just factories but engines driving structural transformation, fostering 'agglomeration economies' where enterprises, employees, and infrastructure interdependently promote growth within industrial clusters."
"By connecting these economic zones with cross-border trade and investment, the IMT-GT and BIMP-EAGA are building bridges to higher levels of economic integration within ASEAN."
Mohd Sedi believes ASEAN can leverage the IMT-GT and BIMP-EAGA to drive development in key sectors such as tourism, agriculture, renewable energy, and manufacturing.
He said both sub-regions are also committed to building integrated value chains in agriculture, with the IMT-GT focusing on agro-processing industries like palm oil and rubber, while the BIMP-EAGA serves as ASEAN's 'rice barn' (shrimp, rice, and seaweed). The halal food industry also benefits from their complementarities.
He is optimistic about the potential of geothermal energy and marine energy in Kalimantan and biodiesel. Clean energy transition is crucial for mitigating rising energy costs, benefiting other ASEAN countries.
Additionally, he pointed out that interventions from these two sub-regions help narrow domestic development gaps, improve spatial equity, and address challenges not fully covered by the ASEAN Economic Community.
He said that in addition to infrastructure construction, both sub-regional initiatives also effectively drive local economies through developing economic zones and strengthening regional value chains.
He cited, for instance, the IMT-GT-supported southern Thai economic corridor, which created over 15,000 jobs in 2023. The projects not only attract foreign investment but also integrate entrepreneurs into the regional supply chain, strengthening industrial complementarity in sectors like agriculture, energy, and tourism.
Mohd Sedi, Director of Investment Research at UOB Kay Hian Wealth Advisory, pointed out that while the ASEAN Economic Community has formulated a macroeconomic framework, prioritizing the development of sub-regions also helps address regional development disparities, particularly by focusing on marginalized and underdeveloped areas and implementing the ASEAN inclusive growth agenda.
"The IMT-GT is closely linked to the Strait of Malacca, one of the world's busiest trade routes, while the BIMP-EAGA is located at the Sulu Sea and Celebes Sea, serving as the gateway for maritime connectivity. Therefore, they become natural nodes for promoting trade, investment, and connectivity within ASEAN and the broader region."
"Their advantage lies in implementing what economists refer to as 'spatial economics,' applying tailored interventions to underdeveloped areas."
He told Bernama that these sub-regions are not random geographic blocks but strategically distributed along key maritime corridors.
He mentioned that the IMT-GT focuses on agro-processing and tourism, taking advantage of the complementary strengths between southern Thailand, the northern Malaysian Peninsula, and Sumatra; while the BIMP-EAGA has advantages in fisheries, renewable energy, and eco-tourism.
"This is not a one-size-fits-all approach but leverages local strengths, integrating into regional and global value chains."
Both sub-regional initiatives will establish economic zones to attract foreign investment, drive industrial growth, and create jobs by providing incentives and streamlining regulations, becoming boosters of economic development.
In the IMT-GT, regions like Malaysia's Bukit Kayu Hitam, Indonesia's Medan, and Semanggi have already shown economic vitality; BIMP-EAGA also boasts more than 60 economic zones, widely distributed from Indonesia's Bitung to the Philippines' Zamboanga.
"These zones are not just factories but engines driving structural transformation, fostering 'agglomeration economies' where enterprises, employees, and infrastructure interdependently promote growth within industrial clusters."
"By connecting these economic zones with cross-border trade and investment, the IMT-GT and BIMP-EAGA are building bridges to higher levels of economic integration within ASEAN."
Mohd Sedi believes ASEAN can leverage the IMT-GT and BIMP-EAGA to drive development in key sectors such as tourism, agriculture, renewable energy, and manufacturing.
He said both sub-regions are also committed to building integrated value chains in agriculture, with the IMT-GT focusing on agro-processing industries like palm oil and rubber, while the BIMP-EAGA serves as ASEAN's 'rice barn' (shrimp, rice, and seaweed). The halal food industry also benefits from their complementarities.
He is optimistic about the potential of geothermal energy and marine energy in Kalimantan and biodiesel. Clean energy transition is crucial for mitigating rising energy costs, benefiting other ASEAN countries.
Additionally, he pointed out that interventions from these two sub-regions help narrow domestic development gaps, improve spatial equity, and address challenges not fully covered by the ASEAN Economic Community.
He said that in addition to infrastructure construction, both sub-regional initiatives also effectively drive local economies through developing economic zones and strengthening regional value chains.
He cited, for instance, the IMT-GT-supported southern Thai economic corridor, which created over 15,000 jobs in 2023. The projects not only attract foreign investment but also integrate entrepreneurs into the regional supply chain, strengthening industrial complementarity in sectors like agriculture, energy, and tourism.