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[SINGAPORE] It is better for Singapore and Malaysia to be friends than rivals, Malaysia’s Investment, Trade and Industry Minister Tengku Zafrul Aziz said on Wednesday (Oct 8), as he called for deeper cooperation between the two neighbours and greater unity within Asean amid a shifting global order.

Speaking at a fireside chat at the annual Asia Future Summit, Zafrul said the guiding principles underpinning Malaysia’s ties with Singapore, and Asean as a whole are consensus and centrality, with Asean shaping key outcomes affecting South-east Asia.

The premier thought leadership conference is jointly presented by SPH Media flagship titles The Straits Times, Lianhe Zaobao and The Business Times, with OCBC Bank as the presenting sponsor.

Both countries need each other to remain strong so that the right environment can be created for their people and economies to grow, he said.

“It is better to be friends than enemies, better to be collaborators together – and we have shown that we can,” said Zafrul, citing the Johor-Singapore Special Economic Zone as a practical example of how the neighbours can work together to achieve shared success.

Agreed in January by the two countries, the zone aims to streamline cross-border trade and investment in key sectors such as advanced manufacturing, logistics, technology and the digital economy.

Covering 3,571 sq km of southern Johor, the zone will feature simplified customs clearance, harmonised regulations, improved connectivity for people and goods, and targeted tax incentives for companies operating there.

Responding to a question from the moderator, BT editor Chen Huifen, Zafrul said the initiative was aimed at attracting global investors to the region, rather than shifting Malaysian or Singaporean firms across borders.

He added that small and medium-sized enterprises would also benefit by becoming part of supply chains supporting larger players, described by Chen as a “queen bee approach” whereby big investors draw in others around them.

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Efforts to streamline customs and improve the mobility of goods and labour, he said, would further help smaller businesses thrive.

Zafrul said that Asean must remain united and relevant at a time of intensifying competition among major powers and the emergence of new economic blocs.

Malaysia is Asean chair for 2025 and will host the Asean Summit at the end of October.

He said the region’s collective strength lies in its commitment to consensus and multilateralism – principles that have allowed member states to navigate differences peacefully while pursuing common goals.

“We have seen some problems in certain countries within Asean and they were resolved quite quickly,” said Zafrul, adding that the group is stronger together.

In July, deadly border clashes between Thailand and Cambodia killed more than 40 people and displaced over 300,000, marking the most serious fighting between Asean member states in recent years.

A truce was brokered on July 28 through diplomatic efforts led by Malaysia, with the active involvement or presence of the US and China.

To stay competitive, Zafrul said, Asean must continue to deepen its economic integration. One priority is to boost intra-Asean trade, and he noted that regional leaders are expected to sign an agreement in October to upgrade the Asean Trade in Goods Agreement (Atiga), as part of efforts to move closer to the grouping’s single-market goal.

Atiga, a key free trade accord first signed in 2009, will be updated to further simplify trade procedures and harmonise customs standards across member states. “This, we hope, will increase trade within Asean,” said the minister.

There are also opportunities in the region’s fast-growing digital economy, which Zafrul said could be a game changer for growth, especially for smaller businesses that have traditionally been left out of global supply chains.

He cited the ongoing negotiations on the Asean Digital Economy Framework Agreement (Defa) – launched in 2023 – as one of the grouping’s most significant initiatives. Once completed, it is expected to double the value of Asean’s digital economy from a projected US$1 trillion to US$2 trillion by 2030.

Zafrul said Malaysia’s Asean chairmanship would focus on advancing Defa and ensuring that regional digital policies align with efforts to attract investment, strengthen supply chain resilience and promote sustainable growth.

He said he hoped that Singapore will continue to champion these priorities when it takes over as Asean chair in 2027.

“For Asean as a group, it’s important that we continue to engage each other,” he said.

Asked by a member of the audience about his political future, Zafrul confirmed that his term as senator will end in December, and said he hopes to continue serving the government in some capacity.

In Malaysia, a Cabinet minister is either an elected MP from the Lower House or Dewan Rakyat, or an appointed Senator from the Upper House or Dewan Negara. Zafrul was appointed a Senator in March 2020 and will finish his second and final term at the end of 2025.

The former banker, who joined the public service in February 2020 just two weeks before Malaysia’s Covid-19 lockdowns, said he had entered government focused on managing the economy rather than pursuing politics.

“I wanted to really focus on the job at hand and as minister of finance it was a time when there were a lot of things that we needed to do and there’s no time for politics,” he said.

Now in his sixth year in government and having served under three prime ministers, Zafrul said he intends to remain active in politics and hopes to contest the next general election under Prime Minister Anwar Ibrahim’s administration.

In the meantime, he said he remains committed to assisting the government in any way he can, even if not as a minister.

“So, what am I going to do next? One of the things I told people at my table – you know, if SPH is looking for people, I’m available, of course,” he suggested, gesturing at his table in the Grand Ballroom at The Ritz-Carlton, Millenia Singapore, the summit’s venue.

When told by Chen that he would be too expensive, Zafrul replied: “You can pay me in ringgit!” causing the crowd to erupt in laughter. THE STRAITS TIMES